Principles on CSR and CSV—A Proposal based on ISO 26000—
Preamble (Our Concern)
1. CSR Today
It has been ten years since Japan’s “First year of CSR” in 2003. CSR (CorporateSocial Responsibility) is now a widely recognized and respected concept with many large
companies incorporating CSR into their business operations. Many companies havebegun accepting and practicing ISO 26000 (Guidance on Social Responsibility), thus thephilosophy is gradually penetrating into the Japanese society.
ISO 26000 was developed through an international multi-stakeholder process and its
goal is to contribute to a sustainable society by offering behavioral standards forbusinesses and other organizations as well as providing guidance on the “relationshipbetween businesses and society” which serves as the framework for behavioral standards.
We believe that the concepts and philosophy of ISO 26000 are extremely important.
In the international world, CSR has seen some new movements since ISO 26000 waslaunched in 2010; i.e., EU (European Union)’s new CSR strategy, GRI (Global Reporting
Initiative)’s G4, and IIRC (International Integrated Reporting Council)’s Integrated
Reporting. These movements, intertwined with the United Nations’ “Guiding Principles on
Business and Human Rights,” are raising people’s awareness for corporate responsibility
for the respect for human rights more than ever before.

2. The Role of CSR in CSV
CSV (Creating Shared Value) is a concept put forth by Professor Michael Porter ofHarvard University. It is a business strategy which seeks to create economic value in away that creates social value at the same time, mainly through development of products
and services that address social needs. As professionals concerned with the unmet needs
in society, we understand the significance of CSV and have high hopes that it will, as one
form of relationship between the business world and society, contribute to the creation ofnew value for a better and sustainable society.
However, we fear that CSV is being misinterpreted in Japan. We have heard people
say, “From CSR to CSV”—but if these words are taken literally, others may begin to thinkthat CSR is outdated, or that the age of CSR is over and the future is in CSV. It would not
be desirable for the Japanese society to move in this direction.
According to ISO 26000 and other international statements, CSR aims to promotesocial responsibility by taking into account the impacts of businesses’ decision making
and actions on society and the environment, and preventing/decreasing negative impacts,
to shape a more sustainable society. Businesses that carry out this responsibility gain
trust. It is important that as they consider their impacts on society, they monitor every
aspect of their activities, including the value chain; CSR needs to be integrated into thebusiness as a whole.
CSV, on the other hand, is a competitive strategy for the business. Therefore, as withall its other activities, CSR is essential when a business implements CSV—it needs toconsider the impacts on society and the environment.

3. The Future of CSR
In this age where sustainability of the global society is being questioned, CSR has
been and will continue to be a global task. For Japanese companies also, CSR is achallenge they must tackle with or without CSV.
This is why, in view of various movements regarding CSV, we are concerned about thesociety’s approach toward CSV, and feel the need to re-establish the fundamental
concepts of CSR for the Japanese society to share the same understanding andawareness.
We hereby propose the “Principles on CSR and CSV” in hopes that it will serve inhelping all sectors of society to search together for solutions to the mounting social
challenges of today.

Principles on CSR and CSV

1. CSR is essential for every business activity
CSR aims to promote social responsibility to shape a more sustainable society by taking
into account the impacts of the business’ decision-making and actions on society and theenvironment, and by preventing/improving on negative impacts. “The responsibilities of anorganization for its impacts on society” is clearly stated in ISO 26000 as well as in otherglobal initiatives, and should never be left out from a business’ operational process or itsproducts.

2. CSV cannot replace CSR
CSV is a business strategy that aims to strengthen the business’ competitiveness whiletackling social problems. CSV and CSR are essentially different; thus CSV is not a
replacement for CSR, and businesses that address CSV are not exempt from their CSR.
Naturally, CSR continues to be vital to all activities for businesses that do not pursue CSV.

3. CSR should precede CSV
The “responsibility of an organization for its impacts on society” applies also to CSV which
is a business strategy, and the social justice and sustainability of a business’ operational
processes and products ought to be examined and evaluated. The business’ CSV needs
to follow the principles of social responsibility (i.e., accountability, transparency, ethicalbehavior, respect for stakeholder interests, respect for the rule of law, respect forinternational norms of behavior, and respect for human rights) as with any other businessstrategy.

4. Examine and evaluate the “social value” created by CSV
As with CSR, businesses must always examine, evaluate, and be accountable for the“social value” they try to create through CSV, making sure that the social needs are really
being met. In doing so, businesses must take stakeholder engagement, an importantelement of CSR, into serious consideration, as well as being highly sensitive to thesituation that their CSV addresses.

March 13, 2014

About “Principles on CSR and CSV”

BackgroundEver since the concept of CSV (Creating Shared Value) introduced by Professor MichaelPorter (2011) reached Japan, there have been calls to “turn from CSR to CSV” andcomments that “CSR is outdated, and the future is in CSV.” Members from various
sectors—businesses, NPO/NGOs, consumer groups, think tanks, etc.—who wereconcerned about the direction the general opinion on CSV was moving in, and the impact on
the functions of CSR in Japan, formed a “CSR and CSV study group” and met together fordiscussion four times since Summer 2013. The “Principle on CSR and CSV” was developedby this group as a compilation of conceptual standards based on ISO 26000 (Guidance onSocial Responsibility) and the United Nations’ “Guiding Principles on Business and HumanRights.”
The Asia-Pacific Human Rights Information Center (HURIGHTS OSAKA) and CSO
Network Japan took on the role of administration for the “CSR and CSV study group”
discussions.

Promoters
Comprised mainly of members of the “CSR and CSV study group”, the promoters of the“Principles on CSR and CSV” are as follows:

Naoki ADACHI, Makiko AKABANE, Yukiko FURUYA, Toshihiko GOTO, Takaji HISHIYAMA,Yoshiteru HORIE, Katsuji IMATA, Masahiko KAWAMURA, Kaori KURODA, Hideki MATSUOKA,Akiko MERA, Setsu MORI, Mai NOMURA, Masao SEKI, Takeshi SHIMOTAYA,Osamu SHIRAISHI, Katsuhiko TAKEDA, Takeshi TOMINO, Hidemi TOMITA, Masaki WADA
(in alphabetical order)

March 13, 2014

Asia-Pacific Human Rights Information Center (HURIGHTS OSAKA)CSO Network Japan