Carbon Neutral Innovation

Global warming is a global challenge for all stakeholders. The Paris Agreement sets a goal of keeping the global average temperature rise below 1.5°C above pre-industrial levels, and to achieve this goal, it is necessary to reduce greenhouse gas (GHG) emissions to net zero. In order to promote carbon neutral initiatives, companies need to actively work on calculating and reducing carbon emissions and energy management in their own companies and supply chains. In addition, some of the areas such as the introduction of EV vehicles and green energy have progressed in recent years, and the shift to renewable energy and decarbonization efforts are accelerating.

In this webinar, Mr. Hiroaki Izuma, one of Japan’s leading cleantech experts, was invited as a guest to present decarbonization innovation and cleantech cases.

Guest Speaker : Mr. Hiroaki Izuma
Mr. Izuma Graduated from the Department of Mechanical and Physical Engineering, Kyoto University in 1983. He has managed data analysis, behavior observation, and open innovation businesses in the R&D and IT departments of Osaka Gas. Since 2016, he worked in Silicon Valley in the United States to explore business development with Western cleantech. He joined Tokyo Gas in 2018 and participated in the launch of CVC in Silicon Valley. He returned to Japan in 2021 and joined Tohoku Electric Power as an advisor to their business creation department. As the representative of IZM, he also serves as an external advisor to major manufacturing companies and consulting companies, as well as supporting the expansion of overseas startups in Japan. In 2022, he became a director of Osaka University Foresight and an advisor of the Tokyo Decarbonization Fund of Funds and Investment Lab. He has served as a visiting researcher at the University of Southern California’s Robot Research Institute, a part-time lecturer at Kyoto University and Osaka City University, and vice president of the Operations Research Society of Japan.

Key summaries and webinar

Silicon Valley is leading decarbonized innovation

Silicon Valley is known as a leader for decarbonization innovation, and clean tech is attracting attention. However, Japan is not even in the top 35 in the cleantech ecosystem regional ranking, and it is clear that cleantech has been developing in Silicon Valley for the past 20 years. In 2009, President Obama issued a Green New Deal policy, and the first clean tech boom occurred, but there was a challenge that hardware startups did not scale, and then software technology became the focus. Since 2017, the second clean tech boom has been ongoing. Battery and EV charging startups have been attracting attention and there have been cases of acquisitions by European energy companies. However, from 2021, the term “clean tech bubble” has started to be used. So, a long-term perspective is required to achieve carbon neutrality.

Energy x Mobility, cross-industrial competition is happening around the world

Large energy companies have entered the automobile, charging, and mobility services industries. On the other hand, there is a move from the automobile industry to enter the energy industry. Japanese energy companies are paying attention to the cleantech field, such as by expanding into Silicon Valley and investing in startups. Tokyo Gas made a scenario plan for 2050 and they were the industry’s first company to issue a decarbonization declaration.

Shell aims to become world’s largest electricity supplier

Shell has acquired EV charging companies and startups in the clean tech field. Its CVC division, Shell Ventures, has invested in over 100 startups around the world. Since around 2018, Shell has been focusing on mobility, but from around 2020 Shell has shifted to the hydrogen field. It also has an accelerator program which is focused on long-term energy storage. With this move, Shell aims to become the world’s largest electricity supplier.

Hydrogen plays a leading role

Since the goal is to reduce carbon emissions to zero by 2026, startup companies in the decarbonization field, such as battery management and EV charging, are playing a leading role. In the energy field, such as hydrogen, CCUS, and long-term energy storage, these fields are dominated by start-ups, but large companies are also making inroads into these fields. Attention will be paid to whether large companies will acquire startups in such fields, or whether startups will grow on their own.

Challenges and bright spots for Japanese startups

It is said that there are many Japanese startups that are not yet known to the world, such as those that have not been registered as VCs or CVCs. However, there are companies that can compete globally in the hardware field, such as Panasonic, Mitsubishi Heavy Industries, and Mitsubishi Shipbuilding, which were selected as the top innovators of Global Energy Transition. Furthermore, positive signs are beginning to appear, such as Japanese startups taking the lead in energy-saving technology and the emergence of carve-out startups.

Why Data Strategy for GHGP Scope 3 accounting and reporting is important?

Scope 1, 2, and 3 are indicators for classifying greenhouse gas emission sources, and are essential concepts for companies to conduct environmentally friendly business.
Scope 1 indicates the amount of greenhouse gases emitted directly by the company itself, such as fuel combustion and processes. Scope 2 indicates greenhouse gas emissions generated by the electric power and thermal energy used by the company. Scope 3 indicates greenhouse gas emissions generated by a company’s supply chain and product life cycle.

With much of Scope 1 and 2 data, the location, quality and format are known. With Scope 3, the data dimensions are harder to understand, and it requires one or more partners outside of your control to manage each data source from both of the upstream side and downstream side of your business.

Data management in the decarbonization field

In the field of decarbonization, which starts with tracking carbon emissions, startups have appeared that make recommendations for visualization technology and carbon reduction.
Large companies such as traditional ERP, SAP, Oracle, and Salesforce are also entering the decarbonization field by providing net zero service, compiling data as an extension of its own business and acquiring startups to expand their portfolios.