Since fiscal year 2023, NEC has been actively promoting the integration of digital technologies to strengthen adaptation finance at the Conference of the Parties (COP) organized under the United Nations Framework Convention on Climate Change (UNFCCC). Adaptation finance aims to increase financial flows for climate adaptation initiatives, a sector that often receives less attention compared to climate mitigation efforts. COP29, held in November 2024, was called the "Finance COP," and while the main topic was the financing targets for climate change, NEC continued its efforts from the previous COP28 to disseminate information on NEC's initiatives for social implementation of adaptation finance and convey images of how our digital technology can be utilized, receiving strong support. This paper introduces the content and results of NEC's information dissemination efforts at COP29.

1. Introduction

NEC has set mid- to long-term environmental targets, beginning with the “Course of Action for Climate Change Toward 2050” in 2017 and the “NEC Environmental Targets 2030” in 2021. To further accelerate our efforts toward carbon neutrality, we joined The Climate Pledge in 2022.　The company has also advanced the target year for achieving its climate change policy to 2040 and is working to continuously reduce its environmental impact and risks for the future.　In addition, NEC is committed to creating value through environmental initiatives that address both mitigation and adaptation strategies for climate change. In particular, we are advancing the initiatives of the NEC Digital Adaptation Finance Project as part of our adaptation efforts.

2. Advancing Climate Change Adaptation Through the NEC Digital Adaptation Finance

Since fiscal year 2023, NEC has been actively working towards putting the NEC Digital Adaptation Finance into practice throughout society. The goal is to visualize the three comprehensive values of economic value, socio-economic value, and greenhouse gas emission reduction as quantitative effects based on scientific reasoning by quickly capturing the information needed to adapt to climate change through the use of digital technology and scientifically measuring and predicting its effects. Specifically, we will use digital technologies such as remote sensing, AI, and digital twins to assess the economic benefits of implementing adaptation measures and provide the necessary information to private sector investors and financial institutions, which are expected to be the main providers of new sources of financing for adaptation. In addition, we are working to promote the dissemination of "NEC Digital Adaptation Finance" by developing and providing financial products that evaluate the economic benefits of adaptation in cooperation with financial institutions, by creating adaptation projects that involve both beneficiaries and implementers of adaptation measures, and by establishing investment and financing schemes.

2.1 NEC’s Initiatives in the NEC Digital Adaptation Finance

At COP28, held in 2023 in Dubai, United Arab Emirates (UAE), NEC President and CEO Takayuki Morita (hereinafter referred to as Morita) delivered a keynote speech entitled "Advancing Climate Adaptation with Digital Technologies" at the Global Innovation Hub Pavilion, an event organized under the United Nations Framework Convention on Climate Change (UNFCCC) (Photo 1). In his speech, Morita emphasized the critical role of collaboration among private enterprises, financial institutions, government agencies, international organizations, and academia in accelerating climate adaptation initiatives. He called for joint efforts to create practical use cases for the NEC Digital Adaptation Finance through the effective use of digital technologies.

Subsequently, NEC established the "Japan Consortium for Adaptation Finance" together with Mitsui Sumitomo Insurance Co., Ltd. on March 15, 2024. The consortium aims to establish a system that uses digital technology to predict and analyze adaptation value (disaster reduction and environmental benefits) and provide investors with easy-to-understand quantitative information, and to promote the creation of financial products such as insurance, bonds, and loan schemes based on various adaptation measures and value assessment methods with members and global partners (Photo 2). In 2024, we worked with partner companies and organizations to create use cases for "NEC Digital Adaptive Finance" using practical examples, which we presented at COP29 in Baku, Azerbaijan in 2024.

3. Key Discussions and Agreements at COP29

The international community is committed to limiting the rise of global temperatures to less than 1.5°C above pre-industrial levels. However, discussions to date have highlighted the significant economic challenges associated with rapid greenhouse gas (GHG) emission reductions, particularly for developing countries, making it difficult to set and implement emission reduction targets that are inclusive of all nations. At COP29, the 1.5°C goal took center stage, with discussions focusing on concrete actions that countries need to take to achieve this goal (Photo 3). In addition, as COP29 was recognized as the "Finance COP," a major agenda item was expanding the scale of climate finance, with a particular focus on developing new financing frameworks to increase support for developing countries.

As a result of the discussions at COP29, a goal was set to provide at least $300 billion per year in support to developing countries by 2035, including support from multilateral development banks and advanced countries.　It was also decided to call on all stakeholders to work together to increase financing for climate action in developing countries to more than US$1.3 trillion per year by 2035, using both public and private sources.¹⁾ This resulted in highlighting the preference for increasing support for developing countries that are particularly vulnerable to the effects of climate change and promoting the concept of "blended finance," which uses both private and public funds for climate change mitigation.　Discussions were also held on the Global Goal on Adaptation (GGA), which was established under Article 7 of the Paris Agreement, to promote global adaptation to climate change. Discussions focused on three key areas: the UAE-Belém Work Programme on Indicators, general considerations on the GGA, and transformative adaptation. A certain degree of progress was made towards completing the UAE-Belém Work Programme on Indicators by COP30. It was also decided the Baku Adaptation Roadmap (BAR) would be launched providing a comprehensive framework to guide GGA-related initiatives.²⁾

Regarding mitigation strategies, while no significant new agreements were reached, the full implementation of international cooperation on reduction and removal measures was achieved under Article 6 of the Paris Agreement, in particular through the use of the international credit market. This included deciding on necessary details such as approval and reporting formats required by the contracting governments to quantify and distribute reductions and removals as credits and establishing links between registries to record and report these credits. This development is expected to facilitate international efforts to reduce emissions through market mechanisms.

4. NEC’s Engagement at COP29 and Global Reception

At COP29, NEC actively presented its latest climate change initiatives and digital technologies, receiving strong support and recognition. The following sections provide an overview of NEC’s contributions and the global response.

4.1 On-site Pavilions and the Role of the Japan Pavilion

At COP29, many countries set up national pavilions to showcase their climate actions, innovative technologies, and climate adaptation needs. In particular, China and the Middle East countries made a big impact with their exhibits, demonstrating their intention to actively participate in climate change mitigation from both a financial and technological perspective, and attracting the attention of visitors. In addition, countries from the Global South also set up exhibition booths and vigorously promoted increased support for developing countries and the serious impacts of climate change. Discussions on expanding support and public-private partnerships took place throughout the day at the booths of international organizations and climate funds.　The Japan Pavilion, operated by the Japanese government, featured on-site exhibits from 11 organizations and virtual presentations from 39 companies and institutions (Photo 4). In addition to the exhibits, the pavilion hosted approximately 40 seminars on various environmental topics, including Net Zero, Adaptation to Climate Change, and Nature Positive. The event was a huge success, attracting visitors from more than 100 countries.

4.2 NEC’s Participation at the Japan Pavilion Exhibition and Seminars

4.2.1 NEC’s Exhibition

NEC exhibited at the pavilion as a member of the Adaptation Finance Consortium (Photo 5), and shared with some 150 visitors, examples of how to visualize the economic benefits of disaster risk reduction as "adaptation value" and promote investment on that basis. By highlighting the economic benefits of implementing adaptation measures, we demonstrated the potential for business models that leverage private funds for public works projects and reduce insurance premiums by reducing the risk of damage to entire regions. While the project received positive feedback from visitors, who considered it an important initiative when thinking about adaptive measures in response to natural disasters, we were also often asked about our current achievements, demonstrating to us the expectations for its practical implementation in the field.

4.2.2 Keynote Session at the UNFCCC Pavilion

At a seminar held at the UNFCCC Pavilion, NEC Executive Officer, Corporate EVP, CTO and Head of Global Innovation Business Unit, Motoo Nishihara (hereinafter referred to as Nishihara) gave a keynote speech entitled, "Advancing Climate Adaptation with Digital Technology: Fostering Pilots of Excellence in Climate Resilience Through Partnerships" (Photo 6). In his presentation, Nishihara emphasized the importance of adaptation in climate change measures and presented NEC's efforts to implement NEC Digital Adaptation Finance in society with specific technology utilization proposals. In the technology utilization proposal, he presented a solution that combined satellite image analysis technology with a large language model (LLM). He showed how it would be possible to quickly obtain information about increasingly severe disasters on a global scale and respond quickly by converting the data collected globally into information that anyone can understand.　In the panel discussion that followed, together with the panelists from international IT suppliers such as Tata Consultancy Services and IBM, Nishihara engaged in a lively discussion on the importance of public-private partnerships in promoting climate change measures on a global scale based on examples of initiatives that utilize each company's technologies. As the international community seeks to develop more sophisticated worldwide support mechanisms for adaptation, NEC's idea that quantifying and assessing the risks of climate change will lead to faster access to finance and promote the adoption of adaptation measures has gained support and sympathy.

4.2.3 Participation in the Ministry of Internal Affairs and Communications' ICT x Green Seminar

Nishihara also spoke at a seminar hosted by the Ministry of Internal Affairs and Communications, where he touched on NEC's wide-ranging businesses, including satellite, wireless communications, and submarine cables, and introduced NEC's contribution to the development of industry and the realization of a sustainable society around the world. He also mentioned the future of communication technology, which is constantly evolving, and how the dramatic performance evolution of 5G wireless technology will lead to an increase in the volume of ground observation data from satellites and sensors that will be processed and utilized in real time. In this presentation, he showed videos demonstrating these technologies, capturing not only the attention of the audience but also the co-presenters from Fujitsu, Hitachi, and NTT, who could be seen looking back and focusing on the screen, indicating the high level of interest in NEC's proposals for climate change countermeasures using its technology (Photo 7).

4.2.4 Participation in the Ministry of the Environment’s Seminar on Advancing Early Warning Systems (EWS) in the Asia-Pacific Region and Exploring New Partnerships

At NEC's presentation, Miki Sato (hereinafter, Sato), Senior Director of the GX Business Development Division, took the stage to introduce disaster prevention and mitigation solutions centered on early warning systems, as well as initiatives aimed at implementing NEC Digital Adaptive Finance in society (Photo 8). In this context, she presented the efforts of domestic public transport operators and energy companies to adapt to climate change and the results of their assessment of the value of adaptation as use cases for NEC Digital Adaptation Finance. She also shared the progress being made working with financial institutions to create insurance products that reflect the value of adaptation in risk premiums, and proposed a model in which the economic benefits of adaptation investments could lead to the creation of new investment incentives through the use of NEC Digital Adaptation Finance.　Additionally, Soichi Noguchi, Executive Chief Fellow and CTO of the Institute for International Socio-Economic Studies and the representative director of the Japan Consortium for Adaptation Finance, delivered a video message from his unique perspective as an astronaut. He underscored the need for global disaster prevention and mitigation efforts and emphasized the critical role of adaptation finance in implementing proactive disaster prevention measures (Photo 9). Co-presenter Swiss Re Ltd. presented a case study on the development of parametric insurance, which uses data to mitigate the risk of damage from climate change demonstrating that global insurance organizations are moving in the same direction as NEC on adaptation finance.

4.3 Reactions to NEC's Proposals

Throughout the discussions and sessions, many of the attending representatives from governments and international organizations repeatedly emphasized that it is no longer feasible to completely avoid the impacts of climate change, making adaptation a critical priority. Japan, which is prone to natural disasters, is already internationally recognized as a leader in disaster prevention and mitigation and is expected to take a leading role in promoting adaptation measures that make use of its technology and expertise on a global scale. NEC's efforts to create use cases for the Adaptation Finance Consortium and Adaptation Investment Incentives, which were announced at COP29, have been received with considerable approval and appreciation from various stakeholders, including government officials and businesses, as concrete proposals capable of solving problems. In addition, through our participation at COP29, we recognized that many stakeholders are facing challenges in quantitatively assessing adaptation projects. In order to expand the scale of funding for climate action, it is also necessary to improve the decision-making cycle for international support, and we have received interest from the Climate Change Fund and other international organizations in visualizing the value of adaptation and monitoring impacts through evidence-based data using digital technologies such as simulation and AI, which has provided us with further proof of the expectations for NEC's digital technologies.

5. Conclusion

At COP29, a clear direction was established for expanding international support for climate change adaptation in developing countries. There are high expectations that Japan, with its extensive experience and proven track record in disaster preparedness and risk reduction, will play a significant role in this area on the global stage. NEC has reaffirmed that it is possible to contribute to accelerating decision-making and ensuring transparency in international organizations and foundations by visualizing adaptive value through digital technology.

Going forward, efforts will continue to promote practical implementation through the Japan Consortium for Adaptation Finance, while fostering cooperation with international organizations.

The focus will not only be on disaster risk reduction, but also on issues expected to be discussed at COP30 in Brazil in 2025, such as green infrastructure and agricultural sustainability, with the aim of tapping into a wide range of business opportunities.

References

Author’s Profile

Related URL: