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New investment opportunities by 2030 amount to USD 2.3 trillion

2020-09-15GoldenBeeGoldenBee0

Masao Seki, Steering Committee Chairman

of Council for Better Corporate Citizenship (CBCC)


The global public crisis and economic devastation caused by the COVID-19 pandemic, forced businesses and organizations to make changes. In particular, financial support is needed to withstand the impact of the pandemic and quickly recover from the economic, financial and climate crises and pave the way for sustainable development for a better recovery. Where are the new opportunities for global economic recovery? What new thinking does businesses and organizations need to have?

At the 15th International CSR Forum held in Beijing, Masao Seki shared a report and said that Society 5.0 can create new investment opportunities worth 250 trillion yen (USD 2.3 trillion) by 2030.

He made recommendations on the evolution or the revolution of ESG investment, which means that we have to make progress in having transformation-oriented investment that can create much larger positive impact on society and that is also connected with financial return. “The next-stage ESG investment” aims for maximization of both economic and social impact for realizing Society 5.0 and SDGs and will be favored by more ESG investors.

Key points:

The next decade will be a truly important decade
 
Last year CBCC celebrated its 30th anniversary in 2019. Headed by Mr. Futamiya, Chairman of Sompo Japan Insurance, CBCC has been working on promoting CSR in Japan and having dialogue with stakeholders both home and abroad to promote understanding of Japanese companies' CSR initiatives.

In February this year, we held a symposium at Keidanren Hall in Tokyo to commemorate the 30th anniversary of CBCC. For the keynote speech, we invited a distinguished guest, Mr. Aron Cramer from BSR, which is a long-standing partner organization of CBCC. Mr. Cramer gave us a very thought-provoking keynote speech. He particularly emphasized that the next decade will be a truly important decade, which he called “the decisive decade” and we business need to become much more resolute and capable of innovation considering how big the challenge we face would be.

At the symposium, we invited guests from various parts of the world to hold a panel discussion. Mr. Gefei Yin from GoldenBee shared the latest CSR development in China, including increasing influence of SDGs and expansion of sustainable finance. Mr. Gabrielle Lo Monaco, representing EU Delegation to Japan talked about the long-term EU strategy such as European Green Deal, Climate-neutrality by 2050 and Just Transition Mechanism. All in all, our discussions focused on how government policies and corporate strategies could bring together a transformative and systemic change that we need now.

Connecting ESG investment with the strategy of Society 5.0 for SDGs

The next topic is the result of joint research by Keidanren, the University of Tokyo and GPIF or Japanese Government Pension Investment Fund. And I am especially pleased to share our findings of this research as I took part in this task as one of the members from Keidanren.

We had a thorough discussion about what we should do collectively to realize the common purpose of realizing society 5.0 for SDGs and how we can make a difference to come up with transformative change to economy and society.

Just for your information, Society 5.0 is a Japanese national strategy. We use the term “Society 5.0” to refer to a new society which could also be described as the “Human Centric, Super Smart Society.” Society 5.0 aims to go far beyond just the digitalization of the society. The goal would be to make our society highly optimized, efficient, and yet inclusive and sustainable. So, it is closely related to 17 goals of SDGs. The report of this joint research was officially published on March 26 of this year. 

 

 
The main theme of the research was how do we effectively connect ESG investment with the strategy of Society 5.0 for SDGs, which is the business strategy of Keidanren. One of our answers was to change the nature of ESG investment from a normative one to strategic one which focuses more on business and/or investment opportunity.

So, in this research report, we especially make recommendations on the evolution or the revolution of ESG investment. It means that we have to make progress in having transformation-oriented investment that can create much larger positive impact on society and that is also connected with financial return. 

We call it “the next-stage ESG investment” which aims for maximization of both economic and social impact for realizing Society 5.0 and SDGs. This report makes one estimation. How much new investment opportunity or business opportunity will be created by aiming to realize Society 5.0.

We estimated in the fields of next-generation healthcare, digitalization of manufacturing, smart mobility, smart living, and next-generation energy. As a result, new investment opportunities in these fields by 2030 amount to 250 trillion yen. Promotion movies on society 5.0 for SDGs are available on Keidanren’s website.

GPIF, one of the researchers, signed the UN PRI in 2015 and became highly active in ESG investment. Companies are working hard to realize the SDGs which was adopted in 2015. It is extremely important for these two players to engage each other more strongly and deeply through ESG investment in order to create a huge synergy effect.

In the report released on March 26, announcement was made as to what actions each of the three would take as a way forward. Obviously, it is not the end of our journey. We just started our collective action for transforming our world.
 
Effort in building more inclusive society with civil society organizations

As you know, COVID19 is hitting hard vulnerable part of society. Japan is also experiencing various issues due to COVID19, including declining economy, poverty, isolation, and weakened local communities. To solve these problems, civil society organizations are demonstrating their strength today. A new government law of utilizing dormant cash deposits to achieve a society where no one gets left behind was put in place in 2018 (Note:The law stipulates that from January 2019, savings set aside for more than 10 years will be used for social programs).

Keidanren was deeply involved in the establishment of JANPIA which is the core organization of this new system and is playing a significant role in promoting it. Today, we are focusing on supporting initiatives by NGOs and social entrepreneurs that are working on issues related to COVID19 to help vulnerable people. We will continue to strengthen collaboration with civil society organizations and social entrepreneurs to build an inclusive society in the age of COVID19.

Click here to watch the full speech video.
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