The Economist has published two articles on ESG, one focusing on its expansion in Japan led by the GPIF and the other focusing on the impact of passive funds on the effectiveness of ESG investment overall. I was [accurately] quoted in the former – ” Nick Benes, who heads the Board Director Training Institute of Japan, an educational body, says he is “all for” the enthusiasm for ESG in Japan. But he frets that Japanese companies are focusing on environmental and social aspects at the expense of governance. “That is the real driver of sustainability,” says Mr Benes. “But here it’s a big, bold E and S, and a small, plain G.”
While we are certainly better off than we were 10 years ago , I also fear that many Japanese institutions find it more comfortable (in this society) to talk vaguely about “ESG” in triple letters because that makes it easier to avoid setting forth the specific governance (G) practices they require, some of which which might be opposed by the same industrial groups which they are members of.
I wonder what others think.