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Corporate Japan’s passion for protecting nature is inspiring

This opinion piece from Singapore-based Managing Director Diego de Sartiges was originally published in The Business Times.

 

For keen observers of the global effort to decarbonize business and tackle the climate change crisis, the idea of Japan as an early sustainability adopter might sound somewhat surprising.

But as a new focus on preserving nature takes hold alongside climate in boardrooms and policy forums across the world, Japan is showing impressive leadership.

The reason for this might just be because when it comes to the appreciation of nature and its centrality in our lives, Japan is unlike any other nation or culture on Earth.

When the Taskforce on Nature-related Financial Disclosures (TNFD) released its framework late last year, companies worldwide suddenly had a toolkit for dealing with the risk posed to their businesses by the decline and collapse of nature.

The TNFD provides companies with clear and consistent guidelines to better understand both the impact and dependency of their business model on nature, manage risk, capitalize on opportunities and disclose all this in a useful way for investors deciding where to put their money and how to take action.

In January, the TNFD announced an initial list of companies from around the globe that have promised to deploy the new framework as early adopters.

Of the 320 companies that have signed on so far, an astonishing 81 are headquartered in Japan. Japanese companies are displaying a clear intention about preserving nature. Their passion is truly breathtaking and marks them out as world leaders.

So what is behind this?

The first and most important reason I see for this is that Japanese corporate leaders tend to have a holistic view of the value of nature, rather than seeing it as just another compliance burden in terms of company disclosures.

There is perhaps no idea that better illustrates Japan’s special relationship with nature than satoyama, natural areas used for various purposes including resource gathering and agriculture. Some are treated as shared community lands.

In Western culture, the closest parallel to these is probably the village common, a shared space where villagers could access resources and graze their livestock in bygone times.

Community satoyama are a stark illustration of how Japan differs when it comes to nature. For most economists the idea of the commons evokes the “tragedy of the commons” — the notion that natural assets will be degraded to the point of catastrophe if there is shared access to them and shared benefits from their preservation but no specific benefit to any individual user.

It is that kind of logic of individualism and extraction rather than custodianship that is driving the climate and nature crises we see in the world today.

Community satoyama reflects a different way of seeing nature, tied to custodianship: shared access but also shared appreciation and a shared obligation to protect nature.

Over the past couple years, I have made half a dozen trips to Japan to meet with senior corporate leaders to discuss nature strategy and how companies can play a role in stopping damage to biodiversity and beginning to reverse nature loss.

When I talk with them, it is rare to find any executive whose family is not in some way linked to a satoyama. The connection is usually not just a transactional one, but also deeply cultural, emotional and cross-generational.

The second factor is a determination among Japanese businesses, led by trailblazers such as Kirin Holdings and Norinchukin Bank, to make up for what many would characterize as a relative slowness to respond to the climate agenda. As nature emerges as a priority alongside climate, there is a willingness to leapfrog ahead in improving practices that is tangible.

The third trend is a creeping realization among Japanese companies about their exposure to nature risks.

Japanese companies often have long, geographically dispersed supply chains. Whether it is with automobiles, technological hardware, rubber or timber, Japan’s longstanding status as an economic powerhouse around Asia means its companies often have dependencies and impacts across the continent in areas of high biodiversity risk and vulnerability.

That brings us to the fourth factor: opportunity.

Within Japan, the conversation around nature-based solutions is becoming rapidly internationalized as companies realize the potential for projects in neighboring countries to provide the high integrity and quality carbon credits they need as they undertake the complex transition to net zero.

The emerging opportunity of nature-based solutions goes beyond the sphere of climate action. It can also be a powerful engine for delivering conservation and biodiversity outcomes.

Japan is increasingly seeing this potential and becoming a trading hub for nature-based solutions across the region, underpinned by the signing of bilateral memoranda of understanding with multiple countries. This is moving in parallel with a similar strategic push from Singapore, which also seeks to become a regional center for carbon markets.

All of these factors mean that Japan looms as potentially the most exciting place in the world right now when it comes to the nexus around business, nature and emerging efforts to involve the corporate world in the necessary work of restoring biodiversity.

In so much of the world our work involves trying to convince corporate leaders that nature has a value and that its degradation will come at a cost to their bottom line. In Japan, the land of satoyama, that is a conversation which is much easier to have. But it cannot and will not be enough for Japanese companies just to take part in nature projects within the country’s borders.

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