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Nathaniel Bullard and Miho Kurosaki

The World’s Biggest Pension Fund Struggles With Sustainability

Making environmental issues a priority has proved elusive to its active managers. 

Investing for them.

Investing for them.

Photographer: Adrian Dennis/AFP/Getty Images

Japan’s Government Pension Investment Fund has nearly $1.5 trillion in assets and a legion of external asset managers running its portfolio. The GPIF sees itself as a “super-long-term investor” with the goal of a century or more of sustainable investment and outflows. Managing money for that long is a matter of stewardship, not just picking assets — and in the past few years, the GPIF has included environmental, social and governance factors as part of its stewardship responsibilities.

For the past few years, the fund has asked managers “to consider the materiality” of ESG issues in companies they invest in. The results are intriguing, but they don’t bode all that well for the E in ESG.