Japanese firms are under deepening pressure over their ties to Russia and are scrambling to assess their operations, company and government insiders say, after Western rivals halted business there and condemned Moscow for invading Ukraine.

While environmental, social and governance (ESG) investors have previously targeted Japanese firms for using fossil fuels, scrutiny over Russia could become intense. Executives say privately they are worried about reputational damage, a sign corporate Japan is — however reluctantly — becoming more responsive to pressure on social issues.

Japan's trading houses — commodities giants long seen as quasi-governmental arms integral to Japan's energy supplies — have significant ties to Russia. Last year Russia was Japan's second-biggest supplier of thermal coal and its fifth-largest of both crude oil and liquefied natural gas (LNG).