Mr. Renji Hirase, CEO（Chief Executive Officer） Sustainable Lab Inc.
Society is changing from a “strength”-centered capitalism towards an era focusing increasingly on the SDGs. Consequently, we see an increase in sustainable efforts that combine environmental conservation and improvement of social aspects. However, there are still many challenges to quantify “social friendliness” and “sustainable growth” of companies, which is a pain point especially for management and corporate employees. To address this problem, Sustainable Lab Inc. is developing ways to measure and visualize enterprise value by analyzing big data via AI. Today we are interviewing Mr. Renji Hirase, CEO of the company.
Sustainable Lab Inc.
―I heard that Sustainable Lab Inc. is currently working on visualization of enterprise value. Could you give us a brief summary of what you are doing?
We are developing and providing “TERRAST β”, a SaaS-based SDGs/ESG analysis platform, which we also call non-financial data bank. To ensure that everyone can evaluate each company’s SDGs initiatives with conviction, we collect vast amount of data on SDGs/ESG, analyze it with AI, and visualize it quantitatively. While the main target of TERRAST β are institutional investors in Japan and overseas, we are also developing and providing “TERRAST for Enterprise β” for operating corporates.
As every decision making surrounding investment, financing, or management is increasingly viewed in the context of ESG, institutional investors and corporations are struggling with how to analyze and visualize ESG initiatives. We are solving this problem by quantitatively visualizing contribution to society and the environment with the power of data science.
―I heard that the name “TERRAST” has an important meaning.
The service name “TERRAST” comes from the Japanese word “terasuhito,” which literally translates to “illuminator”. The name represents our desire to put a spotlight on truly good companies by making full use of big data. In order to transition to a sustainable society, we shine a light on good companies. This will enable companies that contribute to society and the environment to be rewarded, which will lead to enterprise value creation and social participation. The spread of TERRAST β will make it easier for investors to use SDGs/ESG as a basis for making investment decisions. This will in turn make it easier for all listed companies to incorporate social and environmental contributions into their management. This trend will extend to unlisted small and medium-sized companies. It will also become commonplace for consumers to use SDGs/ESG as a decision factor when choosing products and services. Through TERRAST β, we wish to create a paradigm shift that will change the way society is and the way people judge “what constitutes a good company”.
―You said that the name “TERRAST” refers to those who put a spotlight on companies. So, specifically, what kind of information can be obtained and what can be done from TERRAST β?
It can quantitatively visualize contribution to the environment and society by theme to allow users to understand the current progress of companies’ sustainability activities. For easier understanding, I would say that TERRAST β plays the role of a “sustainability checkup tool”.
TERRAST β collects up to 800 non-financial KPIs for each company and analyzes them using AI. Based on the analysis results, it visualizes the degree of sustainability contribution by showing an overall score as well as data on individual themes, such as climate change, environmental management, diversity, and workers’ rights. Users can also view the raw data of these results as well as look at their own company in chronological order and compare it horizontally with other companies in the same industry.
TERRAST β greatly increases the speed of information collection, making it possible to improve efficiency and to reduce time. In addition, it enables advanced analysis by providing cross-industry comparisons through quantification of non-financial information, a suitable analysis experience for each customer through individual customization powered by multiple methodologies, and other services.
―Does TERRAST β require expertise or a special environment to use?
No, users can easily access it from anywhere online. It’s a SaaS-based platform, a place to share information on the web, so it can be edited and managed by multiple teams and people. In addition, it has a reputation for easy-to-use UX/UI design for customers that allows them to operate the platform intuitively and comfortably without expertise so that even non-specialists can quickly perform high-level analysis.
―What special advantages does your service have over other companies?
We have disclosed not only the theoretical system of TERRAST β but also the entire methodology of the development. In addition, since it allows users to make individual customization, each user can analyze data according to their own investment or management philosophy and time frame, which is the biggest feature of our service. We call this the “democratization of sustainability assessment” and are confident that our company and services are significantly different from conventional assessment agencies and ratings.
―What comments have you received from users?
We have received many favorable comments. They say, for example, that, since the platform allows them to check detailed raw data, they can objectively understand their own company, that it is good in that it covers not only environmental (E) data but also other various data, and that the basis of the data used for analysis is clear and reliable.
―By the way, you majored in physics at university but you have been active as a serial entrepreneur by starting up and selling or transferring a venture company and then using the profits and personal connections from the activities to start up another company, right? Your career sounds a little surprising to me. Were you interested in starting a business even at that point?
To be honest, I had no plans to start a business, and simply aimed to become a physicist. I admired Mobile Suit Gundam and the movie Armageddon, which fascinatingly depicted a physicist who saved the earth, and I thought I could possibly pilot a robot or become an astronaut and go to a frontier of mankind. This is why I majored in physics.
However, when I entered university and stepped in the world of theoretical physics, I found that it was an endlessly wide world in which there were so many geniuses and people with extraordinary abilities. When I was at a loss, feeling defeated and frustrated, my friends invited me to interact with student entrepreneurs in Tokyo, and I gradually got into the business world.
―That experience motivated you to be an entrepreneur?
That’s right. However, the reason I originally chose physics was because I wanted to live a life to saving the world. As an entrepreneur, too, I have wanted to change the world on my own even to the slightest extent.
In the first few years as an entrepreneur, I chose profitable business fields in which senior people did not engage, such as data analysis in the digital advertising area. I was thinking, “If I make money and become stronger, I can be more philanthropic (or do activities to save the world).” It worked somewhat for a while. However, it almost always happened that a big company eventually came and took over everything in the field. I had this experience several times. In addition, when sales and profits increased with our ideas and efforts, we were of course happy, but felt somewhat uncomfortable. I wondered if I wanted to live such an exhausting life for the sake of sales and profits. After I kept living the life anyway for several years, it occurred to me, “Do only what keeps me fulfilled and I can spend my life on. Doing so will grow me far beyond my limits, and most of all, I can live a life I never regret.”
After many twists and turns, I finally started a venture business in the sustainability field to “save the world,” that is, to make the world sustainable from the perspectives of environment, agriculture, and welfare.
―So your aspirations inspired by the world of Gundam and Armageddon are still alive today. How do you see the future of your company now?
Under our mission “Create a sustainable world by the power of data science “, we will create a better future half a step ahead by highlighting the good points of companies to guide better investment and management decisions. We would like to contribute to raising the level of sustainability in society as a whole by using our solution to put a spotlight on good companies so that more companies can become stronger and more social friendly . As we are beginning to enter the global market, we would like to contribute not only to Japan but also to the entire world.
In addition, we are a group of specialists in three areas: sustainability, financial engineering, and data science. The professional members cover all fields, including environmental economics, sustainability science, statistics, and econometrics. We already have members from seven countries to be an organization with diverse values.
We are proud to be the best and cutting-edge startup doing non-financial data science business in Japan and are determined to build a team that can compete in the world from here. We are always looking for members to work with us, so we always welcome contact from anyone interested.
| Company name：Sustainable Lab Inc. |
| Founded：January 2019 |
| Number of employees：25 |
| Business：Providing non-financial big data platform to visualize ESG/SDGs and conducting research and development related to enterprise value, including non-financial value URL：https://suslab.net |
This article is part of a series of articles introducing venture companies working together as ICF members to resolve societal issues.