Central Japan Railway
Nagoya, Japan| Invested through |
|
|---|---|
| Asset Classes | Listed equity |
| Impact strategy | Impact Equities and Bonds |
| Bloomberg ticker | 9022 JP |
| ISIN code | JP3566800003 |
| Industry group | Railroads |
| Aligned with SDGs |
Central Japan Railway (or JR Central) operates a railway network along the ancient Tokaido route between Tokyo and Osaka.
The company generates 70% of its revenues from the Tokaido Shinkansen high-speed railway line. The other 30% of revenues are generated from local railway and bus connections in the Nagoya area, and from retail and real estate activities at stations. The Tokaido Shinkansen travels from Tokyo (largest city of Japan) passing through Yokohama (2nd largest city), Nagoya (4th largest city) and Kyoto (7th largest city) to arrive in Osaka (3rd largest city). Over 170 million travellers use this line per year. Since inception in 1964 more than 6 billion travellers have used the Tokaido Shinkansen.
JR Central is developing a superconductive magnetic levitation (Maglev) high-speed railway system that can travel at speeds above 500 km/h. It is currently constructing the Chuo Shinkansen line from Tokyo to Nagoya and Osaka that will start operations in 2027.
In 1987 the state-owned Japanese National Railway Company was divided into 6 regional railway companies which were subsequently privatised. JR Central became a listed company in 1997, is headquartered in Nagoya and has almost 29,000 employees.
Investment rationale
Transportation is responsible for around 25% of global CO2 emissions, with around 60% of that coming from passenger transport. Public transport plays an important role in reducing CO2 emissions.
Since 1990 JR Central has reduced energy use of its rolling stock by 30%. On the Tokyo-Osaka route the Tokaido Shinkansen has reached a market share of 85% versus 15% for airplanes. The energy use per seat of the Shinkansen is 1/8-th compared with airplanes and the CO2 emissions per seat are only 1/12-th.
Since 1964 the Tokaido Shinkansen never had a fatal accident. The average delay is 0.4 minutes. Most of the delays are caused by the frequent earthquakes in Japan that require emergency stops or speed reductions.
The Shinkansen technology of JR Central is used in Taiwan since 2014 and is selected for the Dallas-Houston route by Texas Central Railroad which is about to start construction. The magnetic levitation (MAGLEV) technology is selected by the Northeast Corridor project for a connection between Washington D.C. and New York, but this project is still in early stages.