Japanese firm to tackle dearth of female managers with novel bond

One of Japan’s biggest real estate developers is planning a bond linked to it raising the share of women in management three decades from now.

Mitsubishi Estate Co. announced on Wednesday that it is considering issuing sustainability-linked notes, whose terms are linked to variable targets like cutting emissions. In addition to the environmental objectives, the developer of office buildings and luxury condos aims to raise the proportion of its female managers to 40% in fiscal 2050, up from just 5.8% in fiscal 2020.

Sustainable investment products have attracted huge amounts of money across advanced economies, but often meet with criticism that they don’t live up to the label because the environmental and social objectives are too loosely defined.

The Mitsubishi Estate bond would be Japan’s first of its kind to have both environmental and diversity-related goals under the same framework, according to Mitsubishi UFJ Morgan Stanley Securities Co., one of the banks underwriting the deal.

Japan lags other major economies in women occupying executive positions, and the government is calling for an increase in corporate and political leadership roles. Companies in the Topix index have an average of 9.3% of women on their boards, compared with 30% for S&P 500 firms and 38% for companies on the FTSE 100, according to data compiled by Bloomberg.

As part of Prime Minister Fumio Kishida’s policy plans, Japan will also likely require companies to disclose the wage gap between male and female workers from this summer.

If Mitsubishi Estate misses its targets, it will either make a donation or purchase voluntary credit accredited by an international third party organization, according to a statement.