News 2024.06.26

An opinion piece by CAJ’s Representative Director was published in the morning edition of the Nikkei Shimbun

Today, the morning edition of Nikkei Shimbun carried an opinion piece by CAJ Representative Director Yasunori Takeuchi in the column known as Shiken-Takken.

The full text of the article is here:


Yasunori Takeuchi, Representative Director, Corporate Action Japan

The government of Japan has declared that it aims to achieve carbon neutrality by 2050, and many Japanese companies are working to achieve their net zero goals. For companies that emit greenhouse gases (GHG), especially the big emitters, it is now time to demonstrate through action that they are making steady progress toward their targets. To meet their targets, they will need to make structural changes to their business models, rather than simply continuing with business as usual.

Research and development of innovative technologies is important and investment in this area must continue, but there is no guarantee that this alone will solve everything. Even when innovative technologies reach the stage where they can be implemented, there will still be issues to be addressed, such as securing the necessary green hydrogen and electricity, and economic viability taking into account the cost. Therefore, it will be imperative to stop investing in projects that lock in emissions for a long time to come and to take a multi-pronged approach to decarbonization, including the use of currently available technologies.

On the other hand, investors also have an important role to play in achieving net zero. The current system has been built over many years of capital investment. To ensure a transition towards achieving our goals, it is necessary to look at current investment plans, working backward from the ideal state we should be in by 2050.

This will have a direct impact on investors’ understanding of the transition risks of their investment targets and the reduction of GHG emissions of investee companies (financed emissions). Investors and companies need to improve the level of achievability of their transition plans through engagement, and disclosure is the cornerstone of this.

For investors, companies must disclose not only their long-term GHG emissions reduction targets but also their short and medium-term targets, investment plans, and progress in reducing emissions. Furthermore, if climate change is positioned as the most important issue for management, it will be seen by investors as an empty goal unless it is linked to executive remuneration and incentives.

Companies that demonstrate their commitment to decarbonization through visible action and increase transparency by disclosing this information will gain investor confidence. I hope that Japanese companies will take a leadership role in addressing climate change through their engagement with investors.