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CCXG Oct 2019 Japan's long term strategy: How it has evolved the financial sector and business - Yukari Takamura


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CCXG Oct 2019 Japan's long term strategy: How it has evolved the financial sector and business - Yukari Takamura

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CCXG Oct 2019 Japan's long term strategy: How it has evolved the financial sector and business - Yukari Takamura

  1. 1. Japan’s long term strategy How it has involved the financial sector and businesses OECD/IEA CCXG 1 October 2019 Yukari TAKAMURA (Institute for Future Initiatives, The University of Tokyo) e-mail: 1
  2. 2. Elaboration process of LTS • 4 Jun. 2018: Instruction by Prime Minister to launch elaboration process of LTS and to establish an expert meeting • 3 Aug. 2018: First meeting • 4 Sept. 2018: Second meeting, focusing on “Innovation” • 19 Nov. 2018: Third meeting, focusing on “Green finance” ”Green Business” “Local” • 21 Dec. 2018: 4th meeting, focusing on elements to be included in the LTS • 2 Apr. 2019: 5th meeting to issue a recommendation on framework and main points of LTS – See its recommendation, materials and summary of discussion of the meetings (in Japanese) • 23 Apr. 2019 Joint meeting of Environmental Council and of the Industrial Structure Council to consider draft of LTS • 25 Apr. to 16 May 2019: Public comment • 11 Jun. 2019: LTS approved by the Cabinet 2
  3. 3. Long-term goal and vision in LTS • Long-term goal and vision – Aiming to accomplish a “decarbonized society” as early as possible in the second half of this century, while boldly taking measures towards the reduction of GHGs emissions by 80% by 2050. • Sectoral vision – Energy transition and decarbonization toward 2050, by exploring all options. – Establishing new production processes to achieve decarbonized manufacturing with disruptive innovation – Challenging for “Well-to-Wheel Zero Emission” – Creating the “Circulating and Ecological Economy” advanced local decarbonization, and achieve the SDGs with integrated improvements on the environment, economy and society, thereby achieving a carbon neutral, resilient and comfortable community and living by 2050. • One of the basic Principles – Realizing “a virtuous cycle of environment and growth” towards the vision with business-led disruptive innovation 3
  4. 4. Drastic changes from the past • Drastic changes from conventional climate plans/ strategies – Decarbonization (net zero emission) goal • Aiming to accomplish “decarbonized society” = net zero emission • Some more clear sectorial goals for decarbonization • Challenge towards “zero-carbon steel” by 2100 by the Japan Iron and Steel Federation – Approach • Setting an aspirational goal and vision and back-casting from such goal and vision, rather than bottom up from the current undertakings – Shift in paradigm: LTS as “Climate” strategy as well as “Economic” strategy • Pursuing overcoming “antagonistic” view on relationship of climate and economy 4
  5. 5. Statement by Prime Minister Abe in the Growth Strategy Meeting(4 June 2018) • ”…Climate actions are no longer question of cost for companies: rather they are source of their competitiveness… ” • “Now change called as a virtuous cycle in the environment and the economy has been truly accelerating at the global scale and with incredible speed for these 5 years” • “…with view to driving decarbonization toward 2050,…we need to realize a paradigm shift, by turning such virtuous cycle in the environment and the economy increasingly and thereby promoting innovation led by business…” 5
  6. 6. Global investment in clean energy 6Source:BNEF, 2018 More than twice as much ($265.8 billion) was invested in clean energy (excluding hydropower) than coal and gas (around $130 billion) in 2017. 2017 is the second highest year after 2015.
  7. 7. How the process has involved businesses and financial sector? • In addition to public comment process, the small expert group involves businesses and financial sector. Half of members come from businesses and financial sector. – 4 members from businesses, including chairman of the Keidanren (Hitachi), Toyota, Nippon Steel, and insurance company. – 1 member from GPIF. • Uniqueness of the LTS process is that the group elaborated its recommendation by itself. – Elements contained in the recommendation are composed, in principle, of what were stated and/or proposed by members. • Valuable inputs from businesses and financial sector on – Global trends of decarbonization, technological changes… – How financial market is looking at Japanese businesses? 7
  8. 8. Members of the Meeting Name Affiliation and Title Takeshi UCHIYAMADA Chairman of the Board of Directors, Toyota Motor Corporation Junko EDAHIRO President, Institute for Studies in Happiness, Economy and Society (ISHES) / Professor, Shizenkan University Shinichi KITAOKA (Chair) Emeritus Professor, The University of Tokyo; President, Japan International Cooperation Agency Kosei SHINDO Representative Director and Chairman, NIPPON STEEL CORPORATION Shuzo SUMI Chairman of the Board, Tokio Marine Holdings Yukari TAKAMURA Professor, The University of Tokyo Hiroaki NAKANISHI Chairman, Keidanren (Japan Business Federation); Executive Chairman, Hitachi, Ltd. Hiromichi MIZUNO Executive Managing Director (Chief Investment Officer), Government Pension Investment Fund (GPIF) Masahi MORI Mayor, Toyama City Itaru YASUI Emeritus Professor, The University of Tokyo; Former Vice- President, United Nations University 8
  9. 9. Impacts, benefits and challenges (1) • Main points of LTS based on recommendation from the group are well accepted by businesses. – As of 31 July 2019, 77 companies and business associations adopted its own long term vision, followed by 184 which is elaborating its vision. – See more details at the Keidanren website • Climate financial risk disclosure (ex. TCFD) and engagement by financial institution have changed business perception. – Science Based Targets:about 90% of listed companies already set target in line with the Paris Agreement long term goal or committed to set it. – TCFD:about 90% of listed companies has undertaken TCFD. 9
  10. 10. Impacts, benefits and challenges (2) • Civil society criticizes the process as well as content of LTS. • How to develop and implement short- and mid- term climate actions in light of LTS and its long term goal? – What would be the role of policy? What would be necessary policies to enhance and accelerate climate actions for instance by businesses? 10
  11. 11. 11 Thank you for your attention! Yukari TAKAMURA E-mail: