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With Japan announcing a goal to become carbon neutral by 2050 and President Joe Biden signing an executive order to bring the U.S. back into the Paris Agreement, a wave of momentum toward curtailing climate change is growing at home and abroad. And Japanese businesses are following in that wake as they push forward their plans to switch to renewables.

Mitsubishi Estate Co., Tokyu Land Corp. and Yahoo Japan Corp. are among the major companies shifting their energy sources to renewables, as the need to be environmentally friendly is increasingly becoming a key factor in expanding their respective businesses.

On Thursday, Mitsubishi Estate, a developer that owns offices and shopping complexes in Tokyo’s Marunouchi district, unveiled a plan to have its facilities in the district run completely on renewables by April 2023.

Initially, Mitsubishi Estate, which manages about 30 properties there, was going to make the shift in phases — several properties a year — but the government’s new target announced by Prime Minister Yoshihide Suga in October has prompted the firm to move faster, a company spokesman said.

For fiscal 2021, starting in April, the developer said 18 properties will begin to run 100% on renewables, including the Marunouchi Building and the Shin-Marunouchi Building in front of Tokyo Station.

This will bump up the firm’s renewable energy rate to 30% compared to the current 3%. That is expected to cut its annual carbon dioxide emissions by 160,000 tons, or roughly 80% of the total emissions from all Mitsubishi Estate-owned buildings.

Another prominent developer and player in the Tokyo real estate market, Tokyu Land, is also shifting to renewable energy earlier than it initially planned. It is considering accelerating its plan to shift its buildings to 100% renewables to 2025 from 2050, a company spokesman said.

With the momentum toward green energy resources among companies growing rapidly around the world, the renewable shift “is becoming an essential factor for companies to continue and expand their businesses,” said Masaya Ishida, senior manager at Renewable Energy Institute.

Ishida pointed out that foreign firms renting office spaces in high-rise buildings in Tokyo’s bustling business districts have requested building operators to use renewable energy, forcing more Japanese firms to take that into consideration in the coming years.

Solar panels installed by Fukushima Electric Power Co. in Tomioka, Fukushima Prefecture | BLOOMBERG
Solar panels installed by Fukushima Electric Power Co. in Tomioka, Fukushima Prefecture | BLOOMBERG

For real estate players like Mitsubishi Estate and Tokyu Land, “switching to 100% renewable power will help them attract and keep tenants,” Ishida said.

Real estate developers are not the only ones keen to switch to green energy sources. Yahoo Japan Corp. on Tuesday announced that it has set a goal to shift to 100% renewable energy in three years.

According to Yahoo Japan, 95% of its electricity consumption comes from the data centers.

Its data center in Washington is already running 100% on renewables, the company said, adding that it will make the shift for its two domestic centers in Fukuoka Prefecture.

In the IT sector, global tech giants are ahead of the game. Apple Inc., which has already shifted to 100% renewables for its own operations, is now aiming to have its suppliers become carbon-neutral by 2030.

Yahoo Japan’s parent company Z Holdings Corp. said it aims to become a member of RE100, an international initiative run by the Climate Group and an environmental nonprofit organization CDP, for major multinational firms to be publicly committed to the 100% renewable target.

According to RE100’s website, 284 companies have joined the initiative, with more than 40 Japanese firms participating, including Mitsubishi Estate and Tokyu Land.

The momentum toward renewables is growing not only among large companies but also among small and midsized businesses in Japan.

The number of participants in RE Action, a domestic framework launched in October 2019 for smaller companies, municipalities, schools, medical institutions and other groups to commit to 100% renewables, topped 100 in December.

Many firms have joined the initiative following Suga’s announcement of Japan’s 2050 goal for carbon neutrality, according to the organizing group.

The cost of renewable energy is still high in Japan, which could hamper a shift for some big companies that tend to have various operation bases across the country and consume a huge amount of electricity, Ishida of Renewable Energy Institute said.

But “smaller companies don’t have a lot of operation bases and use less electricity, so it’s possible for them to make a swift shift if they think it’s worth the cost,” he said.

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