Potential of Green Business for Transforming Society

In recent years, interest in green business, which provides environmentally friendly products and services for profit, has been growing rapidly among investors and companies. We spoke to Kobayashi Hikaru, a research advisor at the University of Tokyo's Research Center for Advanced Science and Technology and a member of the Tokyo Green Biz Advisory Board. The project aims to develop a greener city, about the potential of green business.
At the Ministry of the Environment, Kobayashi was in charge of creating an economy and town planning that can coexist with the environment. He continues to endeavor to rebuild the relationship between society and the natural environment.

What Companies will Investors Choose in the Future?

As the destruction of the global environment continues apace, society must choose another direction. The business world is already embracing environmental improvements, such as reducing CO2 emissions.

"As the terms 'natural capital' and 'environmental assets' suggest, the idea of the natural environment as an asset is becoming more common in the business world.. In the past, there were many pollution issues caused by corporate activities, but times have changed dramatically. Not only are more and more companies improving their relationship with the environment, but businesses actually focused on improving the environment are also being created."

Companies in all sectors can benefit from the greening of their activities. 

Shinko Sugar Co., Ltd., which produces sugar from sugarcane, is one example. The company used to refrain from using cane varieties that have higher fiber content but deliver lower yield. However, as typhoons continue to strengthen, it is now using such varieties, which are more resistant to strong winds. The company has also implemented an advanced zero emissions system that makes increased use of waste generated in the production process. 

Another company, Zeroboard Inc., contributes to a reduction in corporate emissions of greenhouse gases by providing corporate services that visualize CO2 emissions.

Two worldwide initiatives, the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD), have established a framework to assess and disclose information on climate change and biodiversity impacts. In Japan, companies listed on the Prime Market, the Tokyo Stock Exchange's top-tier segment, are required to disclose information, based on recommendations by the TCFD, which has fulfilled its remit and disbanded in 2023.

"Investors are keeping a keen eye on corporate environmental initiatives. In the future, companies without such initiatives will not be able to grow," he said. If companies are motivated to become greener, the environment is expected to gradually improve.

"Consumers can also contribute to environmental improvements by paying attention to companies' environmental initiatives and choosing products accordingly," says Kobayashi.

Young Adults Play Main Role in DO!NUTS TOKYO

Kobayashi is Vice-Chairman of "DO!NUTS TOKYO," a platform for taking action to realize a de-carbonized society, which is run jointly by the Tokyo Metropolitan Government's (TMG's) Bureau of Environment and the Sustainable Lifestyle TOKYO Executive Committee, which is made up of companies and organizations. The platform's initiative includes a program to engage young people from 18 to their 20s as "ambassadors."

In August 2023, young ambassadors set up a crowdfunding initiative to let more people know that Tokyu Corporation operates its railway lines on electricity derived from renewable energy sources. In November, they organized a presentation event on "Green Urban Development." At the event, the young ambassadors proposed ideas such as greening urban spaces with AR (augmented reality) and generative AI to create walk-through green models, which can then be applied to actual urban programs. They exchanged opinions with urban development experts and TMG officials.

The event also included other youth-oriented ideas such as the use of a donation-based search engine and the devising of a method for communicating information. Photo courtesy of the Tokyo Metropolitan Government. 

"Young people are good at handling information and are skilled in the latest IT technology. However, I think they don't have much experience being in contact with nature. By increasing such experiences, they are likely to hit upon more practical ideas. I hope that we can promote collaboration with companies," said Kobayashi.
These ideas will also lead to greener business in general. "Green business is also closely related to urban design," said Kobayashi, a member of the Tokyo Green Biz Advisory Board. The project is based on the concept of developing a town with greenery for the next 100 years. "In Tokyo, for example, the asset value of real estate will increase by expanding greenery and promoting environmentally friendly urban development, so there are great business opportunities: Tokyo is a city with great potential for green business."

Kobayashi Hikaru

Research advisor at Research Center for Advanced Science and Technology, University of Tokyo. Visiting professor at the Graduate School of Arts and Sciences, University of Tokyo. After graduating from the Faculty of Economics at Keio University, he joined the Ministry of the Environment (then the Environment Agency), where he served as vice minister from 2009 to 2011. Together with Yoshitaka Mari, also a member of the Tokyo Green Biz Advisory Board, he co-authored "GREEN BUSINESS: making money by improving the environment. Ideas and skills", based on Keio University's popular course "Environmental Business Design Theory," and published by Kirakusha.

Operating on the concept that envisions green urban development for the next 100 years, the Tokyo Metropolitan Government is pushing initiatives to protect, increase and maintain, and cultivate Tokyo's greenery. Through wide-ranging activities, including green business and sustainable finance, the efforts aim to transform Tokyo into a sustainable city that exists in harmony with nature.

Interview and written by Imaizumi Aiko
Photos by Kaneko Satoshi
Translation by Ito Shingo