January 4, 2023
December 2, 2022
The Tokyo Metropolitan Government has announced plans to build the world’s first completely ESG focused city. A high-tech, sustainable city on reclaimed land in the capital’s bay area. The Tokyo Bay area is blessed with plenty of waterfront nature, it is Japan’s leading logistics terminal, and it is also home to the Tokyo Waterfront City area which features diverse commercial and entertainment attractions. But the best part of the development is that it offers an unused stretch of land (1,000 hectares). During the 2020 Olympics, this unpopulated area was used to host canoeing and rowing events. After that it’s only been used for waste disposal.
The sustainable city is set to be an extension of Tokyo, making the capital of Japan bigger and better. With the futuristic high-tech mini city Japan hopes to be a blueprint for what other future cities could (or maybe should) look like. The city’s governor believes that the so-called "Tokyo eSG" will have significant international impact, as well as creating a ripple effect for sustainable cities throughout Japan.
We will have to be patience to determine the success of the eco city because it won’t be finished until 2050. That being said, there is not much doubt Japan can pull this off, because it is not the first time in history the country has built a revolutionary city: In the 18th century, Japan’s capital, then known as “Edo”, was the world’s biggest city with a thriving circular economy. Additionally, in 1923 the entire city had to be rebuilt after being devastated by the Great Kanto earthquake.
However, the Japan of today has work to be done... Japan ranked only 29th out of 63 countries on the ranking for digital competitiveness in 2022. With this score Japan has dropped 7 places from their highest ranking in 2018. In the categories “International experience”, “Opportunities and threats”, “Agility of companies” and “Use of big data” the country scored last. In comparison to the rest of the world, it has fallen behind in the digital transformation shift.
Japan has fallen behind in economic growth. From the 1960’s till the 1980’s Japan had one of highest growth percentages in the world. However, even though growth has slowed down, the country still is the third biggest economy in the world, with a nominal GDP of $4.94 trillion (USD). On top of that, Japan has the lowest inflation among the major economies, with the consumer price index rising only 2.8% in August this year, compared to 8.3% in the US and 9.1% in the EU.
With Tokyo eSG, Japan hopes to attract ESG focused venture capital and startups from around the world to bring new technologies to the country. It already has a green finance scheme in place that provides subsidies to sustainability-focused foreign asset managers and fintech companies. The subsidies have received substantial foreign interest: In the first year it has drawn 48 applicants from 17 different countries. Interesting initiatives, such as a credit card company that measures the carbon footprint of every purchase. Another company measures the CO2 emissions of employees, raising awareness. By attracting more start-ups Tokyo hopes to create a vicious cycle of tech companies and ESG investments. Insight and sourcing capabilities from abroad is welcomed in Japan because the PropTech industry is nascent in comparison to the global ecosystem.
Tokyo eSG will be all about sustainability: powered by hydrogen, wind power and floating solar farms, managed by smart grids. The buildings in the area will be zero-emission and 100% of the public transport will be operated by zero emission vehicles. A subway line will be built for easy access to Central Tokyo, the airport and other main locations throughout the country. Zero emission buses and trucks, as well as fuel cell powered boats will provide the area with goods and services.
Not only parks and green spaces will be part of the city, but greenery will be in place in every possible location to create a rich and green waterfront. Roads and buildings will be surrounded by green.
Along with changing concepts such as the possession of goods and consumption through a sharing economy, a circular economy will be realized in the area. This will include the sustainable use of plastics and other resources and the establishment of new systems for waste management.
According to Japan, Tokyo eSG is going to be a city that can withstand all types of crises, whether it’s diseases, climate change or energy shortages. Tokyo eSG is not Japan’s first move in contributing to a sustainable world: Between 2016 and 2020, the volume of sustainability, social and green bonds sold domestically grew 47 times to a total of more than 2,100 billion yen.
The country is determined to turn the Tokyo Bay Area that was once used as a landfill into a rich, green and sustainable paradise.
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