The following is the summary of a session that was part of the 2018 Annual Conference.
- Toshio Arima, Chairman of the Board, Global Compact Network Japan; Senior Advisor, Fuji Xerox Co., Ltd.
- Hiroko Kuniya, Journalist; Goodwill Ambassador for Japan, UN Food and Agriculture Organization
Ms. Kuniya began her speech by explaining that in order to achieve Sustainable Development Goals (SDGs), rather than responding to them separately, understand that they are integrated. Many people claim to know about the SDGs, but most of them do not thoroughly understand them. So, clear and deep understanding of the goals is necessary in order to realize them.
The United Nations (UN) started the SDGs because they recognized that there were still unsolved sustainability issues, and in order to overcome those issues, the SDGs were created out of an urgency to save the Earth. Ms. Kuniya emphasized that the SDGs will be achieved through partnership and collaboration.
Mr. Arima agreed that few people in Japan recognize SDGs, but that knowledge about them is expanding. The majority of Japanese companies are small and medium-sized enterprises (SMEs), and they do not show much interest in the SDGs. Top management have ethics which they value even if there is not a direct link to sustaining society. Companies are interested in reporting positive activities because it enhances their branding and image. Japanese companies tend to do the same things as their competitors or peers. So, if some large Japanese companies start to pursue the SDGs, other players could follow suit.
Ms. Kuniya explained that Environment, Social and Governance (ESG) investment is increasing in Japan. In addition, the SDGs are gaining attention because of investments, however, they have to be understood and approached in terms of business opportunities.
Mr. Arima considered why Japanese companies should be serious about the SDGs. The SDGs offer business opportunities, so entities and financial institutions are willing to take those business opportunities. To capture new business opportunities, ventures have to take risks and many Japanese SMEs are not willing to do that.
Ms. Kuniya asked what approach should Japanese companies take to pursue the SDGs. Mr. Arima answered that there are four important points in pursuing the SDGs. Those points are inside-out to outside-in, backcasting from the SDGs, business models of integrated values, and the SDGs’ integration into corporate processes and plans. To elaborate, inside-out to outside-in means to approach the goals from a point of view outside of the company looking in, instead of a point of view inside of the company looking out. From the outside-in approach, global and societal needs are prioritized by first dealing with social issues outside of the company and building a business model and company around them. Backcasting involves deciding on a future business model based on future issues and the SDGs, and working backwards to identify policies and programs that will connect that future to the present. The creation of business models not only based around economic values but also an integration of economic and social values which lead to the SDGs is effective for the pursuit of the SDGs. Finally, integrating the SDGs into corporate processes and plans correctly could lead to less resources being used and a smaller CO2 footprint which is aligned with the pursuit of the SDGs.
Ms. Kuniya explained that businesses in Japan want to continue with their current business models. If they do that, then cautious consumers may turn their backs on them. The Cabinet Office is trying to bring the SDGs to cities. Many organizations are encouraged to work together to create cities that are SDG friendly. The top 10 municipalities will be subsidized. Unfortunately, Japanese companies do not see the SDGs as business opportunities due to the non-risk-taking culture. The USJC is trying to work with Silicon Valley organizations, so, Ms. Kuniya asked, “How can Japan link with Silicon Valley companies in order to facilitate pursuit of the SDGs?”
Mr. Arima answered that by putting together collaborations and attempting to interact more, then there could be more cooperation between Silicon Valley and Japanese companies. In order to accelerate SDG movement, Mr. Arima suggested that there should be fusion of American and Japanese culture to work towards new solutions.
Click here to see the video of the session.