In order to realize TBM's vision of “Build on the past to create the future, with innovations to sustain a circular ecosystem lasting for centuries.”, we need to redefine how we understand the world. In particular, the economy-centric, short-sighted capitalism to maximize quarterly shareholder returns, which was common until the 2008 financial crisis, needs to be overwritten. In the field of sustainability, the three elements of "environment," "society," and "economy" are called the triple bottom line*, and we believe that activities that meet the needs of the present and future generations with these three elements can lead to a sustainable world.
*Triple Bottom Line The idea that activities should be conducted in the area that meets the sustainability requirements for the three elements of “environment”, “society” and “economy” (center of Figure A). For example, Novo Nordisk (Denmark-based pharmaceutical company **), known for its advanced approach to sustainability management, specifies the principles of this triple bottom line in its articles of incorporation. In addition, as the way of capturing the world, the three circles of "Environment", "Society", and "Economy" depict the relations of the three as shown in Figure B. ** Novo Vordisk, Website: http://www.novonordisk.co.jp/sustainable/triple-bottom-line.html
At TBM, we reorganized these perspectives, and captured the world with the layers of “Natural Environment”, “External Stakeholders”, and “TBM”, all interlinked by their “Relations/Bridges”.
2.1. What are Megatrends?
As the idea above is the snapshot of the world at one moment, it is necessary to consider an extended timeframe for achieving true sustainability. The definition of sustainable development, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”, requires us to capture the (expected) impacts of our activities at present and in the future. To do this, we must understand the long-term major changes of the world, that is, the megatrends, and choose sustainable activities for the future.
The world population continues to grow and will reach approximately 10 billion by 2050. Population growth leads to the formation and enlargement of cities. Greater investment in urban infrastructure than ever before, and some roles played by nations will be played by cities, especially megacities. Cities will spread especially in emerging countries. The center of the world economy shifts from so-called "developed countries" to "emerging countries" where urbanization and industrialization progress, and it is no longer a world centered around Europe and the United States.
With the increase in population and improvements in the quality of life, the amount of resources needed by human society will also increase. The depletion rate of exhaustive resources accelerates, and even renewable resources, if consumed beyond the rate of regeneration, will diminish and eventually become unavailable. Furthermore, greenhouse gas emissions can lead to a climate crisis as well as local weather abnormalities with various other adverse effects such as irreversible sea level rise and spread of epidemics. Thus, in a world of increased uncertainty, risk reduction and transfer will bring about tremendous financial burdens.
The tools left for us to cope with this crisis are technology, values and systemic changes. Technology will dramatically increase the efficiency of human lives and increase the regeneration rate of renewable resources. Additionally, there are also some people who reflect on the wasteful lifestyle led by modern society, and have shifted theirs to one led by a mindset of de-growth. These values will emerge in various areas of the world and spread worldwide at a speed that humans could not even imagine before. Simultaneously, strong efforts to create a system that enables such new lifestyles will be established.
In order to hand over a sustainable world to the next generation, we have to understand this reality, believe in our potential, and unite. We have long survived with the notion that once the time comes, we will be able to do something about it. That time is now.
The efforts of each one of us can accelerate the transition to a sustainable world.
Let us build a bridge to the future we want.
3. Grand Challenges
The changes in the world represented by the above-mentioned megatrends pose major challenges for people's lives. These are so-called Grand Challenges. Among them, the SDGs (Sustainable Development Goals) have become a global movement, being the common language for governments, businesses, and civil society. Furthermore, The Kyoto Protocol in 1997 and the Paris Agreement in 2015 are also major turning points for climate change; one of the biggest environmental issues that requires urgent action on a global scale.
< SDGs >
The SDGs are 17 goals and 169 targets agreed upon by countries to create a sustainable world by 2030. It was devised based on multiple stakeholder consultations involving businesses as well as governments from developing and developed countries. Building onto the former framework, the MDGs (Millennium Development Goals), the SDGs are universal and participatory, involving both developed countries and the private sector. In addition, impact investors, who take into consideration both financial return and social impact, are seeking to link their outcomes to the SDGs. See here why TBM has joined the Japan Climate Initiative>>
< Paris Agreement >
The Paris Agreement covers all measures against global warming, from reducing greenhouse gas emissions, having the necessary “adaptations” for global warming, resisting their adverse effects, providing funding and technical assistance to developing countries, and preventing CO2 emissions from deforestation. It is a comprehensive international agreement to reduce greenhouse gas emissions to virtually zero worldwide by the second half of the 21st century, with the aim of keeping global temperature rise below 2 degrees (with the best efforts, below 1.5 degrees) compared to levels before the Industrial Revolution. It is a ground-breaking agreement that shares the goal of the whole world. See here why TBM has joined the Japan Climate Initiative>>
4. Trends that matter to TBM
As a company that aims to rebalance ecological sustainability and economic viability, TBM conducts its business activities with a deep understanding of changes in the natural environment. Despite many indicators of changes in the natural environment, one of the indicators, Ecological Footprint, is a major factor that defines our business activities. Ecological Footprint refers to the total amount of ecosystem services needed to produce the resources we consume and absorb the carbon dioxide from social and economic activities. According to the 2018 Global Footprint Network’s calculations, 1.7 Earths are needed to support the lives of people in the world, and 2.9 Earths are needed if the entire world population were to have the standard Japanese lifestyle. The businesses that address the issues of water scarcity and climate change are essential to us.
4.1. Climate Change
According to the World Economic Forum, climate change has been among the top five risks with major impacts in the next 10 years since 2012, and has been recognized as a major global challenge. Approximately 70 percent of the solar energy received from the sun is absorbed by the atmosphere and surface of the earth, to then become heat. Some of the infrared rays reflected on the ground surface is absorbed by greenhouse gases (e.g. CO2) in the atmosphere and this contributes to the warming of the earth's surface. However, since around 1850, the concentration of greenhouse gases in the atmosphere has shown a sharp increase, as global temperature continues to increase. Currently, the world-wide average temperature is higher by 0.8 to 1.2 degrees compared to before the Industrial Revolution. Such global warming is beginning to have a variety of adverse effects, including the intense natural disasters caused by extreme weather events. Even if the targets announced by each country (NDCs: Nationally Determined Contributions) under the Paris Agreement were to be achieved, the temperature rise is still expected to reach 3 degrees. The need for more radical efforts are being called out.
4.2. Water Risk
Based on the World Economic Forum, water crisis has always been among the top five risks with major impacts in the next 10 years since 2013, and has been recognized as a major global challenge. In particular, the core problem of the water crisis, "water shortage" is worsening and it is said that about 2.5 billion people are already facing this problem. In addition, by 2050, about 40 percent of the world's population is expected to experience water stress or lack of water. Issues including population growth, droughts and torrential rain caused by climate change may exacerbate agricultural water shortages, international disputes, etc. ( Japan Water Forum、Japan Water Guard)
4.3. Resource Depletion
Since 1970, the world population has doubled, and its economic size and resource extraction have tripled. As the megatrends show, there is a risk of increased material footprint (the consumption of natural resources to meet demands), which is driven not just by the continuous population growth but also due to the global transition of the middle class to upper class, further increasing per capita resource use. There is a need for policies and corporate efforts to decouple economic growth from resource use and the associated negative impacts on the environment (UNEP 2016 “Global Material Flows and Resource Productivity”).
4.4. Marine Plastic Pollution
Today, approximately 51 trillion microplastics are floating around the world (van Sebille et al. 2015), and by 2050, the total amount of marine plastic is expected to exceed the total weight of fish. Not only is plastic waste itself threatening to marine life, but there is also a fear that harmful substances attached to finely fragmented plastic may cause serious health problems. China, which has so far purchased, disposed, and recycled a large amount of plastic waste, has banned the import of plastic waste in 2018, and countries are required to cope with their own plastic waste. Regulations on the use of plastics have been investigated and introduced in more than 60 countries. Since plastics are essential for many, there is an ongoing movement to switch to renewable materials and biodegradable materials.