The Development Bank of Japan (DBJ), with over ¥15 trillion ($135 billion; €128 billion) under management, has signed the United Nations-backed Principles for Responsible Investment (PRI) on 12 December 2016, becoming the newest Japanese investor to demonstrate its commitment to environmental, social and corporate governance (ESG) issues.
The government of Japan-owned DBJ provides financing and advisory services to infrastructure, real estate and energy projects in the country. DBJ has invested in private equity since 2002 and has made commitments to Equistone Partners Europe, MSD Investments, The Riverside Company, and Alternative Investment Capital, according to PEI data.
Out of the 1,631 signatories, only 53 or 3 percent are Japanese, with almost a third of them joining the ESG body in the last two years. Among the 13 LPs are Daido Life Insurance Company, Pension Fund Association and The Dai-ichi Life Insurance Company, according to UN PRI data.
Japan’s $1.3 trillion sovereign wealth fund, the world’s biggest by assets, had joined in September 2015. And in December this year, GPIF chief investment officer Hiromichi Mizuno reportedly joined the PRI's board.
In addition, 30 investment managers including Ant Capital Partners, J-STAR and Advantage Partners, as well as 10 service partners round up the list of Japanese signatories to UN PRI.
DBJ said in a statement on its website that its activities are ‘compatible with PRI’s mission’ and that it will ‘promote the resolution of ESG issues through [its] investment, loans and other business’.
The state-owned bank’s move comes shortly after four Danish pension funds – ATP, PFA, PKA and Sampension – resumed membership of UN PRI. They were among six Danish pension funds that dropped out of the UN PRI in 2013 out of governance concerns.
PRI, the world's leading proponent of responsible investment, encourages institutional investors to incorporate ESG factors into investment analysis and the decision-making process.
The UN PRI was set up in 2006 and emphasises the importance of good governance into investment decisions. They have nearly 1,500 signatories, from over 50 countries representing $60 trillion. In November last year, the organisation finalised a standardised due diligence questionnaire that LPs can use to evaluate fund managers on their commitment to ESG issues.