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The quest for net zero can seem insurmountable. There are too many stakeholders, competing factors, processes to update, capital costs. But as Nobuyuki Baba, the senior vice president and head of the Silicon Valley branch of global business enterprise Mitsubishi Corporation, says, dramatically reducing emissions “demands complex solutions to overcome roadblocks.” To get there, he adds, leaders need “to look beyond our normal scope of business.”
While protecting the health of the planet presents clear business opportunities, securing a stake in the estimated U.S.$20.34-billion global climate tech market requires a lot of hard work and collaboration.
“Climate change cannot be solved by individual companies,” says Norio Matsunaga, the senior vice president of Mitsubishi Corporation (Americas). “We need to collaborate. We need to combat climate change with a consolidated effort.”
Mitsubishi Corporation (MC), whose portfolio includes mining, energy, machinery, mobility and healthcare, has made this a priority for many years. From establishing affiliations with innovation hubs like MaRS to investing in energy-transformation strategies, the company has moved toward net zero in tandem with community and industrial partners.
Here, MC leaders share what they’ve learned about the power of collaboration.
Sustainability may be a business buzzword, but it’s not enough to talk the talk. To achieve meaningful results, companies need to prioritize the social impact of their work. Foregrounding this ethos helps ensure goals are maintained even during changes in leadership and other times of transition.
Mitsubishi Corporation began integrating climate adaptation and resilience into its corporate strategy about eight years ago. In 2021, MC rolled out its Roadmap to a Carbon-Neutral Society initiative, with a target of eliminating half of its FY2020 GHG emissions by 2030 and reaching net zero by 2050; the plan also includes a commitment to investing 2 trillion yen in energy-transformation-related projects by 2030. This ambitious vision hinges on facilitating a responsible transition from conventional (and carbon-heavy) options to sustainable sources of energy, with minimal disruption to daily life.
Formalizing a framework has allowed the company to anchor new initiatives in pre-existing climate targets — which in turn can speed progress. By using the Roadmap to publicly announce concrete goals, the company has made “a display of commitment,” says Etsuko Kobayashi, an investment professional involved in one of MC’s climate initiatives out of Tokyo. “It’s a way of shouldering responsibility and better preparing for any drastic changes that may be waiting down the road.”
In the earliest phases of any project, the most effective way forward is often simply to take the plunge and immerse oneself in unfamiliar waters as a way of seeing what’s available. Around 2015, as buzz around developments in IoT and AI technology intensified, Mitsubishi Corporation redoubled its efforts to explore startups. Asako Vitous, now Mitsubishi Corporation’s Vancouver–based department manager, was tasked with finding potential leads in Canada. She admits that at first, “I didn’t know where to go.”
Her immediate strategy? Vitous began reaching out to as many network contacts as she could, from provincial government offices to trade commissioners to Canada’s Consulate General in San Francisco, with the hope of uncovering, as she puts it, anything related to Canadian startups: innovation hubs, accelerators, incubators. All signs pointed toward Ontario — specifically the Greater Toronto Area — as an AI hotbed.
Then she met with advisors at MaRS and explained she “needed guidance to navigate this ecosystem.” Vitous’s candour and eagerness to receive input allowed the partnership between Mitsubishi Corporation and MaRS to evolve organically. Early on, the relationship facilitated meaningful introductions to promising ventures; since then, MaRS has worked with the business enterprise to build tailored programming into its annual contract by asking a raft of questions about areas of interest and key outcomes. “And sometimes we are not clear about the answers, so having that conversation helps us understand what we are trying to do as well.”
When approaching a new initiative or partnership, it can be challenging to fully grasp the spectrum of possibilities. This is why active engagement is such a crucial part of collaboration. For Mitsubishi Corporation, this process hinges on fact-finding. In 2021, it played an important role in the inaugural Mission from MaRS: Climate Impact Challenge, in which 10 cleantech ventures were paired with strategic coalitions that included representatives from government, academia and industry; the purpose was to break down barriers to scaling technology.
As part of the coalition working with waste-heat capture company Extract Energy, MC provided vital insights about industrial requirements, particularly around scale, says Tyler Hamilton, the senior director of climate at MaRS. “One thing I appreciate about Mitsubishi Corporation as a partner is that its representatives really follow through,” he says. “They’ll take opportunities that they may not have previously considered, and they’re open-minded enough to explore them.”
For instance, MC was intrigued by CRANE (Carbon Reduction Assessment of New Enterprises), a tool which was used by companies in the Mission from MaRS challenge to evaluate their potential impact in reducing emissions. MaRS helped the MC team incorporate the climate impact tool into its Massachusetts-based Greentown Labs accelerator.
Having clarity around goals, responsibilities and timelines is vitally important to any project. For MC, this was a key factor in the success of its recent collaboration with Greentown Labs on a project targeting innovation around supply-chain decarbonization. In 2022, MC and its affiliates in the company’s open-innovation consortium, M-Lab, helped launch the accelerator Greentown Go Make 2022 to pair startups and corporate partners with the aim of helping speed the commercialization of groundbreaking supply-chain decarbonization technology.
Five startups were selected (from more than 140 applicants) to participate in a rigorous six-month process. “It was really important to make sure that these startups weren’t just concepts, but that they actually had a product and service we could see, or even touch,” explains Reina Ozaki, assistant manager of research operations at Mitsubishi Corporation (Americas)’ Silicon Valley Branch. “We wanted to ensure we could provide value not just within the program itself, but that there would be an actual outcome.” And for MC, attaining that goal for each participant — startups and corporations alike — involved an unwavering commitment to working together.
Ozaki and her colleagues realized that if there wasn’t a concrete reason a certain startup could benefit from working with a M-Lab member, then that venture was probably better off finding help elsewhere. “We wanted to bring value beyond the financial piece.”
This allowed Mitsubishi Corporation to connect with key innovators, such as Waterloo, Ont.–based Nfinite Nanotech, which specializes in adding non-toxic eco-friendly coatings to packaging. Ozaki and her colleagues were able to set up a call between NFinite’s CEO and Mitsubishi Corporation Packaging Ltd., a Mitsubishi Corporation subsidiary that works with a paper manufacturing company in Japan. “We’re hoping this will impress them enough to take the project to the next phase and deploy Nfinite’s product in the market. This could be a game changer and we want to be part of that.”
When partnerships fail, it often has to do with a clash between corporate cultures — a misalignment in values, communication or organizational styles. Even when turnarounds are tight, taking the time to understand the motivations and expectations of other players can pay dividends.
In much the same way that Asako Vitous sought out local experts to demystify the finer nuances of Canadian startup ecosystems, Reina Ozaki says she and her M-Lab colleagues were drawn to Greentown Labs in part because the incubator was so adept at managing communication between relatively different worlds. “They did a really good job of facilitating how to work with a Japanese company — we’re different from American companies,” she says. “And they tried to make sure there was a shared sense of certain expectations, and an understanding around cultural differences.”
For corporations trying to make sense of a tumultuous global landscape, the axiom “the only constant is change” rings particularly true. One way to plan for an uncertain future? Seek guidance from the examples of those navigating different realities.
Hidehito Tonegawa, the senior vice president and head of the Boston branch of Mitsubishi Corporation (Americas), has found that reflecting on regional contrasts can be illuminating — and strategically beneficial. Before he arrived in North America, Tonegawa was in charge of healthcare development for Mitsubishi Corporation in Asia and India, where, he says, startups are much more anchored in business and corporate sensibilities than the more academic research-oriented ecosystems in Boston and Toronto. He notes that in Southeast Asia, where there are major issues around accessibility, affordability, and even diagnosis and treatment, there is interest in telemedicine and tele-prescription startups that directly tackle those problems. “They’re eager to adopt new technology, and there are lots of active VCs in the area who act as incubators and accelerators.”
As well, Tonegawa is intrigued by what he sees as “totally opposite” healthcare challenges in the United States and Japan. Where Americans continue to grapple with what a lack of widespread coverage means for the uninsured, Japan’s growing aging population will put great strain on its universal healthcare system. “Both countries need to move toward the middle,” he says, “so the technology or innovation we use to work on healthcare issues in the U.S. can be applied in Japan in the near future.” Looking for similar gaps in a familiar landscape can help uncover new opportunities.
Climate solutions typically demand significant capital in order to scale up production, and corporate partners are a crucial part of that equation. This challenge was top of mind in establishing the Marunouchi Climate Tech Growth Fund, which MC announced last year, in conjunction with MUFG Bank and Pavilion Private Equity. The fund, which raised U.S.$400 million at its first closing, is intended to support the growth of “companies with cutting-edge decarbonization technology or solutions that contribute to transitioning to the decarbonized world,” explains Kobayashi.
That this is a collective endeavour is deliberate: The goal is a fund totalling between U.S.$800 million and U.S.$1 billion, which is a tremendous amount of capital; the hope is that many stakeholders will help offset individual risk and provide more opportunities to pursue a wider range of possibilities. “Everyone is conscious that nobody can do this sort of huge task on their own, but they’re willing to co-invest into exciting opportunities,” says Nagi Suzuki, another investment professional involved in the fund. “I think everybody is more willing to share information, share networks, and try to build this ecosystem together.”
An expansive network can greatly assist in achieving an outsized impact. The strongest leaders seek out ways they can share insights with others to accelerate progress. In the case of Mitsubishi Corporation, the company has acted as a “conduit to other corporations in Japan if they feel there’s a strategic connection,” says Hamilton. In cases where there is a glimmer of potential, MC is always eager to discover more. That process of exploration might lead nowhere, but as Hamilton notes, the process has consistently provided invaluable insights — not only for Mitsubishi Corporation and MaRS, but for the companies who are on the receiving end of that engagement.
In the best-case scenarios, the benefits of collaboration go both ways. More than five years into her mission to explore North American innovation, Vitous is a firm believer in the huge potential that can be found in such a two-way exchange. “I hope Japan will learn from the Canadian way of thinking about the social aspects of technology development,” she says. “Many of the entrepreneurs are not just thinking about making money — they really want to make this world a better place, and that tech for good spirit is really impressive.”
This article was created in partnership with Mitsubishi Corporation.
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Main illustration: iStock, Photo courtesy of Greentown Labs
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