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CSR IN JAPAN
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“Sampo yoshi” (Triple satisfaction) philosophy of “good for the seller, the buyer, society a traditional Japanese strategy for corporate longevity “When you go abroad to do business, it is most important to always keep in mind : To make sure that the garments you are selling satisfy all customers in that country; Think and act customers first; Never aim for a short term high profit; Be humble that you are dependent on God’s blessing; Do business with a caring mind for the people in the region; Never lose faith in God in order not to have a malicious mind. By so doing, you are in line with reason and will be able to keep a healthy body and mind.” message to his grandchild by Jihei NAKAMURA 1754
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Meiji Era: 1867-1911 The government adopted the policy to form the industrial society imported institutions from the West (including the legislation system and the company system) tried to make profit by industrial development founded national enterprises including the coal mine, the shipyard, the railway, and the steelworks. Later many of them were sold to business people, like Yataro Iwasaki, at the relatively lower price. (Iwasaki was the founder of Mitsubishi combine, zaibatsu)
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Meiji Era: 1867-1911 the first period for the relationship between company and society. Business people were closely connected with the government. When the relationship weakened, some business declined. Companies with limited liability found since 1899, when the Japanese Commercial Code was legislated. The Stock Exchange Ordinance was enacted in 1878. Based on this ordinance, the Tokyo Stock Exchange was established in 1878.
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Meiji Era: 1867-1911 The stock market was not full growth. Many companies, which belonged to zaibatsu, did not list their stocks on the stock. Many workers at the factories worked at a lower wage for a long time. Many young women worked at the silk mill. The life time employ system. The first cases of environmental pollution in Japan (large damages from mining pollution in Ashio, where was a copper mine and mined copper; The copper poisoning damaged rice paddies in the Watarase valley)
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Prewar Period (1911-1945) The society started to democratize. The Movement for Democracy and Liberalism in the Taishou Era The Universal Suffrage Law legislated in 1925 The social movements, including labor movements and human right movements The terror groups came into force (took aim at statesmen and business people including Zaibatsu. Osachi Hamaguchi, who was the Prime Minister, and Takuma Dan, who was the chairman of the board of directors in Mistui Zaibatsu were assassinated by the terrorists)
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Prewar Period (1911-1945) Zaibatsu had a change of direction in that situation and gave priority to national interests. Zaibatsu practiced charity in this period.( Mitsui Zaibatsu decided to make a donation of 2.5% of their profits and founded the large hospital for charity.) Koyata Iwasaki who led Mitsubishi Zaibatsu in this period presented the Three Corporate Principle of Mitsubishi: the foundation of the vision and strategy for our commitment to corporate social responsibility. (Corporate Responsibility to Society; “Shoki Hoko”) Strive to enrich Society, both materially and spiritually, while contributing towards the preservation of the global environment. (Integrity and Fairness; “Shoji Komei”) Maintain principles of transparency and openness conducting business with integrity and fairness. (International Understanding through Trade; “Ritsugyo Boeki”)
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Prewar Period (1911-1945)
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Postwar Period (1945-1989) GHQ (the General Head Quarters of the Allied Powers) broke up Zaibatsu and compelled Zaibatsu families to dispose of all company shares. GHQ directed the Japanese government to prohibit holding companies. GHQ supported the seminars on top management for newly- appointed top managers, the ideas of social responsibility for business were taught there. GHQ reformed the agricultural land ownership system and gave rights to the workers.
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Postwar Period (1945-1989) The Antimonopoly Law was legislated in 1947. These policies to democratize the Japanese society set the framework for Japan's postwar economic development. Workers joined the labor union and labor movements (The strong labor movement rose in the Toyota Motors and Kiichiro Toyoda, who was the founder of he Toyota Motors, resigned as president of the company). Companies adopted the capital-labor cooperation policy. (priority was given to employees' interests and welfare over those of their stockholders). Many companies, including Honda Motors, SONY, and SANYO Electric, were established.
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Postwar Period (1945-1989) In 1956, the Japanese Association of Corporate Executives, Keizai Doyukai, issued the statement on social responsibility for corporate executives. It stated that the corporation was a social institution and that corporate executives were no longer in service of shareholders, but that they were in service of the society in which their companies operated. The goal of social responsibility for corporate executives was to develop economy in harmony with society. Really Japan's GNP had become the second largest to the United
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Postwar Period (1945-1989) In 1968 Akira Yamashiro and Shigetaka Mori, famous scholars of business administration in Japan, presented the idea on social responsibility for corporate executives. Their idea related to the separation between ownership and management. The price of this rapid economic growth was steady pollution. Some pollution diseases were famous around the world. After these diseases well known in the Japanese society, the Basic Law for Environmental Pollution was adopted in 1967. In 1960s, the idea of consumerism (tTe Japanese Government enacted the Basic Law for Consumer Protection. But the Product Liability Law came into force in 1997).
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Postwar Period (1945-1989) the different concepts of corporate social responsibility were introduced In the early 1970s, the members of the Japan Society of Business Administration entered into a controversy with corporate social responsibility in their national conference. Some books on business and society were published, and some university established the chair of business and environment, or corporate policy. However, the concept of corporate social responsiveness, that R. W. Ackerman and R. A. Bauer presented in their book, “Corporate Social Responsiveness-' the Modern Dilemma, in 1976, was not introduced to Japanese business society. Corporate social responsiveness referred social issues management and attached importance to the process of management.
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Postwar Period (1945-1989) The oil crises brought about economic business depression. The more they were interested in the economic recovery, the fewer they were interested in corporate social responsibility. Japanese companies went into the United States after the high-yen recession and the trade friction. The community urged the companies to undertake philanthropic activities. Companies started with donations and volunteer activity in the USA. After that many large companies introduced philanthropic activities into Japan.
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Present time society realized the affluent society and large companies internationalized Ryuzo Kaku, who was the chairman of Canon, presented the idea, “kyosei”, symbiosis. A concise definition of this word would be "living and working together for the common good. Presently the idea of kyosei is the corporate philosophy of Canon. Many bribery incidents came to light in this period. (The bribery scandal of Showa Denko, which operated in the business of chemical fertilizers, the Lockheed scandal came to light in 1976, and the Recruit scandal was detected in 1988). After some regulations on pollution, large companies adopted anti-pollution measures
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Present time After the collapse of the “bubble economy”, many company scandals were brought to light. Large security companies were forced to compensate for losses their customers had suffered due to heavy falls in stock prices. The Japan Business Federation, Nippon Keidanren, published the Charter of Corporate Behavior in 1991. After that many large companies established a code of ethical conduct or code conduct in Japan. Japanese scholars began to use the term "business ethics" to introduce and describe the situation in the United States. The Japan Society for Business Ethics Study was established in 1993 The Japanese Financial Services Agency published an inspection manual for banks in 1999. The word "compliance" was used there. R-BEC, the Business Ethics & Compliance Research Center at Reitaku University published ECS 2000, Ethics Compliance Management System Standard in 1999.
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Present time In 2003, Keizai Doyukai published The 15th Corporate White Paper on “Market Evolution' and CSR Management-' Toward Building Integrity and Creating Stakeholder Value”. Keizai Doyukai regarded corporate social responsibility and corporate governance as most important when companies built trust and create sustainable stakeholders value. This white paper was affected by the idea of European CSR.
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Present time In 2004, Keizai Doyukai published the results of a survey on corporate social responsibility and corporate governance in Japan. It concluded Japanese companies needed to build compliance systems with effective checking mechanisms. In 2004, Nippon Keidanren revised their Charter of Corporate Behavior. Nippon Keidanren recognized that their stakeholders became more interested in corporate social responsibility and they wrote “human right”, “communication with their stakeholders”, and “supply chain” clearly. The top managers in large Japanese companies do not recognize the embrace social responsibility in the same degree, largely due to the fact that many do understand that the society which their companies operate in, or that their stakeholders are continuously changing their relationship with the company. Many of these companies are relatively cut off from society, resulting in a sort of exclusivities.
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CSR Awareness of Japanese Companies Management that thinks "companies should play a role in solving social issues" is 86%. Management awareness has changed from social contribution through philanthropy activities to CSR that solves social issues through business activities.
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Main Entities to Promote CSR in Japan have their own guidelines on optional disclosure. the Ministry of Economy, Trade and Industry is the CSR leader. the Japan Business Federation ("Keidanren" ) emphasizes CSR reporting and environmental reporting as tools to link the market, consumers, and investors with corporations, and encourages its member companies and groups to actively establish and disclose these reports (Charter of Corporate Behavior of the Japan Business Federation - For Gaining Public Trust and Rapport) the Cabinet Office compiled the "Report by the Study Group on Social Responsibility for a Safe and Comfortable, Sustainable Future" in May 2008. the Ministry of the Environment (environment), the Ministry of Health, Labor and Welfare (labor), the Ministry of Economy, Trade and Industry (internal control, intellectual property, etc.)
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Cabinet Office "Report by the Study Group on Social Responsibility for a Safe and Comfortable. Sustainable Future" (May 2008) "To become a business operator trusted by consumers - Guideline on Autonomous Action Standards" (December 2002, Report by the Commission to Examine Autonomous Action Standards, Consumer Policy Subcommittee, Quality-of-Life Council“ - established the guideline to promote the establishment/operation of autonomous action standards by business operators. "Report by the Study Group to Promote CSR in Labor" (March 2008) - measures to promote CSR in labor, autonomous inspection items were drawn up and the method of information disclosure was summarized. "Interim Report by the Study Group on the Way of CSR in Labor" (June 2004) - consideration of employees in line with changes in social trends and the role of the country in promoting CSR in labor were proposed. In order to promote drawing up and disclosing environmental reports by business operators, the items that should be listed in environmental reports were stipulated. "Environmental Report Guideline ~ To realize a Sustainable Society" (June 2007,March 2012) Drawn up as a practical guideline for environmental reporting. "Principles for Financial Action towards a Sustainable Society"(Principles for Financial Action for the 21 st Century)
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Ministry of the Environment "Report by the Study Group on Social Responsibility (Sustainable Environment and Economy)" (January 2005) - Ideal images of a sustainable environment, economy, etc., were proposed. Established the "Environmental Consideration Law (Law concerning the Promotion of Business Activities with Environmental Consideration by Specified Corporations, etc., by Facilitating Access to Environmental Information, and Other Measures (Enforced in April 2005) - In order to promote drawing up and disclosing environmental reports by business operators, the items that should be listed in environmental reports were stipulated. "Environmental Report Guideline ~ To realize a Sustainable Society" (June 2007,March 2012) - Drawn up as a practical guideline for environmental reporting. "Principles for Financial Action towards a Sustainable Society"(Principles for Financial Action for the 21 st Century)
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Round-Table Conference on Social Responsibility The representatives of business groups, consumer groups, labor unions, NPOs/NGOs, and governments participate as equals, and these conferences serve as a framework to encourage collaborative efforts. In March 2011, a "collaborative strategy" was established to realize a safe and comfortable, sustainable society with each organization assuming their social responsibilities To achieve a "safe and comfortable, sustainable society," a collaborative strategy was established as an "action plan" for each entity to engage. To increase the effectiveness of solving social issues, the "system and schedule to implement the action plan" was implemented and evaluated. Issues arising while implementing a new multi-stakeholder system were summarized as future examination items in developing the system of round- table conferences.
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Key Points of the Collaborative Strategy Create societies that live harmoniously To achieve a society where everyone can live happily with human dignity, which allows work with diverse choices, and feel they belong and methods to "visualize the ease of life" are conducted Participate in global-scale problem solving Cooperation among the main entities is enhanced, and the efforts of each entity are promoted for issues in the fields of poverty/development and the environment Form sustainable regions The start of "regional round-table conferences" is encouraged as a foundation for collaboration that takes advantage of the characteristics of diverse entities Create the foundation to develop human resources With regard to the development of human resources, which play an important role in a sustainable society, by diverse entities, e.g., consumer education, public education, and ESD (Education for Sustainable Development), examples are shared, organized and analyzed, and collaborative efforts are promoted
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Promotion of BOP Business It is important to assist the BOP business policy from the following perspectives: Assisting overseas development of Japanese companies, (problem solving in developing countries, and contributing to higher incomes in Asia, etc. The BOP Business Assistance Center was established in October 2010. Its functions include unifying information provision through its portal site, matching assistance (promote information exchange/cooperation among interested parties) and functioning as a consultation counter. Potential to become useful (Win-Win-Win) measures for all parties involved --
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Promotion of Social Businesses The Ministry of Economy, Trade and Industry disclosed the "Social Business Study Meeting" report in April 2008. The "Social Business Promotion Initiative" examined and proposed methods to conduct nationwide activities, and social businesses were promoted in this way. In order to summarize past social businesses and examine their future course, the Social Business Promotion Study Group was established and a report compiled in March 2011.
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