ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Environment

Japan's first ESG real estate fund set for launch

Farm lender Norinchukin picks properties tied to green energy and worker health

Tokyo families harvest rice grown on a rooftop in Roppongi. Buildings in Japan's capital are trying different ways of going green. (Photo by Arisa Moriyama)

TOKYO -- Japanese farm lender Norinchukin Bank will market real estate investment funds focusing on properties that achieve sustainability targets, in what it calls a first for the domestic asset management industry.

Norinchukin, which has grown from a savings institution for farmers into a global investor with around 106 trillion yen ($982 billion) in assets, has devoted 10 billion yen of its own money to a handpicked portfolio of real estate investment trusts.

The move marks the latest example of Japanese institutional investors adopting environmental, social and governance factors as a guide for asset allocation.

The REITs are selected using the Global Real Estate Sustainability Benchmark, which considers criteria including worker health, energy consumption by buildings and the presence of renewable energy generation.

About 40 REITs out of the 64 trading on the Tokyo Stock Exchange will be part of the portfolio, according to Norinchukin. The portfolio was developed jointly by group company Norinchukin Zenkyoren Asset Management.

Norinchukin will develop investment products based on the portfolio for institutional and retail investors.

Returns on the products are expected to match or exceed those on the Tokyo Stock Exchange REIT Index. With interest rates at historic lows, institutional investors have shifted more money into real estate.

Norinchukin holds over 60 trillion yen in deposits from Japanese farm and fisheries cooperatives. The bank has become one of the world's biggest buyers of collateralized loan obligations, a type of security consisting of packaged corporate debt.

Its domestic peer, the Government Pension Investment Fund, has also allocated part of its assets under management to ESG investments.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more