Financing Sustainable Tourism In An Aging Society: Esg Investment Spillovers From Japan To Global Markets

Abstrak

Japan’s transition into a super-aged society presents urgent fiscal and sustainability challenges, particularly in financing inclusive sectors such as healthcare, tourism, and infrastructure. ESG (Environmental, Social, and Governance) investments are increasingly seen as a strategic avenue for mobilizing capital aligned with the Sustainable Development Goals (SDGs). This study investigates volatility spillovers and co-movement dynamics between the FTSE4Good Japan Index, Japan’s main equity index, and selected global ESG benchmarks (US, UK, EU, Malaysia, Developed Markets) using the MGARCH-DCC model and daily data from January 2015 to May 2025. By comparing ESG and conventional indices, the analysis identifies differentiated correlation patterns and selective integration with global markets, particularly during periods of heightened uncertainty. Japanese ESG assets demonstrate weaker co-movement with specific regions such as the UK, EU, and Malaysia, indicating potential diversification benefits. These findings offer insights into the evolving role of ESG capital in Japan’s financial landscape and underscore its potential to support regional SDG-oriented initiatives, especially in ASEAN, through sustainable and demographic-aligned investments in sectors like healthcare and regenerative tourism.