Japan emissions-monitoring startup Asuene backed by SMBC, Murata

Sumitomo Mitsui Banking Corp. and Murata Manufacturing are among 17 Japanese companies investing 4.2 billion yen ($26.7 million) in a startup that helps businesses visualize and cut carbon dioxide emissions down their supply chains, amid growing investor pressure for greater transparency.

Asuene, established in 2019, uses artificial intelligence to calculate customers’ Scope 3 emissions — which include indirect upstream and downstream emissions — and support efforts to reduce them. It is the largest player in this space in Japan, with more than 6,000 companies adopting its measurement service.

The group of investors is taking a roughly 17% stake in Asuene via a private share placement. Other names on the list include Nippon Express Holdings, SBI Holdings, Ricoh, KDDI and venture capital firms.

Asuene will use the funds to develop a feature using AI to automatically recommend measures to help with decarbonization, set to roll out this summer. It also looks to acquire multiple companies with AI development expertise this year.

Six of the 17 companies also plan business tie-ups with Asuene. SMBC will use data from the startup’s customers to gauge carbon emissions trends by industry and more effectively advise its clients on reducing their emissions.

Murata will recommend Asuene’s services to its 4,700 suppliers, aiming to get a clearer picture of emissions along its supply chain and shrink its carbon footprint. Nippon Express will partner with Asuene on decarbonization support for the logistics sector.

Companies face growing pressure to report their greenhouse gas emissions. The Sustainability Standards Board of Japan in March proposed disclosure requirements for supply-chain-wide emissions as well as reduction targets, aimed at businesses listed on the Tokyo Stock Exchange’s Prime market.

The Financial Services Agency is drafting rules based on this proposal. Prime-listed companies valued at 3 trillion yen or more are expected to be required to provide emissions-related information as early as the fiscal year ending March 2027.

The U.S. Securities and Exchange Commission adopted rules in March mandating disclosure of greenhouse gas emissions for U.S.-listed companies. Businesses are increasingly moving to make their supply chains greener, as seen with Apple’s push for its suppliers to go carbon-neutral.

Japan, which aims to achieve net-zero greenhouse gas emissions by 2050, set out plans last year to mobilize 150 trillion yen in public- and private-sector investment in decarbonization over a decade.