Sasakawa Peace Foundation Focuses on Solving Gender Challenges

Ms. Matsuno:   In FY 2017, Women's Empowerment was added to the five pillars of the SPF's priorities. We believe that women's empowerment and gender equality are essential for creating a more sustainable and inclusive society. 

The Sustainable Development Goals (SDGs) set by the United Nations in 2015 and the policies for women's advancement promoted by the Japanese government from the same period have recently attracted more and more attention and an increasing number of people started to concern gender equality. I believe this is a positive change. 

Awareness raising events to promote SDGs by governments, companies, and others are also increasing. But achieving SDGs within the timeframe is a huge challenge. Awareness raising activities alone will not advance effort in achieving SDGs. According to the report by the United Nations Conference on Trade and Development (UNCTAD) released in July 2014, $5-7 trillion annually in funding is required globally to achieve the SDGs, but only $1.6 trillion in public investment and $1.9 trillion in private investment have been collected. This calculates to an annual shortfall of $2.5 trillion. This situation is reported to be exacerbated by the COVID-19 pandemic. 

Ms. Matsuno:   Yes. In order to make the world we have now sustainable, we need to fundamentally change the flow of funds. "Impact investment" has been attracting attention in recent years as a way of mobilizing capital towards solving social issues. 

Impact investing seeks social returns by investing in projects that solve social problems while earning economic returns  just like a conventional investment. Global renowned foundations such as the Rockefeller Foundation and the Ford Foundation have demonstrated impact investing and its effectiveness by becoming impact investors themselves. The Sasakawa Peace Foundation established the "Asia Women Impact Fund (AWIF)" in 2017 and is making impact investments through AWIF to achieve women's economic empowerment and gender equality. 

Ms. Matsuno:   AWIF has invested about $38 million to improve financial access for women entrepreneurs and women in Asia, including but not limited to Indonesia, Vietnam, India, and Cambodia. While these emerging countries are promising foreign investment destinations with high economic growth rates, there are not many companies and other employers that can provide stable employment for women. Therefore, starting a business rather than finding a job is a realistic approach for women who want to gain financial strength. 

However, most decision makers in traditional financial institutions are men. In addition, the financing needs of women entrepreneurs have not been met as women generally do not have assets to serve as collateral, their creditworthiness is not high, and there are gender bias issues on part of the lenders. 

Against this backdrop, AWIF has been providing indirect support through the fund and direct support through technical assistance projects to women entrepreneurs in Asia since 2017 for their start-ups, business development, and business expansion. Impact investing was rare outside of Europe and the United States at this stage, so I think it was significant as a leading example of the advent of impact investing in Asia. 

Further, AWIF is a unique initiative that intentionally targets economic empowerment of women and promotes Gender Lens Investing. Currently, about half of the world's workers are women, but only less than 20% of managers and less than 15% of business owners are women. The global average wage gap between men and women is still large, with women earning only 52% of men's wages. 

In other words, AWIF of the Sasakawa Peace Foundation is investing in a mechanism to create the social impact of gender equality by supporting women entrepreneurs, which is equivalent to the economic empowerment of women. 

Ms. Matsuno:   Actually, in 2019, the SPF also conducted a research in collaboration with Equileap and published a report titled "Top 100 Companies for Gender Equality in Japan, Hong Kong, and Singapore." 

The study compared data on gender equality disclosed by 200 publicly listed companies worldwide with data on gender equality from 100 companies headquartered in three Asian locations. The degree of gender equality in Asian companies is much lower than in global companies. The reason for this, in addition to the large gender disparity, is that information disclosure is extremely limited and data is not available. 

Incidentally, Equileap calculates a gender equality score using 19 indicators based on the Women's Empowerment Principles (WEPs) set forth by UN Women and other organizations, which is the original data for the ESG index adopted by GPIF and in which it invested 300 billion yen. 

Ms. Matsuno:   I have worked overseas. I feel that Japan lags behind other Asian countries in addressing gender issues. What Japanese corporate society needs now is to create a framework for performance indicators and information disclosure items for women's participation policies. However, we do not want to create a framework that is merely superficial. Rather, we want our efforts to be grounded in the conviction and understanding that solving gender issues is essential for a company to sustainably increase its corporate value and contribute to society in Japan, which is undergoing rapid changes such as climate change and demographic shifts. 

I believe that we need to change our mindset and look outward to make the most of gender equality and diversity in corporate management. Referring to precedents overseas, indicators and items should be disclosed in a manner that is clearly understandable to overseas research institutions and institutional investors. SPF intends to introduce international trends and translate research that will be helpful to Japanese companies that sense an urgency in the current situation.