Nomura Asset Management (NAM) has launched a Tokyo-listed Japan ESG ETF with Solactive with €300m of seed investment.

The Next Funds Solactive Japan ESG Core Index ETF listed on the Tokyo Stock Exchange on 8 April, backed by Finnish pension company Varma.

According to Varma, it is the largest ever responsible investment ETF to be listed in Japan.

The Solactive Japan ESG Core index – based on the Solactive GBS Japan Large and Mid-Cap index – will track approximately 100 large and mid-cap Japanese companies based on Japan’s mid-to-long-term growth potential.

The ETF will screen companies based on the “market standards” such as the United Nations Global Compact as well as excluding those with significant involvement in defined sectors.

The index will also seek to overweight “exemplary ESG performers” and will also apply a decarbonisation target to the starting universe.

Timo Pfeiffer, chief markets officer at Solactive, said: “It is encouraging to see wider adoption of ESG linked strategies globally, and especially in Japan. On a broader scope, we are convinced that this opportunity reaffirms Nomura’s status as one of the strongest players in this field.”

Osamu Okuyama, head of ETF business department at NAM, added: “ESG investing in Japan has been growing rapidly and we see diversified approaches increasing among investors.

“This ETF is designed to provide an opportunity to invest in Japanese companies that comply with established ESG standards and that are expected to have continued medium-to-long-term growth.”

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