Socio-economic System and Corporate Social Responsibility"
Chapter 1 Thinking about CSR
Professor, Graduate School of Commerce, Hitotsubashi University
The first chapter shows an outline of our basic ideas and theoretical
framework on this report. In our country, corporate social responsibility
(CSR) has come to be an important management subject and has drawn
unprecedentedly much attention in recent years. From the perspection
of the stakeholders (employee, labor union, investor, consumer, environment,
community, etc.), this report analyses the problems in each domain,
and shows an indicator of a new corporate society. CSR is a concept
that companies fulfill accountability to their stakeholders by integrating
social and environmental concerns in their business operations.
CSR does not remain in philanthropic activities, compliance and risk
management. It is called for reflecting upon the way of everyday business
activities itself. The total corporate value is evaluated by not only
the financial index but the social and environmental index. In order
to become a socially responsible corporation, it is important that
the corporations should be supported by the stakeholders and to build
relationships of trust with them.
The following three points are considered in this chapter ; expected
CSR, current situation in Japan, and required policy of corporation.
Chapter 2 CSR and Stakeholders
Professor, Faculty of Commerce, Meiji University
The stakeholder concept is useful to understand CSR. Stakeholders
represent society, so corporate social responsibility means that corporation
is responsible to their stakeholders. Stakeholders may be affected
by the decisions and actions of corporation, and stakeholders may
affect the decisions and actions of corporation. Thus, stakeholders
have interaction with corporation.
Main stakeholders for Japanese corporations were banks and other corporations
that belonged same KEIRETU, corporate group, and employees who were
employed for "lifetime".
But these relationship changes, for recent depression influence the
structure of Japanese corporate society. NPO are growing up in Japan,
and someone affect corporations.
Stakeholder management is important for CSR. Some corporations carry
on a dialogue between their stakeholders and enter into partnership
with stakeholders. They recognize the stakeholder view is necessary
for business success.
Chapter 3 Labour and CSR
Director of Policy Bureau, UI Zensen
It is an important factor of CSR for the both labour and management
to conclude and comply with their labour agreement on the job security
of employees (union members) and maintenance and improvement of working
In recent years, as corporate activities are advanced across national
borders and uncontrollable issues by governments and trade unions
have started to happen, the need to monitor the behavior of multi-national
companies through setting up codes of conduct has increased, some
international institutes establish rules or guidelines on corporate
behavior of multinationals, and some of global trade unions have agreements
with specific companies on code of conduct.
On the other hands, in Japan, the ratio of corporate codes of conduct
which have article on labour is small. The level of trade unions'
commitment to monitoring of CSR is also low. A considerable number
of Japanese enterprise-based unions are deeply involved, in substance,
with decision-making process and sharing of information in their companies.
Under such a matured industrial relations, there is a possibility
that the commitment of trade unions to CSR to be raised ever than
before. As for monitoring, it is also possible for trade unions to
collect information and to find problems through their network. This
could be helpful to early solution in the event of that a problem
Taking advantage of the above characteristics, it is necessary to
focus more on labour and enhance the level of commitment of trade
unions in CSR.
Chapter 4 Working Women and CSR
Representative, Women's Initiative for Advancement in Japan
Not a family but an individual is the basic unit of economy. In Japan,
however, it is quite difficult for women or female workforce to become
a stakeholder in SRI. The reality of women's work life in Japan is
that: women "enter workforce at 22 years old, around 50% of them
leave the initial work place within three years, get no promotion,
even remained and worked hard for about 10 years, quit the job, get
married and bear children at 29 years old, return to work as a temporary
worker at 35 years old, after reaching a certain stage of child bearing,
find some affordability at 45 years old but not enough to purchase
investment funds, and become a domestic and neighboring helper at
55 years old. Especially, the low wage of a temporary worker is an
immediate problem that calls for early correction.
Presently, the lifetime wage of women, who quits the work then returns
as a temporary worker, is about one-fifth of those who continue to
work as a full-time employee. The "Women and Work Research Center"
has set the independent standards to assess company activities, with
an aim to establish a "Working Women Fund."
In their activities, the issue of temporary workers, which is unique
to Japan, becomes a bottleneck for internationalizing their standards.
Chapter 5 Agenda around the issue of Human Rights and the Corporate
Secretary-General, The International Movement Against All Forms of
Discrimination and Racism (IMADR)
The issue of human rights is one of the areas that has not progressed
as far as the most of the development of activities with regards to
the Corporate Social Responsibilities (CSR) in Japan. Even Nippon
Keidanren's Charter of Corporate Behavior and the recent white paper
on CSR management by Keizai Doyukai allocate only a few lines for
human rights issues.
For Japanese corporate enterprises to develop relevant activities
for human rights and the CSR, the work should be carried out at first
to set concrete agendas to be addressed, by putting in order relationships
between different human rights agenda and various forms of business
while promoting awareness on comprehensive human rights. In the course
of that work, while in accordance with various international principles
and legal framework, it will be important to breakdown 'human rights'
into different categories of rights and also to identify what types
of corporate enterprises exist in order to analyze relations between
these categories of rights and each type of business.
At the same time, ideas should be developed on what kind of policies
and measures could be effective for enabling an environment in establishing
human rights and the CSR, such as the introduction of legislation
on anti-discrimination in the field of labor issues or the introduction
and active promotion of bids standards, which are conscious of human
rights, for corporate enterprises by government agencies.
Chapter 6 Consumers and CSR
Chairman, Green Consumer Research Group
"Consumer issues" concerning the threats to the life, health
and assets of consumers are old but also new issues. In recent years,
we have seen fewer actions of big company which directly threaten
the life or health of consumers. However, consumers seeking advice
of public organizations are steadily increasing, which call for the
further development of legislation to protect consumers. In the past,
the response to a consumer claim used to repeat the process of: the
occurrences of consumer injuries; development into a social problem;
case-by-case legislation for consumer protection; and the calming
down of the situation.
The policies for appropriateness of company activities to serve consumers
and supporting consumers are improving though still insufficient.
Also companies are required to voluntarily develop the system of consumer
claim response. For the policy proposals in this field, the research
is to outline the questions of: what kind of a system a business entity
should develop in the fields directly related to consumers, such as
product safety and consumer services; and how the current situation
of information disclosure is; and what items should be disclosed.
Chapter7 CSR and People-friendly "Accessible Design"
Secretary General, The Kyoyo-Hin Foundation
In principle, no corporations intend to provide products and services
that do not accommodate people with vast differences in ages, disabilities,
languages, and so forth. However, if we are to ask whether "all
the products and services" are made in a way usable or easy-to-use
for the disabled or elderly, the answer will definitely be "no."
Compared with 20 years ago, however, the concept of "everyone
is the customer and the user" seems to have taken root among
public service entities since the enactment of the Barrier-free Transport
Law and what called the Heartful Building Law. The private sector,
also, seems ready to strive for further advancement in this respect,
compared with 20 years ago. Efforts have been made to reduce inconveniences,
and to set up unified standards among industry associations. Corporations
start to pursue the needs of the disabled and elderly, for whom they
have hardly taken note as consumers in the past.
On the other hand, the "market principle" is the very key
for the activities of private corporations, so the efforts are "still
ongoing in search" for the way to address issues in various fields.
It may not be made public but not too few corporate managers would
likely question "why companies with the purpose of making profits
should conduct semi-volunteering projects?"
In response to such corporate managers, this chapter will review the
"provision of people-friendly products and services," which
in the past used to be considered as a special service to be dealt
with individually, as a part of "CSR" along with "environmental
protection" and "employment."
Chapter 8 SRI and Evaluation of Corporate Value
Mariko KAWAGUCHI, Senior Analyst, Industry Consulting Department,
Daiwa Institute of Research Ltd.
Socially Responsible Investment is attracting attention as a promoter
SRI is said to have begun the US in 1920s, by Christian churches who
avoided investing in 'sin stocks' such as tobacco, alcohol and weapon.
In the 1990s', when environmental management began to gain support
from business communities, assessing business's environmental management
has been regarded as indispensable in evaluating corporate value,
and positive connection between CSR and corporate value began to have
In the last ten years, SRI asset is growing rapidly in the western
world. In the US, the total SRI asset grew 3.4fold, and in Netherland,
15times from 1995 to 2003. In the UK, total SRI asset expanded 10times
from 1997 to 2001. These SRI have social screens, such as negative
screens that omits sins stocks, and positive screens which picks up
best in class company within each industry regarding each CSR criteria
such as environmental management, human rights and labor issues.
It is now becoming well known that CSR has positive relation with
long-term corporate value. However it is still a challenge to evaluate
monetary value of CSR for the short-term and recently some research
has been published, estimating climate risk.
In the near future, evaluating CSR impact on corporate value will
be an important concern not only for SRI investors but corporations
with high CSR practices.
Chapter 9 CSR and Community
Kanji TANIMOTO, Professor, Graduate School of Commerce, Hitotsubashi
Masa-atsu DOI, Visiting Researcher, GISPRI
Recently in a market society, a business corporation is expected to
tackle the social problems in the community by philanthropic activity
in collaboration with NPO/NGOs. Corporate community activity in Japan
has been conventionally understood as"returning profits to society",
or "doing good secretly". However, recently community support
activity is positively evaluated by Socially Responsible Investment（SRI）,
which has grown rapidly since the second half of the 1990's. In the
West, the new flow of "Strategic Philanthropy"and"Cause-Related-Marketing"(CRM)
has been popular in the corporate community activity since 1980's.
These strategies are based on the way of thinking of utilizing the
company's limited resources efficiently, and utilizing their expertise
and experience of the business in the community activities. It is
important for a company to reconfirm the mission, communicate with
NPO/NGOs and build a collaborative relationship with them in doing
the community activity. Moreover, building the intermediate support
organization which functions as an information center and a coordinator
with a company and NPO/NGO is a hot issue.
Chapter 10 Japanese Institutional Investors Promoting the Development
of Socially Responsible Investment
Tsukasa KANAI, Deputy General Manager, Pension Investment Dept., The
In the recent asset management society, we often find topics related
to socially responsible investment (SRI). The concept of SRI contains
2 aspects i.e. social screening and shareholder advocacy. In relation
to the screening aspect, it is expected in the Japanese SRI that the
positive screening method based on the "triple bottom lines"
will be in the mainstream. In this type of screening we are not necessarily
concerned with the consistency with fiducially responsibility, which
has often been questioned overseas in case of the negative screening.
With regard to the shareholder advocacy, the essence of SRI is expected
to prevail through the incorporation of social or environmental elements
into voting standards for shareholders. In both of these aspects,
the institutional investors in Japan are playing a very important
role in developing socially responsible investment by providing SRI
related financial products. We do believe that the Japanese SRI market
will steadily grow as the number of investment institutions providing
SRI funds increases. We also expect that the aspect of shareholder
advocacy will have a strong influence on the Japanese corporate governance
that hasn't paid as much attention to environmental or social elements
as in foreign-based corporations' cases.
Chapter 11 CSR as an Emerging Critical Element to Companies' Sustainability
in the Global Marketplace
Hitoshi SUZUKI, Department Manager, Social Contributions Dept., Corporate
Communication Div., NEC
Interest in CSR (Corporate Social Responsibility) is rising globally.
One of the major reasons for this growing interest is the pace of
economic globalization, to which some attribute negative social and
environmental impacts, particularly on developing countries. Accelerating
diversification of corporate stakeholders is another reason for the
rising interest in CSR.
For example, NGO power and influence over sustainability and human
rights are growing around the world. People are increasingly concerned
about the environment, health and safety, and about allegations--
and evidence -- of corporate misconduct and injustice.
Intensive media coverage and development of the Internet draw even
more attention to these issues. As a result of all these factors,
much attention is being given to voluntary CSR codes and standards,
to the related interests and actions of governments, and to SRI index
evaluations that promote CSR management and practices.
However, the most influential factor is supply chain risk management.
Leading multinational companies are now applying CSR practices to
their supply chains in order to ensure the ongoing success of their
business. In order for Japanese companies to avoid risk and sustain
their positions in the global marketplace, it is critical that they
introduce, practice and enforce CSR management. This diligence must
extend to self-disclosure regarding their supply chains and business
partners around the world.
Chapter 12 CSR-Related Initiatives led by Japan Association of Corporate
Hiroaki FURUSE, Manager, External Activities, Corporate Business Intelligence,
Fuji Xerox Co., Ltd.
Since its establishment, Keizai Doyukai, or Japan Association of Corporate
Executives, has been one of the pioneers in the area of "Corporate
Social Responsibility." In 2003, it issued the 15th Corporate
White Paper, which was widely received as a result of serious discussion
on CSR among corporate managers. Their argument was based on their
convictions of what an ideal society should pursue.
In the White Paper, the aspirations of top management are considered
the driving force of CSR. Furthermore, the pursuit of CSR is recognized
not as cost but as an investment. It places importance on fundamental
questions such as why a company exists. In addition, it proposes a
Corporate Evaluation Standard as a tool for driving CSR efforts.
The results of the self-assessment by the Corporate Evaluation Standard
show how Corporate Japan addresses CSR. Efforts in creating a CSR-adherent
system are making progress. Particularly, manufacturers and large
corporations lead environmental efforts. Major challenges for the
future include empowering female employees and ensuring effective
A lack of active dialogue between corporate managers and stakeholders
could be indicative of why CSR has not taken root in Japan despite
Doyukai's previous proposal. Doyukai should engage in such dialogue
in its future activities.
Chapter 13 Initiatives by the Nippon Keidanren and the CBCC to
Promote CSR in Japan
Tomoko HASEGAWA, the Deputy Director, the Council for Better Corporate
Citizenship, Manager, International Economic Affairs Bureau, Japan
Japan Business Federation (Nippon Keidanren) and its affiliated organization;
the Council for Better Corporate Citizenship (the CBCC) has long been
promoting Corporate Social Responsibility (CSR) in Japan.
Nippon Keidanren first established "Charter of Corporate Behavior"
in 1991, it revised the Charter in 1996 and published the Implementation
Guidelines for the Charter. In 2002, Nippon Keidanren published the
third revision of the Charter, requesting its member corporations
to establish and maintain a system for promoting ethical corporate
conduct within corporations. In October of 2003, Nippon Keidanren
established a Sub-Committee on Socially Responsible Management to
discuss the Japanese corporate views on CSR and issues facing Japanese
The CBCC, through the activities of its Study Group on CSR and the
Working Group on the ISO CSR standardization, studies the trend of
Global CSR and it engages in networking activities with the leading
CSR organizations overseas. The Nippon Keidanren and the CBCC believes
that in promoting CSR, it is essential to respect corporate autonomy
and voluntary initiatives, given the diverse nature of CSR.
Chapter 14 Current Issues and Future Perspectives of CSR in Japan
Professor, Graduate School of Commerce, Hitotsubashi University
Each sector of Japan addressing CSR will face the following four issues
in the future:
(1) Development of, and the support for, NPO/NGO : Need to
develop NPO/NGO that can study and assess the activities of businesses
and government from an independent viewpoint, and recommend policy
proposals. Also required is the presence of intermediate support organizations
that can develop the alliance between NPO/NGO and businesses.
(2) Increase CSR studies and develop CSR education system at universities
: In our corporate society, most people have shown less interests
in CSR, and fewer researchers studied "business and society"
as a research subject. Now researchers are expected to develop management
systems and education programs in cooperation with businesses and
NGOs, while presenting policy proposals.
(3) Recognition of a role of the government : The government
needs to base CSR for its industrial policies through coordination
among ministries and agencies. Moreover, it is necessary to enhance
CSR not only by regulatory measures, but also by preferential policy
and tax measures.
(4) Establishment of a multi-stakeholder forum : Need to develop
a system in which businesses and economic entities study CSR in cooperation
with the government and NGOs. In practice, it is necessary to set
up a multi-stakeholder forum where economic entities, government sector
(ministries and agencies), NGOs related to environmental, consumer,
and social issues, labor unions and other stakeholders participate
and discuss CSR.
Corporate Social Responsibility by Machine-industry Companies in Europe
Stockholm School of Economics
This study focuses on Europe, which has a good reputation for its
advanced approach to corporate social responsibility (CSR). It assesses
the status quo, and considers why European companies are so more active
than other regions by the following steps.
First, European companies are compared with those in Japan, the United
States and other regions. Comparisons are also made between different
Second, three theoretical models (institutionalism, resource dependency
and information diffusion) are shown to explain regional differences
in the performance on CSR.
The third step examines nine machine-industry companies in Northern
Europe, which apparently exhibit particularly high CSR performance,
to see what they carry out as CSR activities, how they conceive CSR
and how their performance is characterized. The research is conducted
not only by the investigation into corporate reports but also by the
interviews with those directly engaged in CSR activities.
The conclusion points out that CSR-consistent values, norms and perceptions
have traditionally existed in Europe, that European companies tend
to hold stronger and broader approach to stakeholder relations, and
that wide network is being established to help many companies share
and diffuse relevant information. All those factors contribute to
the advancement of CSR performance in Europe.
Chapter 2 Current Movement of CSR in EU
Professor, Graduate School of Commerce, Hitotsubashi University
Director, Research Planning, Global Industrial and Social Progress
Research team visited five cities in EU (Geneva, London, Copenhagen,
Paris and Brussels) to survey the latest movement of European CSR
and the EU Multistakeholders Forum (EMSF).
Interviewed were the European Commission and other twenty organizations
including ILO, UNEP, CSR Europe, Euro Chambres, WBCSD, EuroSif, Amnesty
International, Friends of the Earth, International Chamber of Commerce,
Royal Institute of International Affairs, and Business in the Community.
The subjects commonly asked to each organization were as follows:
(1) Basic recognition/understanding of CSR; (2) Issues of CSR implementation;
(3) Assessment of the EMSF's roles and activities; and (4) Future
perspectives of the European CSR.
In the EMSF, discussion on sector-specific CSR is ongoing with inclination
toward the development of pragmatic guidelines, while shelving the
philosophical debate on "Should the CSR be Voluntary or Mandatory."
To promote the awareness of CSR in the SME sector is recognized as
one of the most important issues in the European Community.