Corporate Responsibility for Biodiversity: The Potential of "Environmental Transfer Technology" to Visualize Impacts on the Ocean (Part 1)

What challenges lie ahead for sustainability business? What new technologies and solutions exist? In this series, members of Dentsu Inc.'sSustainability Consulting Office —a specialized organization supporting corporate and business transformation from a sustainability perspective —visit opinion leaders in this field to hear their insights.

For the first installment, Yuka Sawai of the Sustainability Consulting Office interviewed Shiki Takeuchi, COO of Inoca Co., Ltd., who aims to create "a society where humans and organisms can coexist for the next 100 years" using the unique technology of environmental transfer. This interview will be presented in two parts.

Environmental Transfer Technology: Preserving Natural Oceans and Recreating Them on Land

Sawai: As part of the Sustainability Consulting Office, supporting various companies, I feel that new perspectives and innovation are still needed to balance environmental conservation with business activities. Particularly in the field of "biodiversity," unlike issues like climate change, it's difficult to quantify, so it seems many companies don't even grasp the current state. In that sense, I was very interested in Inoca's business of artificially recreating marine environments and "visualizing the sea." First, could you introduce what kind of business Inoka is developing?

Takeuchi: Inoka was founded in 2019 and is now in its fifth fiscal year. It was started by two individuals: Takakura, our current CEO who originally researched AI at the University of Tokyo, and Masuda, who independently studied marine ecosystems and cultivated coral reefs. We now have about 30 employees, including interns. Our business operates on two pillars: research and development, and educational events. Underpinning both is our proprietary environmental transfer technology.

Sawai: What exactly is this environmental transfer technology?

Takeuchi: It's a technology that recreates natural environments within closed spaces like tanks, controlling and monitoring complex environmental parameters to model natural conditions. We aim for a level of replication that feels like we've cut out a piece of the natural ocean and brought it directly into an indoor space on land. We combine artificial equipment to recreate everything from sunlight penetrating the sea to the substances contained within the waves. For example, we measured the light spectrum of Okinawa's sea, adjusted the wavelengths and intensity, and even recreate the changes from sunrise to sunset. The waves contain nutrients like calcium and magnesium, essential for the growth of coral and various organisms.

Sawai: What significance or benefits does recreating a realistic ocean within an aquarium hold?

Takeuchi: The primary benefit is the ability to collect data that cannot be obtained in the natural ocean and utilize it for research. Collecting environmental data in the natural ocean requires significant effort, like going out to sea daily and checking sensors at the same locations. There are also areas where data is hard to obtain, and weather changes can corrupt the data. However, with an aquarium that replicates the ocean environment using environmental transfer technology, such labor is unnecessary. You can conduct experiments by adjusting various conditions, like light, according to the desired data. In other words, it enables obtaining the desired data at lower cost, significantly speeding up research.

Furthermore, experiments like directly introducing chemicals into the ocean to identify substances beneficial for environmental improvement are difficult to conduct in the real natural environment. However, using our tanks allows companies to safely test various byproducts generated during their production activities. We believe that utilizing environmental transfer technology broadens the scope of experimentation, contributing to elucidating the mechanisms of marine issues and conserving biodiversity.

Coral reefs, home to 100,000 species, are central to biodiversity

Sawai: I understand that within your efforts to recreate marine environments, you've placed particular emphasis on replicating coral reefs. Could you explain the reasoning behind this?

Takeuchi: Coral reefs themselves cover only about 0.2% of the ocean's surface area. However, they are home to 25% of marine life, nearly 100,000 species. Therefore, if all the coral were to die, nearly 100,000 marine species would be affected. Coral reefs are central to marine biodiversity and serve as a yardstick for measuring it.

Sawai: So coral is crucial for understanding marine biodiversity. It's said that within about 20 years, 70 to 90% of coral could die off.

Takeuchi: Yes. Rising sea temperatures due to climate change will severely impact coral reefs. Corals are inherently delicate organisms; even slight environmental changes can kill them instantly. That's precisely why artificially rearing them has long been considered extremely difficult. Amidst this, our colleague Masuda, simply because he loves living things, took up recreating coral reefs as a hobby in his home aquarium. He meticulously adjusted the tank environment and relentlessly applied the PDCA cycle. Through this painstaking, artisan-like trial and error, he succeeded in raising coral, which then led to the development of environmental transfer technology. The number of people in Japan capable of cultivating coral in this manner is probably very limited. Masuda, bearing the title "CAO (Chief Aquarium Officer)," is central to Inoka's ecosystem technology. While Inoka achieved the world's first successful artificial coral spawning experiment in February 2022, we are now integrating IoT and AI into these technologies to provide more versatile solutions.

Growing demand to measure the impact of corporate products on ecosystems

Sawai: More companies are adopting sustainability management, but until now, efforts have mostly focused on climate change and decarbonization. Recently, however, I sense growing momentum in the business world for biodiversity initiatives. Aren't you seeing more inquiries from various companies?

Takeuchi: That's correct. Regarding climate change, the international organization "TCFD (Task Force on Climate-related Financial Disclosures)" was established in 2015. This task force recommends that companies disclose specific information about how they are addressing climate change, such as CO2 emissions. Following this trend, the Taskforce on Nature-related Financial Disclosures (TNFD) began its activities in 2021, urging companies to disclose the impacts of their activities on natural capital and biodiversity. Companies are now being compelled to respond. Consequently, we frequently receive inquiries such as, "We want to measure the biodiversity impact of our products to comply with TNFD." We are increasingly supporting companies in this capacity as TNFD data analysts. By gathering various corporate case studies related to TNFD and monitoring trends, we assist companies in meeting global standards for biodiversity.

Sawai: While we're also seeing an increase in biodiversity-related inquiries at our company, we often hear that companies struggle to visualize concrete actions they should take. What are some specific examples of collaborative projects or joint research with companies?

Takeuchi: For example, when people enjoy swimming at the beach, they naturally use sunscreen. However, there is actually very little research on how much this sunscreen affects coral reefs. Therefore, we are collaborating with a company on a project to properly investigate the impact of sunscreen on coral. We are also proposing to other industries that appropriately evaluating and disclosing the impact on coral, and establishing rules, can lead to enhanced corporate value.

Additionally, in collaboration with steel companies, we are conducting research on substances produced as byproducts of the steelmaking process. These substances, when introduced into the ocean, can improve coral growth and help purify the environment.

Sawai: So the focus isn't just on whether our products negatively impact the ocean, but also on the potential for the ocean and marine life to generate new industries.

Takeuchi: That's correct. Marine-related economic activities are termed the "Blue Economy," with its future market potential estimated at 500 trillion yen. Japan holds particular strengths in marine biodiversity resources, which can lead to new material development and drug discovery. Next, I believe the market related to "blue carbon" also holds significant potential. Blue carbon refers to carbon absorbed by algae and marine organisms. Efforts are advancing to utilize the ocean ecosystem's capacity to absorb and store blue carbon, thereby capturing atmospheric CO₂ and contributing to global warming countermeasures.

Furthermore, while offshore wind power generation is currently being developed in Japan, its impact on marine ecosystems remains poorly understood despite its potential to generate renewable energy. Consequently, technological development to minimize these impacts is simultaneously required, and we believe we can contribute in this area as well.

Sawai: Hearing you speak, I realize there are many points of contact between the ocean and business. That said, I suspect many companies still feel the "ocean" or "marine life" are quite distant from their own products and services.

Takeuchi: I agree. However, looking at the entire supply chain, it's common for elements related to business activities to flow into the ocean in some form. Therefore, I would like companies to seriously consider what kind of relationship they have with the ocean and aquatic ecosystems. What we aim to do is not just advocate "protect the ocean," but to protect the ocean while also developing industry. We sincerely hope to advance open innovation in a positive relationship with many companies.

In Part 1, we discussed the overview of Inoka's "Environmental Transfer Technology," its benefits for corporate activities, and the potential for collaboration with Inoka. In Part 2, we explore the importance of maintaining marine biodiversity and marine research in Japan, as well as Inoka's other pillar: its educational initiatives.

• Corporate Responsibility for Biodiversity: The Potential of "Environmental Transfer Technology" to Visualize Impacts on the Ocean (Part 2)