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Japan Times
6 days ago
- Business
- Japan Times
Japan bets on homegrown startups to adapt to a hotter world
Japan is hoping startups can help the fifth-biggest carbon dioxide polluter prepare for and adapt to a warmer world. The Environment Ministry is offering ¥60 billion ($415 million) of support for the commercialization of homegrown climate and environmental technology through the Japan Green Investment Corp. for Carbon Neutrality, a government-backed fund that invests in ventures to reduce emissions. The effort is expected to promote innovations in areas from aquaculture to flood defenses. "We realized that it'd be difficult to address climate issues without embracing the innovation, creativity and free thinking at startups,' State Minister of the Environment Fumiaki Kobayashi said in an interview Wednesday. The program will also offer seed money to startups and promote those that make it to commercialization to overseas markets. The government's role as a potential buyer of these technologies will serve to further accelerate development, according to Kobayashi. The ministry is also working with other agencies such as the Government Pension Investment Fund to direct more money to green-tech startups. "The money we've allocated isn't enough at all,' Kobayashi said regarding the ¥60 billion sum. "The ministry's budget may be extremely small, but the role the Japanese government can play as the consumer of these technologies would be absolutely huge.' Japan remains heavily reliant on fossil fuels for electricity and has struggled to shift to cleaner energy sources or to achieve major progress in industrial decarbonization. The country said in February that it would aim to cut 60% of greenhouse gas emissions by 2035 from 2013 levels under a revised climate target, a policy seen as falling short of action required to meet Paris Agreement goals. While the latest initiative doesn't directly address how to reduce gas and coal consumption, Kobayashi said the ministry will encourage cooperation between startups and large corporations to address the problem. The ministry also offers investments of as much as ¥500 million to eligible startups and larger companies that are developing technologies that limit emissions. Kobayashi believes climate-tech startups will eventually comprise 10% of Japan-born unicorns. This would be in line with an initiative that was first introduced under former Prime Minister Fumio Kishida three years ago, which outlined an ambitious push to create 100,000 new startups and 100 unicorns by 2027. "The money we spend on our environment shouldn't be considered a cost,' Kobayashi said. "What's important is to think of this as a business opportunity, not just as a problem to solve.'
Reuters
23-04-2025
- Business
- Reuters
Japan lawmakers urge pension fund to invest in domestic private equity
TOKYO, April 23 (Reuters) - A group of Japan's ruling party lawmakers on Wednesday called on the country's top public pension fund GPIF to expand investment in domestic private equity and venture capital funds to strengthen the domestic private asset investment chain. Global private equity firms such as KKR (KKR.N), opens new tab and Bain Capital have thrived in Japan due to the country's corporate governance reform, rising shareholder activism, and the government's push for industry consolidation. But the presence of Japanese private equity firms has been limited so far, with government-backed fund Japan Investment Corporation (JIC) often the only domestic non-strategic bidder in multi-billion-dollar deals. The call for the Government Pension Investment Fund (GPIF) to step up as well came in a proposal presented to Prime Minister Shigeru Ishiba from a group of lawmakers looking at the issue, the aim being to make sure that profits from such investments remain in Japan. "We always hear the likes of KKR and Bain help big companies overhaul themselves, but profits derived from such restructuring go to U.S. and Canadian pensions (which invest in those global private equity funds)," Fumiaki Kobayashi, a lawmaker and key member of the group, told reporters. Specifically, the group said in its proposal that GPIF should boost its alternative investments, including domestic private equity and venture capital. Domestic private equity funds should also "get involved in large-scale mergers and acquisitions," Kobayashi said. Alternative assets such as private equity, property and infrastructure account for just 1.6% in GPIF's massive 258.7 trillion yen ($1.82 trillion) portfolio, far short of a 5% limit. Former Prime Minister Fumio Kishida launched the policy group last year with dozens of lawmakers from the ruling Liberal Democratic Party to continue his key policy drive to beef up the country's $5 trillion asset management industry. ($1 = 141.7600 yen)
