<Japan GPIF Information>
The Ministry of Health, Labor and Welfare (MHLW) announced a policy to allow the General Pension Investment Fund (GPIF), which manages public pensions, to use pension reserves for “impact investment. Impact investing is a method that aims to achieve both a positive impact on the environment and society and a return on investment. The principle of benefiting the insured will be maintained.
The MHLW is studying the GPIF's investment policy in preparation for the formulation of its next mid-term plan, which will begin in FY2025, and will finalize specific details by the end of March, making necessary amendments to government ordinances.
Impact investments will be made in business activities that contribute to the resolution of social issues and the realization of a sustainable society, such as environmental protection and poverty alleviation. At the same time, it also pursues a certain level of financial return.
On the other hand, pension fund management is based on the principle of “exclusively for the benefit of the insured,” which means that pension fund management cannot be used to achieve other policy objectives or measures.
Impact investment has not been allowed in the past because it violates this principle, but following the June government policy lifting the ban on such investment in public pensions, studies have been underway.
The MHLW will compile a response on impact investment with reference to investment methods for evaluating corporate ESG initiatives that have already been approved.
In addition, the MHLW has indicated that it will allow domestic real estate investments, etc., to be made through commonly used anonymous associations. A wide range of investment methods will be adopted to improve investment returns.
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