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Policy Proposals  csr Charter of Corporate Behavior

(Japan Business Federation)

September 14, 2010

< Foreword >

KEIDANREN (Japan Business Federation) has always made efforts to build vibrant and affluent society that is self-regulated and led by the private sector. To realize such society, corporations and individuals alike should demonstrate lofty ethical values, recognize that their social responsibility goes beyond merely compliance with laws and regulations, and actively participate in solving various relevant issues. To steadfastly and firmly encourage member corporations to voluntarily undertake these tasks, KEIDANREN established its Charter of Corporate Behavior in 1991 and compiled the Implementation Guidance in 1996. The Charter and the Guidance have subsequently been revised several times to reflect changes in economic and social conditions.

In recent years, the idea that all organizations should realize and discharge their social responsibility for sustainable development of society, a concept demonstrated by ISO 26000 (International Standard: Guidance on social responsibility), has spread around the world. In particular, while the presence of corporations is indispensable for the economic development of society in terms of their capacity to generate income and employment, corporations should realize the great impacts they have on society as well as the environment and take the initiative to discharge their Corporate Social Responsibility (CSR).

Specifically, corporations should seek dialogue with a wide range of their stakeholders, including shareholders, investors, consumers, business counterparts, employees and the local community, and earn their trust by responding to their expectations, such as continuing to pursue greater efforts to ensure consumer safety and promoting eco-friendly activities. Corporations should discharge their social responsibility not only within their corporate groups, but they should also promote socially responsible behavior within their supply chain. Furthermore, in response to the growing public interest on human rights and poverty, it becomes important for corporations to tackle these issues from a global perspective.

In view of the recent changes surrounding the concept of corporate social responsibility, KEIDANREN has revised its Charter of Corporate Behavior in order to encourage member corporations to further promote CSR on their own effort. Member corporations should continue to contribute toward social development by creating quality goods and services, while taking the ethical aspects of their activities into full account. Member corporations should once again realize the intimate relationship that exists in the development of a corporation and society, and conduct business activities from a comprehensive perspective of their economic, environmental and social aspects, so that these activities will lead to sustainable development of society. Member corporations, therefore, pledge to comply with the spirit of the Charter of Corporate Behavior as laid down below and implement the Charter on their own initiative.

While the Charter of Corporate Behavior and its Implementation Guidance have been developed by KEIDANREN as voluntary codes of conduct of its member corporations, they are also considered as a freely available tool for socially responsible practices of other organizations all over the world.

Charter of Corporate Behavior

For Gaining Public Trust and Rapport

KEIDANREN (Japan Business Federation)

Charter established: Sept. 14, 1991
2nd version released: Dec. 17, 1996
3rd version released: Oct. 15, 2002
4th version released: May 18, 2004
5th version released: Sept. 14, 2010

A Corporation has a responsibility to contribute toward the economic development of society by creating added value and generating employment through fair competition and should also make their existence useful to society at large. To this end, regardless of its location, a corporation is expected to respect human rights, comply with relevant laws and regulations, observe the spirit of international rules, discharge their social responsibility with a strong sense of ethical values and contribute toward sustainable development of society by acting in line with the following ten principles.

  1. Develop and provide socially beneficial and safe goods and services that give satisfaction to consumers and customers.

  2. Engage in fair, transparent and free competition and ensure that transactions are appropriate. Also, maintain a sound and proper relationship with political bodies and government agencies.

  3. In addition to communicating with shareholders, interact extensively with the public, and disclose corporate information actively and fairly. Also, protect and properly manage personal and customer data and other types of information.

  4. Respect diversity, character and personality of employees and ensure a safe and comfortable working environment, thereby providing a sense of comfort and richness.

  5. Proactively initiate measures in acknowledgment of environmental issues, the common challenges they pose to humanity and their importance to its existence and livelihood.

  6. Actively engage in community involvement activities including philanthropy as a "good corporate citizen."

  7. Resolutely confront antisocial forces and organizations that pose a threat to the order and security of civil society and sever all relations with such individuals and groups.

  8. In line with the globalization of business activities, comply with laws and regulations of the countries and regions where its business operations are based and respect human rights and other international norms of behavior. Also, conduct business by taking into consideration the local culture and customs as well as the interests of stakeholders, and contribute toward the development of the local economy and society.

  9. Top management recognizes that it is its role to realize the spirit of this Charter and takes the lead in an exemplary manner to implement the Charter within the corporation and its entire corporate group, while encouraging its business counterparts to follow the same example. Furthermore, it should always try to keep abreast of what people inside and outside the corporation say and set up an effective mechanism throughout the corporation to implement the Charter.

  10. In case the Charter is violated, top management should clarify both internally and externally that it will take charge to resolve the situation, determine the cause of infringement and make efforts to prevent similar violations in the future. At the same time, top management should promptly make full public disclosure, explain what has occurred, and, upon determining the source of competence and responsibility, impose strict disciplinary action against those held responsible, including top management itself.