The Growing Momentum of Impact Investing and the Impact Economy in Japan and Beyond

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Summary: In 2023, 'impact' is a common language in Japan, signifying the rise of the impact economy, incorporating impact management into investment, business, consumption, and government.

‘Impact’ – A Common Language in Japan

As the realm of impact investing expands, the term “impact” has become a common language in Japan in 2023, embraced by both public and private sectors. This trend finds its roots in the past decade, specifically in 2014, when Japan embarked on its journey to promote impact investing with the establishment of the G8 Impact Investment Taskforce National Advisory Board (later renamed the GSG Japan National Advisory Board, hereafter referred to as “GSG Japan NAB”). Since then, the GSG Japan NAB has collaborated with experts and practitioners across various fields, including finance, business, the social sector, and academia. Through research, outreach, and networking activities, it has contributed to the growth of the impact investing market and ecosystem in Japan. Their initiatives encompassed producing market research reports on impact investing in Japan, developing guidance on Impact Measurement and Management (IMM) methodologies, and organizing impact investing workshops and forums in partnership with the Japan Financial Services Agency.

These efforts, in conjunction with the activities of impact investors and ecosystem builders like foundations, have collectively driven the momentum of “impact” in Japan.

Figure 1. The Overview of GSG Japan National Advisory Board (NAB)
Source: the GSG Japan National Advisory Board

Impact Investing Trends in Japan

Internationally, market players in Japan frequently turn to the activities of international organizations such as GIIN and GSG to stay informed about global trends. The Social Innovation and Investment Foundation (SIIF), serving as the secretariat of the GSG Japan NAB, align Japan’s impact investment market research with GIIN’s definition of impact investing as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” According to the 2022 survey, total impact investments in Japan reached ¥5.848 trillion, representing a more than fourfold increase from the previous year. This rapid growth was primarily driven by investments in debt (48%) and listed equity (34%), accounting for the great majority (82%) of assets under management (AUM). Furthermore, as of October 2023, 64 private financial institutions have signed the Japan Impact-driven Financing Initiative. The Japanese government has shown heightened interest, explicitly promoting impact investing in “the Grand Design and Action Plan for a New Form of Capitalism” and the “Basic Policy for Economic and Fiscal Management and Reform” during Prime Minister Kishida’s administration. The Financial Services Agency has established the Working Group on Impact Investment as part of the Expert Panel on Sustainable Finance.

Figure 2. The assets under management (AUM) of Impact Investing in Japan
Source: The Current State and Challenges of Impact Investing in Japan (FY2016-2022 Survey); SIIF, Secretariat of GSG Japan NAB

From Impact Measurement to Impact Management: The Transformation of Business in Japan

The term “impact” has transcended financial institutions and has become a shared language among businesses in Japan. One notable evolution is the shift from “impact measurement” to “impact measurement and management.” This shift signifies a move beyond mere measurement and evaluation of impact toward implementing impact-based management practices. In essence, it implies an approach to business management that prioritizes impact. In the private sector, Japan Business Federation (Keidanren) has announced its intention to employ “impact indicators” to facilitate purpose-driven dialogues. Additionally, the Impact Startup Association has emerged within the startup industry.

In Japan, “impact” extends beyond impact investing for investors and financial institutions; it transforms impact-driven business practices, consumer behavior based on impact considerations, and the government’s approach to public procurement. Essentially, it is propelling the advancement of an impact economy within the continuum of economic cycles encompassing investment, production, consumption, and government activities.

Figure 3. Impact Economy Landscape in Japan
Source: The Presentation Slide (revised) of Michiru TODA on the Nikkei Forum 2023 “Frontiers in International Finance: Japan’s Pathway to Prosperity”

Democratizing the Impact Economy

Sir Ronald Cohen, a global leader in impact investing, defines an impact economy as one where the measurement of social and environmental impact is integrated into all economic activities, central to government, business, investment, and consumption decisions. Recognizing that economic activities rely on individual participants within the socioeconomic structure, the concept of individuals engaging with the impact economy—referred to as “the democratization of the impact economy”—becomes paramount. Each individual’s role as a participant in the economy, including how they allocate their money and assets, contribute to impact creation, make decisions to enhance impact, and choose selective consumer behaviors regarding goods and services, becomes significant.

Figure 4. Democratizing the Impact Economy
Source: The Presentation Slide (revised) of Michiru TODA on the Nikkei Forum 2023 “Frontiers in International Finance: Japan’s Pathway to Prosperity”

The Future of Impact Economy in Japan and Beyond

In conclusion, the outlook for impact investing and the impact economy in Japan can be summarized as follows:

  1. Keep Expanding: there is a quantitative increase, especially in listed equity and debt, with a growing number of signatories for the Japan Impact-driven Financing Initiative. Additionally, diversification in players and asset classes is emerging, including corporate impact investing by impact-oriented listed companies and innovative finance schemes led by foundations and family offices.
  2. Scale with Integrity: greater demands for transparency are observed, including transparent impact reporting (disclosure) in a comparable manner and independent verification and certification. There is a shift from emphasizing compliance with existing principles and frameworks to focusing on actual and tangible impact performance.
  3. Impact Investing as “Normal,” and Impact Economy Comes with Collective Transformation: common understandings are emerging, influencing the future of business and corporations by facilitating impact management that balances social value (impact) with corporate value. This shift results in a qualitative change in defining corporate value and integrates impact at the core of decision-making for all economic activities, encompassing finance, production, consumption, and government.

In this manner, in Japan, “impact” has become a shared language among both public and private sectors. Shifting our focus to Asia, we see that the term “impact” is gaining momentum across the region as well. According to SIIF’s impact investment market research, approximately 15% of Japan’s financial institutions’ impact investments are directed towards Asian countries other than Japan. Furthermore, new GSG National Advisory Boards are emerging in various Asian countries. Since impact investing aims to address societal challenges, often not confined to a single country but encompass cross-regional and global issues such as environmental and poverty-related challenges, we can expect increased regional collaboration through impact investing.


  1. Ronald Cohen. (2021). Impact: Reshaping Capitalism to Drive Real Change. Morgan James Publishing.
  2. SIIF. (2023). The Current State and Challenges of Impact Investing in Japan – FY2022 Survey:
  3. GSG Japan National Advisory Board :
  4. Japan Social Innovation and Investment Foundation(SIIF) :
  5. Japan Impact-Driven Financing Initiative:

To cite this article, please use:

Toda, M. (2023). The Growing Momentum of Impact Investing and the Impact Economy in Japan and Beyond. Asian Impact Management Review, Volume 2 (2), Winter 2023.

About the Author

Michiru TODA

Michiru Toda is the Deputy Chief of Impact Economy Lab, The Japan Social Innovation and Investment Foundation (SIIF). After working at startups in India and Japan and serving at the International Labour Organization (ILO) in Switzerland as a member of its Global Commission on the Future of Work secretariat and of its G7/G20 secretariats, Michiru Toda assumed his present position in 2019. His roles at the SIIF include structuring impact bonds, providing IMM support for social entrepreneurs, proposing policies, researching on impact economy and systems change, and building global partnerships. Mr. Toda earned BA in sociology from University of Tokyo and MSc in development management from London School of Economics.

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