Amita HD’s Ecosystem Society Vision 2030: Circular Economy and Sustainable Relationships

Amita Holdings Co., Ltd. (hereafter Amita HD) is highly involved in engaging the circular economy, including 100% recycling of industrial waste and designing circular communities. It is currently aligning its business strategy towards 2030 with its “Ecosystem Society Vision 2030,” which includes supporting sustainable management transitions for companies and building circular society models in various regions across Japan through collaborations among industry, government, academia, and citizens. At the core of it’s strategy is the “Co-Creation City (CCC) Concept,” which aims to integrate with the government’s “Vision for a Digital Garden City Nation.”

The CCC Concept forms the foundation of an ecosystem society that circulates resources while amplifying human relationships to address modern societal issues such as environmental degradation and loneliness. Eisuke Kumano, Chairman and Chief Visionary Officer (CVO) of Amita HD, believes that the CCC Concept can be realized in Japan because of its unique spirituality, which differs from that of the West. We spoke with Kumano to understand why this is the case.

Co-Creation City Concept incorporating two major elements of a sustainable society

Since Kumano founded the predecessor company in 1977, Amita HD has consistently created markets and commercialized them by investing in latent social needs. In the 1980s, amid rising demand for alternative natural resources due to pollution and the oil shock, the company began offering 100% recycling services for industrial waste. From the 1990s to the 2000s, with the strengthening of environmental laws and international standards, it started cloud services for environmental certification audits and environmental management. What, then, are the current social needs?

“The COVID-19 pandemic has made anxiety a constant presence in society. In such a society, energy is divided into those seeking stability and those seeking comfort. If the energy that seeks stability becomes too strong, it leads to a society that controls, so we want to move towards comfort.

“When considering what constitutes comfort, or conversely, what causes anxiety, it’s loneliness. Therefore, we need to create an ecosystem society that provides relationships to bring about comfort. We aim to create a market segment called ‘social design business’ to design such relationships.”

The main framework for the new market, which was influenced by the COVID-19 pandemic, is digital and remote. According to Kumano, the sustainable society aimed at based on these foundations includes two main elements:

“The ‘social circular’ where people, goods, and information constantly circulate, and ‘social inclusion,’ where in an era of longevity, the elderly, children, women, and people with disabilities are all considered assets. I believe that more actions can be taken with these two mechanisms, and we have moved past the phase of strategic trial and error. Now, the key to market formation is tactical execution, which is why we launched the CCC Concept.”

The CCC Concept aims to achieve both resource circulation and relationship amplification. Its infrastructure is the “MEGURU COMPLEX.” High-moisture organic waste, typically incinerated, is turned into gas and liquid fertilizer at biogas facilities. Used diapers, whose usage has been increasing, are recycled into pulp and combustible materials. Other sanitary waste is pyrolyzed, with the resulting ash processed into cement raw materials at Amita’s resource recycling plants, aiming for resource recycling without relying on fossil fuels.

Furthermore, at Amita’s “MEGURU STATION®,” a mutual aid community-based resource separation collection station, citizens can bring in resources like plastics, enabling high-quality resource circulation. Citizens visiting the station can also expand relationships by engaging in conversations and enjoy events while bringing in resources.

Resources difficult to recycle locally are connected with external recyclers or “MEGURU FACTORIES,” which have the necessary technology, and supplied as new raw materials to external companies. The digital information platform “MEGURU PLATFORM,” which aggregates resource information collected locally, allows for the analysis of consumption behavior, enabling forecasts for purchase, procurement, behavior, and regional customization. This allows companies to optimize production and services rather than speculate. Furthermore, by procuring raw materials recycled at MEGURU COMPLEX locally, companies can engage in ESG-compliant activities.

“Since 2015, we have been operating a biogas facility in Minamisanriku, Miyagi Prefecture. Local people separate their organic waste, we process it, and provide it back as fertilizer. This is a co-creation model with the residents. The fertilizer price is not linked to the market, so when the Ukraine invasion occurred, it became about one-fifth of the market cost. I believe this represents a new form of capitalism.

“In the future, MEGURU STATION® will be able to provide information on how much and what type of resources have been collected, how many people visited, and their duration of stay using sensors. This will quantify regional consumption and movement behavior, aiding in the operation of local infrastructure, such as delivering desired goods to so-called ‘shopping refugees’ via on-demand buses.”

The CCC Concept holds the potential to address both industrial issues, such as rising resource procurement costs due to international instability, and various regional issues emerging from a declining birthrate and an aging population.

“In the future, as underground resources diminish, there will be competition among companies manufacturing and selling commoditized products. In this intensified competition, products like solar panels and batteries should be handled by around five super-global companies worldwide.

“Meanwhile, in Japan’s shrinking domestic market, ESG procurement, customized production to regional characteristics, and diverse forms of sales activities will become important. To achieve this, it is crucial to adopt smart factory concepts like Industry 4.0, avoiding waste and unusable items. The demand, procurement, and behavior forecast information obtained from MEGURU STATION® will link procurement and production diversity with market responsiveness. We aim to expand such circular business and community design nationwide based on these forecasts.”

Creating a subsystem of capitalism

As the CCC Concept spreads in each region, it will foster a virtuous cycle of production and consumption throughout society, enriching natural and human relationship capital, thus moving closer to an ecosystem society. Kumano envisions such a future.

“The Kishida Cabinet’s regional revitalization and digital garden city initiatives are excellent, but they are management-oriented using digital technology. Regions inherently possess cultural and social values, which are intangible. By integrating the CCC Concept with the digital garden city initiative, we can solve regional social issues while enabling each region’s unique cultural values to circulate.”

To create this scenario, Amita HD recently established the General Incorporated Association Ecosystem Society Agency (ESA), and participated as a platform organization where companies, municipalities, academic institutions, and citizens can co-create in each region. Kumano’s sense of crisis from his years of pursuing a sustainable society through business is also evident in ESA.

“In Japan, the vertical structure of organizations has led to partial optimization and overall inefficiency, which we must overcome. Moreover, both the national and local governments undergo personnel changes every three years, so while technical knowledge can be passed down, know-how is not accumulated. Additionally, even when investment is proposed, budgets are allocated on an annual basis, making it difficult to understand how to secure funds for five years. The private sector is better at this, but it requires market creation to be profitable.

“ESA functions as a subsystem of circular capitalism. Without a healthy subsystem, the main system’s deterioration affects everything. Everyone agrees that a healthy subsystem is essential.”
Supporting the transition to sustainable management for companies, especially ESG supply chain management, will be a key tactical pillar for Amita HD in advancing the CCC Concept. Here too, Kumano believes ESA’s platform functions can be utilized.

“Since 1999, we have been the first in Japan to start environmental certification audits, providing traceability certification and waste management. The remaining aspect is procurement. The strategy is to turn all this information into ESG, which will serve as a tool for companies transitioning to sustainable operations.

“When companies transition their businesses to sustainable models, creating prototypes is crucial. The higher the resolution of the Proof of Concept (PoC), the more necessary it becomes to have implementation sites. In such cases, partnering with ESA municipalities is convenient for gathering collaborators and securing fields. It makes the business repeatable and scalable, and we aim to offer this support system as a product.”

Japan leading the world with resource and relationship circulation

Another important theme is expanding overseas businesses, especially in the ASEAN region. Besides Malaysia, where industrial waste recycling has already started, Amita signed a Memorandum of Understanding (MOU) in May 2023 with Indonesia’s leading cement company, Indocement, and in May 2024 with India’s leading environmental company, Ramky Group, to explore joint business ventures in emerging markets.

“With the onset of COVID-19, we saw ESG investments surpass 40% of global investments, driven by strong pressure from governments and banks. Reading this trend, we are making a full-scale move into ASEAN.

“Japanese success stories are advantageous overseas. Japan is still seen as the miracle country of Asia, a nation of science and environment. Japanese people and the Japanese government should take more pride in being role models.”

In addition to the industrial achievements accomplished during post-war economic growth, Kumano believes that the spirituality cultivated by Japanese people since long ago aligns with building an ecosystem society where both resources and human relationships circulate like an ecosystem.

“In Japan, there is a philosophy of ‘everyone is the main character and everyone is the supporting character.’ Japanese people do not separate ‘I’ and ‘you’; instead, they find meaning in relationships, as expressed in the rock garden of Ryoanji Temple, and mentioned by philosopher Kitaro Nishida. This philosophy should be understood by people in Asia’s monsoon climate, where rice farming culture has established relationships. Furthermore, in Europe, originally based on dry farming and livestock, people with such spirituality are starting to gain power. Japan, which has maintained this philosophy, has a high potential to become a top leader in an ecosystem society.”

As the limitations of a linear economy, which relies on unlimited use of land and resources, become apparent, Kumano believes it’s time to reevaluate Japan’s strengths, which have always found optimal solutions within constraints.

“As of now, few areas globally have so many companies and dedicated municipalities offering sustainable services like Japan. However, there are no editors to harness this social potential. Once this country realizes that, it can create more jobs, reduce over-reliance on money, and eliminate anxiety by relying on relationships.

“Nature is fragile and fleeting, but when connected, it becomes resilient to change. I want to see business transition from competitive principles to coexistence principles like an ecosystem. Therefore, we won’t change our strategy anymore and will focus on tactical execution.”

Originally published on CE Hub, written by Maki Kimura.