Corporate Social Responsibility and Corporate Finance in Japan

This book explores the linkages between the evolution of corporate social responsibility (CSR) and corporate financing and governance in Japan since the late 2000s. Since the 1990s, increasing economic and financial globalization has steadily eroded the Japanese style of business based on relationships and influenced the awareness and practices of CSR that are unique to Japanese companies. In Japan’s two “lost decades” after the bubble economy, the business model and corporate financing seem to have continued a gradual financial reform toward a more market-oriented system. CSR awareness and practices of Japanese companies have been influenced by social and environmental issues that global society and communities face. Furthermore, the Fukushima nuclear accident in 2011 triggered increasing attention paid to the responsibility of business toward society. In this process, major players in corporate governance and components of governance structure have continued to change. The conventional view of Japanese corporate governance and corporate finance is too narrow to understand this field in Japan. This book is based on empirical research to investigate how multifaceted CSR has aligned with business and finance and has influenced the corporate governance structure of Japanese companies. The findings and discussions in this book act are stepping stones in further research on the linkages between business and society, and provide empirical evidence on changes in Japanese corporate finance and governance.

“Both investors and companies are involved in the environmental, social, and governance (ESG) boom in Japan. This book brings to light comprehensive research on the relationships between corporate social responsibility (CSR) and corporate finance and investment. I recommend that professional investors read this book before making ESG investments. Corporate managers can also find helpful suggestions for CSR activities in the book.” (Translated from Japanese, Hidetaka Kawakita, Securities Analyst Journal, Vol. 2, 2019)

“This fascinating book provides the first comprehensive empirical research on the corporate social responsibility of Japanese companies viewed from a corporate finance perspective. The book is an outstanding contribution that offers many remarkable empirical results.” (Translated from Japanese, Motornari Kurasawa, The Journal of Financial and Securities Markets, Vol. 5 (3), 2019)

Megumi Suto was a professor of Graduate School of Business and Finance of Waseda University for April 2016–March 2018, a professor of the Graduate School of Finance, Accounting and Law of Waseda University for April 2004­–March 2016, and a professor of Faculty of Economics of Chuo University for April 1993–March 2004. She had positions of visiting professor of Hitotsubashi University and Osaka University, and visiting researcher of Oxford University and Starling University. She received her Ph.D. in economics at Keio University. She was a board member of Japan Society for Economic Studies of Securities for 2001–2009, a board member of Japan and Economic Association for 1997–2009, and an editorial member of Japan Securities Analyst Journal for 1997–2015. Her main interest is in corporate governance and functions of financial system, and she has conducted research on corporate social responsibility and corporate governance in the context of Japanese financial system.

Professor Hitoshi Takehara received his Ph.D. in management science and engineering from the University of Tsukuba. After working at the MTB Investment Technology Institute (current Mitsubishi UFJ Trust Investment Technology Institute) as a researcher, he started his academic career as an assistant professor at the Institute of Socio-Economic Planning, University of Tsukuba. Since 2006, he has been a professor at Waseda University Graduate School of Business and Finance. Professor Takehara’s main research interest is in asset pricing models and portfolio management. He had been a President of Nippon Finance Association from 2010 to 2013.