Messages from the Director Responsible for Sustainability and an Outside Director
Tackling and contributing to solving issues facing society
In addition to environmental issues, typified by climate change, and social issues such as human rights, today we are also facing new challenges that include the spread of COVID-19 while concerns about the sustainability of society is higher than ever. In this environment, we believe that shifting to a sustainable business model really is an indispensable strategy for companies to enhance corporate value.
In the area of climate change, the Japanese government declared in October 2020 that Japan would realize carbon neutrality by 2050. Furthermore, in conjunction with the climate change summit in April 2021, the government announced that it would raise its greenhouse gas (GHG) reduction targets for 2030. In November 2021, the 26th UN Climate Change Conference of the Parties (COP26) will be held, and the progress is expected to accelerate for discussions aimed at coordination of international policy and development of rules.
As set out under the European Green Deal and Japan's "Green Growth Strategy Through Achieving Carbon Neutrality in 2050," corporations are expected to contribute to sustainability in order to promote a virtuous cycle between economic recovery and the environment and realize a sustainable society. Today, it is no longer possible to enhance corporate value without also working to enhance social value.
Aiming to achieve our vision for 2050
The Mitsubishi Estate Group has established the Mitsubishi Estate Group Sustainability Vision 2050, "Be the Ecosystem Engineers," as our vision for 2050. We formulated the Mitsubishi Estate Group 2030 Goals for SDGs ("the 2030 Goals") under the Long-Term Management Plan 2030 to serve as milestones for achieving this vision. In the Long-Term Management Plan, we aim to achieve the Group's mission and sustainable growth with the Group's strategy to increase both social and shareholder value at the heart of its corporate management. With "Sustainability: Provision of solutions to contemporary social issues" as a key driver for providing value through our business activities, we have set out the four key themes of environment, diversity & inclusion, innovation, and resilience under the 2030 Goals based on the seven material issues we established in fiscal 2018, and articulated specific action plans and targets for each theme.
As the Director responsible for Sustainability, I lead the Sustainability Management and Promotion Department in the planning and drafting of measures related to sustainability targets across the Group. We formulate measures following deliberations and reports at the Sustainability Committee, which is chaired by the President of Mitsubishi Estate. In addition, to achieve the 2030 Goals, the Group has incorporated its annual targets and initiatives related to the four key themes into annual plans for each organization or functional group since fiscal 2020. The Sustainability Committee tracks the progress of the targets established in the annual plans using the PDCA cycle. Achieving these annual plans is also included as one of the qualitative evaluation criteria for determining officer remuneration.
Initiatives under the Mitsubishi Estate Group 2030 Goals for SDGs
Of the four key themes, in the area of environment, we have established GHG reduction targets (SBTi approved in April 2019) and targets to increase the renewable power ratio (joined RE100 in January 2020), and we are working diligently to achieve these targets. In March 2021, Mitsubishi Estate established the Smart Energy Urban Development Action Plan 2050 and set up the Urban Energy Strategy Planning Department in April 2021 as an internal department to plan for specific measures. In addition, starting in fiscal 2021, Mitsubishi Estate will switch to renewable energy-derived electricity for all the power used in 19 buildings, including tenant private-use areas, primarily in the Marunouchi area (the Otemachi, Marunouchi, and Yurakucho districts). As a result, we expect the renewable power ratio will be approximately 30% of the total electricity used by the Group. In fiscal 2022, Mitsubishi Estate will introduce renewable power for all the electricity used in all of the office buildings it owns in the Marunouchi area and plans to proactively introduce renewable power in buildings in other areas as well.
Mitsubishi Estate is also entering the biomass power generation business in Higashimatsuyama, in Saitama Prefecture, as a locally based, recycled renewable energy power generation business. In this project, wood pruned from street and park trees, which is urban waste, will be reused as fuel to generate about 15 million kWh of electricity per year (equivalent to the power for about 4,800 ordinary households). The company is also planning to implement the biomass power generation business in other areas nationwide.
In addition to such specific measures, we have been working to strengthen our climate change-related governance and business strategy through appropriate disclosure of information based on the TCFD recommendations.
In the key theme of diversity & inclusion, in March 2021, we entered a capital and business alliance with Mirairo Inc., which provides universal design solutions utilizing the perspectives of people with disabilities. Through urban development, we aim to create a society where all people, including those with disabilities along with their families, can live with greater peace of mind and safety.
The Group is also working to use timber that complies with the Sustainable Sourcing Code (certified lumber or Japan-grown timber) or equivalent for 100% of the timber in the concrete formwork panels it uses in the construction of office buildings and housing by 2030. As NGOs and other institutions have pointed out, procurement of materials for concrete formwork panels may involve illegal logging, including the taking of indigenous peoples' land and destruction of the environment, we are working on sustainable procurement that ensures traceability from the perspective of human rights and environmental protection.
In the key theme of innovation, in addition to actively investing in start-ups and venture capital with the aim of discovering new business projects and creating synergies with existing businesses, we also develop and operate business incubators and utilize the latest technologies such as AI and robotics. Moreover, we are working continuously to promote new business model innovation and new value creation, including the Mitsubishi Estate Corporate Accelerator Program which aims to create new businesses through open innovation and our internal new business proposal system for the Mitsubishi Estate Group.
In the key theme of resilience, we consider being prepared for natural disasters, such as major earthquakes, one of the most important issues for urban development, and we have already implemented a variety of initiatives in this area.
At TOKYO TORCH (full completion scheduled in fiscal 2027), which is being developed in partnership with stakeholders in the Tokiwabashi district located in front of the Nihonbashi Exit of Tokyo Station, TOKYO TORCH Park, a large open area (approximately 7,000m²) located in the center of the district, will be equipped with various facilities (large screens, wifi, etc.) in order to serve as a base for disaster recovery activities. In addition, the large hall planned for Tower B will be used as temporary accommodations for stranded commuters in the event of a disaster, further strengthening the area's functions to support stranded commuters.
Promoting urban development that creates value in partnership with diverse stakeholders
Looking ahead to 2050, the Mitsubishi Estate Group aspires to be Ecosystem Engineers, a corporate group that provides spaces and infrastructure where all actors (individuals, corporations, and more) are able to coexist sustainably and thrive together―economically, environmentally, and socially. This, in turn. means that each one of our employees must share common values and standards of conduct and work together as they serve as an Ecosystem Engineer to create new value and innovation by engaging with diverse stakeholders and to realize a sustainable society and our basic mission. Moreover, based on our awareness that efforts toward sustainability are essential not only at the Mitsubishi Estate Group but also throughout the supply chain, we are working to review the content and operation of our CSR Procurement Guidelines to build a sustainable supply chain.
The Mitsubishi Estate Group has been making efforts to realize a sustainable society in accordance with the approach of international initiatives, including the endorsement of the UN Global Compact in conjunction with the revision of the Mitsubishi Estate Group Guidelines for Conduct in April 2018. Going forward, we will strive to maximize provision of value to all stakeholders and further enhance our corporate value by working to engage in dialogue and collaboration with all stakeholders to solve diverse social issues and responding to the needs of society and the demands and expectations of the Mitsubishi Estate Group through our core business.
- (As of September 30, 2021)
- Executive Vice President Atsushi Nakajima was appointed as Director Responsible for Sustainability effective April 1, 2022.
Accelerating efforts aimed at realizing sustainability to solve social issues and create innovation
In its Long-Term Management Plan 2030, the Mitsubishi Estate Group positioned enhancement of social value as one-half of its two-part strategy, making a clear commitment to accelerating efforts aimed at realizing sustainability. The Group has also established the Mitsubishi Estate Group 2030 Goals for SDGs as a pillar of its strategy for enhancing social value in which it set out four key themes for realizing a sustainable society.
In initiatives for the environment, one of the four key themes, the Group has newly entered the biomass power generation business using branches pruned from street trees in addition to efforts to introduce renewable power in the Marunouchi area (the Otemachi, Marunouchi, and Yurakucho districts) to achieve its SBT and RE100 targets. I feel this business, as well as the U.S. data center business into which the Group announced its entry simultaneously, represents the kind of business needed by society as the times change and where the Group can capitalize on its accumulated know-how in urban development. Going forward, I look forward to the expansion of such businesses involved in solving social issues, or enhancement of social value, that transcend the Group's existing businesses and assets and the enhancement of shareholder value these new businesses bring.
The Group treats diversity & inclusion as a positive opportunity that will lead to innovation. By bringing together people with diverse ideas for discussion, we believe that we can create new businesses with flexible ideas that transcend conventional business models, and further enhance the competitiveness of the Group. In addition to acquiring external human resources, I believe employees who leave the Group could collaborate with or return to the Group after gaining new knowledge and know-how outside, which could lead to the creation of an even wider range of businesses, so I hope opportunities for such collaborations will be considered.
Consideration of human rights in the procurement of raw materials for buildings is also a very important theme. I was involved in the development of the Sustainable Sourcing Code with the Tokyo Organising Committee of the Olympic and Paralympic Games. I have been impressed by the swift action of the Mitsubishi Estate Group on this issue. The Group has been quick to develop a policy and implement measures to strengthen the traceability of timber used for concrete formwork panels. Although it is more challenging, I believe it is also important to actively approach the managing companies for projects and take appropriate action even in cases where Mitsubishi Estate is not the managing company or its investment is minor.
On the key theme of innovation, Mitsubishi Estate has been selected for inclusion in "Noteworthy DX Companies 2021" under the Digital Transformation Stock Selection (DX Stocks) program by the Ministry of Trade, Economy and Industry and the Tokyo Stock Exchange. However, I feel there is still room for improvement within existing operations, such as the streamlining of operations through the introduction of AI. Reducing dependence on people will also help curtail risks of overwork and so forth, so I believe this is an important initiative from the perspective of risk management. In addition, in its Long-Term Management Plan 2030 the Group advocated the provision of new services and content with a focus on B2C and B2B2C and an increased awareness of the consumer perspective, which I feel is a very important perspective in urban development. The Group has set out a vison of establishing "co-creation platform for innovation through companies, employees, and visitors" in "Marunouchi NEXT Stage," the Group's urban development program in the Marunouchi area from 2020 onward. I believe this program will serve to create a valuable model in this arena.
In the key theme of resilience, I feel that Mitsubishi Estate is working at a high level on both tangible measures, such as building design, and less tangible operational measures, such as strengthening systems for disasters. If resilience measures are inadequate, there is a risk that asset values will decrease, so I would like to see these efforts maintained. While the Group has also established a substantial manual on its response operations in the event of disasters, it is difficult to create one for each and every detailed action to be taken in the event of a disaster. Therefore, I believe it is important to build a mindset that enables employees in the field to take prompt action in the event of an emergency. At the time of the Great East Japan Earthquake, I appreciated the fact that Mitsubishi Estate was able to reduce the damage due to quick decisions taken onsite, and I believe that this mindset has taken root in each and every employee through this experience.
As for other ESG-related themes, I believe that the Mitsubishi Estate Group needs to pay careful attention to the treatment of public officials and others in its overseas operations, especially throughout Asia. Although this is a difficult issue, I hope that the Group will aim to lead the best practice in this area.
In light of the contents of the Corporate Governance Code revised in June 2021, I believe that the demand for sustainability initiatives will increase further in Japan as well as overseas. Mitsubishi Estate is well equipped in terms of disclosure, including the Group's early adoption of the TCFD recommendations. I look forward to seeing efforts promoted further through the businesses and projects such as those I mentioned above in the future.
- (As of September 30, 2021)