Corporate Social Responsibility Discussion (2/3)

CSR in Japan and future perspectives＝Global strategy with local flavour
Japanese companies are on the whole better than their international peers at environmental management. While in Europe only companies with a large impact on the environment are enthusiastic about environmental management, Japanese companies address these issues well regardless of the size of the companies. In particular, Japanese companies are outstanding in environmental management systems. The widespread adoption of the International Organization for Standardization (ISO) in Japan is considered to be the reason.　

On the other hand, Japan lags behind European countries in human rights issues. The reason is European countries have been ahead of the world in this field through its experience of having been accused by NPOs and citizens.

As for equal opportunity for employees, Japan is superior to other Asian countries, but still behind European countries. In particular, employment conditions of women and the number of female executives need improving. Each country/region has different strengths in the corporate responsibility agenda; environment management for Japan, cooperate governance for the U.S., and human rights for Europe.

Although there was a rapid growth in environmental funds know as ‘Eco-funds’ in Japan around 2003, the amount of asset under management in each fund has been on the decrease thereafter. This is largely due to the fact that regardless of the type of fund (be it SRI or conventional funds) the Japanese investment product structure tends to prioritize the creation of constantly new funds. Therefore, it is natural for the total asset under management to decrease if new products are not constantly created. However, there may still be a big potential in Japan judging from the large interest in responsible investment by Japanese cooperate pension funds.

CSR will become more global due to diversification of shareholders and globalization of various issues, but at the same time, it will definitely need to maintain a local flavour which reflects each region’s characteristics. One of the things that I hope for Japan is to take leadership in Asia, particularly to build good relationships with China.