After taking over the helm of the world’s biggest pension fund in 2015, Hiromichi Mizuno helped chart a course that not just made sustainable investing big in Japan, but also raised the strategy’s global profile.

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The Government Pension Investment Fund’s former chief investment officer sidestepped public bemusement and criticism at home, as he sought to turn GPIF into a fund that — as one Harvard Business Review article put it — tried to “change the world” through its approach to environmental, social and governance investing.

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But at a time when the pandemic has accelerated the global push toward ESG themes, the $1.63 trillion-fund seems to be mostly treading water. While its peers around the world have cut fossil-fuel investments and threatened to pull funds from firms that fail to meet ethical standards, the GPIF, constrained by stricter legal restraints, has largely been quiet on impact investing since Mizuno was succeeded in April 2020 by the more reclusive Eiji Ueda.

“The GPIF doesn’t have a mandate to pursue ESG investing in the face of lower returns,” said Takatoshi Ito, a professor at Columbia University’s School of International and Public Affairs who headed a government panel to reform the fund. “It’s difficult to balance with the fund’s fiduciary duty.”

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