Promotion of Corporate Social Responsibility

November 23, 2004

Tomosaburo Yano

METI　

Contents

1. CSR is Old Song & New Song

2. Benefit for Enterprises

3. CSR and ISO

4. Asian Leadership

CSR ＝ Old & New Song (Coporate Social Responsibility) 　　

ＣＳＲ is an Old Song　● “● “ Good for Sellers, Good for Buyers, Good for the People”Good for Sellers, Good for Buyers, Good for the People” from Ohmi Merchants’ Way “Three-Sided Good” in 1600sfrom Ohmi Merchants’ Way “Three-Sided Good” in 1600s ● “ ● “Economy without Morals is Crime, Morals without Economy without Morals is Crime, Morals without Economy is Talking in Sleep” Economy is Talking in Sleep” from Sontoku Ninomiya, a great thinker of the 1800sfrom Sontoku Ninomiya, a great thinker of the 1800s ● “ ● “Your work is not yours for yourself. Your work is the Your work is not yours for yourself. Your work is the People’s work which the People gives you to do” People’s work which the People gives you to do” from Konosuke Matsushita, Founder of Panasonicfrom Konosuke Matsushita, Founder of Panasonic

Tradition of CSR among Japanese Ｆirms

●Human-centered management

　－ Employees as the single most precious resource

　 ・ practice lifelong employment　　　・ provide education & training while respecting

individual desire and preferences　－ Manager and labor work together in efforts to improve labor environment and conditions

⇒ 　 resulting in smaller income gap between employers and employees

Core Value of Japanese Society

●“Wa” at the core of human-centered management － The Japanese core value of “Wa”, which might be

translated as “harmony”, permeates Japanese society － It dictates that we must live in harmony with each other as well as with the community and nature

Corporate Social Responsibility From shareholders to stakeholders

Bottom line of enterprise

Economic efficiency

Social Fairness Environmental preservation

Evaluation of enterprise performance

Sustainable growth

Coexistence Balance

Environment

Economy Society Fairness

Triple Bottom Line

● Enlargement of size of enterprises and globalization of corporate activity -> Business enterprises exert influence upon society

● Expansion of communication beyond national borders plus IT revolution -> "Credibility and trust" of enterprises is a central issue

● Various stakeholders have influential opinions -> Increasing influence of NGO’s opinions

● Frequent scandals involving business enterprises enhance interest in corporate ethics

● Rise of investors who emphasize CSR as an investment criterion (SRI:

Socially Responsible Investment)

Why is CSR Important Now ?

Relationship between Business Enterprises and Stakeholders

(Source) The Japan Research Institute, Limited; CSR Archives HP

Investors

Procurement

Government

Regulation

Financial organizations

Supply chain

Suppliers and business partners

Consumers

Business enterprises

Employees

Customer

Labor UnionEnvironmentLocal community and NPO

Employment

Benefit for Enterprises

　　　“ 3R for CSR”

Responsible

　　　 Reliable

　　Respectable

●Credibility and Reputation To realize continual and stable growth of organization To ensure credibility from society To fuse with local community (corporate citizen)

●Competitive Advantage To increase corporate competitive advantage in the

global market To ensure SRI (social responsible investment)

●Risk Management To provide effective compliance techniques To cope with risk to managers due to stockholders'

representative action 　　　　　　　　　　　 (Source) KEIZAI DOYUKAI (Japan Association of

Corporate Executives),

The Corporate White Paper / 2003 etc.

Factors to Build CSR in Business　

0

10

20

30

40

50

60

70

80

90

100Reputation and brand

Motivation of employees

Competitive strength inmarketLicense for operation

Risk management

Increase in efficiency ofbusiness administrationAccess to capital

Innovation

％

(Source) World Economy Forum / CEO Survey, 2002

Shift to Knowledge-based Economy

Tangible asset

Intangible asset

Good reputation of organization

Brand value

Employees’ satisfaction

Environment

ＣＳＲ

Executives’ planning capability

Different Expectations of CSR

　

＜ Social cohesion ＞ ＜ Corporate Citizen ＞

＜ Human relation ＞ ＜ Corporate as community

＞

Interests depend on regions, religions and customs.

CSR is an Investment for Tomorrow

Sustained and Stable growth of organizationSecuring credibility from societyImprovement of corporate compatibility in

global marketProviding effective compliance techniquesReconciliation with Corporate citizenshipSecuring of SRI

CSR and ISO

　　　　　

Council18 member nations

Committee on conformity assessment 　 (CASCO)

Committee on developingcountry matter 　 (DEVCO)

Committee on consumerPolicy 　 (COPOLCO)

Technical Management Board (TMB)

Advisory Group on CSR

Technical Committee (TC)

Sub-committee (SC)

Working Group (WG)

Central Secretariat consisting of 165 persons

including Secretary General

ISO Organizationchart

General meeting To be held once a year

　　 <148 member nations>

CSR Standards of Developed Countries

Australia AS 8003 (Corporate social responsibility) Canada PLUS 9018 (Corporate social responsibility) France SD21000 (Development of corporate social responsibilit

y) Japan ECS 2000 (Corporate ethics compliance standard) Japan Keidanren Implementation Guideline (Japan Business Fe

deration) Spain PEN (Ethics - corporate ethics management system) Thai TLS8001 (Thai Labour Standards- Thai CSR : Requiremen

t) U.K. AA 1000 (Social and ethical accountability) U.K. SIGMA (Sustainable - management guideline) U.S. EOA (Corporate activity management system) U.S. SA 8000 (Social accountability)

　 International Statement on CSR

OECD multinational corporate guideline(1976/revised in 2000 ）

ILO/Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy(1977/1987/2000 addition)

Guideline for Corporate Behavior at the Caux Roundtable Meeting(1994 ）

United Nation’s Global Compact(2000 ）Ｇ RI Guideline(2000/revised in 2002 ）

★CSR was discussed at G8 Evian Summit (June 2003)

Discussion of ISO/SR

April 2001: ISO Council (Proposal from Israel) May: COPOLCO Plenary (Launch the CSR Feasibility Study)May 2002 : COPOLCO/CSR Final ReportSeptember:ISO Council (establishment of SAG)January 2003: The 1st SAG meeting (Toronto)February: The 2nd SAG meeting (Geneva)July: The 3rd SAG meeting (São Paulo)January 2004: The 4th SAG meeting (Munich)April: The 5th SAG meeting (Chicago) Completion of Report → TMB 　　

ISO/SR Conference, Stockholm, 21-22 June, 2004

Future Development of ISO/SR Standard

June 2004 :ISO/SR Conference 　　　　　　　　　 (Stockholm)June :TMB (establishment of WG)September :TMB (Chair & Secretary: Sweden and Brazil) October :NWIP votingMarch 2005 :First Meeting of WG (Brazil)

2007 :Issue ISO/SR Guideline

ISO Working Group on SR

Membership: 6 experts per ISO member bodies. 2 representatives from each intl. & broadly-based regional

liaison orgs

Chair: Mr.Jorge Emanuel Reis Cajazeira, Suzano Pulp & Paper, of Brazil.

Secretary: Mr.Eduardo Campos De Sao Thiago, ABNT official, of Brazil & Ms.Kristina Sandberg, SIS official, of Sweden.

Timeframes : 3 Years First meeting(Foreseen): 1st Q of 05, in Brazil

Asian Leadership

Let’s take the challenge of maLet’s take the challenge of making our own iking our own international nternational standardstandard ! !

Participation in ISO/SR/WG

● Asian area

- is a key region in production and

consumption in the world.

- should participate energetically in the

process of standard development to

create own international standard.

- most enlarge its existing network to

share our experience and knowledge on SR.

Japan’s Statement

Social responsibilitySocial responsibility,, as as the overall relationship the overall relationship of the corporation with all of its stakeholdersof the corporation with all of its stakeholders,, is is the the most significant issue the world is most significant issue the world is ffacing. acing. ISO work ISO work will thus lead us into will thus lead us into a new a new global phase. global phase.

Japan is eager to contribute to broadening Japan is eager to contribute to broadening awareness of ISO/SR and development of supporting tools such as regional seminars, and exchange of experience in best practice and SR implementation.

AP-COPOLCO Ｗ orkshop on CSR

AP-COPOLCO, a regional community of Asia and Pan-Pacific countries chaired by Japan, is planning to have a workshop on SR next December, in order to have talks with developing countries that potentially would have difficulty with regular participation in face-to-face meetings by this means, we hope to ensure broad input. AP-COPOLCO plans to establishthe SR Forum to expand awarenessof SR.

Contact: sekiguchi@jsa.or.jp

CSR International SymposiumThe Institute for International Studies and Training (IIST, Japan) will hold an International Symposium on CSR supported by METI as a part of the Project of APEC Human Resources Development. Date: Wednesday, January 19, 2005 Place: Keidanren Hall, Tokyo Participants: APEC Member countries and regions Contact: inaba@iist.or.jp

JICA/AOTS/APEC Training Seminars

JICA (Japan International Cooperation Agency), AOTS (Association for Overseas Technical Scholarship), APEC provide several opportunities to study on CSR in their training programs for developing countries.

Work together toward 2007● CSR is a complex and broad range of issues: business

ethics, human rights, environment management, community development and more.

●Japan would be happy to help the WG provide the opportunity to get everyone involved in the ISO process so that all the participants can have their own international standard on SR.

“Businesses are run by People for People”

THANK YOU

Contact Tomosaburo Yano METI/JISC Phone :+81-3-3501-9283 Fax :+81-3-3580-8631 E-mail:yano-tomosaburo@meti.go.jp

Yutaka Okamoto Mihoko Sakurai JSA Phone :+81-3-5770-1569 Fax :+81-3-5770-1636 E-mail:misakura@jsa.or.jp