The Good Bankers Co., Ltd., is Japan's first independent investment
advisory company devoted to social investment research in Japan.
In the Japanese market, The Good Bankers Co., Ltd., is a pioneer with the first
investment product based on the concept of socially responsible investment (SRI).
In September DHARMA WORLD interviewed the company's founder and president,
Ms. Mizue Tsukushi, about the religious background of SRI
and its increasing significance in today's society.
The Good Bankers Co., Ltd., was the first investment advisory company to introduce the concept of socially responsible investment, or SRI, to Japan. What sort of principles is SRI based on?
I believe there are two aspects to corporate social responsibility. The first is that corporate behavior should never be antisocial. I think this is a social responsibility that should not change according to time or place. The other is that corporate practices should aim at solving or relieving the problems of the times and society. That is a responsibility that changes with society. As for Japanese society today, this means being involved with such issues as efforts to solve environmental problems, declining birthrates coupled with an aging population, and providing workplaces in which women can work with peace of mind. SRI is investment activity that in addition to evaluating a company financially also examines how a company responds to such issues and evaluates the company on that basis.
SRI dates back to the eighteenth century and resulted from initiatives by religious groups in North America. At that time, when the slave trade was flourishing, Philadelphia Quakers were buying slaves and setting them free. Many Quakers were successful in business and strongly felt the importance of social responsibility, refusing to do business with anyone in the slave trade. This is said to be the origin of SRI.
Then, at the beginning of the twentieth century, in Prohibition-era America in the 1920s, SRI was started by Christians who realized not only that involvement in the liquor and tobacco business and gambling was against their religious beliefs but also that such activity was a bad influence on society because such businesses supplied capital to the Mafia. So they decided not to invest in such companies, and this is said to be how modern-era SRI started.
In other words, socially responsible investment began originally as a way to invest on the basis of religious convictions. SRI also included classifying savings banks. Later, the behavior that had arisen from a religious conviction spread after drawing a favorable response from even those with no religious convictions, and today it is said that there are about twenty-two trillion dollars of SRI-related funds at work in the global markets. That sum makes up more or less 10 percent of the worldwide financial markets according to a September 28, 2010 news release by Principles for Responsible Investment. So, viewed historically, there has always been an ethical side to caring about a company's social responsibility. And I believe it is the religious sensibilities of a society that dictate what is ethical.
The decision whether to invest in a company is determined by its own business activities. Because this is a big issue for companies, they have begun informing society of their business ethics and social responsibilities, and in some ways companies may become more transparent and their business activities may become more ethical as a result.
How have the Japanese financial world and corporations reacted to SRI?
I don't think the Japanese business community will shift its attention to socially responsible investment in earnest until sometime in the future. The reason for that is that after the Second World War the Japanese forgot ethics and religion. I believe there was an American policy during the Occupation to make the Japanese forget religion, especially the spiritual values of Shinto. And within that context, Japan singularly pursued efficient economic activities and became hugely successful as a result, with no consideration of business ethics.
Japanese businesspeople become very nervous when subjects such as corporate social responsibility or ethics is brought up. In my opinion, businesspeople themselves should be doing business ethically, but because they are not accustomed to ethical considerations in their individual daily lives, when they are suddenly asked about business ethics, I think they are taken aback. I think this is because all of Japanese society has stopped thinking about business ethics or social responsibility; I also think, however, that this situation is changing.
On the other hand, how has the Japanese religious community reacted to SRI?
Frankly speaking, the members of Japan's religious community have little awareness of socially responsible investment. I believe that is because, although using money ethically or using it effectively for society is a matter of religious faith and personal ethics, they have stopped thinking at all about these things. I get the sense that they think that they will somehow be corrupted if they think about money management, or that they avoid thinking about it at all. I wish the religious community in Japan would study SRI and put some effort into it.
In countries other than Japan there are some twenty-two trillion SRI dollars at work. I believe the reason this started with a religious initiative and then grew dynamically is that people overseas had a strong religious awareness. Many of the people overseas involved in SRI have their own religious views, whether they are institutional or individual investors, and through SRI they try to steer corporate activities and society as a whole in a better direction. But in the case of Japan, it seems the religious groups themselves don't seem to be catching on to SRI.
In the end, I'm afraid that members of religious groups in Japan are not catching on to the SRI method of managing money, and the institutional investors who have an abundance of capital have not caught on to ethics.
How did you start working with SRI?
When I was a child I was baptized in the Catholic Church. After studying in France, and marrying and raising a family in Japan, I entered the financial world in 1988. While working in finance, I was astounded to realize how powerful the thing called money is.
At the time I entered the financial world, I thought of what the Bible says: "It is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God," and I also thought that money was something dirty and that I did not want to be corrupted. But as I worked at my job, I learned that money was not in itself bad, that only the way it is used is good or bad.
The fact is, soon after I entered the financial world I considered quitting, but then I thought that if I could use this powerful thing that is money for good things, I could change the world for the better. And when it occurred to me that, by all means, I wanted to do such work, I learned of SRI, that it had its beginnings in Christian religious convictions, and I thought I would definitely want to try it in Japan.
It has been more than ten years since SRI financial products were developed in Japan; how do you view the changes up to now?
Well, at the beginning, the concept was new to Japan, and at the time the only investment products followed the line of thinking that if a company's earnings rise, so will its stock prices, so let's invest accordingly. But then products called eco-funds were developed in response to the line of thinking that earnings are important, but let's also check how we're dealing with social responsibilities such as environmental issues. Even though the brokerage houses thought that there was no way these would sell, they sold like crazy and without any advertising at all, and in a matter of ten days, they sold twenty-three billion Japanese yen's worth.
Ninety-nine percent of the people who bought them were individuals, and many were wealthy, but on the other hand, there were also many women and young people. Most of those people did not have accounts with a brokerage house; in other words, they were unfamiliar with investing in equities. These people don't think that money is everything. They value corporations that place social responsibility above profits, and by investing in them a new movement has emerged through which they can take part in solving environmental issues.
It then became a hot topic, and eco-funds contracts reached one hundred billion yen in six months. And somewhere around eight months into this, other companies followed suit, and contracts reached two hundred billion yen. But then the stock prices started to fall, and now, ten years later, the scope of Japan's SRI funds appears to be four hundred billion to five hundred billion yen. But in contrast to ten years ago, most brokerage houses today sell at least one or two SRI-related products.
How will the future be affected by a large proportion of SRI subscribers' being women and young people?
SRI in Japan, and for that matter in all countries, is a market cultivated by women and young people. It's thought that there is a correlation between the growth rate of women's economic power and the growth rate of SRI. Even among different generations in Japan, there are many households where the housewives hold the purse strings, so I think that the trend will strengthen.And when women with economic power want to put their savings to work, they seem to behave differently from men. Women buy dreams. That is to say, it's not about money, money, all the time. I think this is because, for one thing, it is women who give birth to the next generation and connect lives. And therefore they are highly aware, for example, of environmental issues and the issue of low birthrate coupled with an aging population. Because no matter how much money there is, if the earth can't last, there is no sustainability. And it's also only natural for young people to be sensitive to what their future may be like. I think that the key to SRI's taking root in Japan is for women and young people to continue participating in the planning of activities that raise questions about corporate social responsibility. For our part, at present we are developing funds that invest in businesses that are creating workplaces that are easy for women to work in, that are working toward protecting timber resources, and also that are involved in activities in the fields of education, culture, and the arts. We're marketing them to financial institutions.
What are your thoughts on how SRI and the religious community can interact?
Religious groups are innately a part of the social system, so if one wants to make society better, then I think it's better - rather than to remain a spectator at a distance from the economic systems - to utilize those economic systems to lead society in a better direction.
There is an organization called 3iG, an abbreviation for International Interfaith Investment Group. It's an organization based on the spirit of dialogue and cooperation between religions that was founded in 2005 in Amsterdam for the purpose of joining forces to properly build a sustainable society through SRI. I am the Japanese advisor for this group, and I want the members of Japan's religious community to know that this development exists and for them to be inspired by it.
Mizue Tsukushi, president and CEO of The Good Bankers Co., Ltd., established the company in Tokyo in 1998. She is a former deputy general manager of the Institutional Marketing Department, UBS Trust & Banking Co., Ltd., in Tokyo. She is also a member of special advisory committees of several Japanese ministries.
This article was originally published in the January - March 2011 issue of Dharma World.
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