CSR in Japan: an interview with Yusuke Yamashita (part 2)

This post continues from part 1: an interview with Yusuke Yamashita, lecturer and researcher on CSR and business ethics in Japan. In this second part he shares his views on the development of CSR in Japan up to now and gives recommendations on what can be done to improve this development.

What role does Corporate Social Responsibility have for the Japanese business community?

At first, most Japanese companies were indifferent to CSR. However, when pollution and environmental problems became big social issues in the 1970s, companies were forced to do something. Originating from this background, until about the 1990s Japanese companies mostly saw CSR as a way to respond to environmental topics.

Nevertheless, Japanese companies were also confronted with other problems than just environmental.As globalization expanded, from the year 2000 onward the need for a more proactive way of CSR and business ethics became clear in Japan as well.

These days, I think that most Japanese businesses think of CSR as part of a strategy to improve a company’s image and of risk management. I don’t think that Japanese people really understand clearly the difference between CSR, business ethics and compliance.

At the same time, the number of Japanese companies that are cooperating with their stakeholders and striving to solve social problems is increasing.

Most companies in Japan are tackling the following three points when they talk about CSR:

1)      Risk management (as a way of company protection)
2)      Positively influencing the financial performance through improving corporate reputation
3)      Philanthropy as a way of resolving social issues

These points are very important for companies now. Yet, this doesn’t constitute an integrated approach of CSR. I think the concept of business ethics in these three points is very weak.

Contemporary CSR in Japan is mostly about dealing with solutions to social problems in Japanese society. However, it is not sufficiently concerned about the social issues in management of Japanese businesses.

Business ethics is about a business becoming a thoroughly ethical being as it is the only way to prevent fraud or scandals occurring in a company. Risk management in itself doesn’t require this type of fully integrated ethical awareness. But business ethics does require of companies to fully integrate this in realizing a better way of doing business. This is the difference with risk management.

I think that a deeper understanding of the concept of CSR will also lead to an increase of efforts in business ethics in the Japanese business world. Despite CSR becoming more included in the Japanese corporate world, there are still many occurrences of fraud and scandals. But I think that more and more Japanese people will want companies to make integrating business ethics a priority over their philanthropic activities.

 

In your view, what is the main CSR-issue that needs more attention in Japan (either from government, business or consumers)?

I think that there are very little government policies on CSR in place in Japan right now. On my own website, I have published a proposal for 17 policy issues on CSR.

To summarize, these points include a proposal to establish a “CSR Minister” to the government, to establish a CSR Agency, to establish an independent CSR consulting and whistle-blowing contact point and various additional points on stakeholders, tax incentives and transparency.

I will elaborate on a few points of these below.

In Japan there is a “Consumer Agency” (消費者庁) with a responsible minister but I believe we need a CSR Agency and a CSR minister.

Stakeholders are not only consumers and therefore it is necessary that the government has policy in place to also respond to other stakeholders in a suitable manner.

The government should also proactively present all relevant guidelines so that each company can make their individual practice of CSR and business ethics policy into the most appropriate to their business.

The government should support CSR initiatives of companies for example by reducing the tax burden.

However, the government shouldn’t only think about the corporate benefits, but has to be a neutral intermediary between business and stakeholders.

Finally, there is the issue of the National Contact Point of the OECD Guidelines. In Japan there are several ministries that are in charge of the NCP, but this makes it very difficult to understand which section has responsibility for the NCP. This responsibility should be centralized at one section.

 

Many thanks to Yamashita-san for participating in this blog interview and by sharing his ideas with me in so much detail. どうもありがとうございました!

This series was started by participation in Blog Away NL Maand #2, initiated by Karin Ramaker

CSR in Japan: an interview with Yusuke Yamashita (part 1)

Sustainability, responsible business practices and entrepreneurship: big issues in Asia.

On this blog I share what I know about these topics. But I also want to start sharing views from others: experts on sustainable urban development, academics on corporate social responsibility (CSR), Asia-entrepreneurs etc. This is why I’m starting with a series of short interviews with a wide variety of people about their work and personal ideas about the above question.

YusukeYamashita

Kicking off the series – I’m starting with a Japan-theme – is Yusuke Yamashita. He is a university lecturer and researcher on CSR and business ethics in Japan. We met last year when I was in Tokyo.

I was impressed at that time by his views on corporate social responsibility in Japan including his ideas on the influence of the development of civil society in Japan on CSR and business ethics.

So I am very happy to be able to share some of that with you here.

To try to do justice to the detailed and thoughtful response I received, this interview will be published in two parts. Here, he shares his personal motivation to work in this field. Part 2 will follow with a short history of CSR in Japan and what should be improved.

 

Why did you choose to work in the field of CSR and business ethics?

To make society a better place, what would be the most effective way? I believe that the way for that is to “transform” as many businesses as possible.

The single organization which is the most powerful in a country is the government. But, if you accumulate the power of all the companies in that country, the power of the companies will become more than that of the government. In other words, it will make much more difference to society to transform all businesses than what any governmental policy can do. Theoretically speaking.

This means that when more companies become more ethical in their activities, the better they can integrate CSR – and in turn society will become a little better. In order to achieve this, I would like to collaborate as an academic researcher.

Historically speaking, in Europe and North-America the people gained democracy through their own power. But this is not true for Japan. Democracy in modern Japan was bestowed on Japan by other countries after the defeat in the Second World War.

Accordingly, you might say that awareness of “citizenship” is low among many Japanese people. For most of us Japanese, the use of “public” often has the meaning of “government”. But, I think that originally “public” is “the space of citizens”: civil society is made up of individual citizens.

That there is a weak awareness of “citizenship” in turn means that there is a weak awareness of being a “stakeholder”. When the influence and presence of stakeholders is low, it is not possible to realize CSR and business ethics.

So for CSR and business ethics in Japan I believe it is not just the business world that has to change but it is also necessary for Japanese stakeholders to mature as citizens.

 

Part 2 will go more into the development of CSR and business ethics in Japan and what can be done to improve this.

This series was started by participation in Blog Away NL Maand #2, initiated by Karin Ramaker

Japan in Shanghai

Time for a confession: I’ve loved all the things Japanese in Shanghai while I was there.

Of course, Japan and China are tightly linked together. In all manner of ways: historically, culturally, (geo)politically, economically – and usually, it’s the bad stuff that hits the media. The rows (admittedly, across East-Asia, not just with China) when a Japanese PM visits Yasukuni shrine. The disagreement on the Diaoyu/Senkaku islands. And really every time that Japan or a Japanese politician does something that doesn’t agree with its neighbours.

But: it isn’t all bad stuff. In fact, Japan is probably the most present foreign influence in Shanghai (this is probably different across China, and Japan’s influence is likely to be less away from the East Coast). It’s everywhere. And I doubt Chinese consumers are always aware of the fact that a certain brand, product or company is even Japanese (though possibly I should give them more credit)

Most obvious are all the Japanese restaurants in the city. Anything you’d like you can eat: of course sushi and sashimi, but there are tons of ramen restaurants, Japanese curry, and I also found okonomiyaki and takoyaki. All the major chains are here: from Saizeriya to Yamazaki bakery and from Ippudo ramen to Yoshinoya. And for good prices – or at least, much better prices than at home so I’ve filled up on my Japanese food cravings for a while. They’re popular with the Chinese too: often the restaurants were very busy.

There’s more Japanese food: in the few supermarkets I visited there were a lot of Japanese products on the shelves. Typically Japanese food (like the curry packets or instant noodles) but also lots and lots of choice in sweets and chocolate. Again, good news for my regular need for some Pocky’s.

In retail, the perspective is the same. And I also think some of these brands have fairly successfully re-branded themselves as non-Japanese. That is, it’s not visible much that a certain brand is a Japanese brand – the ads are clearly focused on Chinese, or use Caucasian models (as is the case for Uniqlo for example).  Other products do use Japanese words and characters a lot: it’s almost as if there’s been no effort at all to market their product to a different audience – which is the case a lot for the candies and sweets.

In the various galleries and museums I visited there were often a lot of Japanese artists and designers featured. That they are also popular was demonstrated by the massive crowd at the Kusama Yayoi exhibition at the Museum of Contemporary Art.

So, what is really happening in the China-Japan relationship? They are clearly economically dependent on each other so how does this reflect on what people think?

When I mentioned or spoke about this to Chinese people I met I got the impression that for the younger generation Japan is often an example of how to organize a country: wealthy, clean, and organized. Several Chinese people I know are learning Japanese: whether out of personal interest, or because they feel it will increase their future career opportunities.

The bad stuff is, of course, there too: the memorial for the Nanjing massacre was renovated several years ago and now offers testimony to the drama that occurred at Nanjing in 1937 at the hands of the Japanese army. Unfortunately, for the second time I was unable to actually see the exhibit myself (this time I found myself in front of a closed memorial; the other time it was under renovation) so that is still on my list of things to do when I’m next back in Nanjing.

Of course, most of these examples are anecdotal (I’m sure there’s research about this out there) but maybe, if it were (more) up to the younger generation, the Sino-Japan relationship might not be in such dire straits.

A quick google already revealed some research on this of course: this is a link to the Genron China – Japan public opinion poll results of August 2013, which looks at how people from one of these countries perceive the other. Not surprisingly, after all the problems in the bilateral relationship, the disapproval rates are pretty high….

Also, this Pew research of last summer has interesting numbers on the view in Asia towards Japan. The China numbers seem to match the numbers of the Genron poll above. Pew also includes many other countries in the region in their research (scroll down to the last paragraph of the article).

Crossing Continents: to Japan

Thinking of doing business in Japan, what comes to mind for most people (I hope) is that it takes time, where relationships are important but hindered by a different language and culture. The opportunities are there, but as a business you need to put in a lot of effort.

Japan doesn’t attract a lot of attention anymore as a potential new market for Dutch companies. Overshadowed by other countries in the region with much more impressive economic growth rates. Yet, Japan is still the third economy in the world, which should offer plenty of potential.

So, in a way it shouldn’t have come as a surprise when I found the announcement of an FD & Deutsche Bank hosted event focusing on business opportunities in Japan – and Vietnam – which took place yesterday: Crossing Continents. I’ll focus on the Japan part below, as that is of course what I know best.

There aren’t many events focusing on business in Japan, and happily the room was full of an attentive audience. But: when asked who of the audience had already been in business in either Japan or Vietnam only a handful of people raised their hands. So: who was in the room?

Possibly because of this, or because the format of the afternoon didn’t leave much room for questions from the floor (which were limited to the last 10 minutes), it felt a little like Doing Business in Japan for beginners. But again, maybe this was the right audience for that – I’m not sure how many people in the room have a long acquaintance with Japan. I felt it was also hard, especially at the beginning, to translate economic (Abenomics) and political developments to the practical consequences for business (wo)men.

I liked that the afternoon highlighted some interesting developments: retail in Japan, opportunities for horticulture and connected suppliers in the tsunami-struck region of Tohoku, how trade missions work etc. (In fact, a recent horticultural trade mission to Sendai is profiled here, good to watch!) But then it also seemed to lack answers to concrete questions such as: where do I begin if I want to find an importer for our special brew beer?

Which reminded me: I need to get my post up and online about what type of support is out there for Dutch/European companies interested in entering the Japanese market. To be posted soon!

How to let SMEs grow in Japan

Tokyo / Marunouchi & Tokyo station

Towards Tokyo Station in Marunouchi

Last week in my post on flexible workspaces, I hesitated about putting in this (part of a) sentence:

[…] the government has more than once announced that small business entrepreneurship will be an important driver for innovation in Japan. If Japan has the right sort of regulatory environment to make that happen is another issue […]
I wasn’t sure if I should use this because it also leads to a lot more questions. Such as, what is the state of small business entrepreneurship in Japan now? What changes are needed in the regulatory environment to make this happen? Etc.So, imagine my luck spotting two articles tonight that talk about these exact issues. Prime Minister Shinzo Abe’s economic policies (in popular terms: Abenomics) consists of several pillars – or ‘arrows’ – of which the third is Abe’s strategy for growth. Policies include  liberalising the domestic labour market, expanding the opportunities of women in the workforce, promoting green energy use and deregulation.And these are exactly the things that are needed to create a business environment in which young entrepreneurs and new start-ups can succeed, as the Japan Times today discusses. In this article several companies are highlighted, mostly in the IT-industry, which are great examples of how a single entrepreneur can build a successful company such as Gree, Inc. and DeNA. Yet, the article also mentions that the success of Abe’s policies is essential in order to grow a more entrepreneurial business environment.

A second article, found on East Asia Forum discusses a related topic: the lack of internationalisation amongst Japanese small- and medium-sized enterprises (SMEs). These companies mostly work as suppliers to the large multinationals, many of which we all know like Mitsubishi, Toyota etc. The article gives some reasons for this limited international reach, amongst which several external factors (eg, underdeveloped infrastructure or inadequate legal systems in neighbouring countries). It also mentions several domestic factors such as the lack of English-speakers in the Japanese work force: how can you do business abroad when you cannot communicate with potential partners or customers? (in the case of Japan, I would argue it can also be very beneficial to have Chinese- and Korean-speakers amongst your employees).

The post on East Asia Forum also looks expectantly towards Abe’s third arrow – and notes the opportunity for Japan’s SMEs of increasing regionalism in Asia with several regional trade deals being negotiated (the RCEP, TPP and a China-Korea-Japan FTA).

Change in Japan is often slow, but for a healthy economy it will be important for Japan to make progress on these topics. Let’s see how fast Abe can go…

Business in Tokyo: where to find a short-term work space

in between meetings in Tokyo

Imagine a situation in which you will be in Tokyo for some time on business. You are there to set up the Japanese side of your business and work on the positioning of your product on the Japanese market. This is not a hit-and-run visit of only a few days filled from dawn to dusk with meetings. It is meant as a longer stay with time for more local research, building up a network and being able to take advantage of unexpected contacts and meetings. Something that by the time that happened on shorter trips, you usually would be leaving the country again.

But: where can you do your work? At home, you would have an office available to you with all the facilities you might need. Where do you go to work in Tokyo?

For anyone in this situation, there’s some good news. Flexible offices and co-working spaces are increasingly common in a business environment that is moving away from big corporations. It has taken a while but also in Japan (creative) entrepreneurs have been working independently for a while, and the government has more than once announced that small business entrepreneurship will be an important driver for innovation in Japan. If Japan has the right sort of regulatory environment to make that happen is another issue, but at least it is becoming more diversified in terms of office space.

There are different options for short-term office use. You can rent a small space in a big building, but other possibilities are increasing quickly.

I’ll list a few options, which I visited back in May. Each of these have their own style, pricing models et cetera. When you are looking for a regular space, I’d suggest to try out several locations before putting your money down for a month-long (or more) subscription which some places use as a model.

League Ginza is a fairly new location (open since February), is based in the Ginza neighbourhood, and it offers different types of working space in one location. It’s aimed at bringing different types of entrepreneurs together in this location. You can rent a space of your own: a service office or a personal booth. But you can also become a member and use the more open business lounge. League also has a Dutch connection: it has partnered with the Dutch company Seats2Meet which has set up work spaces across the Netherlands for independent professional, where the exchange of ‘social capital’ is the main way of connecting people and ideas – and which is, in locations in the Netherlands, the way of ‘paying’ for your work space. For League this is a new and innovative way of getting the ‘inhabitants’ of their building together and sharing expertise. When I spent a few hours here in between appointments in May I was immediately approached by the location manager Eriko and met a Japanese graphic designer who could be an interesting contact for future projects.

Agora Tokyo has been around a lot longer, since 2008, and was set up by Dutch architect Maarten Molenaar. It’s an open space where entrepreneurs – currently a mix of foreign and Japanese – can rent desk space to work from. Agora is located in Shibuya, which makes it very convenient to work from (I found in May that I passed through Shibuya and surroundings quite a bit going to and from meetings elsewhere…). The pricing plan works with a monthly membership, and depends on how much space you need. I liked the openness and informality of the space, and I imagine that because it’s a bit smaller it’s easy to get to know the other people working here which will help to build up your local network.

Shibuya MOV is the last place I visited, which I’d heard about a few times when I was researching co-working spaces. A big, brightly decorated space with lots of different areas: lounge areas to chat and talk to people, silent booths, regular desks to work at and a range of meeting rooms around it. I personally liked the interior, though it is least ‘office-like’. Again, here you pay through membership with the amount varying by type of use. You will also formally register as a member when you only need to spend a few hours here, though there is an hourly rate which then applies. What I probably liked most here is the availability of the meeting spaces which – again in Shibuya, right next to the train station – seems to be very convenient when needing to set up a business meeting.

There are many more like these, with different variations – some even with a playroom for your kids – and not only in Tokyo. All over the country co-working spaces are popping up, and this map provides a good overview and makes it easy to find a space wherever you are.

Of course, there are also the hundreds, or probably thousands, of coffeeshops around the city where you can join students and others working away on their laptop. However, don’t be fooled: the availability of WiFi is not nearly as widespread in Tokyo – let alone the rest of Japan – as it has become in the Netherlands (and probably most of Europe). I found that only Starbucks has a reliable presence of WiFi in pretty much all their locations. However, to be able to access this you need to register online at home, your hotelroom or anywhere else where you can access this Starbucks site. After registration, the internet connection works very well in any Starbucks I tried. This also meant that I spent A LOT of time in various Starbucks across the city – a place I avoid anywhere else…

Have a favourite place to work from when in Tokyo? Would love to hear about it in the comments!

 

Pedestrian space: essential to liveable cities?

Walking...
via Flickr/David O

Attractive and well-maintained public pedestrian space is probably essential to a smoothly functioning democratic society, because we are forced to develop and maintain a civic awareness there, our activities are visible and we can meet as equals Read more

Newly launched Japan & China blogs

Now go blog about this
via Flickr/nightthree

When ChinaFile was launched a few months ago, I looked on enviously. What a great discovery: a website full of relevant articles on any topic that is worth knowing about when it comes to contemporary China. With a few articles posted daily, my reading speed can’t quite keep up. But also: wouldn’t it be great if a similar website existed in the Netherlands, writing from the Dutch/European perspective on China?

Maybe I wasn’t the only one thinking this: over the last few weeks two Dutch websites have launched with one focusing on Japan and the other on China. Both of these websites publish regular articles on current affairs in either Japan or China, with a range of topics covered from design to social issues to politics and doing business.

Katern:Japan has been going for a few weeks now. The site is easy to navigate with the different categories listed at the top. With several writers there is a steady flow of articles published which are easy to read and cover many different issues. Interesting to follow for anyone interested in modern Japan, although I also noticed that a ‘economy’ or ‘business’ category seems to be lacking. Maybe this will change in the near future.

The newest ‘kid on the block’ is China2025, a ‘crowdblog’ with a similar format to Katern:Japan: a range of writers covering different topics. But only launched this week, it’s more difficult to assess how this blog will develop. The categories are a little harder to spot, they can be found in a tagcloud in the right column. I’m looking forward to see how this blog will develop from now onwards.

Designing for the future

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This afternoon, I visited an exhibition in Tokyo called Design to change the future: Business with social innovation in 2030. Sounded promising, as did the location – next door to 21_21 Design Sight where I saw a great exhibition last year on local crafts from the Tohoku region (and if the long queue of people waiting there today is any indication, they have something great on again).

The Mirai Design exhibition tries to provide answers to the question: 社会課題を解決できるのは誰なのか? Or: Who will be able to solve the issues in our society?

A very relevant question, not just for Japan, and I was looking forward to see some creative and new initiatives or designs which might really be able to trigger change.

The exhibition was small and divided across five themes: energy, agriculture, education, community and resilience. Each topic had 3-5 examples of ‘solutions’ for a social or environmental issue.

However, walking through the exhibition and taking in these examples, I was underwhelmed. To say the least. All of the examples came from major Japanese – and a few foreign-based – companies, for example NEC, Mitsui, Fujitsu, etc. Of course, this isn’t bad. But I also wonder if real innovation will come from these large companies. Especially when I see many smaller scale initiatives starting up (in Europe or the US) which seem to challenge the status quo much more.

None of the examples were bad things, of course. And from their description, a clear sense came through of the companies’ conviction that they have a responsibility to contribute to society. This is one thing that also came up earlier this week, and was explained to me as a way of thinking originating in post-war Japan. At that time Japan’s economy was devastated and needed to be built up again: being ‘good’ companies and working as hard as possible at making money and thereby supporting the recovery of Japan’s economy was seen by many companies as their contribution to society as this would in turn enable Japan to grow more prosperous and provide for its population. This mentality is still visible in CSR-related activities as well, in which community engagement is a strong part of CSR policy. And it’s great that companies feel so connected to their local community.

Back to the exhibition, where the examples included the promotion of less industrial and more organic farming, volunteer work in the Tohoku region, organizing study tours abroad for volunteers, increasing the usage of organic cotton and game-ifying education.

In short, a nice exhibition of some nice projects. But all of these things are happening NOW (luckily). Don’t we need something more radical? I was hoping for a real look into the future: what could our world be like 17 years from now? That would be a great question for some creative and innovative thinkers & designers to work on and design for. I would love to see it.

CSR in Japan: the highlights

I’ve just finished my last meeting, closing off this week with an interesting dicsussion with officials from the Ministry of Economy, Trade and Industry and a Ministry of Foreign Affairs representative talking about CSR policy in Japan, but also answering their questions on CSR in the Netherlands. Interestingly, they see the Netherlands as one of the leading countries on CSR, accentuated by for example the GRI conference in Amsterdam this week, a new Dutch appointment at the OECD for the Working Group on Responsible Business Conduct and many Dutch speakers at the upcoming Global Conference on Responsible Business Conduct in Paris in June.

Their first question started with exactly this: why is CSR so important and prominent in the Netherlands…. I hope my answer made sense!

But looking back at this week, I have gained so much more knowledge and understanding of this topic in the Japanese context. So I am very happy with how this week has gone and the many different people I’ve had the opportunity to speak with. Of course, there is still much more to learn and many more people I would love to talk to. Next time.

As I’m sipping a coffee, I’m also mentally listing the main points of this week. I’ll add them here below in short bullets, in case it will take me a long time to write out all the things I’ve learnt more fully.

> main premise is that a company is part of society, and contributes to society;
> CSR is something a company just has to ‘do’, there doesn’t seem to be a discussion on the need for a business case, as there seems to be in the Netherlands. This only becomes relevant here when talking about sustainability & sustainable development;
> focus within local community: do good?;
> focus within environmental topics: do no harm;
> extensive tradition of reporting follows from major environmental incidents in the 1960’s & ’70’s but is also part of a business tradition of reporting on many things, including CSR;
> additionally: peer pressure in Japan is high, which is also an explanation for the high percentage of reporting companies;
> but, CSR reports seem to be somewhat limited: focus is mostly on environment, governance and domestic situation (in general);
> major international companies make the connection to the international discourse on CSR (relevance of supply chain, stakeholder dialogue, due diligence), but for many others this is still not quite there;
> only recently, issues such as human rights and labour are coming to be seen as part of CSR (which was also part of a METI-research project)
> ISO26000 is best known from the international CSR frameworks, and is government-backed; ISO-systems are very popular in Japan, but with this ISO26000 runs the risk of becoming a checklist;
> relevance of UN Guiding Principles on Business and Human Rights is not yet well understood among business;
> sustainability is slowly seen as a business opportunity: sustainable building is ‘hot’, investment in renewable energy is increasing. But, incentive is also strongly financial;
> the local ngo’s have a relatively weak position vis-a-vis the general society and business.