CSR Strategy of Supply Chains

ABSTRACT

The importance of corporate social responsibility (CSR) efforts in supply chains has increased with the advance of globalization, a delay in action from enterprises, and the expectation that major enterprises will act as solution providers concerning the environmental and social problems of developing countries. Enterprises must provide optimal management of overall supply chains from the social and environmental side, while balancing it with economic rationality of the original supply chain management.

Western multinational enterprises have been receiving strict requests regarding the CSR of supply chains. The examination of specialized CSR evaluation methods for supply chains has also progressed. Advanced efforts are being made primarily in the apparel, coffee and electronics industries; however, particularly in developing countries the cost vs. effect of the regulatory approach of monitoring the actions of suppliers has come under question, and there is a growing sense that a transition to a cooperative approach based on mutual understanding would lead to long-term profits.

While CSR efforts in Japanese enterprises are progressing and are at a globally high-level, their CSR efforts in the overall supply chain have only just begun. Of 118 major domestic enterprises, 39 are endeavoring in some fashion with regards to CSR in supply chains, although the level and content are varied. Currently, proactive responses from the electronics, chemical and pharmaceutical industries are prominent, while they have lagged in the materials-related and automobile industries.

The challenges for Japanese enterprises in terms of supply chain CSR are stakeholder　understanding, verification of their own strengths, and the formation of a comprehensive framework that will support the enterprises’ efforts. Increasing Japanese enterprises’ global competitiveness in the future will require a strategic examination of supply chain CSR while taking into account international trends. In addition to action from individual enterprises, it will also be necessary for the industrial arena and government to play leading roles in discussing the state of, and then encouraging the spread of CSR in the global market.