〚INSARIBU〛
Business opportunity to ride the social tide
The century of speculative virtual currency creation, started by Bit Coin, is coming to an end, and the increasing regulation and maintenance of virtual currencies by the government and laws are making it more difficult for individual investors to seek large profits.
However, with the progress of legislation, the time has come for "institutional investors" to enter the market as a major alternative to stocks, FX, and futures trading, with a view to investing a large amount of capital.
In addition, blockchain technology has been focused on in the form of virtual currency until now, but in recent years, new and diverse forms of utilization such as NFT and DeFi have emerged, and the industry has become huge.
※Institutional investors are large investors such as life insurance companies, non-life insurance companies, trust banks, ordinary banks, shinkin banks, pension funds, mutual aid associations, agricultural cooperatives, and government financial institutions that invest in stocks and bonds using large amounts of funds.
Sustainable Development Goals SDGs are international goals for a sustainable and better world by 2030, as stated in the 2030 Agenda for Sustainable Development, the successor to the Millennium Development Goals formulated in 2001 and adopted unanimously by member states at the UN Summit in September 2015.
The promotion of "Society 5.0," which is linked to the SDGs, is being promoted from an economic and business perspective, but let's take a look at the background.
From an economic and business perspective, the biggest impact was undoubtedly the revision of the Charter of Corporate Behavior by Keidanren in November 2017 for the first time in seven years.
In it, it followed the trend of stating that it is serious about tackling the SDGs under the concept of Society 5.0 (Society 5.0).
Keidanren is the most influential organization in the business world, with 70% of listed companies as members. The idea is to use the power of Keidanren, in other words, the power of business, to realize the SDGs.
「Society5.0」
Until now, companies have been more interested in doing good things for society with a portion of their profits or surplus money, but with the SDGs, there is a major shift in thinking: let's change the world while making money through our core business. The SDGs are a manifestation of the power of business and the power of money to change the world, and this is one of the areas where I feel the potential of the SDGs.
Society 5.0 is expressed as follows.
・Hunting society (Society 1.0)
・Agricultural society (Society 2.0)
・Industrial society (Society 3.0)
・Information society (Society 4.0)
・Ultra-smart society (Society 5.0)
Society 5.0 was created in the sense of realizing a new society, the fifth after the one mankind has been living in up to now, by making the best use of digital innovation and innovation.
The movement toward a sustainable world is accelerating from a business perspective, especially among global investors.
ESG is an acronym that refers to the three perspectives of the environment, society, and governance, and ESG investment is responsible investment that takes into account ESG issues.
This means that investors are becoming increasingly aware of the idea that ESG investment is not only about short-term earnings, but also about medium- to long-term corporate value, i.e., companies that contribute to the achievement of the SDGs.
The movement toward a sustainable world is accelerating from a business perspective, especially among global investors.
ESG and SDGs can be summarized as two different perspectives on achieving the same sustainable world.
Globally, ESG investments have exceeded 2,500 trillion yen.
Since Japan's national budget is 100 trillion yen, this means that 25 times more money than Japan spends in a year is invested in companies that contribute to a sustainable world and society as ESG.
Really? Why is that happening? Some of you may be wondering. So let me try to unpack what is happening among investors right now from a business perspective.
In fact, it is not that investors have suddenly been reborn as people who want to do more good for the environment and society rather than just making money. They are making ESG investments as a way to make money.
For example, in February 2019, BlackRock, one of the world's largest investment managers, announced that ESG funds outperformed traditional funds in investment returns from 2012 to 2018. This means that it is now more profitable to invest in companies that consider a sustainable world than to invest in companies that do not consider a sustainable world.
On the contrary, it can be said that consumers are no longer buying products from companies that do not consider a sustainable world, but prefer to buy products from companies that do consider a sustainable world. As a result, corporate management has actually changed dramatically over the past decade.
To take a simple example, 99% of Starbucks coffee beans are made through fair trade, a system that supports sustainable livelihood improvement by trading goods made in developing countries at a fair price.
Other companies such as Nike and GAP are also making cotton products from 100% organic cotton within a few years. This is because conventional products use large amounts of defoliant and have caused major problems with air, soil and water pollution.
These activities support the company's brand image and are supported by consumers, resulting in higher sales and, from the investor's point of view, a profitable cycle.
Creating a New Blue Ocean from the Old Red Ocean
Today, industries related to food, clothing, and shelter have a long history, with pioneers such as long-established companies and major corporations, and excessive competition is fierce, so it can be said that there is almost no chance for a venture company to succeed even if it enters the market late. However, in such a red ocean industry, it is not the case that latecomers are not successful at all.
When people hear the term "red ocean," they think that the market is saturated and that it is difficult for newcomers to enter the market unless they are financially strong and well-connected.
On the other hand, the existence of that many people and companies means that the market is large and demand is great.
For example, even though virtual currencies are popular in the blue ocean right now, they are far from the size of the stock and FX markets.
The best business model today is to take an adventurous venture stance in the old and credible red ocean world and build a blue ocean world within the red ocean market using new and untested methods and technologies.
