Japan has become the number one leader in the movement of Asia towards a financial system which is more environmentally friendly. The Development Bank of Japan has been leading that trend, focusing on sustainable solutions with both its borrowing and its lending. Social, environmental, and governance factors might not have been part of Development Bank of Japan’s primary remit at the time of its established as Japan Development Bank in 1951, however, as the bank transitioned to a financial institution owned by government in 1999 and lately has become a united stock corporation in 2008, the part it used to play in the Japanese society has changed. Now, it integrates a commitment to making an impact for good with the goal of making a profit.
The Chief Executive Officer of Development Bank of Japan, Hajime Watanabe passed a statement which said it is only in past few years that ESG has become a global trend, however, our consistent focus in the past has been the environment. It blends very well with their miss of contributing to the development, as well as, enhancement of the Japanese economy and society, however, it also gives an offer for catchy business opportunities while making a contribution to the issues related to environment faced by Japan.
Aren’t more problems created for DBJ being committed to environmental lending and making a profit? The bank is operating in an immobile economy, in spite of serious efforts put in by the government, as well as, the central bank – that things seemingly are not going to change too soon. Watanabe argues that the transition towards green finance, as well as, wider set of socially conscious market segments, will be more prevalent and irreversible. This concludes that the major risk to the lending institution is not attached with the quick-moving pace into social financing, but moving too sluggishly