Consumers might not expect you to fix everything, but brands are increasingly scrutinised to make a positive difference on issues under their control.
Whilst concerns about data security and employee welfare are becoming more talked about in the public sphere, the largest focus is now, no doubt, on the environment and climate change. Many companies have been prompted, nudged and forced to make a stand on such issues.
If you’re entering the Japanese market as a business and are curious about the way companies approach CSR here compared to other markets, you’ve come to the right place. However, as this is such an interesting topic, we encourage you to read on if you’ve landed on this article for other reasons or are simply curious about how Japan has historically (and more recently) approached corporate social responsibility.
What Does CSR Mean in Japan?
There has long been a growing concern among global citizens that something should be done by businesses to address the various social imbalances and “wrongs” that exist in the world. And if a business has actually contributed to some kind of wrong directly, there’s a much stronger call for compensation or a plan for future mitigation to be issued.
Many also perceive that if businesses are not having some kind of a positive impact on the world, or actively addressing the issue of corporate social responsibility, they’re potentially causing damage. As businesses get bigger and grow internationally, they face even greater pressure to adjust their systems and processes to ensure they are acting responsibly.
Today, CSR encompasses a vast range of topics that includes everything from human rights to mental health. Who is benefiting from a company’s commercial activities? And who is losing out? These are fundamental questions we’re all asking, whether we’re talking about large corporations or small independent businesses.
A Traditional View of CSR in Japanese Society
Japan is a place where giving money to strangers or donating to charity hasn’t always been common practice. Instead, money or aid has traditionally been distributed through existing networks and relationships between people, whether that’s the employer-employee relationships or family-based relationships.
The idea of companies giving large amounts of their profit to causes and people that aren’t associated with it was once alien in a world where, in theory, individuals were looked after and supported by the circles they existed within (e.g. their companies, families and local communities).
Defenders of Japan’s traditional approach to CSR might still argue that companies have always existed to create mutual benefit for everyone. And this is perhaps more sustainable and tangible than trying to help those you don’t know.
When it comes to matters of the environment, social welfare and human rights, many have considered this to be the responsibility of the government alone. With historically higher levels of trust in the government, many were content to defer to its management of social improvement.
However, as time has passed, and perhaps as traditional structures of companies and families have evolved significantly, the popular belief is that governments can’t (and perhaps shouldn’t) be charged with resolving certain issues on their own.
A Modern Japanese Perspective on CSR
Today, things are much more complex. The impact of things like poverty, social unfairness, physical and mental wellbeing, and the environment are seen to affect all people’s lives and it’s believed that these issues can be addressed through the actions of individual companies and people, rather than solely through the efforts of public administration.
This aligns more with the European view of CSR where charitable donations to several causes (not necessarily connected) by businesses has long been viewed as normal.
Japanese corporations now face pressure to become ”good” and truly responsible for their actions outside of their existing networks and value chains.
Meeting Global Standards for Social Responsibility
It’s been argued by many that powerful global corporations can exert more influence (both good and bad) than any single government ever could when it comes to social, economic, and environmental issues.
For instance, Japan’s Toyota, one of the world’s largest automotive companies, employs over 360,000 people and produces about 10 million vehicles per year, contributing to the welfare of so many while significantly impacting the environment through the manufacturing and use of its products.
As well as a changing perception of what CSR means and how it should be carried out domestically, the nation (and companies like Toyota) now experience increased international scrutiny as growth continues.
To avoid public criticism, these entities must be diligent in their recording of their actions and how they report on issues relating to CSR. You can find Toyota’s Sustainability Data Book here, which has chapters covering everything from Respect for Human Rights to Social Contribution Activities.
If you’re a business in need of inspiration regarding the form your CSR measuring and reporting can take, Sony’s landing page on CSR and sustainability is a great place to look.
As well as an annual Corporate Report that details the progress of various initiatives for value creation, it’s also home to their annual Sustainability Report and documents relating to its global justice fund, key charitable activities and it’s Green Management roadmap aimed at achieving Net Zero by 2050.
Japan now conforms to OECD guidelines for Multinational Enterprises and most major companies operating here have adopted more externally measured global CSR processes that advocate transparency and the publication of regular reports, documenting a company’s efforts to address a wide range of social issues.
CSR Metrics Adopted by Japan
- Global Reporting Initiative (GRI)
- Integrated Reporting (IIRC)
- FTSE 4 Good
- Dow Jones Sustainability Index
- AccountAbility AA1000 Series of Standards
- International Organization for Standardization (ISO)
Building Your Approach to CSR
Corporate social responsibility isn’t compulsory, so many companies might not feel the need to engage in it to the same extent as others. However, there are several reasons why building a sound CSR strategy for Japan makes good business sense too.
- Improve customers’ perception of your brand
- Attract and retain employees
- Strengthen employee engagement
- Increase your product’s perceived value to the customer
- Enable you to better engage with customers through shared values
- Become more sustainable, efficient, and profitable
- Engage more easily with other businesses and networks that share common values
Guidance on Building Your CSR Framework
If you’re setting up shop in Japan, you might be thinking about how you can pull together a CSR plan that makes sense within the local context and also adheres to global standards.
One of the best ways you can do this is to implement a system of measuring and reporting that takes into account what many call your “triple bottom line”, (profit, people and planet).
There is also plenty of guidance out there on how you can structure your processes, such as the International Organization for Standardization’s ISO 260000 guidance. Below are key elements from this framework.
- Due diligence: Check for violations of human rights within the organization and in related organizations. If violations are found, correct them
- Human rights risk situations: Special care should be taken in situations where governments are corrupt and with business relationships that are not protected by law, since violations of human rights can easily be overlooked.
Avoidance of complicity: Avoid the earning of improper profits from human rights violations, including profit earned through the organization’s complicity in such violations and through violations by others. - Resolving grievances: Resolve grievances by establishing systems that make it possible to notify the organization when human rights have been violated.
- Discrimination and vulnerable groups: Prohibit direct or indirect discrimination against all those connected with the organization, and give special consideration to providing equal opportunities and respecting the rights of vulnerable groups whose members are liable to be placed at a disadvantage.
- Civil and political rights: Respect people’s rights to live with dignity as human beings and as members of society, including their freedom of speech and expression and freedom to participate in politics.
- Economic, social and cultural rights: Respect people’s rights to pursue lives of happiness and of good mental and physical health.
- Fundamental principles and rights at work: Respect the fundamental rights at work identified by the International Labor Organization (ILO), including freedom of association, the right to collective bargaining, elimination of forced labor, abolition of child labor, and elimination of discrimination.
HB Pro Tip: Finding a way to provide value and improvement to those within your existing network is still incredibly important in Japan. It is seen as an important attribute for any business to create value for its shareholders and promote mutual benefit for all. If you can integrate this aspect into your CSR plan too, you’ll be setting yourself up well.
Entering the Japanese Market?
If you’re interested in learning more about the Japanese market and how you can adapt and optimize your internal and external communications so they line up with your CSR plan, we’d love to hear from you!
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