[ Nippon Keidanren ] [ Policy ] [ CSR ]

Corporate Social Responsibility:
The Strength of Japanese Corporations

by Hiroshi Hirose, Nippon Keidanren's Subcommittee on Socially Responsible Management

Corporate Social Responsibility (CSR) has become an indispensable element of Japanese corporate management and has been promoted by Nippon Keidanren consistently since the 1970s. In 1991 Keidanren established a "Corporate Behavior Charter," and has recently promulgated CSR guidelines. Nor is our job over -- we fully intend to further actively promote and strengthen CSR.

Many Japanese companies are baffled by the heated level of discussions in European and US business associations over CSR. Unlike corporations in the US and Europe that tend to place importance on short-terms profits for the shareholders, Japanese corporations have long taken a balanced approach to managing their companies, with an eye to the overall stakeholders, including employees, customers, and local citizens, as well as to shareholders. A significant number of Japanese corporations have established CSR-related departments, disseminate information through the publication of reports, and pay attention to relationships with stakeholders.

If CSR is at the heart of a corporation's comprehensive activities aimed at maintaining harmony between the corporation, society, and the environment, all the while sustaining development, Japanese companies are certainly at least on par with the West. Moreover, by turning its resource-poor handicap to its advantage, Japan has targeted cutting-edge technology and knowhow toward energy conservation, resource conservation, and environmental protection -- to the good of the rest of the world.

Nippon Keidanren and CSR

In October 2003, the Nippon Keidanren established the Subcommittee on Socially Responsible Management, a union of two existing committees (Corporate Behavior Committee and the Committee for the Promotion of Contribution to Society). The new bureau has conducted a continuing review as to what constitutes social responsibility in a corporation.

CSR-related activities are wideranging and diverse; contributions to society include the thorough enforcement of corporate ethics, the establishment of sound corporate governance and employment policies, communication with stakeholders and consumers, conservation of the environment, protection of privacy, respect for intellectual property rights, etc. Most of these thorny issues have been dealt with over a long period of time by a variety of committees who have worked cooperatively within Nippon Keidanren and its related organizations, such as the Council for Better Corporate Citizenship (CBCC). On the basis of its acquired experience and knowledge, the Social Responsibility / Management Bureau will be able to effectively and appropriately deal with CSR matters, both in Japan and abroad.

So that corporations are better able to promote CSR and to tie those goals to the betterment of corporate values in a rapidly changing society, an accurate assessment of what the various stakeholders expect from corporations is necessary.

In all candor, very few opportunities have existed in Japan for a frank discussion with concerned parties beyond employees, customers, shareholders, and local residents. To meet this need, the Social Responsibility / Management Bureau would like to create a forum for dialogue that would include labor and consumer organizations, opinion leaders, non-governmental organizations, company valuation rating organizations, etc. Naturally, stakeholders will have different requests and hold different expectations. Although sharp differences in opinion may at times arise, we wish to create a more sustainable and improved society by accepting suggestions and advice from the concerned parties through continuing dialogue with a wider range of participants.

"Japanese corporations have long taken a balanced approach to managing their companies, with an eye to the overall stakeholders, including employees, customers, and local citizens, as well as to shareholders."

The Bureau would also like to conduct interviews and surveys with member organizations concerning CSR, as well as to analyze the nature of the activities of our multinational corporations located overseas. From these surveys, a variety of examples will be collected and offered to corporations as reference material for use in the conduct of their business.

In May and June of 2004, the Nippon Keidanren reviewed its "Corporate Behavior Charter" and "Implementation Guidelines" from the CSR standpoint, which are to become baselines for corporate behavior and ethics, in addition to legal compliance. In the future, the Social Responsibility / Management Bureau intends to use the Charter and Guidelines as the basis of a review of CSR activities in order to make the data more practical for member companies.

ISO's Codification of SR

In mid-September 2004, the International Standards Organization (ISO) held a meeting of its Technology Management Bureau, which is de facto the highest decision-making organization within the ISO. At the meeting, ISO announced its intention to a "Guidance Document Concerning Social Responsibility (SR * )," which will not require approval by a third party, by the end of 2007.

Accordingly, the ISO said it would establish three or four Task Groups at the first meeting of its Working Group, scheduled to be held in late February 2005 in Brazil. Following that, experts representing business circles, labor organizations, consumer organizations, NGOs, governments, and standardization organizations from various countries will be included in discussions concerning the preparation of this guidance document.

Because CSR activities are appropriately considered voluntary and spontaneous and the endresult of diversified approaches, the Nippon Keidanren initially tried to be in step with the European and American companies that resisted attempts to codify CSR. Interestingly, though, public opinion in many developing countries has tilted toward codification. Once the ISO decided in June 2004 to establish a guidance document, Japan opted to assume an active role in the establishment of such an effort, because when the ISO 9000 and ISO 14000 were promulgated, critical matters were determined under Western leadership, with Japan having no choice but to comply with the "given" specifications. Japan is determined not to make the same mistake again by ceding the field to other players.

"Nippon Keidanren intends to take an active role in the preparation of ISO's codification work."

Accordingly, Nippon Keidanren has decided to dispatch three corporate experts to the ISO; we intend to take an active role in the preparation of the guidance document concerning SR, giving full consideration to the positions of Japan and other Asian countries.

* SR: According to the ISO, the "Guidance Document Concerning Social Responsibility" applies, not only to corporations but also to all those whose interests are at stake, including government organizations, NGOs, etc. Thus, the ISO dropped the C for Corporate and uses only SR (Social Responsibility).
Hiroshi Hirose is Executive Managing Director, Sumitomo Chemical Co., Ltd.
and Chairman, Social Responsibility / Management Bureau of Nippon Keidanren.

Home Page in English