Eisai and Kirin HD are exiting ESG investment and turning ESG investment into “owacon” by displaying the amount of money and utilizing it for IR and management strategies

moomooニュース日本株 wrote a column · Sep 26, 2023 15:23

“ESG Investment,” which had been gaining popularity from investors, has reached a turning point. Bloomberg reported on the 26th that hedge funds have begun targeting short sales of ESG stocks, and it has also been reported that the number of funds claiming ESG is rapidly decreasing. A major reason why ESG investment is being shunned is that it is difficult to see the actual state and effects of ESG activities, and the fact that it is difficult to eliminate “pretentious ESG” has also led to distrust from investors. Meanwhile, Eisai, Kirin HD, etc. are utilizing it to appeal to investors and execute management strategies by converting the effects of ESG activities into specific amounts.

▲Examples of companies that have published the effects of ESG activities by converting them into monetary value

The Nihon Keizai Shimbun dated 26th $Yamaha Motor (7272.JP)$It was introduced that the social value of the small water purification system installation project handled in developing countries was disclosed as about 15 million dollars (about 2.2 billion yen). Also, $Eisai (4523.JP)$In addition to calculating the social value of tropical disease treatment drugs provided free of charge at an average annual rate of 160 billion yen, it was also reported that pricing in the US for the dementia treatment drug “lecanemab,” which was approved by the Ministry of Health, Labor, and Welfare on the 25th, uses social value as a clue. Incidentally, the company has set target amounts for rekanemab's social impact in the US to be about 260 billion yen in fiscal 2025 and about 1.8 trillion yen in fiscal year 30.

Eisai has announced not only the ESG effects of products, but also “ESG EBIT,” which reflects non-financial capital in accounting. The company regards labor costs and research and development expenses as “investments in intangible assets” that achieve “social good,” and explains that “increasing ESG EBIT, which is an essential profit, will lead to the creation of medium- to long-term corporate value” (Value Creation Report 2023) without deducting labor costs or research and development expenses from operating income. In addition to these, the company also estimated “employee impact accounting,” which adds and subtracts wage quality, employee opportunities, diversity, and contributions to local communities in 2020. 26.9 billion yen was calculated as a “positive social impact creation” amount.

$Sekisui Chemical (4204.JP)$has quantified the effects related to efforts against climate change. The company has calculated the amount of impact on all stakeholders, stating that efforts against climate change “have an impact not only on shareholders, but also on multi-stakeholders such as customers, business partners, employees, and local communities” (TCFD Report 2023). The calculation formula is as follows.
Comprehensive stakeholder profit = (net profit+amount of employment created by employees implementing climate change initiatives +economic value brought about by contributing to reduction of greenhouse gas emissions from products +economic value brought about by products to environmental aspects other than climate change issues) - (economic loss caused by greenhouse gas emissions from business activities+economic loss caused by business activities on environmental aspects other than climate change issues)
The company has announced a numerical value (multiple) obtained by dividing this comprehensive stakeholder profit by current income. FY2022 is less than tripled, and when converted to net profit of 69.263 billion yen, it is calculated that comprehensive stakeholder profit is approximately 200 billion yen.

$Kirin Holdings (2503.JP)$It has also published numerical values relating to climate change and efforts against natural capital. In the “Environmental Report 2023,” in addition to the financial impact due to climate change and natural capital risks, the financial impact of solving social issues related to climate change and natural capital is calculated by positioning it as a business opportunity. For example, it is calculated that the cost reduction effect when the food waste reduction target is achieved is about 900 million yen, and the effect of reducing chemical fertilizers and pesticides in Vietnamese coffee plantations is 110 million yen, etc.

Source: Bloomberg, Nihon Keizai Shimbun

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more

See Original

Report

164K Views

Comment

moomooニュース日本株

moomoo News Official Account

20KFollowers

4Following

218KVisitors