Creating a truly meaningful society through urban development based on trusting relationships with diverse stakeholders

Inheriting entrepreneurship and enhancing the value of spaces

The Mitsubishi Estate Group has been working on its Long-Term Management Plan 2030 since April 2020. However, during the first three years of the plan, we have experienced major changes in the social environment that were unforeseen at the time it was formulated. The spread of COVID-19 has completely shaken up our economy and livelihoods, as well as the way people work and even their values. In addition, we are facing a situation in which it is difficult to predict the future due to waves of change with the manifestation of geopolitical risks and the fragmentation of the international community, particularly the invasion of Ukraine by Russia in 2022. I assumed the post of President in April 2023, and I take my responsibility for setting the direction of management in this increasingly uncertain environment very seriously.

In the Long-Term Management Plan, the Group clearly stated its policy of integrating sustainability into management. As set out in this plan, my mission is to practice management focused on increasing both social and shareholder value. While these two elements may be contradictory in the short term, they are not inherently opposed to one another. Building an internal compliance system is the right thing to do, and engaging in business that contributes to society and being useful to society over the long term will amass excellent human resources and create opportunities for the next stage of growth. For a company, being recognized for providing social value is the minimum requirement for engaging in corporate activities, and ultimately translates into an increase in shareholder value.

The urban development of the Mitsubishi Estate Group originates from Mitsubishi’s decision to take over from the Meiji government the entire Marunouchi area of Tokyo, which in 1890 was a deserted field overgrown with grass. Thanks to the strong determination of our predecessors, the Marunouchi area (the Otemachi, Marunouchi, and Yurakucho districts) subsequently evolved into a business center that supports the economic development of Japan. Throughout this time up until the present day, we have been pursuing urban development that has enhanced the value of spaces in addition to real estate for more than 130 years with a belief in being cutting-edge while contributing to the creation of Japan’s industry. This kind of mindset inherited from our predecessors has been embodied in our mission statement, which is to contribute to the creation of a truly meaningful society through urban development.

We believe that “a truly meaningful society” is a society in which each of our stakeholders can find happiness and joy.

We will identify changes in society, listen to the opinions of our stakeholders, and take advantage of the various business capabilities of the Group to enhance the attractiveness of spaces. By so doing we will bring satisfaction, happiness, and smiles to all kinds of people. I believe that our ability to pursue this kind of businesses is precisely where our strength lies. Keeping in our minds the tremendous entrepreneurship of our predecessors, who, in an empty field, built a world-class business center, we will continue to promote urban development with more flexibility in our ideas than ever before without being constrained by the stereotypes of the past.

Identifying global trends to reflect them in business

Over the past ten years or so, the Mitsubishi Estate Group’s International Business has expanded significantly. In addition to real estate development businesses in various countries, we have also expanded the global network of the Investment Management Business. In the International Business, our mission of building attractive communities and enhancing the value of spaces is the same. Going forward, we will continue to grow the International Business further and strengthen its collaboration with other business sectors as set out in the Long-Term Management Plan.

At the same time, it will be important to be alert and identify global trends in promoting business in Japan as well. When we think about how the Mitsubishi Estate Group can contribute to Japan maintaining its presence in the world, continuing to increase the competitiveness of cities with a high profile internationally such as Tokyo and Osaka is essential. However, it is also vital to create unique towns and areas in order to increase the attractiveness of Japan as a whole, including rural areas. Looking at the development of the Marunouchi area, we may have a strong sense of the merits of the Mitsubishi Estate Group, but I think we must look at our company objectively from a broader perspective, without being complacent.

A global perspective also holds the key to taking a multi-faceted approach to providing value to society. From 2011, I was seconded to Rockefeller Group, the core of our U.S. business, and I served as President & CEO there from 2014, which was a very valuable experience for me. When I was initially assigned, I was often bewildered by differences in culture, ways of thinking, and business practices. I learned from this experience that it’s not a matter of whose argument or position is right. Rather, it is important to understand things from diverse perspectives. Communicating with one another and working toward mutual understanding is key.

Today’s world is being described an “era of fragmentation.” However, precisely because we are in this situation, I want to have faith that the whole world could join together through mutual recognition of diversity and respect for diverse values. In 2019, many people visited Japan for the Rugby World Cup 2019TM Japan Tournament co-sponsored by Mitsubishi Estate, and we witnessed firsthand fans and players enjoying their stay in Japan. I feel that the steady recovery of inbound travel demand amid the easing of travel restrictions indicates that many people feel Japan is an attractive country. Sports, culture, and the arts play a substantial role in connecting people, and I would like to incorporate these elements into urban development, creating the hope that people will connect on a global scale.

Using Marunouchi as the platform for meeting the challenge of new value creation

With 2020 onwards positioned as Marunouchi NEXT Stage, we have been working to create new urban value for the Marunouchi area, which forms the foundation of the Mitsubishi Estate Group. Marunouchi NEXT Stage is a vision to create a platform where people and companies come together and interact to create new values, generating innovation and strengthening digital infrastructure, and thereby aims to improve quality of life (QOL) for individuals and find and solve social issues. Using the entire neighborhood as the platform, we will provide venues for demonstration experiments, expand support for startups, and leverage entertainment and the arts to develop the area into a place where people come together to exchange information and culture with each other.

Take Yurakucho, a district which is to undergo a large-scale redevelopment. We will take on the challenge of leveraging art for creative urban development. Although we are still in the exploratory stages, based on the special features of the neighborhood, we would like to create a unique character that is distinct from the Marunouchi and Otemachi districts, which are ahead in redevelopment, and which will, in turn, translate into enhancement of value in the Marunouchi area as a whole.

On another front, in our TOKYO TORCH project (formerly Tokyo Station Tokiwabashi Project), where we anticipate the completion of the Torch Tower in fiscal 2027 following the Tokiwabashi Tower, completed in June 2021, we challenge ourselves to deliver diverse functions not limited to offices, including Japan’s highest hanging garden, an ultra-luxury hotel, and the first high-rise residences in the Marunouchi area.

We are also aware of the changing roles of offices as work from home (WFH) is becoming more accepted in the post-pandemic work environment. What is the significance of going into the office despite the increasing number of tasks that can be performed online even at a remote location? What people are seeking is value as a “place for interaction and creation” consisting of communication that deepens through sharing spaces in real life and the new ideas and inspiration that come about unexpectedly through casual conversations. As a place where people and companies meet, the overwhelming conglomeration of the Marunouchi area is a major strength. Going forward, we hope to build on this strength to further accelerate urban development with an accurate grasp of the changes in social needs and a more flexible approach to buildings, spaces, and their functions.

Demonstrating management commitment and striving for high goals aimed at decarbonization

The Mitsubishi Estate Group formulated the Mitsubishi Estate Group Sustainability Vision 2050 by reflecting on the present from the perspective of our vision for 2050 and our purpose (the meaning of our existence in society). In our Long-Term Management Plan, we position the Mitsubishi Estate Group 2030 Goals for the SDGs, which are the milestones for achieving the vision, as the center of our strategy for increasing social value. We established KPIs and action plans in the four key themes of the 2030 Goals — that are environment, diversity and inclusion, innovation, and resilience — to drive our efforts in these areas.

In terms of our decarbonization initiatives, we significantly revised up our targets for reducing GHG emissions and the renewable energy ratio, and, in June 2022, we were the first Japanese company to receive certification for targets in line with the Net-Zero Standard from the SBT initiative^*1. This can be considered a step forward, but we still have much to do. The targets we set this time certainly cannot be achieved easily, and we must keep going with trial and error and adjusting our course as necessary.

Furthermore, there are growing social demands for nature positive initiatives. As some aspects of the Group’s real estate development business alter nature, we have a responsibility to be proactive about conserving and expanding natural capital and ensuring biodiversity.
In February 2023, Mitsubishi Estate concluded a three-way collaboration agreement with Minakami-cho, Gunma Prefecture and the Nature Conservation Society of Japan (NACS-J), launching efforts aimed at becoming nature positive^*2. This initiative utilizes Japan’s corporate hometown tax donation system, working to convert planted forests with depleted biodiversity into natural forests and regenerating woodlands through donations to the town of Minakami. By collaborating with people who have specialist knowledge and share our vision, we will give concrete shape to a goal we cannot achieve alone.

This is a challenge in a field yet to be explored by Mitsubishi Estate. However, we will assess the results of the initiative quantitatively and qualitatively and consider the potential for applying it in other areas. Furthermore, looking ahead, I believe we should aim to become nature positive through our business in itself.

In the field of sustainability, we cannot bring about major changes even if each of the relevant departments add up their likely achievements and set realistic goals. I think it is a field in which there will be no progress unless top management sets high goals itself and communicates their thoughts. From this perspective, I think positioning increasing social value as a strategic goal, demonstrating the commitment of management both inside and outside the company in the Long-Term Management Plan was of great significance. In fiscal 2022, I was involved in initiatives aimed at achieving the goal in my position as Director Responsible for Sustainability, and I would like to make further significant progress for the Group as a whole by demonstrating my own commitment as top management again, both inside and outside the Company.

Increasing sensitivity to the issues to realize a truly diverse society

In order to implement the Long-Term Management Plan, it is essential to create an environment in which each and every Mitsubishi Estate Group employee can make the most of their different capabilities. The continued pursuit of true diversity and inclusion at the Mitsubishi Estate Group also forms an important foundation for providing society with proposals for richly diverse urban development.

During my assignment in the United States, I felt every day that it is a society where people with different races, nationalities, cultures, religions and various other attributes coexist, based on mutual respect of each other’s diversity. In comparison, I feel the idea that Japanese society is contrastingly homogenic in a certain sense has been the accepted opinion for a long time.

The United States has its own unique challenges, and I do not believe we should simply follow in its footsteps. However, I think we can say that an environment in which diversity must be recognized encourages the creation of these principles and norms. There has been an increasing understanding of gender issues in Japan in recent years, and Mitsubishi Estate has accelerated initiatives aimed at increasing the percentage of female managers. However, we need to further deepen our understanding of diversity, and I include myself in this. I believe that the important thing as a company or as an individual is to first increase our sensitivity to the kind of issues arising in the world today. We must dig deep to find out what the issues are and where we need to change. Everyone at the Group, and managers in particular, must be prepared to take another look at and improve their own organization, with the assumption that unconscious bias is present.

In April 2022, the Group revised the Mitsubishi Estate Group CSR Procurement Guidelines into the Mitsubishi Estate Group Supplier Code of Conduct to clarify our policy on striving to ensure global standards across the supply chain on human rights and environmental issues. The Code of Conduct not only covers suppliers that have direct transactions with the Group but also second tier suppliers and others lower in the supply chain. We have transactions with many companies of different sizes and from different industries, and it is not easy to treat them the same as the situations of each company are not uniform. Now that we are going into the second year of the Code of Conduct, we would like to further deepen our communication with each company to progress in a better direction across the supply chain.

Continuing to meet challenges as the Ecosystem Engineers

Now that I am in charge of management in my capacity as President, my hope for the future of the Mitsubishi Estate Group is that it will be a corporate group that continues to take on new challenges. I would like to build a strong presence around the world as well as in Japan so that Mitsubishi Estate comes to mind when people think about real estate companies. To accomplish this, it is not only important to build strength in our business but also to build trusting relationships with diverse partners. Urban development is a project in which society as a whole creates things that individuals and companies cannot achieve by themselves, and this is the same everywhere. Mitsubishi Estate is a company with approximately 1,000 employees on the non-consolidated basis and approximately 10,000 employees at the Group overall. The number of employees is by no means large in comparison with the size of our business. In other words, it can be said that our business is based on strong external partnerships and the fusion of mutual resources. Thus, the foundation of our business consists of strong relationships with diverse partners as well as our employees, who are our human assets with the interpersonal skills to build these relationships and a spirit of meeting challenges without fear of failure.

Our vision to “Be the Ecosystem Engineers” as stated in the Mitsubishi Estate Group Sustainability Vision 2050 has deepened our awareness of co-creation with diverse stakeholders. We will continue to be the Ecosystem Engineers bringing together the power of people and companies in different positions by demonstrating solid achievements in increasing both social and shareholder value in order to earn trust. We would like to contribute to the realization of a sustainable society while sharing aspirations and values related to urban development with all kinds of stakeholders.

• An environmental initiative that calls for companies to set greenhouse gas emission reduction targets based on scientific evidence (= SBT: Science Based Target) consistent with the level required by the Paris Agreement (limiting average global temperature rise due to climate change to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C)
• Nature positive: Refers to halting the loss of biodiversity and restoring nature for the sake of human beings and the Earth. The realization of a nature-positive society was set as a mission for the international community at the 15th Conference of the Parties to the Convention on Biological Diversity (COP 15) and global targets have been established to achieve it.