Tokyo as a hub for climate change action (PR)

2023年01月31日 09時30分

Transition finance drives decarbonization of hard-to-abate sectors, or sectors for which reducing greenhouse gas emissions is difficult. The United Nations Framework Convention on Climate Change (COP 27) held in November 2022 saw high expectations for the role transition finance will play as a new financing approach that will pave the way for steady transition to a decarbonized society.

The Organization of Global Financial City Tokyo (FinCity.Tokyo, Chairman: Hiroshi Nakaso, former Deputy Governor of the Bank of Japan) will host “FinCity Global Forum—Transition Finance, Challenges and opportunities for Tokyo” in February 2023. The forum will provide information and make recommendations on financial support for decarbonization, involving an all-Japan team that includes Financial Services Agency, Ministry of Economy, Trade and Industry, and Ministry of the Environment, as well as financial industry groups, financial institutions, and private sector companies.

This special report, a three-part series planned in connection with the FinCity Global Forum, looks at the current situations of transition finance and introduces initiatives of FinCity.Tokyo.

＜Second installment of a three-part series＞

◆FCT’s Activities

The Organization of Global Financial City Tokyo (FCT, Chairman: Hiroshi Nakaso) has set a goal of “making Tokyo a top-class global financial city.” Currently, it is focusing on efforts to spread and raise awareness of transition finance, which supports a gradual transition to low-carbon operations in industries where reducing GHG emissions is difficult. The aim is to contribute financially to solving the global problem of climate change and help Tokyo develop as a base for decarbonization in the Asia-Pacific region.

The FCT was founded in April 2019. As of December 15, 2022, it had 51 member companies and organizations, including the Tokyo metropolitan government, the Japan Securities Dealers Association, the Development Bank of Japan, megabanks, major securities companies, startups and universities. The activities cover a wide range of areas, such as promoting the attractiveness of Tokyo in Japan and overseas, holding events in Japan and overseas, supporting the establishment of bases for foreign financial companies, and making policy recommendations. All these are aimed at helping Tokyo establish itself as an international financial city. Support for transition finance is one of them.

In November 2017, under the leadership of Governor Yuriko Koike, the Tokyo metropolitan government formulated a plan called “Global Financial City: Tokyo,” with the goal of becoming an Asian financial hub by utilizing Japan’s abundant domestic financial assets for achieving economic growth and solving social problems. To realize this, it clearly stated policies of accumulating financial human resources, funds and technologies, developing asset management and fintech companies, and contributing to the resolution of social issues by incorporating customer-oriented and ESG (environmental, social, and corporate governance) ideas. The FCT acts as a specialized organization that fleshes out this set of policies.

The FCT has resumed road shows in major foreign cities, which were suspended due to the novel coronavirus pandemic, to publicize the attractiveness of Tokyo as an international financial city. Last year, its team visited London and Paris in July, New York and Casablanca in October and Singapore in November. Together with stakeholders in and outside Japan, it conveyed the attractiveness of Tokyo and the importance of cooperation among international financial cities around the world. A promotional campaign was mounted through participation in a fintech expo.

In Japan, the FCT hosted exchange meetings to support networking between foreign financial companies (fintech companies and asset management companies) in Tokyo and Japanese companies in Tokyo to promote the formation of a financial ecosystem. In addition, it ran “Tokyo Sustainable Finance Week” to promote sustainable finance, which contributes to sustainable urban development, and increase Tokyo’s presence in the field. Policy recommendations were also made to the Japanese government and private financial institutions to help improve the functioning of Tokyo as an international financial city.


◆FCT Member Companies, Their Views
The FCT’s activities are backed by 49 member companies and organizations supporting the goal of “making Tokyo a global top-class financial city.”

Heiwa Real Estate is a member company since the establishment of the FCT. Known as the “landlord of Kabutocho,” which owns the Tokyo Stock Exchange building in Tokyo’s Nihonbashi Kabutocho, the company just opened the KABUTO ONE complex building with a large hall in 2021. Aiming to contribute to “town development that generates investment and growth” through the FCT, it runs the FinGATE office for financial startups from 2017, providing a place for business and exchange mainly for companies in the asset management and fintech fields. “We have expectations for the FCT’s activities, hoping that financial companies with diverse human resources and innovative business models will gather in Japan, leading to economic growth not only in Japan but also in Asia as a whole. We’d like to continue our activities to contribute to that through the FinGATE operations,” said Akika Hamakawa, deputy head of Heiwa Real Estate’s Building Business Department.

Japan Asset Management Platform Group, based in the FinGATE office, is also an FCT member. It helps financial institutions set up and operate asset management businesses. “We hope to contribute to Japanese economic growth and an increase in presence as an international financial city through the development of Japan’s financial and asset management industries,” CEO Keiichi Ohara said eagerly.
Regarding the Tokyo metropolitan government’s Global Financial City initiative, Ohara said, “It cannot be realized only through the efforts of specific companies.” He pointed to the need for public-private cooperation. He wants the FCT to serve as a guide for member companies and organizations, leading them to the overall goal of realizing the Global Financial City initiative.

Recruit is another member company that agrees with the objective of the FCT. “We’ve joined the FCT because we thought it would be a good opportunity to have discussions about what kind of human resources is needed to advance the financial industry and about the future of the Japanese financial industry,” said Takayuki Yanagisawa, high-career global consulting manager.
For further development of the financial industry, it is essential to develop high-level financial human resources as advocated by the FCT. It is also important to establish a human resources system, such as “onboarding” to develop new employees into useful human resources. As a comprehensive human resources company, Recruit not only has its strengths in horizontal expansion covering a wide range of industries but also approaches each layer of the financial field vertically through a dedicated team for the financial area. The company says that it will use the accumulated knowledge and know-how for the development of the financial industry.

Alpharevo is a fintech company founded in April 2019 that has two faces: a financial instruments business operator and a system development company. It offers systems and financial services that accelerate the digitalization of financial market operations. The direction the company takes is in line with that of the FCT’s priority businesses, such as attracting foreign financial institutions and supporting the growth of emerging asset management companies and fintech firms.
“While Tokyo aims to become a global financial city, very difficult problems lie ahead, such as English and the tax system. It is clear that the challenge is far from easy,” Alpharevo said. “It is important for the future of Japan that the FCT secretariat and member companies work as one” to make Tokyo a more attractive city to financial institutions and fintech companies, the company said, emphasizing the significance of the FCT’s activities aimed at making Tokyo a global financial city.


◆FinCity Global Forum
Tokyo is in a special position regarding transition finance. With its gross domestic product of 1.6 trillion dollars, Tokyo is the world’s biggest city in terms of economy, surpassing New York City with 1.4-trillion-dollar GDP. The Japanese government plans to channel household assets of over 2,000 trillion yen into investment, in a bid to support economic growth. The shift to a low-carbon society, which requires huge amounts of funds for capital investment and research and development, can be a good area the Japanese money dormant in households should be directed to. The Tokyo Stock Exchange, which is highly transparent, has started a demonstration test of carbon dioxide emissions trading. Japan has a deep accumulation of technologies, leading the world in energy saving technologies by turning its weakness as a resources importer into its strength. Tokyo is a city with advanced transportation and communications infrastructure indispensable for business and with a high cultural level. It is blessed with the makings of an international financial city. In the Asia-Pacific region including Japan, meanwhile, economies are in various stages of development, and decarbonization efforts are yet to go into full swing. It’s only natural for Tokyo to declare its bid to become a center of transition finance.

“Tokyo can play a unique role as a financial city,” FCT Chairman Nakaso said, expressing his hope for Tokyo’s development as an international financial center, bearing in mind its differences from Singapore and China’s Hong Kong. “We should support the decarbonization of the Asia-Pacific region,” he said, adding that Tokyo should play an active role in the transition to a decarbonized society by utilizing its abundant funds and urban infrastructure. Successes in decarbonizing Asia and eventually stopping global warming may depend on the Tokyo metropolitan government’s global financial city initiative.

Important activities that the FCT has continued include the FinCity Global Forum (FGF), a large-scale seminar event using an online platform. Since its launch in 2020, the FGF has invited key figures in the financial industry and the political, government and business sectors in Japan and overseas to deepen discussions through lectures and debates on how Tokyo should demonstrate leadership in the global financial world. The FGF’s theme for 2022 is transition finance. With the aim of furthering the spread of transition finance, the government, economy-related government agencies and financial institutions will bring together their knowledge and opinions and problems they recognize so that policy proposals can be made to resolve problems.

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Public-private “all-Japan” team event
“FinCity Global Forum—Transition Finance, Challenges and opportunities for Tokyo”
https://bit.ly/40eM4FO
*Applicants will be notified about archive streaming.

Organizer: FinCity.Tokyo
Date & Time: Thursday, February 2, 2023 13:30-17:50 (JST) 
Venue: KABUTO ONE Hall & Conference (7-1 Nihonbashi Kabuto-cho, Chuo-ku, Tokyo) 
Sponsors: Financial Services Agency; Ministry of Economy, Trade and Industry, Ministry of the Environment; Japanese Bankers Association; The Investment Trusts Association, Japan; Japan Securities Dealers Association, Japan Investment Advisers Association; The Securities Analysts Association of Japan; CFA Society Japan; Japan Exchange Group; Tokyo Stock Exchange, The Alternative Investment Management Association (AIMA), The Consortium for Japan International Asset Management Center Promotion (JIAM)