Japanese Companies’ SDG Actions: Growing Awareness and Remaining Challenges
Photo by IISD/ENB | Kiara Worth
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A new research report titled, SDGs and Business in Practice – Early Actions by Japanese Private Companies, presents a first look at actions being undertaken by leading Japanese companies on SDG implementation.

Leading Japanese companies primarily use the SDGs as a checklist for determining the consistency of actions with existing corporate priorities and objectives, while several Japanese companies are starting to move towards positioning the SDGs at the core of their business model.

It is vital to foster an environment where multiple stakeholders can cooperate on promoting business actions on the SDGs; governments can lead this process by advocating a broad and inclusive vision on SDG implementation, while establishing knowledge sharing platforms to collect and disseminate information on good practices of corporate actors.

Almost two years have passed since the international community adopted a landmark global framework for action, the 2030 Agenda for Sustainable Development, which includes the Sustainable Development Goals (SDGs). The upcoming High Level Political Forum will present an important opportunity for UN Member States to report and share their efforts on SDGs.

Whilst various actors around the globe are leading campaigns in support of the SDGs, the private sector plays an especially vital role, promoting the business case for sustainability in line with the demands of citizens and consumers. Indeed, SDG initiatives led by private companies in Japan and abroad are increasingly garnering attention, but there remains some uncertainty about the level of recognition Japanese companies attach to the SDGs ― including the extent to which implementation plans are being developed — as well as those specific issues informing such initiatives.

A new report, jointly published by IGES and Global Compact Network Japan (GCNJ), seeks to clarify the main factors driving Japanese businesses to consider the SDGs. This report presents examples of successful companies that are leading efforts in this space, based on the results from a questionnaire survey of 233 GCNJ member companies and organizations, as well as face-to-face interviews with 17 companies (including 1 non-member company) and external organizations.

Key observations and findings of the report include:

  • Growing awareness, yet challenges remain. Awareness about the SDGs has increased among CSR staff of selected Japanese companies from 61% in 2015 to 84% in 2016, although there is still room to grow awareness among top management, with 28% reporting familiarity with the SDG agenda in 2016. On the other hand, middle managers appear to be largely uninformed about the Goals, with only 4-5% indicating an understanding of the SDGs and their relevance to business. This lack of information presents an important challenge for Japanese CSR staff, who must persuade middle managers about the merits of action before top executives will be able to move SDG-related activities forward.
  • Global Compact affiliation represents a key driver. The report reveals a sizeable difference concerning levels of SDGs awareness between GCNJ member and non-member companies. A total of 79% of GCNJ member companies/organizations consider the SDGs as “important for improving corporate value related to sustainability” (58% for non-members), and 57% of members regard the SDGs as a “new business opportunity” (26% for non-members).
  • Partnerships remain crucial. Although “government” was selected as the most important partner for SDG implementation in 2015 (62%), percentages for “customer” (34% → 60%) and “suppliers and buyers” (37% → 56%) increased dramatically in 2016.
  • Important work lies ahead. The report identified several obstacles in the way of Japanese companies taking action on SDGs, including “Low understanding about the SDGs inside a company” (66%), “Undefined method for internal deployment” (66%), “Low social recognition” (63%), and “Unclear evaluation methods such as quantitative indicators” (52%).

The following snapshot of the main messages on SDG actions led by Japanese companies offers additional insight into Japanese companies’ incorporation of the SDGs into their business models and practices:

  • Japanese companies primarily use the SDGs as a checklist for determining the consistency of actions with existing corporate priorities and objectives.
  • Several Japanese companies are starting to move towards positioning the SDGs at the core of their business model — such as incorporating the Goals into corporate missions, visions and strategies — reflecting that these companies recognize the importance of using the SDGs as a trigger to leverage brand equity and improve their overall value proposition.
  • Communicating to top executives and middle managers on such issues as “SDGs as business change reflecting the needs of future generations,” a mixed bottom-up and top-down approach, and forging alliances with other stakeholders, are the “essentials” for Japanese companies to promote SDGs.

There is an urgent need for more business actions moving forward — this report could provide companies with useful guidance and suggestions for mainstreaming SDGs into their core business model, with a view towards improving overall sustainability management, and thus serving as a practical resource for fostering a sustainable society that leaves no one behind.

Authors of this report include: Akiko Ueno, Deputy Representative of GCNJ Office, Tomoko Dowaki, Assistant Manager of GCNJ Office, Tetsuya Ishii, Principal Research Director/ Principal Fellow of IGES, Ikuho Miyazawa, Communications Manager of IGES, Mizuki Kato, Assistant Researcher of IGES, Tetsuro Yoshida, Senior Researcher of IGES, and Hideyuki Mori, President of IGES.

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