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FSSAインベストメント・マネージャーズは、アジア・パシフィック、日本、中国、インド、東南アジア及びエマージング株式のスペシャリスト

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Our philosophy is very simple. We are constantly searching for high quality businesses and when we acquire them, we will work relentlessly with them to create long-term sustainable value through innovation, ESG-led and proactive asset management.

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リアルインデックスは、時価総額調整インデックス、スマートベータ等のクオンツ・アクティブ戦略を提供するシステマティック株式の雄

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スチュワート・インベスターズは、1988年の運用開始以降、お客様に代わって長期的な時間軸のもとでポートフォリオを運用(20年超の保有を行う場合も)

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Tokyo towers: The secrets of Japan’s net zero leaders

Investors with an ESG focus can take a lot from leading and technologically resourceful real estate companies in the world’s largest office market as they move quickly on their renewable energy targets.

Moves by two of Japan’s larger landlord-developers to accelerate green and energy efficient operation and development shows the direction forward-thinking companies in the property sector are taking.

Mitsubishi Estate and Mitsui Fudosan, both listed companies actively engaged in development and as landlords, are examples of companies globally finding new pathways to carbon emissions reduction.

Mitsui Fudosan, for instance, is looking for ways to substitute timber for high carbon emitting concrete, drawing on plantations it owns in the north of Japan. The company is building condominiums and in some instances high rise office buildings with increasing amounts of timber in order to reduce concrete use, a major source of embodied carbon in the construction process.

Both Mitsui Fudosan and Mitsubishi Estate are undertaking initiatives to source renewable energy for all of their assets within central Tokyo to address operational carbon.
 

Real estate’s carbon problem

Overall, it is estimated 40% of global emissions comes from the real estate sector, according to the Global Status Report for Building and Construction1. This contribution is made up of both embodied as well as operational carbon.

So called ‘embodied’ carbon relates to the extended lifecycle of a real estate asset. That includes emissions right from the point of raw material extraction, through to construction and redevelopment activity, as well as post the active life of a building including demolition and through to landfill.

The operational side of emissions relates to the active life of a building and predominantly comes from the sourcing of energy for buildings during their active life spans.

Companies like Mitsui Fudosan and Mitsubishi Estate, along with other companies around the world, are finding new ways to address carbon emissions, as investor capital and tenant demand continues to find its way towards cleaner and greener operators and developers.
 

Green in Japan

The Japanese government has initiated a target to achieve net zero carbon emissions by 2050. The Japanese government has also undertaken to significantly increase the amount of renewable energy sources it’s looking to utilize.

By 2030 Japan is aiming to increase its renewable energy to close to 40% (excluding nuclear), according to IHS Market data2.

At the same time the country is looking to halve the amount of carbon emissions within its economy by the end of the decade, relative to a base year of 2013, according to Climate Scorecard data3.

It’s become even more imperative for Japan to look at green sources of energy given some of the geopolitical risks that have arisen, specifically, given the country has sourced coal, oil and gas from Russia. With the Ukrainian conflict playing out, Japan has decided to phase out the use of oil and coal, making it even more important for renewable and green energy to be sourced from within Japan going forward4.
 

Investor opportunity

ESG and in particular net zero is a big issue for developers and landlords to address, with many of the implications for laggards not yet fully priced into market valuations.

Meanwhile, businesses accelerating their efforts towards net zero and broader ESG issues provide strong opportunities for investors.

Green initiatives can potentially reduce the asset redundancy risk related to developer and landlord portfolios in light of the increasing demand tenant have now for clean environmental office opportunities. It’s estimated that green certified buildings in Tokyo can command roughly a 6% “green rental premium” compared to non-certified peer offerings5.

Further, developers and landlords, like these two Japanese examples, are actually looking to build their own green energy sources, including wind, solar and even biomass facilities.

Access to clean environmental income sources means these companies – and others like them – can reduce and indeed offset emissions in their wider landlord portfolios.
 

Important Information

This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should consider, with the assistance of a financial advisor, your individual investment needs, objectives and financial situation.

We have taken reasonable care to ensure that this material is accurate, current, and complete and fit for its intended purpose and audience as at the date of publication. No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material and we do not undertake to update it in future if circumstances change.

To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may not reflect the views of everyone at First Sentier Investors.

About First Sentier Investors

References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which is ultimately owned by Mitsubishi UFJ Financial Group. Certain of our investment teams operate under the trading names FSSA Investment Managers, Stewart Investors and Realindex Investments, all of which are part of the First Sentier Investors group.

We communicate and conduct business through different legal entities in different locations. This material is communicated in:

  • Hong Kong by First Sentier Investors (Hong Kong) Limited and has not been reviewed by the Securities & Futures Commission in Hong Kong. First Sentier Investors is a business name of First Sentier Investors (Hong Kong) Limited.
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  • Japan by First Sentier Investors (Japan) Limited, authorised and regulated by the Financial Service Agency (Director of Kanto Local Finance Bureau (Registered Financial Institutions) No.2611)

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