Growth and Environmental Conservation in Japan’s Major Railway Corporations

This study examines growth and environmental conservation in Japan’s major railway corporations. The analysis utilizes financial, transport, and environmental performance data from 20 publicly traded entities from 2019 to 2023. Each fiscal year is analyzed separately, covering the periods before, during, and after the COVID-19 pandemic. The study is structured around three points. First, the regression analyses based on the Environmental Kuznets Curve (EKC) hypothesis identify turning points from JPY 0.068 to 0.117 in Passengers Per Employee (PAX/EMP). These turning points establish target thresholds for railway companies for Scope 1 CO₂ Emissions per employee (SCP1/EMP) and combined Scope 1 and 2 CO₂ emissions per employee (SCP1+2/EMP) relative to PAX/EMP. Second, the validation of the EKC hypothesis results from the combined influence of four key factors:(1) railway companies have adopted decarbonization technologies and pursued energy efficiency in their operations;(2) the growing emphasis on ESG principles by institutional investors has created additional incentives for environmental performance;(3) the influence of external guidance and evaluations has driven corporate engagement in environmental conservation; and (4) regulatory authorities have tightened emissions controls in line with domestic and international climate commitments. Third, and most importantly, increasing PAX/EMP to the threshold range validates the EKC hypothesis and enables corporate growth while achieving environmental conservation in Japan’s major railway corporations.