Importance of ESG and climate initiatives grows

In October 2020, Japan’s new prime minister, Yoshihide Suga, committed the country to reaching a target of zero greenhouse-gas emissions and achieving a carbon-neutral society by 2050, with a fundamental shift in the policy of energy use.

In the following month at the G20 Summit, Suga pledged Japan will lead the world’s green industry to create a favorable cycle for the economy and environment. This commitment is expected to lead to significant changes in Japan’s society in various ways.

In recent years, the awareness of environmental, social and governance (ESG) concepts and their utilization have rapidly grown in Japanese markets and real estate sectors, led by market leaders in government sectors as well as institutional players. In 2020, Nikkei released the Nikkei ESG-REIT Index, utilizing GRESB data, as a new market index targeting ESG real estate investments, in response to growing interest.

The changing mindset as well as investment strategies with