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The SDGs perspective is always required in large-scale projects
Investors who have come to look at more than just returns.
One theme that has emerged as a top priority in corporate management over the past few years is the SDGs (Sustainable Development Goals), the goals that the 193 member states of the United Nations will achieve over the 15-year period from 2016 to 2030, which were adopted at the UN Summit in September 2015. The SDGs were adopted at the UN Summit in September 2015. Along with ESG investment, which selects companies that give consideration to the environment, society, and corporate governance, the SDGs became a top management priority early on in Europe and the United States, and have become a frequent topic of discussion in Japan over the past year or two. </span
I'm sure that those of you reading this article are also looking for ways to incorporate the SDGs into your own business on a daily basis.
In fact, as a global business, there are many moments when we are aware of the SDGs. A typical example is in the world of investment. Until now, annualized IRR (internal rate of return), which is calculated by adding the period of time to the investment amount, has been used to evaluate projects such as construction and real estate. However, as the growth of dedicated SDG funds shows, investors are focusing not only on returns, but also on the sustainability of the planet.
These trends were particularly prominent in Europe, but now they are expanding worldwide. Even in the U.S., where shareholder capitalism is the mainstream, an increasing number of companies, especially global companies, are managing their businesses with an awareness of the SDGs. The emergence of the Biden administration in the United States, which has made climate change action a major pledge, will also support this trend. </span
Initial cost increase can be covered.
If we apply this change to construction and real estate, it means that if you don't include SDG elements in your projects, you will have a harder time attracting funding.
We are promoting Public Private Partnership (PPP) projects to support the development of social infrastructure in emerging countries, including toll road concessions in Ghana, Vietnam, and Peru. These PPP projects are self-initiated. These PPP projects are not self-financed, but are based on investments and loans from institutional investors, banks, and government-affiliated financial institutions, and when collecting funds, they are required to structure their projects in accordance with the SDGs. （
This is not a negative thing.
In the case of social infrastructure, not only do we build cost-effective toll roads, but we also propose surrounding facilities that will create jobs and increase incomes for nearby residents. Build affordable housing complexes near interchanges and service areas that use renewable energy. Or, using cutting-edge AI (artificial intelligence) technology to make maintenance more energy efficient. This is in line with the principles of the SDGs.
In Japan, we can aim to build zero-CO2 offices, houses and public facilities with reduced CO2 emissions. </span </span
Of course, initial costs may increase by being aware of the SDGs. However, SDGs funds often have lower expected returns, and the cost of raising funds will also be lower because of this, so we see a balance between both business income and expenses and fundraising. We also see significant maintenance and energy cost savings from AI and IoT. It is the role of us project managers to put these things into action through trial and error.
With the new coronavirus raging, the future of the Japanese economy is uncertain. In the midst of all this, we remain hopeful and are determined to build projects that will boost the SDGs.
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