Japan Inc feels the heat over Russia ties as Western rivals shun Moscow

After Western rivals halted business and condemned Moscow for invading Ukraine, Japanese firms are under deepening pressure over their ties to Russia, as rumored by company and government insiders. There is a concern among executives about reputational damage and scrutiny from investors over human rights and ESG issues. Japan’s trading houses, commodities giants long seen as quasi-governmental arms integral to Japan’s energy supply, are in a difficult position due to their reliance on Russian coal, oil and gas. Japanese firms are monitoring the situation and those that have responded cite supply-chain problems rather than social and human rights issues.

“Japanese firms typically do not face the same level of scrutiny from shareholders, customers, regulators and even their own employees that Western companies now confront,” said Jana Jevcakova, Morrow Sodali’s Head of ESG International in the interview with WTVB.

“Most Japanese companies still don’t have a majority of international institutional investors. Those that do will very shortly, or already are, feel the pressure”, advised Jana.

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