TOKYO -- Japanese property developer Mitsubishi Estate has begun asking its suppliers for information about carbon emissions sparked by construction materials like cement and steel, a move that could force a rethink of traditional construction methods and materials, Nikkei has learned.
The request was made to large general contractors Mitsubishi Estate works with. The real estate company plans to ask contractors to use power generated with renewable energy.
Mitsubishi Estate has set a goal of reducing emissions by 87% from the 2017 level by 2050. It intends to reduce emissions not only in its own operations but also at companies it does business with, such as contractors, construction material makers, heavy equipment makers and other subcontractors.
The request for information disclosure was first made to its largest business partners, such as Taisei and Kajima. A similar request has also been made to companies participating in the project to build Torch Tower, a skyscraper near the Tokyo Station.
Similar efforts are already well underway at other global corporations. Apple and global automakers demand that their suppliers disclose information about the amounts of their emissions. Their goal is to make sure emissions are reduced throughout their supply chains.
The trend has caught up with domestic demand sectors such as real estate.
Japan's business community is under pressure to work toward a government goal of achieving carbon neutrality by 2050. But the country's sprawling construction industry is having a difficult time getting started. It has 20,000 operators, most of whom have only recently begun working toward a low-carbon shift.
There are major concerns, one of which is how to ensure that the cost of using greener technologies is shouldered by both the supplier and the customer. "We are developing technologies to reduce carbon emissions," said a Sumitomo Mitsui Construction representative, "but using such technologies could result in cost increases. Will our customers accept a price hike?"
Mitsubishi Estate estimates that total emissions from its supply chain amounted to 3.53 million tons in fiscal 2020. Construction site CO2 emissions came to 1.27 million tons, accounting for 36% of the total and a 28% increase from fiscal 2017.
Real estate companies, meanwhile, are under pressure from their investors and tenants. In Japan, more and more tenants are demanding to know whether the power their offices use comes from renewable sources.
In Europe, property values are significantly impacted by whether the developer used certified green materials.