Column 2024.11.06

[Tripartite Discussion Report] Zeoroboard and Dataseed, the aims of M&A and the direction of sustainability management

On July 1, 2024, Zeroboard acquired the business of Dataseed, a data collection, analysis, and improvement support solution for the advancement of ESG management. By realizing the M&A with Dataseed, how can ZeroBoard support corporate sustainability strategies, including ESG, through the use of data?

At the 3rd anniversary Events held on August 22, 2024, we welcomed Minami Shinzawa, CEO of SOL Company , who introduced the two companies, for a three-way discussion. From this talk, we will explore what the future of Support for Sustainability Management will be like, created by Dataseed and Zeroboard .

Speaker Profile

CEO of SOL Company
Minami Nobusawa

After joining the launch of the first in-house venture company at a major human resources comprehensive Service Company as a new graduate, he participated in the founding of Circulation Company, which creates new values in working through the professional sharing business. After working as a consultant supporting the creation of management infrastructure and personnel systems specializing in IT growth venture companies, he served as the head of the human resources department during the company's founding period.

In 2018, she concurrently served as a project commissioned by the Ministry of Economy, Industry and Industry on "Recurrent Mid-career Women" with the aim of promoting women's participation in the Japanese economy and promoting diversity and inclusion. Aiming to fundamentally transform social/economic systems and values, she launched the Social Development Promotion Office in 2019 as a project directly under the president, and, prior to the company's IPO, began laying the foundations for the company's sustainability/ESG management from the N-2 period. In 2023, she founded SOL Company to fully launch its sustainability/ESG management consulting services. She provides support to a wide range of companies, from large corporations to listed ventures and regional SMEs. She has supported over 50 companies, primarily listed companies, and has trained over 2,000 people.

Graduated from the School of Human Sciences at Waseda University and completed the Yale School of Management/Corporate Sustainability Management Program.

CEO of Zeroboard Inc.
Michitaka Tokeiji

After a successful tenure at JPMorgan in the bond and derivatives business, Mr. Tokeiji joined Mitsui & Co. where he spearheaded the company's commodity derivatives, energy, and ICT-related business investments, as well as new business launches. He then transitioned to a start-up company where he led the energy solution business, including power traceability and environmental value trading system construction. In response to the global trend toward a decarbonized society, proceed with the development of "zeroboard." In September 2021, a management buyout of the same business was implemented, and the business started as Zeroboard Inc. Graduated from the Faculty of Engineering, University of Tokyo.

Zeroboard Inc. Sales Headquarters Business Strategy Office Manager and CEO Office Special Manager (Dataseed)
Masashi Fukuda

He worked in the Corporate New Business Development Division of SoftBank Company , where he led partnership projects and organizations using AI and IoT technologies with domestic and international startups and large corporations. He also promoted New business development using business data in the Domestic Business Division of Recruit Co., Company He launched a large joint venture with a major Financial Institution in the financial sector and promoted partnership negotiations with major client companies. In July 2022, he founded Dataseed Company, an ESG information management solution company. In July 2024, he joined Zeroboard through a business transfer. He holds a Master's degree in Environmental Resources from Hokkaido University Graduate School (carbon trade and forest certification).

[Tripartite Discussion Report] Startup version of "Our Time"
I'll talk about the inside story with the M& A Cupid of Zeroboard × Dataseed

self-introduction
The story of the Zeroboard × Dataseed M&A
Where is M&A headed?
How should Support for Sustainability Management fare in the future?

1. Self-introduction

Masashi Fukuda (hereinafter referred to as Fukuda): Until July , I was working at Dataseed Company , proposing ESG data management tools to companies.1 dayFrom now on, it will be a Zeroboard.JoinI am currently working on this project with great excitement. Thank you for your support.

Minami Nobusawa (hereinafter, Nobusawa): I am Nobusawa, the representative of SOL Co., Company Nice to meet you.I have had individual connections with Tokeiji and Fukuda, and I am here today with the belief that these two companies will be crucial in accelerating the creation of a sustainable society in the future.

I myself have been building the foundation as the person in charge of promoting sustainability at a growth company since around 2018, and have also been helping large corporations and listed companies promote sustainability management for around three years.

We decided to set up an independent Company in order to fully focus on implementing sustainability management, and we are now helping with location within the company.

For example, large companies often face the issue of how to incorporate indicator goals into mid- to long-term management. They often have Issue in getting executive officers and department/section managers to review and implement these indicator goals, which ends up becoming an extension of the mid- to long-term management plan. We can help them change their thinking to the mid- to long-term.

Michitaka Tokeiji(hereinafter, Tokeiji): I've known Nobusawa on a one-sided level, as he has appeared in the media in the context of sustainability since I began researching this industry in 2018-19. In his previous job, he was involved in launching sustainability at Circulation, a Company that introduces and dispatches personnel, and many of the Zeroboard members joined through Circulation and are now active there. CTO Kido also joined Zeroboard through an introduction from Circulation, so I feel a strong connection between us.

Today, the three of us will be talking about the background to our business integration with Dataseed. I would like to talk about why we decided to do this M&A in the first place . Actually, Mr. Nobusawa was the cupid. First, could you please tell us about the background to this?

2. Zeroboard × Dataseed M&A History

Zeroboard is not just a Service provider, but a partner that works with companies to achieve decarbonization. I thought we could do some interesting things if we worked together. (Fukuda)

Zeroboard collects ESG data and discloses it. Dataseed thoroughly analyzes ESG data and incorporates it into business strategies. There was synergy in the fact that the two companies were creating products that focused on similar but different functions. (Tokeiji)

Shinzawa: Around 2019 and 2020, the acceleration of environmental (E) data disclosure began in the context of decarbonization. Looking ahead to the medium term, the Corporate Governance Code was revised to include not only environmental (E) but also social (S) and governance (G). The original background was that disclosure of sustainability as a whole, and not just disclosure but incorporating it into management strategy, would become a common trend. Zeroboard was at the forefront of this effort, focusing on the E aspect. Dataseed was established with a vision to visualize not only environmental (E) but also ESG in general. I had met the two of them separately in the context of sustainability, and I felt that working together would allow us to accelerate sustainability management in the medium to long term, rather than working separately. This was the selfish thought of wanting to introduce them to each other at some point. That was the beginning.

At that time, Fukuda-san reached out to me, saying, "If you know Tokeiji," and I replied, "I thought so too!" and we connected. This time, we unexpectedly got together, and it was exactly what I wanted.

Tokeiji: I believe it was in May that Nobusawa contacted me via messenger. The next time I messaged him back, I said that the announcement would be made next week.
There were probably many options available to you, so why did Dataseed decide to work with Zeroboard? What were your thoughts and feelings about this?

Fukuda: Originally, we supported the data management of Prime listed companies, but the GHG field is highly complex, and it is difficult to solve the problems with data management tools and solutions like ours alone. Therefore, we originally envisioned increasing the value of companies through collaboration with those who calculate GHG. That is why we were talking about a partnership. To be honest, the reason why I wanted to talk to Zeroboard is that Zeroboard, especially its sales people, often deeply understand the Issue of companies. In our sales, we sometimes meet with sales people from GHG calculation companies, and there are quite a few cases where we get deeply involved in this area. Among them, Zeroboard was very deep. Rather than being a simple Service provider, we often support companies as an accompanying partner to achieve decarbonization, and I thought that if we could work together, we could do something very interesting, so I contacted Mr. Nobusawa.

Tokeiji: We collect ESG data and disclose it. Dataseed's solution thoroughly analyzes ESG data and creates a Dashboard that incorporates it into business strategies. Although the products seem similar, they focus on different functions, so I think there was synergy, and I think that this kind of business connection is actually important for more than just business.

I played rugby from junior high school to university, but Fukuda played American football in university. We both use the same oval ball (laughs).

Fukuda: We even have similar body shapes (laughs).

Tokeiji: There were some small details about him, like the fact that he was my teammate in high school, so I felt that this was also a connection.We decided to go for yakiniku the week after we met for the first time.

Fukuda: Yes, I did (laughs).

Tokeiji: I remember that we decided on a direction at that point. This was over the last two to three months (note: May to June).

Fukuda: I checked my past emails in preparation for this, and I found out that we first met on May 9th. We actually only talked about working together for about a week, so it really felt like 1.5 months.

Tokeiji: Everything was completed and he joined on July 1st, so it was probably almost completely decided by mid June.That's how we came to work together.All the members who worked at Dataseed have joined Zeroboard and are now operating as the Dataseed headquarters. With the exception of Fukuda, all members are foreign nationals, which I think adds a lot of diversity and variety to our team. Also, the speed at which products are developed is very fast, so I think we can create a variety of new products together.

3. Where are you headed after M&A?

A Issue in ESG management these days is building sustainable relationships with suppliers. We are currently in the midst of a shift to sustainable procurement that includes not only E, S, and G but also human rights due diligence. An approach that visualizes and analyzes supplier risks while analyzing surveys from suppliers will help ease the workload that companies are currently experiencing. (Fukuda)

Currently, the process is a relay of Excel spreadsheets. Considering the hassle involved, some companies are reluctant to send out questionnaires. We are currently working with Dataseed to test a system that uses the power of digital technology to reduce the burden and provide standard questions as presets. (Tokeiji)

Tokeiji:Regarding where the company is headed after this M&A, I would like to ask Fukuda to tell us how he plans to develop Dataseed's products.

Fukuda: Thank you. I think you all have various Issue in ESG management, but I think a major point these days is building sustainable relationships with supplier companies .
It's not just about E, S, and G, but also about human rights due diligence (hereinafter referred to as human rights DD) and sustainable procurement, and other such surveys. The approach of visualizing and analyzing supplier risks while analyzing these is currently placing a heavy workload on companies. We are considering providing a so-called survey function for such situations. Rather than simply providing a survey function, we are actively considering creating a system that will enable both buyers and suppliers to have a more future-oriented trading experience .

Tokeiji: As I mentioned earlier, I think it's a tool that will lead to engagement with supplier companies . You're involved in formulating sustainability strategies for various Company, and recently, quite a few of your clients have been facing Issue with supplier engagement.

Nobuzawa: Yes, that's right. Perhaps they haven't even reached the point where they have raised the Issue of engagement, and they need to collect information from suppliers, but they haven't yet fulfilled their accountability in the first place. I think most companies are really just at the entrance, not knowing what questions to ask or how to even collect the data. The goal is to increase engagement, but they don't know whether they can increase engagement after collecting the data, or what kind of work they should do to improve the data they have collected. I think this is the current situation.

Tokeiji: Thank you very much. Companies that do business overseas receive a variety of sustainability-related questionnaires from their overseas business partners. I think many Company are struggling with how to distribute these to domestic companies and increase engagement with their stakeholders.

Nobusawa: That's right.

Tokeiji: The Issue is exactly this relay of Excel spreadsheets. I think some companies are hesitant to send out the questionnaires because they are worried about how to distribute the Excel spreadsheets and whether distributing them would be too much work for the responding Company.
So, what we are trying to do with Dataseed is to somehow use the power of digital technology to reduce the burden there, and also to create a system that can serve as a standard for Company that don't know what questions to ask, where questions based on current trends can be set in advance and used.

Fukuda: We also have many discussions with companies, and when we look at the surveys and Contact us from buyers, we see that while there were around 10 companies about two years ago, this year that number has increased to 50 or 100 companies.In fact, we've seen quite a few cases where people say, "Actually, I didn't even realize that we had received a survey."
We believe that these are issues that we can resolve as a solutions provider, so we would like to be able to provide this as a Service that will enable us to smoothly address these issues at hand while also engaging in discussions about how data can be used in the future.

Tokeiji: Thank you.

3. How should Support for Sustainability Management fare in the future?

For companies, the overwhelming concern regarding Scope 3 reductions is how to address E. However, in many cases, companies have not yet taken the plunge into incorporating strategies for how to utilize the current situation to improve it in their mid- to long-term plans. (Nobusawa)

We will also utilize Dataseed's knowledge and functions in Zeroboard to develop management strategies that utilize sustainability data. GHG emissions can be offset elsewhere, but this is not the case with human rights and natural capital. Taking responsibility for everything, including the supply chain, is extremely difficult for a company, so we would like to create a system that allows for solid management. (Tokeiji)

Tokeiji: Many of the companies here today are Zeroboard users and partner companies that are working with us to build the Zeroboard platform. There are also many companies that are building infrastructure for the world.We believe that by becoming a Dataseed user and spreading the word, we can work together to create a system that does not complicate data distribution and collects sustainability data in a relatively standardized way. We think it would be very interesting to have Dataseed on the Zeroboard platform.
Mr. Fukuda, do you have any expectations for working together on the Zeroboard platform?

Fukuda: Yes, as I mentioned at the beginning, I think the fact that we accompany our customers is quite important. For example, the Dataseed team would like to participate in interviews with companies, and I think there are some Issue with current business, such as "Actually, this is what I wanted to do, but I couldn't do it, or it was different from the GHG Issue, so I didn't consult with Zeroboard," so I would be happy if you could tell us about such things without hesitation. We think that we can use such voices in discussions about how we can provide it as a function on the Zeroboard platform, so we would like to create it together with companies.

Tokeiji: I'm really looking forward to it. Now, there are a wide range of things that companies need to do to address sustainability, but in the context of sustainability, what aspects of ESG are of most interest to customers?

Nobuzawa: Yes, in terms of ESG,Regarding E, in addition to responding to TNFD, we are also working on reducing Scope 3.I think that is overwhelming. Of course there is interest in each item, but I think most companies have this issue at the time of mid- to long-term review, but another concern is that many companies have not yet taken the plunge into incorporating strategies for how to utilize and improve the current situation in their mid- to long-term plans, and I think this is another concern.

Tokeiji: As I mentioned earlier, we would like to do something in the future, which is management that utilizes sustainability data. Dataseed has expertise in this area, including data calculation, so we would like to utilize these functions in Zeroboard, not just supplier engagement.

Also, the term "human rights due diligence" was mentioned, and I think that interest in human rights and natural capital has been increasing recently. For example, when it comes to GHG, if the same company absorbs what is emitted here in another place, I think that it can be organized as a total offset. On the other hand, when it comes to human rights, for example, if someone dies in a harsh working environment, that fact cannot be offset somewhere. With natural capital, if you destroy the ecosystem there, it is difficult to say that you have offset because you have enhanced the ecosystem here, so I think that it is also a context that can be a complete knockout factor for companies. Taking responsibility for everything, including the supply chain, is very difficult for a company, so I would like to create a system that can manage it properly.

4. Conclusion

"Dataseed" represents our desire to sow the seeds of sustainability management. We want to use data to support companies and grow it into a big forest. (Fukuda)

Tokeiji: Well, time has flown by. Finally, Fukuda-san, how did you originally come up with the name Dataseed?

Fukuda: In a word, we plant the seeds of sustainability management in each and every one of our clients. It may be presumptuous to say so, but the original idea was to sow them widely, so that they would sprout and grow into a big forest. We added this in the context of using data to support companies.

Tokeiji: Of all the functions Dataseed had, the first thing we tried to do was to collect data from suppliers, which we then turned into a product, and we distributed the product to supplier companies in large quantities. I think it's a product that truly lives up to its name, "sowing seeds." If there are any companies here today who are unsure how to create items for evaluating suppliers, I would love for you to contact us.

Fukuda: I look forward to working with you.

Tokeiji: We are a company that uses ESG data as a tool for formulating sustainability strategies and identifying or reviewing materials. If you need consulting support in this area, please feel free to contact Nobusawa. He has extensive experience in sustainability management strategies, so please feel free to contact him. Although I like to think of him as a member of the Zeroboard family (laughs). I look forward to working with Dataseed as well.

This concludes our roundtable discussion, which covers Dataseed, the background to the M&A, and the future of sustainability management. Thank you for listening.

*The above Contents is current as of August 22, 2024.

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