Reforms Toward Sustainable Corporations

ABSTRACT

Whether by introducing environmental management systems, producing environmental reports, or adopting environmental accounting, many of Japan's major corporations have demonstrated their seriousness about environmental consciousness. Their intentions, moreover, have been to show international leadership in the corporate transition to environmental friendliness. However, from the viewpoint of constructing social sustainability, the content and the quality that is demanded of corporations has changed. The issue facing corporations now is how to refine and enhance their environmental management to create a management strategy based on sustainability, a type of strategy that would take into account, not just environmental factors, but the larger synthesis of environmental, economic and social issues taken together.

Though concern about sustainability is highest amongst the stakeholders of America and Europe, in recent years, amidst widely spreading international awareness, the interest of consumers, investors, financial institutions, and local societies in Japan has been rising. Awareness, with Japanese corporations, is growing rapidly. While there were 9 companies that engaged in the changeover from environmental reports to sustainability reports in 2001, this number grew to 72 by the end of 2003. Sustainability reporting is particularly active among corporations that have a high rate of overseas businesses (e.g. electronics and transportation companies) or those that have strong ties to consumers or regional societies (e.g. retail businesses and electric companies). The major companies in the Japanese information technology sector will most likely be large future contributors to social sustainability.

In order to achieve sustainable management, companies must establish a vision and a policy under which they work to enhance the sustainability in their own business activities; they will contribute to the sustainability of society byway of the sustainability in their own operations. Sustainability within the company can be developed by designating committees and creating specialized divisions focused on improving the company infrastructure, expanding the system of environmental management into a system of sustainable management, and establishing an evaluation index that would enable managers to evaluate performance and hone in on company goals. However, in setting up and implementing their management strategies, corporations must pay attention to the expectations and demands of the stakeholders, which can be done through stakeholder matrices and interactive dialogues. Japanese companies, it is hoped, will become corporate citizens that not only make contributions to sustainability through social donations but also through their products and services.

Japanese efforts at sustainability are not necessarily given adequate credit internationally. The top businesses in America and Europe are ahead in terms of their clarity of vision and policy, in their improvements of company infrastructure, in their communication with stakeholders, and in their supply chain management in the global market. As the worldwide demand for sustainability increases, however, the key for Japanese corporations in considering how to boost their international competitiveness is, while harnessing the unique strengths that can be seen in the trade structure, to market their readiness to contribute to social sustainability through their industrial practices.