Corporate conscience
One mantra growing in popularity among Japanese business leaders is corporate social responsibility, or CSR. In my dozens of interviews with executives in the past year, most mentioned the magic phrase. One, Masamitsu Sakurai, president of fax and printer manufacturer Ricoh, said: 'We take our own CSR initiatives proactively, not as an imposed duty.'
As well as developing 'green' products, Ricoh has also eliminated its industrial waste for landfills at its plants and has come up with an elaborate recycling scheme. Last year, it set up a special taskforce to draft a corporate social responsibility charter and to design action plans - a model which other companies have followed.
Toyota Motor Corporation, for example, recast its annual environmental report as an 'environmental and social report' and has joined CSR Europe, a leading organisation in the promotion of corporate social responsibility.
Mizuho Corporate Bank, meanwhile, became the first Japanese bank to adopt the Equator principles, a scheme founded by global banking institutions in which big banks manage environmental and social issues as part of financing in developing countries.
Last year was the first in Japan's corporate social responsibility era, when businesses began shifting from awareness to action, according to Masahiko Kawamura, a senior researcher at the NLI Research Institute in Tokyo. The term only began appearing in major economic papers in 1998, he said. But in a newspaper survey last year, nearly half the 1,000 corporations who responded claimed they had begun initiatives.
One force behind the trend is the increasing interest of investors in such companies. Japan's first eco-fund was created in 1999, which became a hit despite earlier pessimism.
Now, Socially Responsible Investment (SRI) funds are gaining popularity. The Sumitomo Trust & Banking Company launched the first such fund for corporation pensions. This proved so successful that it has now launched a fund for individual investors.
Japan's SRI funds are believed to total about 90 billion yen (HK$6.5 billion), a mere 0.3 per cent of total investment trust fund assets. But with increasing public interest, this is likely to rise.
Not surprisingly, auditing companies are keen to jump on the bandwagon, offering their corporate clients new services which include assisting with environmental and other issues.
Now, corporate leaders, together with the Japan Business Federation and the Ministry of Economy, Trade and Industry are in the process of establishing guidelines for companies on environmental policy, legal compliance and human rights. This is to comply with protocols to be issued by the International Organisation for Standardisation, expected around 2007.
The mantra is creating businesses and shedding new light on the Japanese corporate landscape. Let's hope it prevails, paving the way for good news about Japan's economy.
