The era of making decisions based solely on financial indicators is coming to an end when it comes to launching new businesses. In order for companies to achieve long-term growth, it is essential to quantitatively understand "non-financial values" such as ESG (Environment, Social, and Governance) and incorporate them into business strategies. In particular, the perspective of the ripple effect on society and the impact on the entire supply chain (corporate activities from raw material procurement to product sales) cannot be seen only through conventional profitability assessment. Bridgestone Corporation, one of the world's largest tire manufacturers, has adopted aiESG's "ESG analysis" for planning and developing new businesses as a new indicator.

In this article, we asked Mr. Osaka of Bridgestone Corporation's Exploration Business Development Promotion Department 1 about the background of the introduction, the results brought about by the analysis, and future prospects.

Clients

(Mr. Takeshi Osaka, Exploratory Business Development Promotion Department 1)

The deciding factors in the introduction of ESG analysis are "breadth" and "objectivity.

─ ─ What is the role of your current department?

The Exploratory Business Development Promotion Department 1, to which I belong, is responsible for business exploration, planning, and development in new areas that are different from Bridgestone's existing tire business and the mobility field that is closely related to this business. The main role of this department is to create new businesses with an eye on future changes in society and industrial structure, while utilizing the technologies and know-how cultivated in our existing businesses.

In the planning stage of a new business, a major challenge is that the value of the business cannot be measured only in terms of financial profitability. This is because in the early stages of planning and development, the full picture of the specific profit model is not yet clear, and it is very difficult to quantitatively express "what value this business will bring to society.

───Please tell us about the background behind the introduction of aiESG's analysis services.

We focused on aiESG's services because we were strongly attracted to its ability to comprehensively analyze not only environmental indicators such as greenhouse gas (GHG) emissions, but also a wide range of non-financial areas such as society, economy, and governance. Another deciding factor was the ability to look at the entire supply chain, not just individual products, and to understand the impact of our business from multiple perspectives.

We considered other companies' services, but we could not find one that could perform such a comprehensive analysis, and we were convinced from the comparative study stage that this was a value that could not be found anywhere else. When considering a new business, we believe that "visualization of social value" in non-financial terms is just as important as financial evaluation.

Tackling the challenge of "bias-free evaluation" in tire recycling-related

─ ─ What specific projects have you analyzed?

We are currently promoting "tire recycling" as our exploratory project, whereby used tires are recycled back into raw materials and other resources. We asked aiESG to analyze the impact of this initiative on our entire supply chain.

─ ─ Were there any particular innovations you made in the preparation or process of the analysis?

Since the project was still in the conceptual stage, we did not have all the data we needed to provide to aiESG. We proceeded by carefully establishing "assumed values for analysis" by comparing various data with statistics and general formulas published by international organizations.

Also, it is not a single condition analysis,Multiple scenariosWe chose the method of evaluation by setting up a This is to "remove our own bias. If we rely only on subjective assumptions, the results we see will be biased. We believe that examining diverse possibilities from a third party's perspective is the essential value of analysis.

Risks and opportunities beyond the expected emerge.

─ What was your internal reaction to the results of the analysis?

Although we cannot disclose specific figures, many people said they had no idea there were such great risks and opportunities out there. Interest within the department has grown dramatically as the impact, which could not have been noticed without looking at it from a non-financial perspective, has been revealed in the form of numerical figures.

Furthermore, when we explained the importance of incorporating ESG perspectives from the planning stage, many stakeholders strongly agreed with us. Until now, discussions have centered on financial simulations, but I feel that the addition of non-financial evaluations has greatly increased the depth and breadth of the discussions.

ESG analysis is a "weapon in the start-up phase".

───How do you intend to expand the use of ESG analysis in the future?

We intend to continue to evaluate businesses by considering both financial and non-financial aspects from the earliest stages of planning and development. The important thing is to expand the understanding that financial and non-financial values are not opposites. We believe that the two are rather complementary when viewed from the perspective of mid- to long-term value creation, not just short-term profit. If this concept takes root within the department, the quality of the business itself will improve and the speed of decision-making will increase.

─ ─ Finally, what are your expectations for aiESG and what is your message to our readers?

We have already consulted with you on some projects, and we look forward to providing you with multifaceted evaluations and new perspectives through scientific and objective data analysis.

The main feature of aiESG's service is that it analyzes ESG indicators based on statistical data released by international public organizations such as the OECD (Organization for Economic Cooperation and Development) and Eurostat (European Commission Statistics Bureau), and from the connections between countries and individual industries. The ability to understand risks and opportunities from the stage before the supply chain is established and to flexibly adjust strategies may be a very significant advantage when launching a new business.

─ ─ Thank you very much for your time today. We will continue to strive to visualize new values so that "ESG analysis" can become a strategic weapon for companies that are taking on new business challenges, leading to solutions to social issues and a sustainable future.