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sustainable japan

ESG promotional content
produced by The Japan Times CubeExperts: Making the best use of a declining population
ESG/SDGs seminar
HIROKO NAKATACONTRIBUTING WRITER

Business experts discussed the management of aging and shrink humanresources — a long-standing issue inJapan and an emerging one in manyother nations — in Tokyo on Dec. 7 ata seminar, “Exploring Opportunities ofUtilizing Underrepresented Human Capital in Japan, a Country with Advanced
Challenges,” held by the Tuck School ofBusiness at Dartmouth College in NewHampshire.
In his opening speech, Dean Matthew
Slaughter warned that the phenomenon
will affect many countries.
“I think the privilege that we had in
the environment of general economic
growth and general growth in demandbecause of population growth has given
way all over the world to a very different
scenario, which is [that] in most sovereign
nations, prime working-age labor forces
are shrinking, not growing,” he said. “So,the dynamic of what individuals are seeking for human capital development and[what] the organizations that hire them
are seeking is quite different.”
A society needs a fertility rate of over
2.1 to sustain itself, but an increasing number of nations’ rates are falling below that.
According to the United Nations, the rate

for Japan stood at 1.3 in 2021, with China
at 1.2, South Korea at 0.8 and the UnitedStates at 1.7.

said Japan could serve as an example forcountries with aging demographics at atime when neighbors like China, SouthKorea, Singapore and Thailand are catching up with Japan’s population shrinkage.
“Japan could be a model because we experienced a lot of challenges, problems, andare trying to find solutions ahead of othernations,” he said.

Fixing labor scarcity creatively
Slaughter said in an interview prior to
the seminar that the declining birth ratemeans businesses “have to find creativeand new ways to drive innovation, andin an environment that I think is very
different, where labor is becoming morescarce.”
He also said that further female participation is a key to Japan’s labor market.
“One of the ways that female labor-force
participation really matters is not just thenumber of worker hours, but it’s bringing
diverse ideas and perspectives into organizations,” he continued. “The research isvery clear that more diverse organizations— along lines of gender, along lines of age,along lines of race and ethnicity — whenthose people are brought together andthey feel safe and trusted, they can actually really contribute to sounder decisionmaking, more innovation and stronger
corporate performance in terms of revenue, growth, profitability.”
Hiroshi Nakamura, dean for Keio University’s Graduate School of Business
Administration (Keio Business School),
explained the seriousness of Japan’s labor
shortage. Citing data from Teikoku Databank, he said that up to 51.4% of companies think there is a shortage of regular

Seto with Matthew
Slaughter, dean ofthe Tuck School ofBusiness at Dartmouth CollegeTORU HANAIWorking for diversity: Lixil

Lixil’s president and CEO, Kinya Seto, discusses its history and diversity efforts. TORU HANAI

employees and 30.7% think they don’t
have enough nonpermanent labor, bothof which are close to the record highs
marked in 2019.

Decline is top threat in Japan

Nakamura maintained that the population
decline is the biggest threat to the Japanese economy, as the population of active
workers from ages 20 to 64 is expected
to decrease by as many as 11 million by
2040. Therefore, he said, companies needto alleviate the tight demand for humanresources by utilizing female workers,
those with disabilities and foreign residents — those who have been underrepresented in Japanese society — to improvelabor productivity. The types of industries

Mizuho aims to hasten
renewable energy technology
ESG/SDGs
HIROKO NAKATACONTRIBUTING WRITER

With global attention being paid to increasing renewable energy to mitigate global
warming, Japan should put its technological advancements in offshore wind farms,hydrogen power and carbon recycling tobest use to enhance its global competitiveness, Mizuho Financial Group Inc. said in arecent report.
“The focus for net-zero carbon emissions
is to advance electrification. And the question is how we can boost renewable energy
production for that,” Yasuhiko Ushikubo,senior executive officer and group chiefsustainability officer for Mizuho Financial
Group, told The Japan Times in a recentinterview.
In the Dec. 1 report on sustainability andhow Japan should ramp up its industrial
competitiveness, Mizuho Financial Groupsaid the country needs to accelerate technological innovation and structural businessreform. For that to happen, engaging in threefields — offshore wind, hydrogen and carbon recycling — is a strong option. “Whenit comes to renewables, the first thing wehave to do is gear up on offshore wind farms,”
Ushikubo said.
To significantly increase the generationof renewable electricity, Japan should takeadvantage of its surrounding waters andfurther develop technologies for floating offshore wind farms, he said.
In multiple areas in the Sea of Japan, windA screenshot of Mizuho’s sustainability report
MIZUHO FINANCIAL GROUP

could generate large amounts of electricity, he said. Building giant solar power farms
on land, on the other hand, is much harderbecause two-thirds of the country is mountainous, with problematic slopes and the riskof landslides after heavy rains.
Unlike northern parts of Europe, whereshallow coastal waters are suitable for installing fixed-bottom wind turbines, Japan’s
narrower continental shelf makes it better
suited for floating turbines, he said.
Japanese companies have made technological advances in the offshore wind powerbusiness, including in the manufacturingof turbine components, floating buoys andelectrical systems such as submarine cables
and offshore substations, as well as in providing services for operation and maintenance.
Although the production of wind turbines
is currently dominated by manufacturers
in other countries, such as Denmark, Germany, Spain and China, “considering all of
the factors, it will be a huge business,” Ushikubo continued. “Japanese companies needto develop their technologies further andsecure supply chains so they can gain global
competitiveness.”
The second key business for future zero
emissions is hydrogen. As an alternative tofuels like liquefied natural gas, oil and coalthat can still produce the high temperaturesneeded to make steel and other raw materials, hydrogen is a potential option, he said.
What Japan needs to do is to develop
technologies for more efficient electrolysisof water, cargo ships for hydrogen and lowercost hydrogen stations for fuel cell vehicles.
Carbon capture and recycling is anothertype of technology that Japan can further
develop for decarbonizing, he said. The problem, however, is that it takes time for thesebusinesses to bear fruit. Many offshore windfarms are still in the planning stage and mostof them will be operational only after 2030.
Also, in the case of floating wind farms, a big
remaining hurdle is that the cost of generating power remains relatively high.
Experts say the world must reduce carbon
emissions significantly by 2030 to limit theglobal average temperature increase to 1.5that suffer from severe labor shortages arelabor-intensive ones such as hotels andryokan inns, restaurants and information
service providers, he added.
Amid the declining population, Nakamura said that enhancing workers’
productivity and engagement are also
important. “So, my point is that management education is more important thanever,” the dean said.
“Not only the management skill ability,
but also the mindset is very important”
amid the challenges facing Japan, Nakamura said. Since there are unmet demandsin the Japanese labor market, that means
the country has opportunities for futurebusiness, he said.
At the end of his speech, Nakamura

MAIKO MURAOKACONTRIBUTING WRITERdegrees Celsius above the pre-industrial era,
one of the targets set in the 2015 Paris Agreement. Aiming to accelerate carbon reduction,
this year’s closely watched United Nations
Climate Change Conference in Dubai, commonly referred to as COP28, led to an agreement in December to transition away fromfossil fuels, triple renewable energy capacity
by 2030 and increase climate financing forthe most vulnerable.
Ushikubo evaluated the agreement
positively because it mentions transitioning
away from fossil fuels and tripling renewables, despite the fact that the conference
was hosted by an oil-producing country,
the United Arab Emirates, but he conceded
there were some concerns. “I can hardly saythat it produced a big step forward, and eachpart of the agreement needs further discussions,” he said. “Since each member country
has a largely different stance, I expect thenext conference, COP29, to continue facing a
tough time.”
Until the 2030s, when Japan’s floating
wind farms will start operating, the country
needs to take every possible step to reducecarbon emissions, he said — rooftop solar
panels, standing offshore wind turbines, thecareful resumption of nuclear power and thedevelopment of co-firing ammonia at coalburning power plants.
“As a financial institution, we will support
such transitions by financing technologies
with future potential,” Ushikubo said, addingthat Mizuho will also compile policy proposals for the government and provide a wide
range of solutions, including consulting for its
business clients.

Hiroshi Nakamura, dean for Keio University’s
Graduate School of Business Administration
TORU HANAI

accelerated its use of remote work, shifting
to a hybrid work model, which contributes to making it easier to balance workand private situations for employees whoare caring for children or elderly parents orhave physical difficulty with commuting.
Seto said in a separate interview with The
Japan Times that by doing so, especiallyin Japan, where the burden of family careweighs more heavily on women, the company can attract competent female workers and thus enhance its corporate value.
“It may be difficult for each of us alone
to change the world, or one company
to change all of society. But
at least one company canchange its own ways,” hesaid, adding that he hopes
Lixil’s changes have a positive
impact on other firms.
Aiming to highlight issues
related to a sustainable society, The Japan Times gave
its support to this event by
becoming a media sponsor.

Young B-Lot is on the realty A list
for renovations plus innovations
ESG/SDGs

Yasuhiko Ushikubo MIZUHO FINANCIAL GROUP

Following pitches and a panel discussion
by Tuck graduates who have expertisewith introducing diversity into Japaneseorganizations, Kinya Seto, president andCEO of Lixil Corp., explained what hiscompany has done toward achieving
diverse human capital.
Lixil, a maker of water and housing
products that has approximately 55,000
employees in more than 150 countries,
had a tough time consolidating its efforts
because of its corporate history. It was
founded in 2011 by merging five construction material and housing firms,and acquired companies in the USA andEurope in the following years. “But someof those difficulties actually resulted ingreat inventions,” Seto said. Building on
the original diversity that derived from thehistory of its founding, and additionallymaking efforts to hire women and make iteasier for them to continue their careers,
Lixil has been able to develop some successful products.
For example, one of its unique products
is a foam shower device, called Kinuami
U, that turns shower water into a creamy
foam at the flick of a switch.This productwas initially appreciated for its innovativefeature, but it was later discovered that it
also provides significant assistance to people with disabilities and the elderly, further enhancing its value. Another productis its Well Life kitchen, which was designed
from the outset to enable users to cook
while sitting on a chair.
After the pandemic broke out, Lixil

It has been 15 years since the founding of
B-Lot Co., a real estate investment, consulting and management company, and nine
years since it was publicly listed. It is still a
relative youngster in the industry, whichis also polarized between giant players
serving large enterprises and small ones
targeting individual customers and small
businesses.
B-Lot has successfully held a unique position of focusing on small to medium-size
investment properties for wealthy individuals and small to medium-size real estateagents and companies. “The locations andpurposes of use vary, and so do the prices,from ¥100 million to ¥3 billion ($700,000to $21 million),” said Makoto Miyauchi,
its CEO. “We not only sell, buy and manage properties but also serve as an agent
for those looking for investment properties and do everything else related to realestate.”
What makes B-Lot unique is not just its
customer base. The life span of buildings inJapan is relatively short, especially in urban
areas. This may be due to the persistentnotion that new is better, and a scrap-andbuild mentality during the economic boomof the past. “A building constructed in 1980 isconsidered old and torn down in most cases.
We try to think about how we can renovate
and add value to it,” Miyauchi said.

A guest house in Kyoto constructed by B-Lot
and sold to international clients. B-LOT

PAGE: 7

Destroying and constructing buildings
consumes a lot of energy and materials.
Existing buildings are resources that are still
usable, and modern technologies for reducing environmental impacts and improving
sustainability can be applied to old buildings as well as new ones. “Energy-saving air
conditioners and building materials such as
insulators, solar panels — these things canbe installed in old buildings, which is moresustainable than demolishing them andbuilding new ones,” he said.
This is better for existing tenants andresidents too. “Let’s say there is a building
with a 20-tenant capacity, and only fourrooms are occupied. The conventional way
would be to ask the four tenants to moveout and to destroy the building,” Miyauchi
said. But B-Lot does not blame a building’s
unpopularity on its age. It tries to renovate
the building to make it more attractive tonew tenants while existing tenants stayand carry on with their business.
As long as the structure itself is strongor can be reinforced adequately, it makes
more sense to keep existing buildings.
Only about 10% of the 60 or so buildingsthat B-Lot currently owns are new. Sincecore members have abundant experience
in renovating old buildings, Miyauchi has
confidence in the company’s ability to fixup buildings and attract new tenants andresidents with increased comfort and satisfaction as well as reduced costs thanks to
improved energy efficiency.
It also provides various new services tomeet people’s changing needs. “Due to thecoronavirus pandemic, demand has been
increasing for high-speed home internet,
soundproofing and secure package-dropservices,” Miyauchi said. B-Lot tries out various third-party services at the properties
it owns and recommends the best ones
for the buildings it maintains for clients. It
also has two solar power generation facilities in Ibaraki Prefecture. “In addition to thepurpose of reducing electricity cost and thesocial significance of solar power generation, such as the utilization of vacant land
and the reduction of carbon emissions,

Makoto Miyauchi, CEO of B-Lot HARUO
MOTOHASHI

there are things we can only learn by doing— for example, that the level of power
generation drops when panel surfaces get
dirty, and what kinds of measures and procedures need to be taken during a disaster,”he explained.
B-Lot’s properties and services havebeen appreciated by international as wellas domestic clients. “We sold a property
worth several billion yen to our first foreignclient, from Singapore, about 10 years ago,”
Miyauchi said. Since then, the company has
been serving clients from various places,
including China, Taiwan, Hong Kong andSouth Korea.
There are English-speaking membersin the company, including Miyauchi himself, who lived in the United States for 3½years. Some employees are from Chineseor Korean-speaking countries. “The realestate industry is quite domestic, and there
are many business practices and laws thatare unique to each country, which makes
communication of utmost importance,”
Miyauchi said. “At the same time, we provide a one-stop service to meet all needs
related to real estate and ensure long-lasting
relationships with our clients.”
Mizuho and B-Lot Co. are members of the
Sustainable Japan Network, a group ofcompanies that cooperate with this newspaper to spread information about sustainability in Japan. You can also be part of thenetwork; scan the QR code for more details.