Investment strategy in climate technology unveiled by Nomura
Nomura Securities Launches Sustainable Innovation Investment Scheme for Climate Tech Start-ups
In a move aligned with Japan's national energy transition and carbon neutrality goals, Nomura Securities has announced a new investment scheme focused on supporting climate tech start-ups in Japan. This initiative is part of a broader public-private investment structure, the Japan Green Investment Corp. for Carbon Neutrality (JICN), which aims to fund decarbonization ventures, including climate technology start-ups.
The investment universe for this scheme spans a variety of decarbonization and climate tech sectors, aiming to accelerate the adoption of innovative technologies that can reduce carbon emissions. This includes renewable energy, energy efficiency, and advanced technologies supporting Japan’s energy transition policy frameworks.
The funding structure is notable for its public-private partnership style, where government funds combine with private sector capital to provide stable and scalable investment resources. The government also offers financial market guarantees to support JICN’s financing activities, enhancing investor confidence.
Nomura's asset management arm, being Japan's leading investment trust manager with $584bn assets under management, will play a significant role in facilitating these investments. The scheme, called the 'sustainable innovation investment scheme', will primarily target early-stage start-up companies first.
While the details of the funding for Nomura's climate-tech investment scheme remain undisclosed, the group's statement suggests a conviction in the returns Japan's climate entrepreneurs could offer. It's worth noting that Nomura Group, the parent company, has adopted a net zero by 2050 target for its investment and loan portfolio, committing to deploy $125 bn in 'sustainable finance' by March 2026.
However, the scheme is Nomura's own and principal investment scheme, meaning they are not seeking investment from institutional investors. The high level of uncertainty in commercializing new climate technologies and establishing new markets is a concern for many entrepreneurs and investors, according to Nomura's statement.
Despite the recent approval of climate policy reforms by Prime Minister Ishiba's administration, including the 7 Strategic Energy Plan and the GX 2040 vision, these reforms, according to critics, fall short of addressing critical issues in Japan's energy transition such as the phase-out of coal power. Nomura's announcement of a new climate-tech investment scheme does not reveal the details of the scale and structure of funding, nor does it seem to have been a significant factor in prompting Nomura's investment decision.
In conclusion, Nomura Securities' sustainable innovation investment scheme is a significant step towards supporting Japan's climate tech start-ups and aligning with the nation's carbon neutrality goals. The scheme, however, is just one piece of the puzzle in Japan's broader energy transition, and the challenges of commercializing new climate technologies and establishing new markets remain.
Table of Aspects:
| Aspect | Details | |------------------------------|-------------------------------------------------------------------------------------------| | Investment Scheme | Sustainable innovation investment linked with Japan Green Investment Corp. for Carbon Neutrality (JICN) | | Investment Universe | Climate tech start-ups focusing on decarbonization, energy transition technologies | | Funding Structure | Public-private partnership: ~36 billion yen capital (private + government FILP funds), government guarantees up to 25 billion yen | | Policy Impact | Supports Japan’s 2050 carbon neutrality goals by scaling tech innovations, knowledge sharing, and stakeholder collaboration | | Nomura’s Role | Major financial intermediary supporting market and investment activities in sustainable finance | | Nomura's Investment Approach | Focus on early-stage start-ups, conviction in returns from Japan's climate tech entrepreneurs | | Funding Details | Undisclosed, but aligned with Nomura's $125 bn sustainable finance commitment by March 2026 | | Investment Decision Factors | Uncertainty in commercializing new climate technologies and establishing new markets, not significantly influenced by recent policy shifts | | Criticisms of Policy Reforms | Fall short of addressing critical issues in Japan's energy transition such as the phase-out of coal power |
- The sustainable innovation investment scheme launched by Nomura Securities primarily focuses on environmental science, as it aims to support early-stage climate tech start-ups.
- This investment scheme is an example of forward-thinking finance, with Nomura Securities integrating climate-change considerations into their investing, as part of their commitment to sustainable finance.
