Many firms and people in Japan still consider ESG a "box-ticking exercise,” resulting in cases of greenwashing, according to former Goldman Sachs Japan vice chair Kathy Matsui.

"ESG isn’t just a compliance exercise,” said Matsui, speaking to Bloomberg Television. "I believe that many companies, many people still believe it’s a box-ticking exercise, and hence we have seen greenwashing incidents here and there.”

Matsui is known for her "Womenomics” research that explores the economic benefits of encouraging more female participation in the workforce. After stepping down from her post at Goldman in 2020, Matsui last year launched a venture capital fund that aims to invest $150 million (¥16.5 billion) in sectors including health care, fintech, education and the environment.

While Prime Minister Fumio Kishida has highlighted green investment as a key part of his government agenda and pledged to double existing funding for green technology, Matsui said more needs to be done.

"Japan is very dependent on imported fossil fuels, but it has this very ambitious target at the same time to reach carbon neutrality by 2050,” said Matsui. "You will not be able to get there if you don’t invest in innovative technologies.”

Regarding Japan’s energy imports, Matsui said Russia’s invasion of Ukraine was causing headaches for Japanese companies.

"We’ve already been seeing companies in the automobile sector or the technology sector either halt or pull back their presence in Russia for instance,” said Matsui. "Japan is wholly reliant on imports for its fuel supplies, these fossil fuel supplies, so it always has to walk this delicate balance between geopolitical considerations but also economic realities.”