CSR in Japan
September 3, 2013
This week, I am in Japan attending a 5th year anniversary event for our American Express Leadership Academy in Tokyo. Created in partnership with the Japan Philanthropic Association (JPA), the curriculum for the Leadership Academy is supervised by Professor Seiichiro Yonekura, Head of Hitotsubashi University Institute of Innovation Research.
Emerging leaders from the nonprofit sector throughout Japan will gather to hear from a number of speakers, including Mr. George Hara, Group Chairman and CEO of DEFTA Partners, who has led a number of U.S., European and Japanese companies and is considered a visionary architect in the field of post-computer technology, which he has termed "Pervasive Ubiquitous Communications."
While preparing for a speech that I will be making on Global Trends in CSR, I took a look at the history and current state of CSR in Japan. I was interested to learn that much like the American corporate impulse to "give back" to communities, many Japanese companies regard corporate philanthropy as a way of giving back their profit to society. From an economic standpoint, many Japanese companies see corporate philanthropy as an indispensable social cost for their existence.
The cultural foundation for corporate philanthropy can be traced back to the pre-modern or Edo period (1603-1867). Philanthropy or charity was understood as Intoku ("performing an altruistic deed without expecting recognition") or Sekizen Intoku ("ancestors' good deeds bring descendants' happiness").
According to Toshiyuki Aoki at the Japan International Institute of Volunteering Research, these concepts emerged as merchants – who were considered the lowest social class by the samurai – sought to justify making a profit by practicing their businesses ethically (sounds familiar doesn't it?).
For example, the present ITOCHU Corporation has its roots in an enterprise founded by Chubei Ito, a Jodo-Shinshu Sect Buddhist in 1858. At that time, Buddhists judged merchants by the following rules:
- Treat family fortune as a trust from ancestors
- Give charity and donate to temples
- Have mercy on many people in need and give charity and service to them.
Today, the ITOCHU Corporation has the words, "Committed to the Global Good" prominently displayed on its web site.
(Interestingly, some American companies with strong philanthropic histories were founded at about the same time: American Express in 1950, Bell Telephone (now AT&T) in 1877, and JP Morgan (now JP Morgan Chase) in 1890.)
Today, many of the companies that are considered to be the most socially responsible in Japan are household names. According to the 2013 CSR Ranking of companies by Toyo Keizai (a Japanese business publication), the top ten CSR companies are:
- NTT Docomo
- Fuji Xerox
And, according to a 2012 study of CSR by the Japan Ministry of Economy, Trade and Industry, 86 percent of corporate managers think "companies should play a role in solving social issues" and that management awareness of CSR has changed from social contributions through philanthropy (Mecenat) to CSR that solves social issues through business activities – much like the American progression from checkbook philanthropy (focusing on who to support) to strategic philanthropy (focusing on what to support) to corporate social responsibility (focusing on what to do).
However, Aoki argues that there exists a fear that if Japanese companies think of social responsibility and philanthropy as a means for profit-making, there will be a loss of ethics. He argues that Japanese executives should insist on CSR and corporate philanthropy based on the sense of ethical value and as a manifestation of gratitude for the support of people and society – challenges that have been leveled at American and European companies as well.
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Thanks for reading and sharing with colleagues.
P.S. Because of my travels to Japan, CSR Now! will return the week of September 16th.