• The Paris Agreement was adopted in December 2015 at the 21st Conference of Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC), and came into effect in November 2016. The goals of the agreement include holding the increase in the global average temperature to below 2°C above pre-industrial levels.
  • On the domestic policy front, new non-residential buildings with floor space of 2,000m2 or more need to comply with energy saving standards under the Building Energy Efficiency Act (publicly issued in 2015) since the law came into force in 2017. Meanwhile, there has been progress in improving and broadening programs that offer government subsidies for projects with high environmental performance such as the "leading projects" program for sustainable buildings.
  • Global investment and financial sectors recognize that addressing global environmental problems is essential. Approximately 3,000 institutions in the United States and Europe have become signatories to the Principles for Responsible Investment (PRI), a United Nations-led global platform for investment that takes into account environmental, social, and governance (ESG) issues since its launch in 2006. Under the United Nations Environment Programme Finance Initiative (UNEP FI), more than 200 financial institutions based in Japan and overseas, including banks, insurers, and brokerages, are working together to integrate ESG risks into financial system functions. Furthermore, the Principles for Responsible Banking (PRB) advocated for by UNEP FI as a framework for sustainable banking practices came into force in 2019. [The SuMi TRUST Group has been a signatory to PRI, UNEP FI and PRB since their launch.]
  • Used for investment decision-making, Global Real Estate Sustainability Benchmark (GRESB) was created in 2009, mainly for a group of large pension funds in Europe, to measure sustainability performance in the real estate sector. In 2019, 70 companies in Japan participated in the GRESB assessment. Of those, 44 were real estate investment trusts (REITs) that together comprise about 91.5% of Japan’s total REIT market capitalization.
  • In 2015, more than 200 institutions in Japan’s asset management and finance sectors announced their adoption of Japan’s Stewardship Code, which spells out principles for responsible investors. The Corporate Governance Code, which includes principles to encourage listed companies to respond to sustainability concerns, also took effect as an attachment to the Tokyo Stock Exchange’s securities listing requirement.
  • For real estate, there is a growing emphasis on environmental considerations.
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