210525_CLSA_JAPAN_FORUM_EN_.pdf

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1. Digitalization in Tokyo, Global Financial City MIYASAKA Manabu Vice Governor of Tokyo May 25, 2021 17th CITIC CLSA Japan Forum 2021
2. 1. Prologue
3. We must overcome these two major crises, forge a bright future, and pass on an abundant planet to generations to come. Image: National Institute of Allergy and Infectious Disease Climate crisis Image: Earth Literacy Program Two major crises confront humankind 2 Threat of infectious disease
4. 3 The climate crisis is at the point of no return Sources: “Future Weather Forecast for the Year 2100” Ministry of the Environment The Ministry of the Environment’s weather forecast for Tokyo in the year 2100 Highs 90m/s 43～44℃ Typhoon maximum wind speed
5. 4 In the year 2050: 70% of the world‘s population lives in urban areas World Urbanization Prospects: The 2018 Revision（United Nations Department of Economic and Social Affairs/Population Division） 2050: 6.8 billion people (68% of total population) 1950: 750 million people (30% of total population) 2018: 4.2 billion people (55% of total population)
6. 5 Responsibilities of cities in the 21st century Overcome the climate crisis Achieve comfortable living that is human-centered Key words are DIGITAL and GREEN
7. 6 However … DIGITAL and FINANCE hold the keys to Tokyo's growth Tokyo ranks high in comprehensive power Global Power City Index 2020（THE MORI MEMORIAL FOUNDATION） Ranked 3rd in the world after London and New York Increased competition in finance and economy IMD “World Digital Competitiveness Ranking” Ranked 27th out of 63 countries Z/YenGroup “Global Financial Centres Index” Ranked 5th in Asia, 7th in the world Delay in digitalization
8. 7 Tokyo’s future strategy: Turning predicaments into opportunities Launch proactive initiatives in "Digital" and "Green Finance” fields
9. 2. Tokyo Bay eSG Project
10. Tokyo Bay eSG Project - Creating Japan’s future from Tokyo Bay - （Version 1.0） ◦ Adding to the original concept of ESG ✔ ｅ＝ ecology, economy, epoch-making ◦ Carrying on the spirit of our great predecessors to shape the future ✔ S＝Shibusawa Eiichi: Putting a sustainable society into practice ✔ G＝Goto Shinpei: Creating a city looking 50 years, 100 years into the future A symbolic project leading to Future Tokyo 9
11. The Tokyo Bay Area is full of potential 10  Places for work, living, study, play, and parks to enjoy the water are situated in a well- balanced manner.  New attractions have been created such as facilities related to the Tokyo 2020 Games, commercial facilities, and hotels. Tokyo Waterfront City New reclaimed land  An area that will become a vast parcel of land, which holds unparalleled potential 442ha About 1,000ha *main island of Venice: 517ha Tokyo
12. Redesigning the City: Image of a sustainable city of the future By refocusing on the traditions of the Edo period and the advanced environmental technologies of Japanese companies, and promptly transforming the structure of society such as adopting the most advanced technologies of today, we will create a sustainable city that fuses “nature” and “convenience,” and will serve as a model for the world. 11
13. AA city A city that constantly produces new value through a A city that is pandemic-ready, disaster-ready, and resilient. A city of human-centered spaces surrounded by rich greenery, close to the water, and also rich with biodiversity. A city that constantly produces new value through a concentration of the world’s best talent and knowledge. 12
14. ❷ Introduce cutting-edge digital technology ❶ Realize net zero emissions and create a city full of water and greenery ❸ Implement projects utilizing green finance ➍ Enhance transportation networks for a sustainable city ・Have 100% of the region's energy needs met by clean energy, mainly renewable energy and hydrogen. ・Enrich the Tokyo Bay Area‘s waterfront by increasing various green spaces such as parks. ・Realize a sustainable city through public-private sector utilization of digital technologies that showcase Japan's determination. ・Open up vast areas, such as a huge parcel of reclaimed land in Tokyo Bay, for implementation of the latest technologies. ・By utilizing the "Tokyo Green Finance Market" (name TBD), gather green tech companies from around the world and implement a variety of projects under the keywords of “green” and “sustainable.” ・Significantly improve access between central Tokyo and places like Haneda Airport, through, among others, extension or new construction of subways, and establish a public transit model that uses ZEVs and other modes of transportation. Strategies for realizing the Tokyo Bay eSG project 13
15. Projects implemented through green finance Completely cashless Implementation the latest technology A vast area for technology implementation ・Completely cashless, AI traffic control, etc. Automated ships ・Autonomous vehicles, flying cars, etc. ・Utilization of “Tokyo Green Finance Market” (name TBD) From the Tokyo Bay Area, reclaim Tokyo’s stature as the world’s most advanced city. AI traffic control Sea Forest Waterway Ariake Legacy Area Tokyo Metropolitan Industrial Technology Research Institute Tokyo International Cruise Terminal Medical DX Tokyo Big Sight A digital city that leverages spatial expanse ZEVs for public transportation 14 Our vision (2021-2030) 14
16. The world’s first 22nd century style Future City A city in harmony with the sea and greenery, which, as a gateway to the world, is a place where people interact ・The traditional city is replaced by a 22nd century style city where people can reside in the air, on the sea, or anywhere. ・Is the face of Tokyo with its facilities such as universities and commercial facilities, and its concentration of people, goods, and information from around the world. Swimmable Tokyo Bay Startup Village Plant Factory Become a leading innovation center in Asia where the functions of both areas are combined Local production for local consumption (fish from Tokyo Bay) 15 22nd century style Future City A city in harmony with the sea and greenery Our vision (2030-2050 and beyond) 15 A model city for the world that continues to create new value.
17. 3. Digital Strategy of the Tokyo Metropolitan Government
18. Wellness Industry Education Digital transformation of the TMG Open government ICT professionals TOKYO Data Highway  Monitoring robot  Early discovery of illness  Remote health care Energy  Local production for local consumption  Demand control Enhancing the QoL of Tokyo residents through digital services / Realization of the 3 cities Diverse City Smart City Safe City An open big data platform and use of AI Nature and Weather Infrastructure Data Life and Economy Disaster resilience Urban development  3D digital map Work styles  Telecommuting  AI for simple work tasks Digital shift  Autonomous driving  MaaS  Information collection by cameras and drones  AI automatic detection of danger  Individualized education  Use of tablets  Distance learning  IoT, 3D printers  Automation of agriculture, forestry and fisheries industries Mobility Output Output Data Data Nature  Water and greenery  Biodiversity Overall image of Smart Tokyo(Tokyo edition of Society 5.0) 17
19. Accelerate digital transformation from the perspective of living with COVID Tokyo connected by a data highway （TOKYO Data Highway) Digital shift in public facilities and resident services (Digital transformation of the city) 1 2 3 Digital shift in the government (Digital transformation of the government) Three Pillars + One to achieve a Smart Tokyo Roll out measures under three strategic pillars and accelerate DX from the perspective of living with COVID 18
20. TOKYO Data Highway 19 Anywhere Everyone Anytime Accelerate the construction of high-speed mobile internet networks such as 5G and Wi-Fi to realize a Tokyo connected by a data highway In any situation Realize a connected Tokyo
21. Database of assets owned by the Tokyo Metropolitan Government which can serve as candidate sites for base stations Open data on some 15,000 assets owned by the Tokyo government, including location, is provided. The data form has been made public to allow its use by other municipalities. 20 Buildings (Tokyo Big Sight) Parks Buildings (Tokyo International Forum) Bus Stops Underground passageways Street lights Land (Kozushima Airport site)
22. Improve quality of government service (QOS) through digital power 21 Currently （Quality of Service） QOS Time Around 1995 Significantly improve QOS through digital power
23. × Digital Digital communication（Website, apps, SNS, etc.） Information provision × Digital Online education Education × Digital Remote work Work style × Digital Smart mobility (MaaS, etc.) Transportation Improving QOS through data sharing and utilization systems Improve the quality of service by incorporating digital technology in the various infrastructure possessed by the government and policies 22 × Digital Online medical consultation Health care × Digital Digital disaster management Disaster management × Digital Smart maintenance Infrastructure
24. Pilot areas for Smart Tokyo Cross-sectoral services through 5G and advanced technologies  Support for market advancement by e-sports related companies, etc.  Support for building business models using autonomous driving technology Bay Area  Digitalization of education in Hachijojima and implementation of model projects such as telemedicine using 5G  Horizontal deployment of demonstration results to other islands Tokyo Islands  Town development using advanced technologies  Autonomous mobility, etc. field testing  Research using local 5G Minami-Osawa （Tokyo Metropolitan University)  Supporting the construction of an urban OS  Verification and implementation of services using accumulated data City Center Otemachi・Marunouchi・Yurakucho Takeshiba Toyosu  Demonstration of digital services using smart poles  Startup interaction and support  Verification of autonomous driving mobility services using 5G  town development using big data, etc. Nishi-Shinjuku 23
25.  密を回避 REAL VIRTUAL  Promote paperless, online applications, etc. Investment in digital Investment in goods  Avoid crowding  Secure mobility Virtual Tokyo Metropolitan Government A concept to create another Tokyo government office in a virtual space to provide Tokyo residents with both real and digital services and allow government employees to work on a virtual platform. 24
26. Create information with digital tools (Digitization) COVID-19 → Currently here DX progress Time January 2001 (e-Japan strategy) 2020 Within 5 years 2025 As is… Change the speed of evolution Exchange and share information through digital tools (Digitalization) Utilization of information will change society itself (Digital transformation) SaaS､ Paperless Fax less Open data, etc. Use of PC e-mail, etc. To start, transform to a “DX-Ready” state New Tokyo government structural reforms will enhance the pace of evolution of the Tokyo Metropolitan Government 25
27. The Tokyo government’s ICT personnel: a global comparison 26 Various efforts will be taken to secure more ICT personnel, as Tokyo lags far behind other megacities of the world in this area City Total no. of city employees No. of ICT personnel Percentage of ICT personnel Tokyo 32,000 100 0.3 % New York 125,200 1,500 1.2 ％ Los Angeles 32,200 400 1.2 ％ Paris 52,600 500 1.0 ％ Singapore 37,300 2,600 7.0 ％ (Numbers are approximate)
28. 27 Serve as the headquarters for all things digital in the Tokyo government Provide technical support for the digital transformation of Tokyo government bureaus and municipalities Gathering ICT personnel and cultivating talent among the Tokyo government employees Establishment of Bureau of Digital Services Launched in April 2021 to serve as the organization promoting and driving the use of digital technology to boost the quality of government services Bureau of Digital Services
29. 4. Financial Strategy of the Tokyo Metropolitan Government
30. In November 2017, the Global Financial City: Tokyo vision was formulated as a part of Tokyo's growth strategy (Background) • Intensifying international competition in the financial sector • The financial industry has impacts on a wide variety of industries as the lifeblood of the economy ⇒ Tokyo is expected to grow through the revitalization of the financial industry • A majority of Japan's household financial assets is in the form of cash and deposits ⇒ Effective utilization of financial assets is a challenge to address Growth Strategy Vision for Global Financial City: Tokyo 29
31. The three pillars of Global Financial City: Tokyo 1 2 3 Improve administrative procedures, including tax systems and English language support, and improve the environment in areas such as health care and education Encourage domestic and foreign financial players, especially asset managers and fintech companies, to participate in the Tokyo market Contribute to solving social issues such as by ensuring investor protection and promoting ESG investment 30 Create an attractive business and living environment Cultivate players to participate in the Tokyo market Solve social issues through the financial sector
32. ◆ Brexit and obstacles in subsequent negotiations between the UK and EU ◆ Changes in the situation in Asia (enforcement of the Hong Kong National Security Law) ◆ ◆ Chaos caused by the global spread of COVID-19 Major movements in the international financial situation Dramatic change in the international financial situation since the formulation of the vision for Global Financial City: Tokyo Growing global interest in ESG investment 31
33. Country/ Region Greenhouse gases (CO₂, etc.) reduction target % of global CO₂ emissions (2018) Mid-term target Long-term target USA -26 to -28% in 2025 (compared to 2005) → -50 to -52% in FY2030 (compared to 2005) Achieve carbon neutrality by 2050 14.7% EU -55% in 2030 (compared to 1990) 9.4% UK -68% in 2030 (compared to 1990) → -78% in 2035 (compared to 1990) Japan -26% in 2030 (compared to 2013) → -46% in FY2030 (compared to 2013) 3.2% Canada -30% in 2030 (compared to 2005) → -40 to -45% in 2030 (compared to 2005) 1.7% China ・CO₂ emissions per GDP in 2030 -65％ or more (compared to 2005) ・Have CO₂ emissions peak out by 2030 Achieve carbon neutrality by 2060 28.4% Note: Red indicates goals that were raised and items added after the Leader’s Summit on Climate held on April 22-23, 2021 (Source: JETRO) Growing global trend toward “decarbonization” 32
34. Greenhouse gas emissions（compared to 2000） 50％ reduction（2030） Use of renewable electricity about 50％ （2030） (Ｃ40 Steering Committee, December 2020) ”Climate Emergency Declaration: TIME TO ACT” ”Climate Action” Kick Off Meeting Creation of Tokyo Green Finance Market (name TBD) Tokyo’s international leadership in the fight against climate change New environmental goal (halving carbon emissions) announced at the Davos Agenda Declaring and rolling out a movement to accelerate action to overcome the climate emergency (February 17, 2021) 33
35. New passenger car sales in Tokyo Zero Emission Tokyo Strategy Greenhouse gas emissions (compared to year 2000) Tokyo’s energy consumption (compared to year 2000) Use of electricity generated from renewable energy sources 34 50% reduction 50% reduction approx. 50% 100% non-gasoline “Carbon half style,” an ambitious goal for 2030 to achieve net zero carbon emissions by 2050 Accelerating the shift to zero-emission vehicles New motorcycle sales in Tokyo 100% non-gasoline （by 2030） （by 2035）
36. 13,261 19,683 22,839 30,683 0 20,000 40,000 60,000 80,000 100,000 120,000 2012 2014 2016 2018 2030 Source：2018 GLOBAL SUSTAINABLE INVESTMENT REVIEW, Global Sustainable Investment Alliance, 2021/1/6 (billion dollars) approx. 130,000 （estimation） Climate change and corporates Past the tipping point with customers and stockmarkets, Deutsche Bank Sustainable investment balance in 2030 is estimated to be 4.2 times more than in 2018 Sustainable investment is a global trend 35
37. 43 446 2,699 0 1000 2000 3000 4000 5000 6000 7000 8000 Source: The Green Bond Issuance Promotion Platform “Issuance of Green Bonds by Domestic Companies, etc. (as of December 2020)” 2014: 33.8 billion yen 2020: 1,017 billion yen about 6,200～7,200 Global green bond issuance is also expected to increase significantly Global green bond issuance has increased significantly in recent years, and some estimate that in 2035, it will be triple that of 2020. 36 References: “Zero Emission Tokyo Strategy 2020 Update ＆ Report”; OECD “Analysing potential bond contributions in a low-carbon transition” Issuance of green bonds by Japanese companies, etc. Total amount issued (Billions of U.S. dollars) 2010 2015 2020 2035
38. Growing importance of decarbonization for building a sustainable society Growing global interest in sustainable finance Finances A new financial strategy for Tokyo's sustainable growth With stimulation of green finance a top priority, revision of the Global Financial City: Tokyo vision scheduled for fall 2021 37 Environment
39. Study to be finalized in June 2021 ⇒ Reflect in the revised Global Financial City:Tokyo vision (Study points)  Measures to boost green finance  Formulation of a roadmap for realization, etc. Realization of Tokyo Green Finance Market (name TBD) Accelerating studies for stimulating green finance to attract domestic and foreign investment centering on the environment 38
40. FY2017 FY2021（scheduled） Continue issuance to broaden the base of both issuers and investors Promote environmental measures using Tokyo Metropolitan Government ESG bonds First local government in Japan to issue green bonds in FY2017 Scheduled to issue “Social Bonds“ from FY2021 39 Tokyo Green Bond Issued 20 billion yen Tokyo Green Bond 40 billion yen to be issued Social Bond approx. 60 billion yen to be issued FY2018 & FY2019 FY2020 Tokyo Green Bond Issuance continued Tokyo Green Bond Issued 30 billion yen
41. Project scheme Clean energy centers Sustainable Energy Fund 1 billion yen (max.) from the Tokyo government Investment and lending Tokyo Private Sector Renewable energy power plants Eg. Eg, Setting up a Sustainable Energy Fund Promote the development of clean energy centers and renewable energy power plants using public-private partnership fund schemes (from FY2021) 40
42.  Personnel expenses  Recruitment expenses  Office rent  Equipment and facilities purchase  Consultation fees Support foreign companies engaged in green finance Financial companies engaged in green finance, which are starting operations in Tokyo, will be given support focusing on new investments required to start operations in Tokyo (from FY2021) 41 Expenses eligible for support
43. TOKYO FINANCIAL AWARD The Tokyo Financial Award recognizes financial businesses that develop and provide innovative financial products and services, and businesses that promote ESG investment (A total of 20 awards were presented in FY2018-2020) Financial Innovation Category  Domestic and foreign financial companies that operate or plan to operate in Tokyo (including fintech companies) ESG Investment Category  Domestic and foreign financial businesses practicing ESG investment promotion activities  Domestic and foreign businesses that implement SDG management initiatives (From 2021)  Domestic and foreign businesses that implement green finance initiatives (The Governor's Special Award will be presented) 42
44. Tokyo Sustainable Finance Week (TSFW) A week of events to promote ESG investment and to raise the presence and recognition of Tokyo in the area of sustainable finance A sustainable finance forum, financial seminars for Tokyo residents and other events will be held for about a week in mid-October 2021 43
45. 5. Epilogue
46. DX（Digital Transformation) × GX (Green Transformation) ＝ SX(Sustainable Transformation) DX （Smart TOKYO） GX （Zero Emission） SX 45
47. 46 Smart Tokyo Zero Emissions by 2050 Rebuild Tokyo into a sustainable city chosen by the world, while maintaining the functions of this megalopolis with a population of 14 million Global Financial City: Tokyo
49. EOF