BBA Winner Profile: Positive Impact – Barclays

With the climate of increasing concern, the appetite for responsible and sustainable investment looks set to grow. And, buoyed by a new accolade, Barclays Japan is ready and eager to meet demand.

The BCCJ Platinum Member arranged eleven environmental, social and governance (ESG) investments in 2019, helping to address and raise awareness of some of the world’s most pressing issues, such as global warming, water pollution and food waste. For these efforts, Barclays Japan was awarded the 2019 Positive Impact British Business Award (BBA) at the BCCJ’s red-carpet headliner in November.

For Barclays, the gong means recognition of the team’s success as well as the potential to grow ESG investment in Japan.

“It’s great kudos and shows our colleagues in other offices that we are making an impact here in Japan,” said Kentaro Kiso, president and representative director of Barclays Securities Japan Limited.

Expanding market

Japan’s ESG market is in its early stages and lags that of the UK and the US. Investors in Tokyo have typically prioritized a bond’s potential yield over its green credentials or rejected ESG investment due to the extra time and resources that issuers require to check legal documentation. But Kiso believes those attitudes are changing, describing 2019 as “a tipping point year” for Barclays Japan.

“Investors in the past were not happy about paying more on green bonds than for regular investments. Now we hear less complaints about that. I feel 2019 was the first year in Japan when investors felt ESG investment was a must and weren’t picky about the time and resources required,” he said. 

Barclays’ credentials as a British multinational investment bank with a global track record in green investment has helped to attract investors to ESG investment in Japan, according to Kiso.

What’s more, investors have seen the growth of sustainable finance in the UK as well as the global appetite for responsible business. As the government, organisations and individuals in Japan ramp up efforts to support the United Nation’s Sustainable Development Goals (SDGs), the country is embracing sustainability. 

“In the UK, there is a social movement that believes society needs to grow in a sustainable way, so a finance company like us getting involved proactively in this activity is very natural. When Japanese investors put their SDG badge on, they look up to Barclays … it’s become very natural to us to respond to their needs,” said Kiso.

Though Kiso admits that Japan had a slow start in green investment, he predicts the market will start to receive more and more attention as the ESG trends takes off. And Barclays Japan, he says, is ready “to be on a fast track to catch up” with the rest of the world. Work is already underway to arrange more ESG bonds in 2020 and beyond, to build on the bank’s successes in 2019.

Bonds launched, marketing boost

Last year alone, Barclays Japan arranged six food loss and waste bonds totalling more than US$300 million for Japanese distributors (securities houses), life insurers, regional banks and city banks. The bonds enable institutional investors to address their social missions through their investments, while individual investors can support a good cause via their bond purchases.

In energy, the bank arranged five mega-solar renewable energy project bonds in 2019. The set-up helps project sponsors to finance their renewable energy projects, while investors can gain exposure to long-term and stable fixed-income bonds via engagement in green projects. At the same time, Barclays is promoting renewable energy in Japan and expanding the Japanese green bond market.

The work is far from straightforward, with extensive due diligence required at the renewable energy sites to ensure the use of the money invested, says Kiso. But he is delighted with his team’s efforts, describing last year’s achievements as “outstanding.”

In marketing, Barclays Japan hosted a conference for the Sovereign Super Agencies, the sector leading ESG investment globally, as part of its work to introduce the sector to new investors.

“ESG has a lot of products: food loss and waste, green, social and sustainable. For the sake of investors’ better understanding and to help them make the best choice of product, we need to make extra effort to do marketing, to study what is going on and to have direct conversations with each investor,” said Takayuki Isobe, Barclays Japan’s director of banking.

By doing so, Isobe hopes not only to help investors make appropriate choices, but also to show Barclays Japan’s commitment to ESG investment. The bank plans to continue its efforts in the market to make revenue and support the delivery of the SDGs.

For Barclays Japan, scooping the BBA for Positive Impact is an important acknowledgement that will help promote ESG bonds even further, says Isobe.