March 31, 2008


Corporate Social Responsibility: A Tool for Sustainable Society -- Cre-en inc.

Keywords: Newsletter 

JFS Newsletter No.67 (March 2008)
Toward a Sustainable Japan--Corporations at Work Article Series No.70 (in Japanese)

In today's global market, some companies are so large that their annual sales exceed the GDP of many countries. It is obvious that their presence is increasingly eclipsing the national power of many nations. As the influence of companies continues to grow, the concept of corporate social responsibility (CSR) has emerged, calling on companies to be more accountable, not only for their financial performance but also for the impacts of their activities on society and the environment. CSR reports are one tool corporations now use to demonstrate how they are working to meet these expectations. Cre-en inc., a company named from two French words "createur" and "entrepreneur" featured in this issue of the JFS Newsletter, supports corporations' CSR activities by providing services to help prepare their CSR reports.

In Japan, many corporations accelerated their efforts to adopt environmentally friendly management practices after the ISO 14001 standard for environmental management systems was created in the late 1990s. Around the same time, they started receiving requests for information disclosure from socially responsible investment (SRI) research agencies in the United States and Europe. In the midst of these developments, corporations became more interested in CSR.

A series of corporate scandals in Japan since 2000 strengthened demands from industry and the general public for more responsible corporate behavior, and gave even more momentum to the promotion of CSR. Many consider 2003 to be the year that CSR really became noticed in Japan.

In this context, a large number of corporations started issuing CSR reports. "Many of them, however, seem to have just jumped on the bandwagon without knowing what CSR really means and what they should really do," says Mr. Masayuki Ando, manager of Cre-en's Corporate Communication Department in its CSR Consulting Division. Looking back, he says, "At the time, the series of scandals gave many corporations the impression that CSR simply meant complying with rules and regulations."

Turning Point for CSR: Going Beyond Compliance

Many companies then started creating corporate codes of conduct after identifying potential problems, but they soon realized that compliance-based CSR alone was not enough to transform corporations. Thus, some companies embarked upon a new approach: integrating CSR as a core component of their business.

Cre-en defines CSR as a means for corporations to achieve the goal of sustainability. To reach that goal, however, corporations must first realize that their own sustainability depends on sustainability for the global environment and society. From this perspective, companies can begin to identify what they must do to make CSR part of their core business.

"When we make a proposal to our clients, we have to come up with a comprehensive plan that has a future vision and a direction, along with specific suggestions on how to get started. Otherwise, clients won't accept it. For companies, publishing CSR reports is to declare their commitment to implement some activities by a specified time, which requires a great deal of resolve," Mr. Ando says.

Companies in areas directly connected with sustainability, such as those in the energy-related industries, may find it easy to promote CSR in their core business. But some companies may have difficulties in making a connection between their business and sustainability in the context of their relationship with society.

"Many companies do not know where to start addressing CSR in their core business. Cre-en provides a service of preparing CSR reports, and we do this through close discussions with personnel in the client company. If the goal is simply to make a report, it could be produced from a business outline and various data. But the real value in what we do comes from working closely with our clients to help them develop realistic and visionary targets for achieving sustainability in the context of corporate social responsibility," says Mr. Ando.

True to Its Word: Cre-en's Approach

A number of companies in Japan are like Cre-en, involved in producing CSR reports, but Cre-en is earning itself an especially good track record because it can offer both consulting and report-preparation services, rather than being limited to simply writing reports.

"We help companies promote CSR for sustainability. As we ask other companies to carry out CSR, we as a company disclose our own CSR activity report on our website for all of our stakeholders to see, including clients," says Mr. Ando.

"Cre-en produced its own Vision 2020 to envision how we can help realize a sustainable society in 2020 through our own business activities. Our employees tackle their own issues, make reports and participate in in-house workshops, taking in a variety of communication methods to consider our clients' needs. Our corporate philosophy, 'We create Earth's future full of dazzling smiles,' was established during this process."

The company also created its own CSR Promotion Committee and has bimonthly discussions to build models to promote CSR for medium-sized companies. Almost all of our 40 or so employees participate in it through seven subcommittees (CSR in the core business, risk management and compliance, quality assurance, human resource development, work style, environment, and corporate citizenship).

"We plan to hold our second Stakeholder Dialogue this April with our clients and CSR experts. We will post all feedback that we receive, both positive and negative, on our website. Whatever we recommend for our clients, we do the same thing ourselves. We put our words into action. That's how we do things," says Mr. Ando.

Turning Good Intentions into Action

Ahead of the G8 Hokkaido Toyako Summit to be hosted by Japan in July 2008, a Children's Environment Summit will be held in Kobe timed to coincide with the G8 Environment Ministers' Meeting, scheduled for May in Kobe. On this occasion Cre-en is promoting efforts to make nearby Rokko Island, an island developed as commercial and business area, more environmentally friendly. The company is articulating a vision of "businesses related to sustainable cities" and is counting on local collaboration to make the initiative a success and establish a model for others to follow.

In cooperation with experts, Cre-en also prepared a "Scenario for the Next Climate Regime" in the summer of 2007, with the aim of providing companies with information to create business strategies to support the shift toward a low-carbon society. Using the scenario, Cre-en and affiliate the CSR Institute Inc. will provide trainings for management and key divisions in companies to help them establish systems to adapt to the post-Kyoto climate regime and provide support for them to develop winning business strategies.

"Unfortunately, many companies in Japan tend to react only after the government has imposed new regulations and the corporate world has reached a certain degree of consensus on how to comply. The scenario we created looks at the future from the perspective of the various threats that could arise. It is more strategic to take proactive steps now than to wait and see what regulations are imposed before deciding how to deal with the situation," says Mr. Ando.

Companies in Japan still have room for improvement in terms of integrating CSR into their core business, and tend to avoid being pioneers in this area, but Cre-en believes one of its roles is to encourage such companies to be bolder and move forward.

"Some companies hold internal workshops across multiple departments to discuss CSR. In large companies, employees hired by a company at the same time sometimes might not see each other for years or even decades if they are assigned to different departments. When they are able to meet each other again at CSR workshops, they start to work toward a common goal of sustainability by promoting CSR in their respective departments. Employees from various departments may act independently for their company, but with this kind of innovation can become a driving force for the entire company to achieve objectives," he says.

He believes that in an ideal situation, the CEO continually reminds employees why the company is engaged in CSR activities, employees make the connection between CSR and their own jobs, and the personnel in charge of CSR facilitate activities in their own departments as both leaders and supporters of CSR. Regardless of how open communications are within the corporate culture, everyone in a company will share the same vision and cooperate to eliminate the company's negative impacts and increase the positive impacts on society. When everyone thinks that way, true CSR activities will become rooted in a company and will not end up as simply a passing fad.

"Looking ahead 10 or 20 years, I think that the direction of CSR activities in Asia, with its rapidly expanding economies, will determine the future of global sustainability. The Japanese government and companies have an obligation to help Asia move in the right direction and avoid mistakes, since Japan has already experienced both the positive and negative sides of economic growth. What companies and governments need to do is "backcasting"--the process of determining our best path by starting with an awareness of the desired destination and using that to help us decide what we should do today. The future of our planet depends on what we do or fail to do today," says Mr. Ando.

(Written by Reiko Aomame)