Dialogue with a person outside of the aG regarding environmental initiatives
How should companies engage in nature positivity?
—Thinking about the significance and approach of the initiative—
Professor Kaori Fujita (front left),
Green Goals Initiatives/ Graduate School of Life Sciences, Tohoku University
Masato Iwasaki (front right),
Executive Officer, Azbil Corporation responsible for intellectual property strategy and environment promotion
In recent years, there has been a strong demand for environmental measures related to the sustainability of the global environment, such as carbon neutrality and circular economy, to be clearly positioned in business strategies as important guidelines for management. Under these circumstances, nature positivity to stop and reverse the loss of biodiversity has become an important theme on a global scale. Masato Iwasaki, Azbil Corporation's executive officer in charge of environment promotion, discusses how companies should approach this theme with Kaoru Fujita, a professor at the Tohoku University Green Future Creation Organization and Graduate School of Life Sciences.
The relationship between nature positivity and corporate business activities
Iwasaki As seen in our response to carbon neutrality, today's companies are required not only to pursue profits and growth, but also to take actions from a high-level perspective on a wide range of issues related to maintaining the sustainability of the global environment. In such circumstances, in recent years, nature-positive management has emerged as an extremely important keyword when considering the future of corporate management. First of all, could you please tell me again what this keyword is intended for?
Fujita To put it simply, I think nature-positive management can be defined as management that takes biodiversity and nature into consideration. However, when talking about biodiversity and nature, many people think of the protection of wildlife such as pandas and ibises, and may wonder how this has anything to do with corporate management.
First of all, I would like you to understand that natural capital is a concept that includes not only living things, but also things such as water, soil, and the atmosphere, in other words, nature itself. Accordingly, we realize that corporate activities are actually based on using and influencing nature.
For example, a manufacturing company like Azbil always needs raw materials to manufacture its products, and whether those materials are metals or plastics, they come from natural resources. If you imagine industries such as agriculture, forestry, fisheries, food, and paper/pulp, it may be easier to understand the relationship between such business activities and nature.
In addition, and this is also an example of the manufacturing industry, building a factory means modifying land and forests. Naturally, water resources will be used there as well, and the wastewater and chemicals generated through production activities will have an impact on the surrounding ecosystem. Furthermore, the natural environment is also affected when the manufactured products are sold, consumers enjoy their value, and the products are then disposed of. For example, it is a well-known fact that the problem of marine plastics is having a negative impact on the ocean ecosystem.
In other words, while corporate activities as a whole enjoy the services provided by natural capital, that is, the blessings of the ecosystem, they are also damaging it, and if the damage continues, companies will not be able to receive such services any more, and that means that companies will no longer be able to guarantee the sustainability of their activities.
Therefore, nature-positive management is now required for companies; that means conserving forests, oceans, and the creatures that live there, making peace with the appropriate use of natural resources, and halting the loss of biodiversity and turning it into something positive.
As for the movement in the world related to this, there is the "Kunming-Montreal Biodiversity Framework" adopted at the 15th Conference of the Parties (COP15) to the Convention on Biological Diversity held in Montreal, Canada in December 2022. Within this framework, the so-called “30 by 30” goal, which aims to conserve approximately 30% of land and sea areas by 2030, is well known. It also includes information disclosure goals for companies to evaluate and disclose risks, dependence, and impacts on nature through their supply chains.
Japanese companies account for 25% of the TNFD Early Adopter list
Iwasaki It is expected that the increasing social demands related to the practice of nature-positive management will inevitably have a huge impact on ESG investment, that recognize initiatives in sustainable areas related to the environment, society, and governance, as a focus of evaluation for investment and loans. For example, in areas related to climate change risk, based on the frameworks presented by the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB) of the G20, the movement to request information disclosure on items such as governance, strategy, risk management, and business opportunities is accelerating in Europe, the United States, and even Japan. Is a similar movement underway in the field of nature positivity?
Fujita Yes. In order to realize the information disclosure goals of the Kunming-Montreal Biodiversity Framework, the framework of the Task Force on Nature-related Financial Disclosures (TNFD), which can be called a nature version of the TCFD, was announced in September 2023. Similar to the TCFD, it requires information to be disclosed in 14 categories under four pillars: governance, strategy, risk and impact management, and indicators and targets.
In this regard, at the World Economic Forum Annual Meeting held in January 2024, the so-called Davos Conference, a list of companies that had registered as Early Adopters of TNFD was announced. This is a list of companies that have declared that their corporate reports for fiscal 2024 or earlier or for fiscal 2025 will be disclosed in accordance with the TNFD framework, and there are 320 companies worldwide. Of these, 80 companies, or 25%, are Japanese companies. Given that information disclosure under the TCFD is already mandatory for prime-listed companies, these Japanese companies have the idea that the TNFD will proceed in the same way, and have begun voluntary disclosure as soon as possible. I think part of the reason is that the companies want to train and be prepared.
Expecting contributions through the use of technologies such as sensors, IoT, and AI
Iwasaki 25% of the list means that Japanese companies probably account for the largest number on a country-by-country basis. Naturally, it is expected that this will make a major contribution to eliminating global risks related to biodiversity. For example, in the areas of energy conservation and decarbonization, the contributions of Japanese companies, especially in terms of technology, have been highly evaluated internationally.
At Azbil, we had adopted the corporate philosophy "Savemation" (a word coined from the combination of "Saving by Automation.") established in 1978 as our slogan, and by applying our unique measurement and control technologies, we have been working to save energy and reduce CO2 emissions. Our business philosophy has been to protect the irreplaceable global environment and contribute to the realization of a prosperous society where nature and science are in harmony. In this sense, we believe that it is also our mission to make a solid contribution in the field of nature positivity, the theme of this dialogue. We would appreciate it if you could give us advice from this perspective.
Fujita First of all, speaking in general terms, there are several approaches. First, you begin by understanding how much impact your company has on nature throughout your supply chain, and then identify areas and raw materials to be prioritized because they are considered to be at particularly high risk. This is the first step of thorough risk management in this regard.
The second is an effort to increase nature and contribute to the ecosystem. Easily understood examples include initiatives such as tree planting and greening. Thirdly, and this is particularly relevant to Azbil's business, based on the first step being risk management, for example, is collecting data related to the ecosystem and managing it as big data. In these areas, I believe that the sensor technology that Azbil has cultivated over many years, as well as technologies such as IoT and AI that have been strengthened in recent years, will definitely come into play.
Iwasaki As you said, our company has been working on sensor technology for many years, and during that time we have also been thinking about the possibility of creating new business based on the fusion of measurement and networks. What inspired me as I listened to what you just said was about resolving issues surrounding fisheries. We often hear from people involved in the fishing industry that the amount of fish caught is not stable even in the same fishing ground. I thought it might be possible to take an approach that focuses on seawater temperature, for example, and creates a network that senses seawater temperature at each fishing ground, and then verifies the correlation between seawater temperature and fish catches.
Fujita I think you're right. In fact, no one knows exactly where and how many fish are in the ocean. At best, we can only estimate it based on the amount of fish caught. If Azbil's sensing technology can be utilized to acquire real data and use it for estimation and forecasting, it will have a major impact on the state of the fishing industry. In addition to the fisheries industry, there are other areas where sensing technology can be applied to natural sites. For your company, this should also lead to the creation of new business opportunities centered on nature positivity.
Another thing I would like to point out is that, in addition to the energy-saving and decarbonization initiatives you have already introduced, Azbil is also indirectly contributing to nature-positive activities, such as reducing risks to nature at customer companies in various fields through automation technology. I think it would be a good idea to take stock of these activities and examine them again from a nature perspective.
Iwasaki Thank you very much. Based on what we learned this time, we would like to reexamine Azbil's various initiatives from the past to the present in the context of nature positivity, and create a story about our unique initiatives that contribute to biodiversity.
Professor Kaori Fujita, Tohoku University Green Future Creation Organization, Graduate School of Life Sciences
Profile
- Kaori Fujita
Professor, Green Goals Initiatives/ Graduate School of Life Sciences, Tohoku University
Biography
Born in Uozu City, Toyama Prefecture. Graduated from the Department of Physics, Faculty of Science, the University of Tokyo. At Nikkei BP, she served as Nikkei Electronics reporter, deputy editor-in-chief of National Geographic Japan edition, Nikkei Ecology editorial committee, Nikkei ESG Management Forum producer, and Nikkei ESG senior editor. In April 2023, she became a professor at the Tohoku University Green Future Creation Organization and the Graduate School of Life Sciences. She also serves as Nikkei ESG Senior Editor. In addition, she serves on numerous national and local government committees, including the Ministry of the Environment's Central Environment Council.
- Overall of Environmental Initiatives
- Contributing to the environment through our core businesses
- Reducing the environmental impact of our own business activities