Have you ever heard of the word “ESG investment” recently?

“ESG investment” comes from the first letters of Environment, Social, and Governance. ESG investment is a general term describing when an institutional investor, etc., determines whether to invest in a company, it considers ESG-related information in addition to financial data.

In 2006, the United Nations advocated investments made from an ESG standpoint rather than those solely in pursuit of short-term profit. This new way of assessing a company for investment has been generating interest – particularly among European and American institutional investors.

Preliminary Performance Figures of GPIF’s ESG Investments

Companies which place an emphasis on the environment, society, and governance (ESG) have tended to show medium to long-term growth and continuously improving value over those which do not.

For the “ESG Investment Category”, Tokyo residents are invited to share which areas of ESG they are interested in. Financial businesses making ESG investments within areas of high interest for Tokyo residents can then apply.

From the all applicants, the best three examples will be chosen and presented their award at a ceremony in February 2020.

We look forward to hearing your opinions on ESG investments.

Source: Compiled by Accenture, using Nikkei Business article, “Why public pensions are being ‘quietly’ managed in a new way’” (Jul. 17, 2017 edition) *“ESG investment” is the investment performance of the indexes used by the GPIF (FTSE Blossom, MSCI Japan ESG Select, and the MSCI Japan Empowering Women Index, at a ratio of 2:2:1), while “Market” is the performance of a 5 year investment (Apr. 2012 – Mar. 2017) using the TOPIX index.