As efforts toward carbon neutrality accelerate around the world, companies are required to “visualize” their CO2 emissions.
Representatives of “Asene” and “Zero Board”, which are attracting attention as domestic CO2 emissions calculation (carbon accounting) ventures, will talk about the present and future of “CO2 visualization” in Japan, what is required of companies in the future, and ” We heard about the case of good CO2 visualization.
“Disclosure of CO2 emissions” is taken for granted. Next is “how to reduce”
Efforts to visualize carbon dioxide emissions are progressing.
Kohei Nishiwada, CEO of ASUENE, compares with around 2019 when the company was founded,Momentum for decarbonization in Japan has steadily increased’ he says.
In October 2020, Japan’s then-Prime Minister Yoshihide Suga declared carbon neutrality, which accelerated decarbonization efforts at once. Asuene’s service was also launched in the same vein.
Nishiwada says that at the time, companies did not understand the service as much as it does now.
“Even when I talked about efforts to visualize CO2 emissions related to the supply chain, such as Scope 3*, people said, ‘Those who understand it will understand. (Representative of Nishiwada)
*scope 3: Amount of greenhouse gas emissions emitted by other companies in the supply chain for raw materials, etc., when manufacturing our own products.
However, as the importance of “measurement” of CO2 has been understood, it has become an issue.“How do we reduce it after we visualize it?”That’s the point of view.
“There are no short-term or medium-term targets, there is a lack of specific measures for how much progress (reductions in emissions) will be made in three to five years, and there seem to be few managers who are essentially committed to climate change. I feel it.” (Representative Nishiwada)
Kohei Nishiwada, representative of ASUENE. The photo was taken when he appeared on a Business Insider Japan web show in November 2022. I responded to the interview online.
Michitaka Tokeiji, CEO of ZERO BOARD, also commented on the changes over the past few years.
“I feel that customers’ resolution (disclosure of CO2 emissions) has improved.” (Representative Tokeji)
He points out that there is a trend to disclose more detailed data centered on global companies.
on the other hand,
“On the contrary, I think that there are companies that are rushing to disclose information superficially, and disclosure tools that encourage this (due to the expansion of the market)” (Representative Tokeji)
He pointed out that as a result of the widespread awareness of the need to calculate CO2 emissions, there are cases where it has become an objective.
More precise disclosure required
Currently, there is a difference in what is required of large companies and small and medium-sized businesses regarding the calculation and reduction of CO2 emissions. The content required of global companies and companies listed on the Tokyo Stock Exchange’s prime market is becoming more detailed.
According to Tokeji, the company’s representative, what has been attracting attention recently is Scope 3, which is equivalent to supply chain emissions.”Improve calculation accuracy”Say it’s an effort.
“I feel that the theme is to change the calculation of Scope 3 from secondary data (indirect values) to primary data (actual values). To do that, we need to receive primary data from our suppliers. (Large companies) may be required to engage with their suppliers and take the initiative in reducing Scope 3.”
Michitaka Tokeiji is the representative of Zero Board. In mid-May, he responded to an interview with Business Insider Japan.
Nishiwada, representative of Asuene, expressed the same view. The key is “primary data.”
For Scope 3 calculations, for example, for items that are difficult to calculate on our own, we may refer to databases such as those of the Ministry of the Environment, or calculate general values on a “price basis” for products. This is a calculation method using so-called secondary data. However, this method has limitations.
“Because it is indirectly calculated on a monetary basis,The more sales you make, the more CO2 you emit.As a result, the calculated emissions will change due to exchange rate fluctuations, etc.That’s right. I think that it will be necessary to calculate using primary data.” (Representative Nishiwada)
Until a few years ago, “emission of Scope 3” was regarded as an “advanced” case in Japan.
At present, global companies are beginning to demand more precise data that reflects the actual state of their business. This trend is expected to gradually spread from large companies to SMEs.
According to Tokeji, the number of companies seeking a function to calculate the “contribution amount” of CO2 reduction has increased recently.
For example, if you develop an energy-saving light source or air conditioner, the company’s emissions will increase as the product develops, while the emissions of the users (businesses, etc.) who purchase the product will decrease. This amount is called the “contribution amount” and is evaluated as having contributed to the reduction of CO2 emissions. This is also an area where Japanese electronics manufacturers have strengths.
In fact, the gist of the communiqué of the G7 Climate, Energy, and Environment Ministers’ Meeting states, “We share the value of recognizing not only reductions by business operators but also the amount of contribution to reductions.” It is said that
In April 2023, the G7 Climate, Energy and Environment Ministers’ Meeting was held in Sapporo. They discussed climate change countermeasures and energy policies. Also discussing “contribution”.
As long as the climate change problem continues, it is expected that the trend of companies to investigate CO2 emissions in detail and show their efforts to reduce them will accelerate in the future.However, as demand increases“How do we secure resources to support calculations?”Mr. Tokeji points out that this is also becoming an issue for the future.
The bigger the supply chain, the more complex the data. In addition, in order to promote high-resolution disclosure, it is necessary to calculate based on the characteristics of each industry.
“(As a business operator), it is difficult to properly assemble calculation support personnel. If we are unable to do so, we may not be able to answer Scope 3 questions at all. Localization is important.” (Representative Tokeji)
Conversely, it can be considered that companies, which are required to calculate emissions, are also in need of human resources with such knowledge.
actual,In an increasing number of global companies, etc., there is an increasing number of cases where a person in charge who is familiar with the calculation of emissions in the industry is assigned.It says. If the demands from large companies become more detailed, small and medium-sized companies may also be required to have “information disclosure specialists” with such knowledge.
How to proceed with the calculation of small and medium-sized enterprises?
99% of Japanese companies are SMEs.
While disclosure of CO2 emissions is progressing mainly among large companies, 99% of Japanese companies are SMEs. Promoting the visualization of CO2 emissions in this area is a major issue for Japan. The Ministry of the Environment has also released handbooks and other materials for small and medium-sized enterprises.
In the case of companies that are responsible for the supply chains of large companies, there are an increasing number of cases where they are working on disclosure at the request of large companies. On the other hand, the problem is that it is difficult for small and medium-sized enterprises to generate incentives to work on visualization.
“As long as we’re not listed, we won’t go so far as to spend money to reduce CO2 emissions,” says Tokeji.
“I think that the current situation is that there are many business operators who are not able to allocate resources even if they have the technology,” says Nishiwada.
Emissions can also be reduced, for example, by switching to LED lighting or modernizing office air conditioners. There is also a direct benefit of saving electricity bills. However, due to the time lag in recovering investment costs, it is difficult to take the plunge.
If so, step by step, small and medium-sized enterprisesCalculating CO2 Emissions Brings Economic BenefitsTokeji points out that the government, local governments, and industry need to create an ecosystem just like this.
“There are more and more local governments subsidizing the system for companies that visualize CO2, and green procurement (proactively introducing raw materials with low environmental impact) in public procurement. In the financial industry as well, in an initiative with (Zeroboard) and Nagase & Co., Ltd., we have introduced a system that allows suppliers to enjoy lower interest rates if they can disclose primary data to their delivery destinations. (Representative Tokeji)
In addition, Mr. Nishiwada said that unlike Europe, which is ahead of others in calculating CO2 emissions, there are few examples in Japan of companies that reduce or offset CO2 emissions, linking this to branding or passing it on to the price of their products. points out.
“In other words, we can’t make any calculations to increase profits, so we can’t spend money (for CO2 calculations).” (Representative Nishiwada)
In fact, there are cases overseas where carbon-neutral LNG, which offsets CO2, is sold at a higher price than usual, and the use of recycled materials as a brand added value, such as sneaker maker Allbirds, which is also expanding into Japan. The number of cases in which it is used for product appeal is increasing.
“Although things are changing little by little in Japan, I still feel there is strong price pressure (the cheaper the better),” says Nishiwada.
In fact, both ZEROBOARD and ASENE have developed services that calculate the emissions and environmental impact of individual products in addition to calculating the CO2 emissions of the entire company. Demand for services is increasing.
Panasonic to Suntory. What is “Good” in CO2 Visualization’s “Good Disclosure”?
As I pointed out at the beginning, the calculation of CO2 emissions must ultimately be combined with a proposal on how to reduce emissions. So, in the end, in what form should we disclose measured emissions to make it a “good disclosure?”
Nishiwada cites the following three elements of “good disclosure.”
- Clearly state the assumptions under which the calculations are made.
- How much accurate data, such as primary data, is collected and disclosed.
- Do you make your emissions visible and clearly state an action plan?
When asked about specific examples of companies they are paying attention to, Suntory Holdings, a major beverage company, and Obayashi Corporation, a major construction company, were cited. In addition to clearly specifying reduction targets and action plans for both companies as a matter of course, Mr. Nishiwada says that the following points are good points.
“Suntory HD clearly states that it collects and discloses primary Scope 3 data from its suppliers.(The ratio of primary data) is 41%, so 60% is still secondary data. However, it is easy to understand because it also indicates a policy to expand the use of primary data.In the construction industry where the number of sites is enormous, calculation should be difficult for Obayashi Corporation, but it is calculated in detail for each site. It is.” (Representative of Nishiwada)
Even if the current situation is not carbon neutral, the company’s attitude can be seen by clearly showing the progress of the current situation and “showing a willingness to change.”
“In addition to carbon dioxide emissions, disclosure of human capital is also required from this year, but Japanese companies are lagging behind in terms of the ratio of foreigners and the ratio of female managers, so I honestly don’t want to disclose it. However, if it becomes a black box, it will never be possible to improve it.
I think it’s important to properly disclose information, and even though it’s currently low, it’s important for the company’s management to make a commitment.” (Representative Nishiwada)
Contents of Panasonic’s “Green Impact”.
When I asked Mr. Tokeji, CEO of Zero Board, about examples of “good disclosure,” he gave an example of Panasonic’s “green impact,” saying, “I think it’s a disclosure that makes you feel a sense of commitment as a company.”
Panasonic aims to reduce its own emissions by 110 million tons by 2050, and by selling its own products such as fuel cells and lithium-ion batteries, it aims to reduce society’s emissions by 100 million tons. there isIn addition, what Mr. Tokeji said was particularly impressive was Panasonic’s “FUTURE IMPACT””Future technology development will further reduce emissions by 100 million tons.”That’s the point.
“The technology has not been realized,We will continue to invest up to 100 million tons in a business that we have not seen yet.The personnel involved in technology development and product development related to the realization of a decarbonized society within the company should be extremely enthusiastic.It is significant for listed companies to make such a commitment.
In addition, other companies and societies are affected by saying this. I think that such a part will also contribute and express it. I think this way of launching is very interesting.” (Representative Tokeji)
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Source: BusinessInsider
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