ESG/GX and Proof of Existence
— Sustainability's Organizational Footprint

This essay is an academic analysis and does not recommend any specific investment decisions or ESG ratings.

1. What is ESG — A New Framework for Proof of Existence

ESG (Environment, Social, Governance) rapidly spread in the 21st century as a framework for evaluating non-financial corporate value.

E: Environment

CO2 emissions, renewable energy usage, waste reduction—these quantify what kind of "footprint" a company has left on the environment. Carbon footprint literally means "carbon's footprint," recording an organization's environmental impact.

S: Social

Employee diversity, occupational safety, community contribution—these visualize an organization's impact on society. Investment in human capital becomes proof that an organization "valued people."

G: Governance

Board composition, executive compensation, internal controls—these demonstrate transparency in organizational decision-making. Proper governance is proof of existence as "being properly managed."

2. GX — Recording the Transformation

GX (Green Transformation) is a Japan-originated concept meaning the transition to a decarbonized society.

Recording the Process of Change

GX emphasizes the "process of transformation" rather than the "endpoint." How did we change? What efforts were made? The trajectory itself becomes proof of existence.

The Path to 2050 Carbon Neutrality

Japan declared 2050 carbon neutrality. Each company's efforts toward this goal will serve as historical proof decades later that "we participated in the transformation."

"GX is not merely environmental measures. It is the act of leaving proof that an organization took responsibility for the future."

3. Sustainability Reports — An Organization's "Diary"

Sustainability reports issued by many companies function as certificates of organizational existence.

Standardization of Reporting

Reporting standards such as GRI (Global Reporting Initiative), SASB, and TCFD have been standardized. This enables "comparison" of proof of existence across different organizations.

Mandatory Non-Financial Disclosure

Non-financial disclosure is becoming legally mandatory, such as the EU's CSRD (Corporate Sustainability Reporting Directive). Proof of existence is shifting from "voluntary" to "obligatory."

Rise of Integrated Reports

Reports integrating financial and non-financial information are increasing. Not only "what was earned" but "how it was earned" and "what was left behind" are now being questioned.

4. Carbon Credits — Recording the "Atonement" of Existence

Carbon credits are a mechanism for offsetting environmental impact, a kind of record of "atoning for existence."

Emissions Trading

In emissions trading markets like EU-ETS, the "right" to emit CO2 is bought and sold. This is a system that monetarily visualizes an organization's environmental impact.

Recording Offsets

Investment in forest conservation and renewable energy projects remains as a record of "offsetting negative footprints with positive footprints."

The Problem of Greenwashing

However, "greenwashing"—superficial appearance without substantial reduction—has become problematic. False proof of existence ultimately damages organizational credibility.

5. Supply Chain and the Chain of Proof of Existence

ESG is not just about individual organizations. Proof of existence across the entire supply chain is required.

Scope 3 Emissions

Beyond direct emissions (Scope 1) and indirect emissions from electricity use (Scope 2), disclosure of supply chain emissions (Scope 3) is required. "Who you did business with" becomes part of proof of existence.

Traceability

Transparency throughout the supply chain, from raw material procurement to final products, is required. Blockchain-based traceability systems enable proof of existence for "where this product came from."

6. ESG Rating Agencies — "Judges" of Proof of Existence

ESG rating agencies like MSCI, Sustainalytics, and CDP "rate" organizations' proof of existence.

Diversity of Evaluations

Different rating agencies evaluate with different criteria, so the same company can receive different ratings. The "correctness" of proof of existence is not singular.

Data Reliability

There are challenges in ESG data reliability, including reliance on self-reported data and lack of third-party verification. "Verification" is essential for proof of existence.

7. Individual Carbon Footprint

The concept of ESG/GX is being applied not only to organizations but also to individuals.

Visualizing Individual Environmental Impact

Air travel, meat consumption, energy use—tools for calculating the environmental impact of individual lifestyles are increasing.

The "Flight Shame" Phenomenon

Sweden's "flygskam" (flight shame) expresses embarrassment about air travel. Individual behavioral choices are now recognized as "footprints" on the environment.

Recording Environmentally Conscious Actions

Using eco-bags, taking public transportation, switching to renewable energy—these choices can become proof that an individual "existed as an environmentally conscious being."

8. Intergenerational Equity and Proof of Existence

At the foundation of ESG/GX lies the ethical issue of intergenerational equity.

Responsibility to Future Generations

Current actions affect future generations. Climate change, resource depletion, biodiversity loss—these are questions of "what we left behind."

Not Leaving Negative Legacy

ESG/GX includes not only the responsibility to "leave good things" but also "not leave bad things." Not passing environmental debt to the next generation is demanded of modern proof of existence.

9. TokiStorage's Position — Proof of Existence Beyond Sustainability

ESG/GX-based proof of existence is important but has limitations.

• Organization-centric: Primarily targets companies and organizations; individuals are peripheral
• Quantitative bias: Tends to focus on quantifiable metrics
• Short-term evaluation: Centers on annual reports; weak long-term perspective
• Changing standards: Past evaluations can change as standards change

TokiStorage offers a different approach.

• Individual-centric: Records the existence of each person
• Qualitative records: Preserves "existence" itself that cannot be quantified
• Ultra-long-term preservation: Aims for preservation across generations
• Immutable records: Not affected by changing standards

If ESG/GX proves "was a good organization," TokiStorage proves "this person existed." The two are complementary.

Conclusion — The Intersection of Sustainability and Proof of Existence

ESG/GX has added a new dimension to organizational proof of existence. Not "what was earned" but "how did we exist" and "what do we leave for the future" are the questions of this era.

Environmental reporting, social contribution records, governance transparency—these are certificates that an organization "existed as a responsible entity." Carbon footprint is literally a record of the "footprint" we leave on Earth.

However, the pursuit of sustainability is a means, not an end. The true purpose is realizing a society where all existence, including future generations, is respected. At the intersection of ESG/GX and proof of existence, we are asked "how do we want to be remembered?"