Energy, data centers and an opportunity for rebirth: Japan’s green leaders share their Optimism

Rakuten Group Chairman and CEO Mickey Mikitani shares the company’s goal to achieve carbon neutrality in 2023 on stage at Rakuten Optimism 2022.

Tech & Green: The future is in motion was the theme of the recent Rakuten Optimism conference, which welcomed leaders and luminaries from a wide range of industries and areas of expertise to share visions of a brighter future.

The conference featured several sessions exploring how tech-fueled growth industries have impacted our environment, covering everything from energy challenges and electricity-hungry data centers to Japan’s status as a global economic power.

Energy in the climate change era

One session exploring challenges and opportunities in the field of energy transformation featured Professor Yukari Takamura from the University of Tokyo’s Institute for Future Initiatives, a prominent industry figure who is actively involved in several governmental advisory bodies.

Takamura referenced a recent report from the UN’s Intergovernmental Panel on Climate Change, which warned that average global temperatures are on track to rise by 1.5ºC within the next two decades — the threshold at which an environmental disaster is all but inevitable.

“A quiet transformation of our values is taking place: Business is only possible as far as our environment allows it.”

TAKEJIRO SUEYOSHI, SPECIAL ADVISOR TO UNEP FINANCE INITIATIVE IN THE ASIA PACIFIC REGION

“Our use of fossil fuels such as natural gas, oil and coal for energy and industrial purposes contributes to over 60% of global greenhouse gas emissions,” she explained. “Even just here in Japan, around 85% of our greenhouse gas emissions are carbon emissions from energy generation. The challenge we’re facing is how we can limit energy consumption and switch to clean, renewable energy.”

Takamura thinks that the decarbonization efforts of established companies are also beginning to affect their standing in the eyes of both investors and customers. Renewable technologies such as solar energy are becoming more affordable, while Japan’s government has set a target to bring the country’s renewable energy rate up to 36-38% by FY2030, prompting many companies to consider switching to 100% renewable electricity — a target Rakuten Group, Inc. achieved in 2021. “More and more companies are doing this nowadays. And as energy users, these commitments are sending a strong message that we need to build a new system.”

While making the switch to renewable energy sources is critical for decarbonization, it is not something that can be achieved overnight. How companies can work on energy efficiencies in the meantime was the topic of another Optimism session focusing on sustainability and data centers.

The rise of the data center: Going digital to go sustainable

Data centers are indispensable pieces of infrastructure for keeping humanity connected. And as internet usage continues to grow, these centers require significant energy to operate.

Professor Hiroshi Esaki of the University of Tokyo argues that data centers, despite their electricity-hungry reputation, actually represent a more efficient way to handle the world’s data needs — particularly compared to companies handling their own servers.

“Simply by taking the computers out of the office and into a data center, companies can improve energy efficiency by 30%. Air conditioning facilities in offices are usually very old and inefficient. And by migrating from bare metal to cloud servers, we can achieve about 70-80% energy efficiency improvements. The managed climate of a data center allows for significant efficiency improvements.”

To add to this, data centers allow for further efficiency gains by way of sharing. Esaki suggested a comparison with another energy-intensive but indispensable industry: shipping.

“Before the great logistics revolution — almost a century ago — products were often delivered individually. It was an extremely inefficient system,” Esaki explained. But this all changed with the rise of the shipping pallet. “Thanks to this, the industry turned into what we might today call a physical sharing economy. You can put all manner of things inside each container: water, rice, money and more. And it can go on all sorts of ships.”

Now, with the rise of online services and digital transformation, we are at the dawn of a cyber-first sharing economy. One that places importance on moving data digitally, and less and less emphasis on the physical movement of goods.

Leveraging data centers, IT companies are doing something very similar to what the shipping industry did, but with information, Esaki reasoned. “Going green is no easy task — it requires significant investment. But going digital presents a lot of advantages that not only make business easier but also bring about all sorts of environmental benefits.”

Moving computing to remote locations that take advantage of local climates can boost efficiency even further. In the same session – titled Data Centers that Support Sustainable Living – the Founder, CEO and President of SAKURA internet Inc., Kunihiro Tanaka, spoke about his company’s data operations in Ishikari City, Hokkaido, the far northern island of Japan.

“Most data processing can happen a long way away,” he explained. “Bringing Hokkaido’s cool air or electricity all the way to Tokyo is not realistic, but we can move a lot of our data processing there.” This approach also allows operators to tackle challenges surrounding sending large amounts of electricity over long distances by situating the data centers in proximity to electrical substations.

The climate crisis: An opportunity for rebirth?

Optimism 2022 also welcomed veteran climate advisor Takejiro Sueyoshi to the virtual stage for a session focusing on the role of corporations in combating climate change. Sueyoshi highlighted the flurry of activity and investment in green companies, issuing a call to Japanese companies to use the climate crisis as an opportunity to reevaluate their business and values.

“A quiet transformation of our values is taking place: Business is only possible as far as our environment allows it,” he stressed. “Now, companies need to serve all stakeholders.”

The climate crisis is presenting both risks and opportunities for countries on the global stage, Sueyoshi emphasized.

“A new game is beginning,” he told the audience. “Countries that weren’t leaders have the chance to become leaders, and those that are leaders are at risk of losing that position.”

But Sueyoshi still sees reason to be optimistic. “Our lifestyle, consumption habits, social systems, values — is the Japan we’ve built really what we want?” he posed. “Behind every crisis is an opportunity for rebirth – they’re two sides of the same coin. This is the attitude we need to take on climate change.”