Japan’s USD 1.8 Trillion Pension Fund Leads Shift Toward Impact Investing

Japan’s USD 1.8 trillion Government Pension Investment Fund (GPIF), the world’s largest, is considering a move into impact investing, prompting several other pension funds in the country to revisit their investment strategies.

The GPIF’s decision in March to explore impact-based strategies has led at least four other Japanese pension funds to update or revise their policies. Asset managers competing for mandates are also aligning their approaches to meet rising demand for such investments. Supported by the government, the strategy aims to address key national challenges, including an ageing population and gender inequality. GPIF President Kazuto Uchida said investments targeting environmental and social goals could ultimately contribute to broader economic growth. Experts note that impact investing offers measurable real-world outcomes and may initially focus on areas like climate, health care, and inclusivity.