April 4, 2017 10:00 am JST

Corporate Japan focusing on global sustainability despite setbacks

Contributions to healthier society could also boost market presence

TAKAHIRO SHIBUYA, Nikkei senior staff writer

The official logos of the 2020 Olympic and Paralympic Games. (Courtesy of Tokyo 2020)

TOKYO -- Under the leadership of President Donald Trump, the U.S. setback in the fight against global climate change, as well as the move toward protectionism, is threatening efforts by corporations to pursue their social responsibilities. But Japanese companies are increasingly aware of their mission in society as the 2020 Tokyo Olympics approach.

ANA Holdings last year conducted due diligence for the first time exclusively for the risk of possible violation of human rights by itself and its suppliers. Chikako Miyata, an official in charge of promoting corporate social responsibility, said the review has made the major air carrier face the growing risk of human rights abuses.

The research identified a factory that cooks in-flight meals, as well as a group company doing aircraft interior cleaning and other jobs, as posing that particular risk. Workers at these labor-intensive workplaces are mainly foreigners hired through the airline's contractors or sub contractors. ANA instructed these agencies to be strictly compliant with rules, including regarding work hours of on-site staff members.

Child labor and other abusive practices in developing countries are perhaps typical examples of human rights abuses at workplaces. But with an increasing number of foreigners doing various jobs in Japan today, especially in the construction and service sectors in the run up to the 2020 Olympics, businesses are increasingly exposed to the risk of human rights violations.

Following the due diligence, ANA is receiving advice from nonprofit human rights experts to keep itself updated on the issue and able to identify areas at risk and take the necessary actions.

Global companies

Meanwhile, Ito En, a leading green-tea product maker, in its 2016 sustainable report, is strongly promoting its commitment to serve as a "global tea company" acting in line with a United Nations initiative on sustainability.

The U.N. in 2015 laid out 17 Sustainable Development Goals that governments and businesses across the world are expected to achieve by 2030, including to preserve resources at sea and on land, and secure the health and well-being of all people. The International Olympic Committee was involved in drawing up the target. And bidders for procurement contracts for the Tokyo Olympics are required to incorporate the sustainability goals into their operations, according to the organizing committee of the Tokyo Olympics.

Ito En has already been working to contribute to the society through purchasing entire crops of tea leaves from farmers to encourage a stable supply of quality teas, and collaborations with municipalities for boosting local economies. 

Ito En President Daisuke Honjo said the tea maker's employees should imagine Tokyo is inviting the entire world to Tokyo for the Olympics, and work harder for the development goals. 

According to Ito En, an in-house review has proved that its CSR efforts have managed to cover all 17 items of the development goals. Hidemitsu Sasaya, an executive in charge of the tea maker's CSR initiative, insists the importance of leveraging the global recognition of the U.N. initiative for advertising the company-wide efforts on the social responsibility.

A trend to value the environmental, social and governance factors is spreading in the capital market when considering an investment in a business. The enthusiasm on social responsibilities has become a strong advantage in fundraising.

Not only for financing, the CSR initiative can be a powerful tool for a business to increase its market competitiveness.

Better for yourself, better for others

Ricoh, a manufacturer of office equipment, has worked to increase energy efficiency of its products, largely in response to requests from its customers in Europe and elsewhere. Weekly power consumption for its signature color multifunctional printer-copiers has been reduced to a third of the level a decade ago, and the top level in the industry, according to the company.

Nippon Life Insurance, meanwhile, last year began company-wide support for physically challenged athletes. Its efforts include encouraging its employees to participate in or watch wheelchair tennis and other sports matches, in addition to sponsoring those events.

Masanori Sugiura, a Nippon Life employee who was a renowned pitcher in Japanese amateur baseball and an Olympic medalist in the 1990s, thinks the company's current direction could help increase the sense of unification within the company, as well as prevent operational mistakes and fraud attempts.

Businesses in other parts of the world appear to be obsessed with how the antics of the Trump administration and the planned departure of the U.K. from the European Union will affect them, and discouraged from considering global sustainability. A crisis can often provide an opportunity -- this may be a chance for Japanese businesses to become front-runners in the CSR initiative.

ANA HOLDINGS INC.

Japan

Market(Ticker): TKS(9202)
Sector:
Industry:
Transportation
Airlines
Market cap(USD): 10,579.9M
Shares: 3,516.43M

ITO EN, LTD.

Japan

Market(Ticker): TKS(2593)
Sector:
Industry:
Consumer Non-Durables
Beverages: Non-Alcoholic
Market cap(USD): 3,877.11M
Shares: 123.45M

Ricoh Co., Ltd.

Japan

Market(Ticker): TKS(7752)
Sector:
Industry:
Electronic Technology
Electronic Equipment/Instruments
Market cap(USD): 6,199.25M
Shares: 744.91M

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