Result : GGX Finance Summit

Video Distribution

GGX Finance Summit 2024 concluded on October 15^th. You can watch the conference videos below.

The Overview of GGX Finance Summit 2024

Day & Time: October 15^th, 2024 (Tue) 10:00-17:00 (JST)
Summit Format: Hybrid (On-Site/ On-Line)
Host: METI (Ministry of Economy, Trade and Industry)
Co-Hosts: WBCSD/ TCFD Consortium/ The GX Acceleration Agency

Program

Opening Remarks	RYUZAKI Takatsugu (Director-General, GX Policy Group, Ministry of Economy, Trade and Industry (METI))
	KOBORI Hideki (Vice Chair, KEIDANREN (Japan Business Federation))
	Mary L. Schapiro (Vice Chair, Glasgow Financial Alliance for Net Zero（GFANZ）)
Session 1 [Expanding the GX Market]	Panel Discussion To expand the GX market, which is essential for industrial decarbonization, it is crucial that efforts to reduce greenhouse gases in the manufacturing process are reflected in product value. What kind of indicators should be used to visualize this? <Moderator> HAYASHI Reiko (Director and Deputy President, BofA Securities Japan Co., Ltd.)
	<Panelist> DOHNOMAE Hitoshi (Chair, International Environmental Strategic Committee, The Japan Iron and Steel Federation)
	KUDO Hiroki (Board Member, Director, Electric Power Industry Unit, The Institute of Energy Economics, Japan)
	Rob van Riet (Head, First Movers Coalition, Centre For Nature And Climate, World Economic Forum)
	Dominic Kailashnath Waughray (Executive Vice President, Imperatives, World Business Council for Sustainable Development)
Session 2 [Creating a GX Startup Ecosystem]」	Keynote Speech KIKUKAWA Jingo (Director-General, Innovation and Environment Policy Bureau, Ministry of Economy, Trade and Industry (METI))
	Katherine Elizabeth Monahan (Deputy Chief of Mission, Embassy of the United States of America)
	Panel Discussion Startups play a crucial role in achieving net-zero. What kind of sustainable ecosystem is needed to address the unique challenges faced by GX startups in technology implementation and demand stimulation? <Moderator> MATSUMOTO Chikako (Managing Executive Officer, Sumitomo Mitsui Trust Bank, Limited)
	<Panelist> SHIMIZU Shinya (Founder/CEO, Elephantech Inc.)
	NUMATA Tomoko (Chief Capitalist, Investment Division, JAFCO Group Co., Ltd.)
	Georgy Egorov (Chief Financial Officer, Finance, ZeroAvia, Inc.)
	Shuo Yang (Partner, Lowercarbon Capital)
Session 3 [Future Prospects of Transition Finance]	Keynote Speech MIYAZONO Masataka (President, Government Pension Investment Fund (GPIF))
	FUKUTOME Akihiro (Chairperson, Japanese Bankers Association)
	Panel Discussion As international recognition of the importance of transition finance grows, what initiatives are needed to further promote investment and private capital supply in decarbonization? <Moderator> TAJIRI Takahiro (Deputy Director-General for Green Transformation Policy, Ministry of Economy, Trade and Industry (METI))
	<Panelist> Mushtaq Kapasi (Managing Director, Chief Representative, Asia Pacific, International Capital Market Association)
	Myriam Zapata (Managing Director, ESG Specialist DCM SSA, Global Markets, BNP Paribas)
	IKEDA Satoshi (Chief Sustainable Finance Officer and Director of the Strategy Development Division, Financial Services Agency)
Session 4 [Formulating Transition Plan]	Keynote Speech ITO Kunio (Chair of the TCFD Consortium)
	Panel Discussion With the acceleration of climate-related disclosure, the importance of developing transition plans is becoming even more evident. How should transition plans be formed? <Moderator> YAMAGA Teppei (Managing Director, Sustainability Planning Department, Mizuho Financial Group, Inc.)
	<Panelist> OSHIDA Shunsuke (Managing Director, Head of Credit Research, Japan, Manulife Investment Management (Japan) Limited)
	OGAWA Noriko (Vice President, ESG Promotion Department, Japan Airlines Co., Ltd.)
	Sean Kidney (CEO, Climate Bonds Initiative)
Closing Remarks	SHIGETAKE Naoki (COO, GX Acceleration Agency)

Summit Overview

METI held the GGX (Global GX) Finance Summit on Tuesday, October 15 as a part of Tokyo GX Week and Japan Weeks, which started on Sunday, October 6, in order to further discuss transition finance, industry de-carbonization, and other issues; promote cooperation among the government, private, and finance sectors; and be a leader in creating international rules for reducing emissions while achieving economic growth within existing frameworks.

The summit had four sessions: (1) Expanding the GX Market, (2) Creating a GX Startup Ecosystem, (3) Future Prospects of Transition Finance, and (4) Formulating a Transition Plan. Experts from Japan and overseas gave a speech on each theme, and panel discussions were held on the activities necessary to achieve GX.

Session Topics

Opening Remarks

RYUZAKI Takatsugu (Director-General, GX Policy Group, Ministry of Economy, Trade and Industry (METI))

The key to the GX Promotion Strategy created in the previous year is the growth-oriented carbon pricing concept that achieves compatibility between economic growth and emissions reductions through the introduction of carbon pricing after the issuance of GX economy transition bonds. Of particular need is transition finance to handle the large capital demand for transitions in hard-to-abate sectors.
In order to achieve GX, an environment needs to be created that generates demand, along with international cooperation, and active discussions on the establishment of global rules and the promotion of transition finance are expected to occur.

KOBORI Hideki (Vice Chair, KEIDANREN (Japan Business Federation))

KEIDANREN has been actively providing opinions on GX. For example, we provided suggestions to the Japanese government in 2022. In order to achieve the 150 trillion yen in investments by the public and private sectors over 10 years as suggested by the government, it is necessary to create an environment favorable to mobilize private funds by: (1) promoting engagement and a wider range of information disclosure, (2) improving the reliability and efficacy of business transitions through the use of roadmaps and guidance released by the Japanese government, (3) actively evaluating the degree of contribution to emission reductions, and (4) establishing global rules through international cooperation on initiatives such as AZEC.

Mary L. Schapiro (Vice Chair, Glasgow Financial Alliance for Net Zero (GFANZ))

The de-carbonization of a carbon-intensive economy like Japan and the management of the impact on businesses, workers, and society resulting from the transition is a challenge shared by countries worldwide. However, the progress of technology, the impact of policy, and economic changes arising from the transition are indicators of hope. The finance sector and real-economy businesses are continuing to find growth opportunities amid the transition.
Businesses should evaluate risks and opportunities related to climate change and the transition based on ISSB or other standards; establish and release a high-quality, reliable transition plan based on GFANZ or other frameworks; and strengthen engagement with investment companies. If financial institutions, real-economy businesses, and policymakers can work together, it should curb global warming and prevent the most catastrophic results.

Session 1: Expanding the GX Market

Panel Discussion 1

Sectors where emission reductions are difficult account for a large percentage of worldwide emissions, and it is vital to achieve de-carbonization in these sectors, but we are facing financial and technological challenges. In order to promote de-carbonization in industrial sectors, we must create a GX market and demand for products with investments in de-carbonization.
In order to create demand, we need a suitable way to evaluate the green premium. A METI workshop discussed and created guidelines based on a concept for emission reduction performance that quantifies emission reductions in the manufacturing stage. Using this index as a global standard and increasing awareness of it was proposed as one way to expand the GX market.
In order to execute de-carbonization projects, it is important to ensure demand. The World Economic Forum clarified demand through the First Movers Coalition, and the WBCSD created the Center for Decarbonization Demand Acceleration in September, which is engaged in promotion activities.
The creation of a GX market is vital to expand investment in de-carbonization, and cooperation is important between financial institutions and industries and between suppliers and the demand side in order to achieve net zero emissions. In the future, we would like to discuss emission reduction performance, which is still in the concept stage, and contributions to emission reductions as an indicator for evaluating the value of a reduction from the perspective of an incentive basis.

Session 2: Creating a GX Startup Ecosystem

Keynote Speech

KIKUKAWA Jingo (Director-General, Innovation and Environment Policy Bureau, Ministry of Economy, Trade and Industry (METI))

Japan's startup ecosystem is bringing about major changes as the number of startups and the amount of funding steadily increases. Japan has a stockpile of technology related to the GX field, and GX field startups have the potential to exhibit significant growth, but they have a mountain of challenges such as poor international recognition, the need for large-scale investment, long lead times, high business risks such as a dependence on international policy, and the developing funding environment in Japan. In order to get past this situation, a 300 billion yen budget has been established for deep-tech startups in the GX field to provide comprehensive support covering research and development for technology seeds and scaling-up businesses for mass production and social implementation as well as support for collaborative research with overseas businesses.

Katherine Elizabeth Monahan (Deputy Chief of Mission, Embassy of the United States of America)

The Japanese GX Promotion Act and the US Inflation Reduction Act are similar in that the government is responsible for handling the overall environment while the private sector is given a lead role. The transition to clean energy is a leadership priority, and Japan and the US are both positioned to be world leaders in this transition through government policy, advanced research, and forward-thinking businesses. Japan and the US have a global partnership to promote a shared vision of future development and prosperity, and we aim to promote innovation, strengthen our industrial foundations, and grow strategic emerging industries.

Panel Discussion2

GX startups are the drivers of innovative technology that will achieve GX. De-carbonization is largely dependent on the development and commercialization of innovation, meaning support for GX startups is vital.
GX startups have opportunities for growth owing to their scientific advantages.
It will take time for the GX field to refine its technology and for businesses to achieve stable profits. Therefore, it is important to support growth for commercialization in addition to R&D through funding of a sufficient scale and flexible time frames.
The government has the role of ensuring continual demand for de-carbonization technology. However, to ensure that the startup ecosystem can grow healthily, public funding must not distort the market.
GX startups should aim for global markets instead of being confined in Japan.

Session 3: Future Prospects of Transition Finance

Keynote Speech

MIYAZONO Masataka (President, Government Pension Investment Fund (GPIF))

The GPIF discloses climate-related financial information in line with the TCFD declaration based on climate change risk and invests in GX economy transition bonds.
In 2023, we analyzed the relationship between greenium and third-party certifications, information disclosure, and impact, and we found that there tends to be a greenium if third-party certification is performed and the usage of funds is disclosed.
In order to achieve GX, it is important for projects with a larger impact to be funded at a lower cost. In terms of continuing discussions on what impacts should be taken into account in the pursuit of profit for stakeholders, we expect to see better information disclosures on the impact of GPIF investments. We hope to see more voluntary ESG information disclosures and businesses raising issues to contribute to the sustainability of the overall market.

FUKUTOME Akihiro (Chairperson, Japanese Bankers Association)

The GX Promotion Act was established last year, GX economy transition bonds began being issued this February, and activities of the GX Acceleration Agency began this July. GX has reached a stage where it is being implemented in society as a business.
The banking world is currently working on transition finance projects, but it is most important for members of the supply chain and stakeholders to work together to understand the transition better and promote action.
We (Sumitomo Mitsui Banking Corporation) recently released the Transition Finance Scorebook, which summarizes challenges and example projects for moving forward with transition finance. We hope it will be useful for transition finance in the future.

Panel Discussion3

Over the past few years, the world has had a better understanding of the concept and importance of transition finance. Countries and regions around the world have been releasing different tools and guidance.
Japan's Climate Transition Bond was positively received, and it has helped increase awareness of transition finance. However, for individual projects, the definition and target are still subject to debate.
Transition plans have three levels: business, sector, and country (government). The reliability of a transition plan increases when the government is committed to supporting the transition of businesses and industries.
An important role of the government in spreading transition finance is encouraging the transition throughout the economy through budgetary measures for sectors that need support and taking the reins in improving education and awareness in markets and with investors.
It is important to increase the overall reliability of transition finance, and disclosures and reporting are necessary. If transition finance can contribute to long-term emission reductions, it can be seen as reliable.
Many frameworks related to transition finance and frameworks for the reliability of pathway judgments in many cases have the 1.5℃ target as a prerequisite, but this is difficult for emerging nations. It is important to discuss ways to close the gap and how reliable tools can be used for this purpose.
Japan established the Asia GX Consortium for activities in the Asian financial market based on the concept of transition. We will provide real examples and use existing resources to create and implement a reliable transition finance framework in the context of emerging nations.

Session 4: Formulating Transition Plan

Keynote Speech

ITO Kunio (Chair of the TCFD Consortium)

TCFD and the TCFD Consortium are reaching a major turning point as TCFD activities wind down, but we see greater importance in climate-related disclosures for achieving GX targets.
The TCFD Consortium created and revised TCFD guidance and green investment guidance. In August this year, we released a transition plan guidebook, and we are continuing discussions related to climate-related disclosures from Japanese businesses participating in TCFD. We will be involved in the operation of the GX Acceleration Agency in the future, and we will continue to discuss activities related to finance.

Panel Discussion4

The systemization and standardization of climate-related disclosures is progressing, and the number of businesses engaging in disclosure activities is quickly increasing. Internal and external discussions on the ideal form of a company through information disclosures are effective for advancing activities for de-carbonization.
Businesses must create and share transition strategies that balance business growth and profit creation with sustainability in order to satisfy stakeholders.
Businesses must work together to achieve the transition across society. When transition plans with ambitious targets are released, it can lead to hints toward a solution from outside of the company.
Investors can increase their understanding of business activities regarding climate change from the transition plan. Two-way communications with businesses improve disclosures and lead to de-carbonization activities.
National transition plans are needed. Japan's government GX policy could become the international standard.

Closing Remarks

SHIGETAKE Naoki (COO, GX Acceleration Agency)

The core message of this summit was the idea of a phase shift in GX.
Session 1 covered the need to focus on the demand side of GX and the importance of reduction in visualizing product emission reductions. Session 2 indicated that startups have a large potential for innovations in the GX field. Session 3 covered the idea that there are various ways to reach a single target and that it is necessary to achieve transition finance through regulation. Session 4 indicated steady progress in activities for transition plans and that transition plans are a strategy for driving investment decisions and are vital for achieving GX.
Accordingly, this summit is a clear indicator that the new GGX generation has started, and the GX Acceleration Agency will put its best efforts into accelerating a green transformation.