Socially Responsible Investing Taking Root in Japan, Survey Finds

Socially Responsible Investing Taking Root in Japan, Survey Finds

The idea of socially responsible investment (SRI), which encourages investors to consider companies' corporate social responsibility (CSR) activities as one of their investment criteria, is gaining recognition among investment professionals and significantly influences their investment decisions, according to Daiwa Investor Relations Co.

The consulting firm of the Daiwa Securities Group Inc. conducted a survey on the "Influence of Socially Responsible Investment (SRI) on Japanese Companies" in December 2004. A total of 99 experts responded, including analysts and fund managers dealing with investment funds in securities companies in Japan.

When asked which SRI topics were drawing their interest, 82.7% of the respondents cited governance and accountability (compliance, disclosure, etc.), 58.2% environmental issues (reduction of environmental risk and prevention of pollution), and 46.9% market-response issues (consumer-oriented activities, supplier-oriented activities, customer satisfaction, procurement policies, etc.). (Multiple responses were possible.)

Asked what are important information sources for their SRI-related decisions, 53.4% cited interviews and research, 38.6% environmental reports, and 17.0% sustainability reports.

Asked whether they thought SRI will take root in Japan, 67.7% answered in the affirmative. This represents an increase of 7.2 percentage points over the previous survey, conducted in April 2004, suggesting that more and more investment professionals see the spread SRI as a natural trend.