Growing corporate engagement and ESG progress in Japan

The latest Japanese ESG indices and passive investment report, written in collaboration with SGX

This report, authored in collaboration with SGX, reviews three key developments: Japan’s evolving sustainability standards, the ESG performance of listed Japanese companies relative to relevant market benchmarks, and the growth of investor participation in SGX FTSE Blossom Japan Index Futures.

Key highlights from this quarter’s analysis:

• During the latest FTSE ESG June Review, one of the two annual ESG review cycles, engagement from Japanese companies reached a record high, with review comments exceeding 20,000 for the first time.
• ESG performance among Japanese companies improved across all major FTSE ESG themes between 2021 and 2025, with the strongest gains observed in Climate Change, Labour Standards and Human Rights.
• The FTSE JPX Blossom Japan Index and FTSE JPX Blossom Japan Sector Relative Index both modestly underperformed the FTSE Japan All Cap Index during the quarter, despite the continuously strong positive contribution from the ESG factor.
• SGX FTSE Blossom Japan Index Futures continued to provide investors with a liquid ESG-linked exposure to Japan, with open interest rebounding during Q2 2026 and participation remaining strong around key dividend periods.