Emi Onozuka, President of Eminent Group, discussing philosophy and direction
Emi Onozuka After working as an investment advisory firm for JP Morgan, Goldman Sachs, and the Monex Group, she became independent in 2022 and entered the advisory and planning industry.
In the United States, the ERISA Act, which stipulates the fiduciary duty of corporate pension funds, has been strongly influenced by politics. So is ESG. The current criticism of ESG, which is tinged with politics, is also an extension of it.
Two things are of concern. One is the benefit of the residents. States with many oil-related companies often have a negative policy toward ESG investment that advocates decarbonization with respect to pension management. It's politically unavoidable, but will it bring long-term benefits to the people who live in the state and actually receive pensions?
Another concern is the attitude of major financial institutions. The attack on the US asset management company BlackRock is also known in Japan. The company is trying to communicate its thinking by devising information disclosure on its website.
As a whole, it seems that many companies are undecided about how to think about ESG. For individual social issues, for example, it is easy to support the appointment of female directors. Others, such as Goldman Sachs, associate it with initial public offerings (IPOs). However, it is not clear from the outside what the company thinks about ESG as a whole. I wonder if it will be questioned someday.
Japan's ESG efforts are sincere and not politicized. It should go in the direction of refining the accumulation so far without being influenced by the United States. We need to improve our literacy and increase the number of specialists.
Many ESG and sustainability research groups have been established in Japan. I have also participated in several meetings, but since the base of experts is not necessarily wide, people are competing with each other. We must have the depth of experts who can move freely.
ESG is not a question of right or wrong. There is a lack of philosophical and directional discussions on what Japan wants to do, as well as specifics such as the environment and human rights. ESG has come to be discussed in public relations for investors, but there are many cases where efforts to address environmental and social issues have not been fully integrated into management. ESG is a perspective that allows us to see what a company wants to do and whether it has the will to complete it.
Redefine the concept, need to verify benefits
Discussions over ESG investment often end in misunderstandings. This is because different people have different images and meanings.
Some see it as non-financial risk management, while others see it as a driving force to achieve decarbonization. In the midst of the energy crisis triggered by Russia's invasion of Ukraine, interest rates rising and stock prices falling, it became clear that he was in the same room.
In order to leave the ambiguity in the naming, it has been abused as a label for selling financial products for individuals, such as "ESG investment trust".
First, the concept of ESG should be redefined. On top of that, it is necessary to verify what kind of benefits will be brought about by adding environmental and social perspectives to investment decisions. The benefit is the expected value of the side entrusting the operation. What do you want to achieve with your investment? It is nothing but the philosophy of each of us that is questioned.
