Japan's US$1.7 trillion fund boosts ESG holdings as others flee
GPIF held about 18.2 trillion yen (S$160.5 billion) of assets tracking ESG indexes at the end of March – or 14.7 per cent of the fund's equity investments – up from 17.8 trillion yen a year earlier, according to documents published on Friday (Jul 4). The fund posted a quarterly loss on a declining dollar and weaker domestic assets.
ESG funds have experienced record outflows as many investors shun a strategy that has been plagued by lacklustre returns, regulatory fatigue and political backlash, particularly from President Donald Trump's administration in the United States. GPIF and Norway's US$1.9 trillion sovereign wealth fund are seen as rare examples of major investors that are continuing to support sustainability-related securities.
Japan has a positive outlook for ESG investments through the rest of the year, supported by GPIF's plans to continue to add green holdings and a push by the Tokyo Stock Exchange to overhaul corporate governance, according to Bloomberg Intelligence. BLOOMBERG
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