Supporting Companies and Organisations【Companies and Groups】■

EBARA Corporation■

COMANY Inc.

■

The Global Alliance for Sustainable Supply Chain (ASSC)■

Sapporo Breweries Limited■

Shiseido Company, Limited■

Sumitomo Riko Company Limited■

Taiyo Jyuken Co. Ltd.

■

Nabtesco Corporation■

Nihon Unisys, Ltd.

■PRI Secretariat

July 2021, Japan
This is the English translated version of the Japanese report published in March 2021.
Authors:
Shinji Onoda, Policy Researcher, Sustainability Governance Centre, IGES
Nobue Amanuma, Research Manager/Senior Researcher, Sustainability Governance Centre, IGES
Maiko Morishita, Programme Manager, Finance Taskforce, IGES
Survey and Coordination:
Tsuneo Oba, Executive Director, GCNJ
Akira Doi, Chief Strategy Officer, GCNJ
Aneta Paskaleva, Project Manager, GCNJ
Yoshiko Shoji, Project Manager, GCNJ
Masahiro Takemoto, Project Manager, GCNJ
Contributing Authors:
Masahiro Kawatei, Hakuhodo DY Holdings Inc.
Tadashi Arimoto, Japan Airlines Corporation
Hiroshi Tomita, Cre-en Inc.
Toshihiko Goto, Board Member, GCNJ
Mari Iizuka, Doshisha University
Acknowledgement:
The authors would like to express their sincere appreciation to all external and IGES colleagues who reviewed
and provided valuable comments on the draft, including members of the GCNJ SDGs Task Force.

Table of Contents
1. Introduction

1

2. Global and National Developments on the SDGs

3

3. Current State of Initiatives on the SDGs
by GCNJ Companies and Organisations:
Developments over the past five years
and initiatives during the COVID-19 pandemic

4. T he Future of Business and Society:Contributions from SDGs Task Force members

717

5. Conclusion

27

Putting into Practice: Executive Interviews

29

Annex:
Overview of the Sustainable Development Goals
Report 2020

50

Source: United Nations Information Centre

1. Introduction

1.1 Objectives of this report
The Global Compact Network Japan (GCNJ) and theInstitute for Global Environmental Strategies (IGES) havebeen conducting questionnaire surveys since 2015 onawareness of the SDGs and related initiatives among
GCNJ member companies and organisations. Beginning in
2016, survey results have been compiled into "SDGs andBusiness" reports. One feature of this series is the inclusionof changes over time in SDGs awareness and initiatives
among GCNJ members. In addition, a specific theme isexamined each year, and interviews and case studies on
related topics are included in the latter half of the report.
The implementation period for the SDGs began in January
2016, and we are now a third of the way to the 2030
deadline for achieving them. However, according to areport published by the UN in 2019, while some progresson the SDGs has been made, we are far from being on
track to achieving them, with regression on targets such as
inequality, climate change and biodiversity.1 In an attempt
to turn this situation around, the UN launched the Decadeof Action to deliver on the SDGs in 2020. However, the
COVID-19 global pandemic that began in the first year of
this decade has caused over two million deaths and is still
wreaking havoc around the world.
In a June 2020 video message, UN Secretary-General
António Guterres stressed that while there has been muchdebate about the need for a "new normal" in the postCOVID recovery, our situation was far from normal even1
2

1

before the pandemic. Guterres asserts that the time hascome to create decent work for all as the basis for anenvironmentally sound, inclusive and resilient recovery,
and that to do so, it is important to use the 2030 Agenda
for Sustainable Development, with the SDGs at its core,
as a guide.2 As this message shows, along with a global
sense of urgency, momentum is growing worldwide to
make our societies more sustainable.
In this report, we review the progress made by GCNJ
members on addressing the SDGs over the past five years,
this time including the impact of the COVID-19 crisis
on people and businesses. In doing so, we will examine
where we stand today and where we need to strengthen
our efforts to achieve the SDGs. For the first time, wehave also included contributions from five members of the
GCNJ SDGs Task Force. The SDGs Task Force is made up
of volunteer members of the Board of Directors, member
companies and organisations, and the GCNJ Secretariat
that meets regularly to promote the SDGs within the
GCNJ. In this report, the Task Force members shared
their thoughts on the future of corporations and society
and the role of the Global Compact from the standpointof private companies, a consultant and an expert. The
second half of this report includes interviews with leadersfrom ten companies and organisations. Our aim is to share
how the top management of companies and organisations
has dealt with the issues of people's safety, management
and sustainability in the face of the COVID-19 pandemic
and in the context of the Decade of Action to achieve theSDGs. We hope this report will show where we are, as
well as where we want to be, in building a new society.

United Nations (2019) “Global Sustainable Development Report” https://sustainabledevelopment.un.org/gsdr2019
United Nations Information Centre (UNIC) website (2020) https://www.unic.or.jp/news_press/messages_speeches/sg/38801/

1. Introduction

1.2 Overview of researchThis report examines the ways in which companies andorganisations are working towards the realisation of
the SDGs. It is based on desk research, questionnaires
and interviews with GCNJ member companies andorganisations.
Desk research consisted of collecting information on
SDGs and business from UN agencies, governments,
local governments, industry associations, non-profit
organisations and research institutions.
Questionnaire surveys have been conducted annually
since 2015 targeting GCNJ members (376 companies/
organisations3), who are asked to answer questions in an
online format. This year, questions were asked to track
trends over time in terms of awareness of the SDGs,
status of initiatives, and future plans, as well as questions
on SDGs-related initiatives in the context of the COVID-19
pandemic in line with this year's designated topic. The
survey was carried out between 1 September and 6

4.3%

November 2020, and responses were received from208 companies and organisations (56% response rate).
Of the companies and organisations that responded tothe survey, 65.9% have sales exceeding 100 billion JPY(Figure 1) and 73.6% operate in global markets (Figure2). Accordingly, the results of this questionnaire may be
regarded as representing the current situation of large
corporations in Japan, excluding the results specifying
companies’ sales volume. It should also be noted that
GCNJ members are companies and organisations thathave endorsed the Ten Principles of the UN Global
Compact and are making efforts to realise them.
Therefore, they are considered to be more advanced intheir efforts to address the SDGs than the typical Japanesecompany or organisation.
In addition to desk research and the questionnaire survey,
this year online interviews were conducted with membersof top management at ten companies and organisations.
The GCNJ Secretariat invited members to apply for theinterview spots, and the GCNJ SDGs Task Force selected
the executives to be interviewed.

8.2%

8.2%
9.6%

12.0%
65.9%

14.4%

2.5 bil. - less than 25 bil. JPY

25 bil. - less than 100 bil. JPY
Over 100 bil. JPY

Non-Proﬁt Organisations

Figure 1: Sales of respondent companies/organisations(n=208)3

3.8%

Less than 2.5 bil. JPY

73.6%

Domestic-Local

Domestic-National

International-Regional
International-Global

Figure 2: Markets of respondent companies/
organisations (n=208)

GCNJ membership as of 1 September 2020.

2

２. Global and National Developments on the SDGs

2.1 Global developments on the SDGs
Throughout the year 2020, which marked the start of theDecade of Action to achieve the SDGs, the COVID-19
pandemic wreaked havoc around the world. According to
the SDGs Report 20204 published by the United Nations
Department of Economic and Social Affairs (UN DESA),the COVID-19 pandemic stalled or set back progress
towards achieving the SDGs in many areas. For example,
the report estimated that global poverty would increase
for the first time in decades, with an additional 71 million
people falling into extreme poverty during 2020. It also
showed that disruptions to healthcare and limited accessto food and nutrition services could lead to hundreds ofthousands more deaths of children under five and tens of
thousands more maternal deaths in 2020. More than 370
million children came to be without school meals in spring2020 due to school closures, and as more families fall into
extreme poverty, more children are at risk of child labourand human trafficking.
Inequality has also increased during the pandemic.
According to Oxfam's "The Inequality Virus"5 report, since
the beginning of the pandemic, the world's 10 richest
people have increased their wealth enough to prevent
anyone on the planet from falling into poverty due to thevirus and to pay for vaccines for everyone. It also warns
that while the world's richest 1,000 people regained
losses suffered due to the pandemic within nine months,
it could take the world's poorest people 10 years ormore to recover. There is also a gap in access to vaccines
between developed and developing countries, and the
UN is calling for fairer distribution.
In this context, the importance of using the COVID-19
pandemic as an "opportunity" to build a more sustainable,
resilient and just world and transforming the current
financial, economic and political systems that cause somany problems, has been emphasised in various forums.
The World Economic Forum held in June 2020 noted
the need to use COVID-19 as an opportunity for a "Great
Reset" of old capitalism and to transform our systems. The
UN High-level Political Forum on Sustainable Development(HLPF), held online in July, also highlighted the need to"build back better" as we recover from the pandemic,
with the 2030 Agenda as our guide. Furthermore,
the Ministerial Meeting on the “Online Platform” on asustainable and resilient recovery from COVID-19, which
Japan hosted in September with the participation of 96
countries, emphasised the need for a "redesign" of moresustainable and resilient socio-economic systems to build
back better from COVID-19. In the area of human rights,
the UN Business and Human Rights Forum was held online
in November and reiterated that respect for human rights
in business activities should be at the heart of corporate
contributions to the 2030 Agenda. The forum also pointed
out that promotion of due diligence is essential to further
embed the concept of respect for human rights, which
many companies have incorporated into management
policies, into corporate activities and to put the concept
into practice.6
COVID-19 has not only had major economic and social
impacts, but has also led to a rethinking of the relationshipbetween humans and nature. The G20 Environment
Ministers Meeting and Agriculture and Water Ministers
Meeting, chaired by Saudi Arabia in 2020, addressed
the relationship between zoonotic diseases and wildlife
species in the context of the COVID-19 global pandemic.
Likewise, issues caused by human activity, such as theclimate crisis and biodiversity loss, were addressed at theG20.
On the issue of climate change, the slowdown ineconomic activity during the COVID-19 pandemic
temporarily reduced greenhouse gas emissions. However,a study was released showing that at the current rateof emissions, the carbon budget will be exhausted inless than a decade if we are aiming to limit temperature
increase to 1.5℃ above pre-industrial levels. 7 Extreme
weather events were observed in many parts of the world
during 2020, and concerns have risen over the impact of"complex disasters", those involving both the COVID-19
pandemic and climate change-related disasters, on
people's lives and ecosystems.
The scientific journal Nature has also warned about the riskof sudden collapse of entire ecosystems if ongoing climatechange increases risks to biodiversity and leads to a scale

 NDESA (2020) “The Sustainable Development Goals Report 2020” https://unstats.un.org/sdgs/report/2020/The-Sustainable-Development-GoalsU
Report-2020.pdf
OXFAM (2021) “The Inequality Virus” https://oxfamilibrary.openrepository.com/bitstream/handle/10546/621149/bp-the-inequality-virus-250121-en.pdf
6
Asia-Pacific Human Rights Information Center (2020) https://www.hurights.or.jp/archives/newsinbrief-ja/section1/2019/12/82019112527.html
Note that human rights due diligence consists of the following four steps: 1) Identify, analyse and assess the negative impacts on human rights that a
corporation participates in; (2) Incorporate results of the assessment into the company's response process and take appropriate action; (3) Continuously
track and evaluate based on qualitative and quantitative indicators; (4) Report externally on company's response.
7
Global Carbon Project (2020) https://www.globalcarbonproject.org/carbonbudget/
453

2. Global and National Developments on the SDGsof species extinctions that exceeds nature's limits.8 The
Dasgupta Review9, commissioned by the UK Government,
pointed out that while people and economies depend on
nature, including biodiversity, this demand exceeds the
goods and services nature can supply, and is therefore
unsustainable (See column below).
In response to this situation, nations are stepping up
their actions. In September of 2020, China announced atarget of zero greenhouse gas emissions by 2060, and in
October, Japan and South Korea announced they would
do the same by 2050. The UK announced substantiallymore rigorous 2030 emissions reduction targets in
December. Following the inauguration of President Biden
in January 2021, the United States formally returned to
the Paris Agreement the following month. It is hoped that
initiatives in decarbonisation by large greenhouse gas
emitters such as the US, EU, China, Japan and South Korea
will bring the world closer to achieving the 1.5℃ target.
On the other hand, some countries maintain plans forfossil fuel production for various reasons, which has been
identified as a challenge that threatens the achievementof the Paris Agreement's 1.5℃ target.
Developments in the corporate and financial sectors
also merit mention. In recent years, as corporations havebecome more committed to the SDGs, there has been agrowing debate about the "impacts" of their efforts. For
example, the United Nations Development Programme(UNDP) is developing the SDG Impact Standards forassessing and certifying the effectiveness of projects
and investments in achieving the SDGs, with the aim ofincreasing the flow of private finance towards the SDGs.
These standards could be launched during 2021 at
the earliest. Three types of standards will be available:
for corporations, bonds and private equity funds. Draft
versions of each type were released in 2020. 10 In
addition, in March 2020 the United Nations Environment
Programme Finance Initiative (UNEP FI) launched a tool
for banks to measure the impact of their loan portfolios,
and in October 2020 issued user guide explaining thetool in detail. This tool helps banks to analyse the impacts
associated with their retail (consumer financing andbusiness banking) and wholesale (corporate finance andinvestment banking) portfolios, and can therefore be used
to set targets as required by the Principles for Responsible
Banking. Other notable developments include the start of
the Task Force on Nature-Related Financial Disclosures(TNFD), a nature version of the TCFD; the launch of the
publication of the Climate Transition Finance Handbook
by the International Capital Markets Association (ICMA);
the development of taxonomy and other green financeinitiatives in Singapore and Hong Kong; and the World
Economic Forum's review of the role of boards inpromoting stakeholder capitalism and ESG.

This robust activity on the SDGs is expected to continue in
2021. The UN Guiding Principles on Business and Human
Rights (UNGPs) will reach the ten-year mark since theiradoption by the UN Human Rights Council in June 2011. The
UN launched the UNGPs 10+ Project in July 2020 and plansto publish a roadmap in June 2021, indicating a course ofaction leading up to 2030. It will also be an important year
for climate change and biodiversity. In April 2021, the US
President Biden will host a climate summit. In November,the 26th Conference of the Parties (COP26) to the United
Nations Framework Convention on Climate Change(UNFCCC), postponed due to the pandemic, will be held
to discuss measures for decarbonisation and adaptationfrom various perspectives, including Article 6 of the Paris
Agreement, on which no agreement has been reached. In
addition, over the course of 2021, the Intergovernmental
Panel on Climate Change (IPCC) is due to publish its Sixth
Assessment Report (AR6) in three parts, which could wielda major impact on international decision-making on climatechange measures. Likewise, COP15 of the Convention on
Biological Diversity (CBD), postponed due to COVID-19, will
discuss the post-2020 global biodiversity framework and set
new targets for the period up to 2030.

2.2 National developmentson the SDGs
COVID-19 has had a tremendous impact on people's lives,
livelihoods and work in Japan. In this context, a variety of
initiatives related to the SDGs are being carried out at thenational government, local government, private company
and civil society levels, including responses to problems
that have emerged as a result of the pandemic.
In December 2020, the SDGs Promotion Headquarters,
which serves as the control tower for implementation of
the SDGs in Japan, held its ninth meeting and formulated
the "SDGs Action Plan 2021: To ‘build back better' fromthe COVID-19 Crisis and Social Transformation in a New
Era". The basic idea behind this plan is that society-wide
behavioural changes are required to realize a flexible
yet resilient "with-COVID" or "post-COVID" society thathas achieved the SDGs and maintains a virtuous cycle
between the economy and environment. The plan stresses
the need for government, corporations and individuals tostart working for change from their respective standpoints.
Key issues to be addressed include: (1) countermeasures
to cope with infectious diseases and preparedness forthe next crisis, (2) growth strategies through businessand innovation for a building back better, (3) regional
revitalisation driven by the SDGs, creating a virtuous
circle between economy and environment, and (4)accelerating action through realising individual potential
and strengthening ties.

Trisos, C.H., Merow, C. & Pigot, A.L. (2020) “The projected timing of abrupt ecological disruption from climate change” https://doi.org/10.1038/s41586-020-2189-9
The Economics of Biodiversity: Dasgupta Review (2021) https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversitythedasgupta-review
10
UNDP Representative Office in Japan (2020) https://www.jp.undp.org/content/tokyo/ja/home/presscenter/events/2020/event_sdg_impact_1204.html
894

<Column> The Economics of Biodiversity: Dasgupta Review
On 2 February 2021, the UK Treasury-commissioned "The Economics of Biodiversity: The Dasgupta Review" waspublished. It provides a comprehensive analysis of the relationship between biodiversity and the economy. The
review presents a new framework, grounded in ecology and the Earth sciences, for achieving a balance between
economic prosperity and biodiversity enhancement.
The Dasgupta Review is based on a recognition of the present state of affairs in which degradation of nature
has approached "tipping points in regime shifts". It points out that unsustainable engagement with nature is due
to widespread institutional failure, and that markets as an institution do not reflect the true value of the various
benefits and services that nature provides in market prices. This pricing distortion has led us to relatively moreinvestments in human-produced capital and less in natural assets, resulting in the destruction of nature. In orderto tackle the problems faced, the report purports that the limits of nature and the biosphere must be made aprecondition for the economy, and that elements of natural assets must be incorporated into the economy. The
Review proposes concrete measures for three broad and interrelated changes: 1) balancing human demand withnature's supply and increasing nature’ supply compared to current levels; 2) changing the measures of economic
success ("inclusive wealth"); and 3) transforming institutions and systems (finance and education systems).
What can businesses do?
The Review calls for urgent action by the business community to halt the loss of nature. The WBCSD summary
notes that the three aforementioned changes will require access to reliable and highly verifiable information
throughout the supply chain to account for impacts on and interactions with nature and to hold actors
accountable.11 Private financial institutions, for example, need to reduce harmful financial flows that encourage
unsustainable activities and degrade natural assets, and to increase positive flows to conservation, restorationand sustainable economic activities. This will also require a better understanding and management of reciprocal
relationships with nature and financial risks and uncertainties related to impacts and nature. The role of trade
includes consideration of border tax adjustments, the ability to monitor and regulate supply chains in a moretransparent way and increased development assistance. The Review also points out that, in terms of the role offood production, agricultural systems can not only function as carbon sinks, but also as net providers of ecosystemservices, including regulating and maintenance services other than food production (e.g. agroforestry).

The SDGs Promotion Roundtable is set up under the
SDGs Promotion Headquarters and its members include
representatives of government, NGOs, non-profits,
experts, the private sector, international organisations,and various groups. The December 2019 revised versionof the SDGs Implementation Guiding Principles statesthat the Roundtable is to consider holding issue-specificsubcommittees. Four subcommittees were establishedin 2020: Environment, Education, Public Relations, andProgress Management and Monitoring. 12 Each of thesubcommittees is to meet once or twice before March
2021, with a view to culminating in a roundtable meetingscheduled for the summer of 2021.
Respect for, protection of, and promotion of human rights
is designated as an important element in achieving the
SDGs. In this context, the Government of Japan supports
the Guiding Principles on Business and Human Rights andhas been working to formulate a National Action Plan
(NAP) on Business and Human Rights since November

2016, led by the Ministry of Foreign Affairs. In April 2019,a framework was set up for the development of the plan
including an Advisory Committee and a Working Group.
Work was performed within these two bodies, resulting in
the formulation of the Action Plan on Business and Human
Rights (2020-2025) in October 2020. This plan includes
government measures related to business and humanrights, and also mentions expectations for companies toadopt human rights due diligence. Stakeholder members
who participated in the working group welcomed thedevelopment of a NAP and commented on the need forfurther strengthening and awareness-raising.13
One notable environment-related development was Prime
Minister Suga's declaration in a policy speech on 26
October 2020 that Japan would aim to achieve a carbonneutral, decarbonised society by 2050. Immediately after
the declaration, Suga ordered reviews of the "Plan for
Global Warming Countermeasures", "Basic Energy Plan"
and the "Long-term Strategy under the Paris Agreement",

WBCSD (2021) “The Economics of Biodiversity: The Dasgupta Review (2021) Summary brief for business" –https://www.wbcsd.org/download/file/11278
Information on meetings of each subcommittee can be found on the Japan SDGs Action Platform. https://www.mofa.go.jp/mofaj/gaiko/oda/sdgs/index.
html
13
"Joint Stakeholder Comments on release of National Action Plan on Business and Human Rights" https://www.ilo.org/wcmsp5/groups/public/---asia/---robangkok/---ilo-tokyo/documents/statement/wcms_760380.pdf
11
12

5

2. Global and National Developments on the SDGs

and concrete deliberations are underway within theadministration. In November, the House of Representatives
and the House of Councillors adopted a resolution
declaring a state of climate emergency. Likewise, theMinistry of Economy, Trade and Industry (METI) andother relevant ministries worked together to formulatethe "Green Growth Strategy Through Achieving Carbon
Neutrality in 2050" in December. This strategy sets forthdecarbonisation of the electric power sector as a major
precondition, while other sectors will be addressed
through electrification, switching to hydrogen and CO2
capture. At the beginning of this year, the Ministry of theEnvironment (MOEJ) and METI both began deliberations
on carbon pricing.
In the context of financial administration, the Japaneseversion of the Stewardship Code (revised) was publishedby the Financial Services Agency (FSA) in March 2020.
The revised code includes provisions on the considerationof sustainability issues, stewardship activities by corporate
pension funds, and the disclosure of reasons in voting
decisions. There has also been increased focus in Japanon impacts as the next step in ESG investment andfinancing. A task force set up by the ESG Finance HighLevel Panel of the MOEJ released its "Basic Approach to
Impact Financing" in July, and has since been working on
the development of a "Green Impact Assessment Guide".
In addition, there is a growing debate on the nature of
the transitions that countries are making to decarbonise
and reduce carbon emissions. METI published its "Basic
Guidelines on Climate Transition Finance" in March and its"Climate Innovation Finance Strategy 2020" in September.
METI, the FSA and the MOEJ are currently co-organising
an investigative commission to formulate the "Basic
Guidelines on Transition Finance".
At the local administration level, the Cabinet Office has
been selecting SDGs Future Cities and Municipal SDGs
Model Projects since 2018. SDGs Future Cities refer tocities and regions that propose outstanding initiatives toachieve the SDGs, and Municipal SDGs Model Projects
refer to leading initiatives to be implemented within SDGs
Future Cities. In 2020, 33 new SDGs Future Cities and
10 new Municipal SDGs Model Projects were selected(a total of 93 prefectures and municipalities have been
selected as SDGs Future Cities since FY2018). One of
the features of this system is that each SDGs Future City
formulates a three-year SDGs Future City Plan outlining
three years of concrete initiatives, along with priority goals,
targets and their KPIs, and regularly evaluates progress on
14efforts. In addition, a questionnaire survey on the SDGs
was conducted for local governments nationwide. The

draft results of the survey have been made public.15
In the context of decarbonisation at the local
administration level, the number of local authorities
that have declared their commitment to net-zero CO2emissions by 2050, or "zero carbon cities", is rapidly
increasing. As of 16 March 2021, 320 local governments,
including 33 prefectures, have done so, representing a
population of over 102 million people. The MOEJ has
requested a budget for a "Zero Carbon City Renewable
Energy Support Package", as the government plans toprovide various kinds of support. Likewise, the Cabinet
Secretariat has set up a "National-Local Decarbonisation
Council" to discuss ways in which relevant ministries,
agencies and local governments can work together.
In terms of developments in the industrial sector, theJapan Business Federation released its ".The New Growth
Strategy" in November 2020. The period "." in the title
implies a full stop to growth strategies to date with thepresentation of this new strategy. The strategy is based ona rethinking of "shareholder supremacy" and the redefining
and reaffirmation of the "sampo yoshi " ("three-way
satisfaction") management philosophy ("good for the seller,
good for the buyer, and good for society"). It sets forth"sustainable capitalism" as a new form of capitalism anddescribes an ideal vision for 2030. In addition, it proposes
the "Action Toward 2030: Growth Strategy" including
actions required for growth through digital transformation(DX), way of working reforms and regional revitalisation,
based on backcasting from 2030, the year in which theSDGs are to be achieved. At the individual company level,
as of 8 March 2021, the number of companies endorsing,certifying and committing to TCFD, SBT and RE100 is thehighest in the world for TCFD (342/1,791 organisations)and the second highest for SBT and RE100 (91/615
companies for SBT and 50/291 companies for RE100), as
decarbonisation efforts are spreading, especially amongmajor companies.16
As explained above, Japan is seemingly making progressin a number of ways in relation to the SDGs. At present,
however, the wealth gap is widening due to the impactof the COVID-19 pandemic, and the number of people
driven to unemployment, poverty and suicide is increasing.
Moreover, issues involving the Olympic Games have drawn
global attention to the low level of awareness on genderequality in Japan. Guidelines have been published to help
companies address these issues through management,
and it is hoped that these will be used as references tobolster efforts to address specific SDGs-related issues on
which Japan faces serious problems or lags behind.17

S ee the website of the Office for the Promotion of Regional Revitalization, Cabinet Office, http://www.kantei.go.jp/jp/singi/tiiki/kankyo/teian/sdgs_followup.html
Local Government SDGs Promotion Evaluation and Research Study Group (2020) "Results of 2020 nationwide survey research on the SDGs" https://www.
chisou.go.jp/tiiki/kankyo/kaigi/pdf/sdgs_enquete_chousa_r02_kekka.pdf
16Ministry of the Environment, "List of Companies engaged in TCFD, SBT and RE100 (as of 8 March 2021)" (http://www.env.go.jp/earth/ondanka/datsutansokeiei/
datsutansokeiei_mat01_39_20210308_.pdf)
17
References include, for example, "Basic Actions for Promoting Innovative and Responsible Business Conduct for Building Back Better from COVID-19 Crisis"by the Business and Human Rights Lawyers Network Japan (https://www.bhrlawyers.org/en-covid-19-bhr) and the "Women's Empowerment Principles(WEPs) Handbook for Japanese Companies" created by WE EMPOWER Japan and GCNJ to help companies put the Women's Empowerment Principles(WEPs) into practice (https://www.weps.org/resource/weps-handbook-japanese-companies ).

14

15

6

3．Current State of Initiatives on the SDGs by
GCNJ Companies and Organisations-Developments over the past five years and initiatives
during the COVID-19 pandemic-

As noted in the Introduction, this is the fifth volume in
the SDGs and Business series of reports, the first having
been published in 2016. As the Decade of Action toachieve the SDGs commenced in January 2020 and calls
were being made for accelerated action on the SDGs,
concerns were also on the rise that spread of COVID-19
would have global impacts leading to set backs in efforts
made to date. We questioned whether GCNJ member
companies and organisations had been able to makeprogress in their efforts to address the SDGs. Thus, thischapter presents the results of a questionnaire conductedto survey progress made by GCNJ member companies
and organisations in addressing the SDGs over the past
five years and the impact of COVID-19 on this progress.
Table 1 shows the number of responses, the number oforganisations targeted and the response rate for eachyear. The "-" (hyphens) shown in some tables below
indicate response options that were not available in thatyear. Although 2020, was a difficult year for all companies
amidst the pandemic, the response rate remained at
the same level as in previous years, with a record 208
responses.

2016

2017

2018

2019

2020

Number of
responses

147

163

180

186

208

When we asked companies and organisations which
guidelines and tools they refer to, it was clear that the
SDG Compass is still the most referenced, even after morethan five years since its publication (Figure 3). Looking
at respondents by size, 83.9% of companies with sales
exceeding 100 billion JPY refer to the SDG Compass.
Meanwhile, only 56.3% of companies and organisations
with sales under 100 billion JPY, including non-profit
organisations, responded on using it as a reference. The
SDG Compass helps organisations understand not only
how to tackle the SDGs, but also business management
for survival going into the future, and thus should be areference for everyone, both for-profit and not-for-profit
organisations, and regardless of scale of business.18

Number oforganisations
targeted

233

254

287

335

376

Q. Which step indicates current progress on the “SDG Compass”?

Response rate

63.1％

64.2％

62.7％

55.5％

56％

Table 1: N umber of responses and response rate forquestionnaire survey

3.1 State of initiatives according
to the SDG Compass
The SDG Compass is a five-step corporate action guidethat explains how companies can address the SDGs
through their core business. It was published by the UN
Global Compact, GRI and the World Business Council
for Sustainable Development (WBCSD) in September
2015, when the SDGs were adopted. This chapter looks
at the progress made by GCNJ member companies andorganisations in addressing the SDGs over the past five
years, following the five steps of the SDG Compass (Table
2).

18

7

Firstly, to get the full picture, let's look at the progress
made in each step. In the 2016 survey, more thanhalf of respondents were on Step 1, "Understanding
the SDGs", with around 25% on Step 3 or beyond. In
2020, the highest percentage of respondents (27.4%)
selected "Step 4: Integrating", with 68.3% on "Step 3" orbeyond. Moreover, respondents selecting Step 4 or Step
5 increased significantly compared to 2019, indicatingthat companies and organisations have indeed madeprogress over the past five years, including during thepast year. Yet, with less than ten years remaining until the2030 deadline for achieving the SDGs, further progress isrequired.

Table 2: State of progress on SDG Compass
2016

2017

2018

2019

2020

Step 1:
Understanding
the SDGs

53.5%

42.9%

30.6%

18.8%

12.0%

Step 2:
Defining priorities

22.2%

27.6%

28.3%

25.8%

19.7%

Step 3:
Setting goals

11.1%

13.5%

16.7%

26.3%

20.7%

Step 4: Integrating

9.1%

8.0%

12.2%

15.1%

27.4%

Step 5:
Reporting andcommunicating

4.0%

8.0%

12.2%

14.0%

20.2%

(*Responses for 2016 were from only 99 companies/organisations
who responded that they were using the SDG Compass as areference.) n unofficial Japanese translation of the SDG Compass by GCNJ and IGES is available for download at the following URL: https://ungcjn.org/sdgs/files/A
SDG_COMPASS_Jpn.pdf

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

Q. What guidelines and tools are you using as references in yourSDGs activities?
SDG Compass

74.5%

SDGs Industry Matrix
Poverty Footprint

28.8%
0.5%

GRI Standards

49.5%

PwC Navigating the SDGs

5.3%

Materials provided by GCNJ

48.6%

Keidanren Charter of Corporate Behavior
Implementation Guidance (ver. 7)

38.5%

Keidanren SDGs website

28.4%

Other (please specify)

13.5%

0%

20%

40%

60%

80%

Figure 3: Guidelines and tools used as references

3.2 Step 1: Understanding the SDGs
We will now have a look at the status of initiatives at
each step. In terms of awareness of the SDGs, the levelof awareness among CSR divisions has been high since2016. For top management, awareness was under
30% in 2016, and promoting leadership was a major
challenge. However, from the following year onwards, top
management's awareness of the SDGs steadily increased,
and by 2020, awareness was so well established thatit surpassed that of the CSR division. At this point,
if members of management in organisations do notunderstand the SDGs, it may be necessary to point out
the delay in awareness.
Awareness on the SDGs is finally starting to climb
among middle managers and employees, indicatingthat the SDGs are beginning to take root throughout
organisations. However, as both still remain below 50%,
further penetration is required to make implementation of
initiatives on the SDGs effective. Meanwhile, the low levelof established awareness in stakeholders, such as affiliates(11%), could pose a challenge to promoting the SDGs
through partnerships. Raising the level of awareness on
the SDGs from a value chain perspective is required.

Table 3: Level of awareness on SDGs
Q. Please select the applicable status of SDGs awareness in yourcompany/organisation (multiple responses)

2016

2017

2018

2019

2020

Well known by
CSR division

83.7%

85.9%

84.4%

77.4%

84.1%

Well known by
top management

27.9%

36.2%

59.4%

77.4%

85.1%

Well knownby middle
management

5.4%

9.2%

18.3%

32.8%

43.8%

Well known
among
employees

―

8.0%

16.7%

21.0%

37.5%

Well known acrossaffiliated companies
and other stakeholders

2.7%

2.5%

4.4%

7.0%

11.5%

Do not know

11.6%

6.7%

2.8%

2.2%

0.5%

How have companies and organisations tried to raiseawareness? As seen in Table 4, they were not actively
working internally to raise awareness in 2016. However,as the years progressed, the range of activities broadened,
and they gained a more solid foothold. Since the surveys
began, messages from top management have been
the most often used means of raising awareness. The
inclusion of interviews with top executives in this reportis intended to emphasise the importance of leadershipand messages from top executives. We can see that the
top executives of most companies and organisations now
share the belief in this importance. Apart from messages
from top management, there has been an increase intrainings (including e-learning), orientation for new hires
and management training. We expect to see the levelof awareness become more established among middle
management and general employees, where there remains
room to grow.

Table 4: Activities to raise awareness on SDGs
Q. What activities are in place to raise awareness on the SDGs inyour company/organisation? (multiple responses)

2016

2017

2018

2019

2020

Training (including
e-learning)

24.5%

30.7%

39.4%

53.8%

63.0%

Communication
on website

24.5%

31.3%

43.9%

56.5%

70.7%

Communicationin company
newsletter (print
media)

27.9%

40.5%

51.7%

61.3%

70.7%

Message from the
top

27.2%

39.9%

55.6%

65.1%

74.5%

Launch ofa specificorganisation

1.4%

1.8%

7.8%

13.4%

23.1%

Orientation for
new hires

―

22.7%

36.1%

43.5%

54.8%

Management
training

―

14.7%

23.9%

35.5%

41.8%

Linked to
performance
reviews

―

0.6%

1.7%

1.6%

6.3%

Inclusion incorporate charter/
code of conduct

―

3.7%

5.0%

14.5%

24.0%

Mentions atmanagement
policy explanatory
meetings

―

16.6%

31.7%

39.8%

51.0%

Distribution ofpromotional
items, like SDG
badges, toemployees

―

―

26.7%

44.6%

51.4%

Promotional
posters, etc.

―

―

10.0%

14.0%

17.8%

Participation inexternal seminars

―

―

―

54.3%

56.7%

20.4%

21.5%

23.9%

20.4%

11.5%

Other

8

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

In terms of perceptions of the SDGs, each year more andmore companies and organisations are choosing to focus
on increasing corporate value on sustainability, increasing
company value to society, strengthening multi-stakeholder
partnerships and creating new business opportunities.
On the other hand, very little change has been seen in
responses on social and market stability and response toinvestors. Although more detailed research is required on
this point, it seems that many companies and organisations
view the SDGs and sustainability in relation to their businessactivities and organisational management (Table 5).

Table 5: Awareness on SDGs
Q. How are the SDGs viewed in your company/organisation?
(multiple responses)

9

2016

2017

2018

2019

2020

Increase corporate
value on sustainability

78.9%

76.7%

82.2%

87.6%

92.3%

Strengthen multistakeholder
partnerships

60.5%

54.6%

59.4%

68.8%

71.6%

New business
opportunities

59.9%

57.7%

69.4%

69.4%

71.6%

Stabilise society
and markets

57.1%

51.5%

58.3%

53.8%

58.2%

Increasecompany’s value
to society

―

74.2%

80.0%

82.3%

90.4%

Recognise its
importance,but still seeking
clear objective

―

19.6%

9.4%

7.0%

9.1%

Respond toinvestors

―

29.4%

27.2%

30.6%

33.7%

Not important

4.8%

1.2%

0.0%

0.0%

0.0%

Other

4.8%

4.3%

5.0%

4.8%

5.8%

SDGs by local governments alongside an increase in thenumber of companies and organisations addressing local
issues. Meanwhile, Goal 17, which increased by 33%
compared to 2017, shows that there has been increased
collaboration with diverse actors to find solutions to theenvironmental and social challenges covered by the SDGs.
On the other hand, Goal 1 (no poverty) and Goal 2 (zerohunger) remained low priority areas of focus between 2017and 2020. This may stem from the fact that companies view
these two goals as being appropriate only for companies
and NGOs engaged in international cooperation. However,
the eradication of poverty and the protection of humanrights are fundamental values that underpin the SDGs. For
Japan, access to food for those living in relative poverty andvulnerable groups is an urgent issue, and more companies
are expected to make positive contributions going forward(as some companies may be causing poverty problems
through their core business activities, such as procurement,these links also need to be re-examined).
Fewer than 40% of companies and organisations havechosen to focus their activities on Goal 14 (conserveand sustainably use oceans) and Goal 15 (protect
and sustainably use land), which are closely linked tobiodiversity issues. Goal 2 also involves issues such as
land use and access to genetic resources, and increased
efforts are required to contribute to biodiversity issues.

Table 6: SDGs given priority
Q: What goal(s) within the SDGs has your company/organisation
selected for focusing its activities? Please choose all that apply.
(multiple responses)

2017

2018

2019

2020

Goal 1

17%

21%

24%

20%

Goal 2

15%

23%

25%

24%

Goal 3

50%

64%

65%

69%

3.3. Step 2: Defining priorities

Goal 4

29%

39%

44%

47%

Goal 5

44%

52%

54%

59%

On which of the SDGs are GCNJ member companies
and organisations focusing their activities (Table 6)? Asof 2020, 76% of respondents were focusing on Goal 13(climate action), followed by Goal 8 (decent work andeconomic growth) and Goal 12 (responsible consumption
and production), both at 75%. Compared to 2017 whendata was first collected, focus on all of the goals has
risen, with three in particular–Goal 9 (industry, innovationand infrastructure), Goal 11 (sustainable cities andcommunities) and Goal 17 (partnerships for the goals)—
growing by about 30%.

Goal 6

30%

37%

33%

34%

Goal 7

46%

57%

59%

62%

Goal 8

60%

65%

65%

75%

Goal 9

39%

59%

59%

69%

Goal 10

21%

32%

39%

45%

Goal 11

34%

51%

55%

63%

Goal 12

51%

62%

69%

75%

Goal 13

63%

72%

73%

76%

Goal 14

23%

26%

31%

38%

The increase in those working on Goal 9 may be partly
due to the fact that many GCNJ members are in the
manufacturing sector, but also because more companies,
including those in the service and financial sectors, areseeking to contribute to the SDGs through their corebusiness and innovation. Increased focus on Goal 11
may be due to more widespread implementation of theGoal 15

34%

40%

35%

39%

Goal 16

24%

31%

41%

41%

Goal 17

29%

43%

53%

62%

None

11%

2%

2%

1%

Do not know

4%

3%

2%

2%

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

A closer look at the partnerships in Goal 17 shows thatpartnerships with employees, customers, suppliers,
shareholders/investors and local authorities haveincreased by more than 20% compared to 2016 (Table
7). Of these, partnerships with employees were themost prominent at 83.2%. This number is likely due tothe fact companies must first gain the understanding
and cooperation of employees in all things they do,whether reforming ways of working, promoting diversity
management, or developing new business and products.
Increased collaboration with customers and suppliers canbe attributed to a growing awareness of the importanceof resolving environmental and social issues in the value
chain, as pointed out in the SDG Compass, as well as
more advanced initiatives related to the human rights
issues of suppliers and the use of resources and reductionof CO2 emissions throughout the life cycle. Likewise,
increased collaboration with shareholders and investors
is likely due to the recent rise in ESG finance, which has
created more opportunities for engagement. See above
for discussion of partnerships with local authorities.
Another noteworthy finding is that the percentageof respondents reporting "none" to this question fell
from 23.8% in 2016 to 3.8% in 2020. It seems that theimportance of partnerships in tackling the SDGs is now
widely recognised.

Table 7: Partnerships in the past year
Q. In the past year, what stakeholder groups have you partneredwith related to the SDGs? (multiple responses)

2016

2017

2018

2019

2020

Employees

53.1%

54.0%

59.4%

71.0%

83.2%

Customers

36.1%

33.7%

36.1%

46.8%

56.7%

Consumers

16.3%

17.8%

16.7%

17.2%

24.0%

Suppliers

34.7%

38.0%

46.1%

54.8%

57.7%

Shareholders/investors

15.0%

21.5%

26.7%

33.3%

38.5%

Government/
governmentalorganisations(including JICA, etc.)*2016 data includes
local governments

29.9%

Local governments

―

26.4%

37.2%

44.6%

Foreign governments/
local governments/
governmentalorganisations

18.4%

19.6%

24.4%

21.0%

UN/internationalorganisations

26.5%

26.4%

32.2%

29.6%

34.1%

NGOs/NPOs

44.9%

41.7%

51.7%

47.3%

50.0%

Academia

21.8%

23.3%

28.9%

31.2%

34.6%

Other (please specify)

7.5%

4.9%

5.6%

8.6%

10.6%

None

23.8%

23.3%

14.4%

6.5%

3.8%

3.4 Step 3: Setting goals
The SDG Compass recommends setting ambitious goals.
An "ambitious goal" is one that is significantly above
the projected performance relative to the baseline,
or one without a clear path to achievement. The SDG
Compass hopes that setting such goals will encourage
innovation and creativity. The setting of ambitious goals
is fundamentally linked to the setting of timeframes forthe achievement of goals. Thus, it is important that thesetimeframes be long enough to allow for the setting ofgoals that represent major turning points in the creationof a future that is significantly different from the present.
Therefore, looking at the state of plans among GCNJ
member companies and organisations, we see that the
number of companies and organisations with plans forlong-term (5-10 years) initiatives or plans up to 2030
increased from 12.9% in 2017 to 33.2% in 2020 (Table8). If the 2020 results are organised by amount of sales,
38.3% of companies with sales of 25 billion JPY or more
reporting having long-term (5-10 year) initiatives or plans
up to 2030, compared to 15.2% of companies with salesof less than 25 billion JPY and non-profit organisations.
It is evident that companies with large sales volume are
putting more emphasis on initiatives from a long-term
perspective. On the other hand, small and medium-sizedcompanies in particular are lacking in the practice of
creating medium- to long-term management plans, likely
making it difficult for them to plan long-term initiatives.
However, we hope more companies will consider how
they can contribute to long-term goals at the national andlocal government level, as Taiyo Jyuken did when it set
its goals in connection with Yokohama City's action plan
to combat global warming. Detail efforts of Taiyo Jyuken
is described in one of the interviews in the Putting into
Practice section of this report.

Table 8: State of initiatives in medium to long-term plans
Q. Please indicate the status of planning for initiatives related to
the SDGs.

25.8%

33.9%

37.1%

38.0%

2017

2018

2019

2020

Plans in place up to 2030

8.0%

10.0%

14.5%

23.1%

48.6%

Long-term initiatives inplace (5-10 years)

4.9%

5.0%

7.5%

10.1%

23.1%

Medium-term initiatives inplace (3-5 years)

41.1%

37.2%

46.2%

39.9%

Short-term initiatives inplace (annual, 1-2 years)

17.2%

21.1%

17.7%

13.9%

Do not know

28.8%

26.7%

14.0%

13.0%

10

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

Table 10: Frequency of discussion in board of directors' meetings

3.5 Step 4: Integrating
The measures outlined so far—raising awareness, promoting
partnerships and taking a long-term perspective—play key
roles in integrating the SDGs into management. In addition,
the development of organisational structures is also an essential element in integrating the SDGs into management.
In a question on the main actors involved in promoting theSDGs within organisations, we saw an overall increase inactors directly connected to management, namely CEOs,
boards of directors, management executive committees andmanagement and planning divisions (Table 9). Meanwhile,
the value for CSR departments fell by around 15% from
77.3% in 2017. This does not imply that companies simply
changed the actor in charge of promoting the SDGs. Rather,many companies have upgraded departments responsible
for SDGs and sustainability issues, or integrated IR, PR andsustainability functions into corporate planning, in their efforts to develop integrated organisational approaches.19
Particularly noteworthy is the increase in the percentageof CEOs, from just 8.0% in 2017 to 26.4% in 2020. Whenviewed in combination with the frequency of discussions
on CSR/SDGs in the boardroom, we see that by 2020
these discussions have become the norm (Table 10). It isa welcome trend that an increasing number of companies
and organisations view the involvement of management asessential to communicating a serious commitment to the
SDGs both inside and outside their organisations.

Table 9: Main actors in SDGs promotional activities
Q. Who are the main actors in SDGs promotional activities withinyour company/organisation (multiple responses)

2016

2017

2018

―

8.0%

14.4% 18.8% 26.4%

Board of directors

2.0%

4.9%

6.1%

9.1%

Management
executive committee

4.1%

8.0%

5.6%

16.1% 19.7%

Management andplanning division―CEO

CSR division

19

11

2019

2020

12.5%

17.2% 25.0% 38.2% 35.1%

68.0% 77.3% 70.6% 59.7% 62.5%

IR division

―

6.7%

5.0%

12.4% 10.6%

New businessdevelopment

―

1.8%

6.1%

6.5%

Business division

7.5%

5.5%

11.7% 12.9% 13.0%

Cross-cutting
projects

―

6.7%

9.4%

8.1%

7.7%

General affairs
division

―

―

―

1.6%

1.4%

Legal division

―

―

―

22.0% 19.7%

PR division

―

―

―

15.1% 17.3%

None in particular

11.6%

7.4%

15.0%

1.6%

Other

6.8%

12.3%

3.3%

19.9% 19.2%

5.8%

1.0%

Q: How often does your company/organisation discuss andevaluate policies and strategies related to CSR/SDGs atmeetings of your Board of Directors (or corresponding
committee)?

2017

2018

2019

2020

Discussed as necessary

39.9%

53.9%

61.3%

68.8%

Discussed as part ofnormal agenda

8.0%

16.1%

15.1%

16.8%

Not included in Boardof Directors' meeting
agendas

12.3%

12.8%

10.8%

3.8%

Discussed in subordinate
committees

16.6%

0.0%

0.0%

0.0%

Do not know

4.9%

5.6%

3.8%

3.4%

Other

18.4%

11.7%

9.1%

7.2%

What types of initiatives are GCNJ companies and organisations promoting? We asked about the status of efforts
on topics considered to be representative of the environmental and social issues related to the SDGs (Table 11).
In the 2020 results, the most common response of “actively
engaged” was for telecommuting and working from home.
It is clear that these efforts were part of the response to
the COVID-19 pandemic that will be discussed later.
Compared to 2019, the four areas that showed an increase of 10% or more in “actively engaged” responses
were: climate change (GHG reduction), climate change(adaptation) and disaster prevention, TCFD compliance,and diversity/women’s advancement. The survey was
conducted between 1 September and 6 November, while
Prime Minister Suga announced Japan’s intention to becarbon neutral by 2050 on 26 October. This shows thateven though the carbon neutral declaration likely had little
effect on responses, there has nevertheless been significant progress on initiatives in GHG emissions reduction,
adaptation and disaster prevention, and TCFD over the
past year (with the percentage of “actively engaged” companies and organisations expected to increase even more
next year).
In terms of the combined total of “actively engaged” and“somewhat engaged” responses, an increase of more than
10% was seen for TCFD compliance, plastics, diversity/
women’s advancement, regional revitalisation and link tolocal government SDGs, and technology (e.g. AI, IoT) and
SDGs, themes that are highly compatible with those attracting attention in recent years.
On the other hand, initiatives to address domestic poverty
and labour issues for foreign workers and technical interns
remain few. This suggests that poverty and human rights
issues are not perceived to be that relevant to companies
and organisations.

For details, see CEO interviews in the Putting into Practice section of this report and case studies in last year's report.

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

Table 11: State of initiatives over the past year
Q. Of the following areas related to the SDGs, please respond on state of initiatives over the past year from the 4 options.
*Level of positive impact from 1 (actively engaged) to 4 (not engaged)

2019

2020

1

2

3

4

1

2

3

4

Contributions to SDGs via corebusiness

45.2%

43.0%

8.1%

3.8%

50.0%

41.3%

7.2%

1.4%

CSR procurement

31.2%

41.4%

17.2%

10.2%

32.2%

44.7%

14.4%

8.7%

Climate change (GHG reduction)

42.5%

38.2%

11.3%

8.1%

52.9%

32.2%

11.1%

3.8%

Climate change (adaptation) anddisaster prevention

30.1%

48.4%

15.6%

5.9%

43.3%

39.9%

13.0%

3.8%

Human rights due diligence

23.1%

38.7%

25.3%

12.9%

24.5%

43.3%

25.5%

6.7%

TCFD compliance

25.8%

19.9%

21.0%

33.3%

38.5%

19.2%

20.2%

22.1%

Plastics

19.9%

34.4%

32.3%

13.4%

25.0%

47.1%

20.2%

7.7%

Domestic poverty

5.9%

13.4%

42.5%

38.2%

4.8%

15.9%

46.2%

33.2%

Labour issues for foreign workers andtechnical interns

15.6%

24.2%

33.3%

26.9%

13.9%

27.9%

26.0%

32.2%

Diversity/women’s advancement

40.3%

39.2%

14.0%

6.5%

50.5%

39.4%

7.7%

2.4%

Corruption prevention

40.9%

35.5%

16.1%

7.5%

49.5%

35.1%

12.0%

3.4%

Regional revitalisation and link to local
government SDGs

24.2%

28.0%

30.6%

17.2%

27.4%

35.1%

25.0%

12.5%

Technology (e.g. AI, IoT) and SDGs

23.1%

25.8%

36.6%

14.5%

24.5%

36.5%

28.8%

10.1%

Inclusion of SDGs in reporting, e.g.
integrated reporting for information
disclosure

50.5%

30.1%

11.8%

7.5%

51.0%

33.2%

9.1%

6.7%

Telecommuting/work-from-home

―

―

―

―

73.1%

21.2%

3.8%

1.9%

3.6 Step 5: Reporting and communicating
The expansion of ESG finance in recent years has
made reporting and communication on the SDGs andsustainability increasingly important. On a question
concerning ways of publishing or disclosing information
about the SDGs over the past year, 2020 responses
showed increases compared to the previous year in all
categories except "no information included" (Table 12).
Compared to 2017 when this question was first asked,
an increase of more than 30% has been seen for the"expression of issue recognition by leaders", "reflection onpriority issues and policies" and "connections to business"
responses. On the other hand, the number of companies/
organisations selecting "no information included"
decreased from 28.2% in 2017 to less than 5% in 2020.
Mention of the SDGs in information disclosure has not
only become common, but the SDGs have become an
integral element of information disclosure.

Table 12: Inclusion of SDGs in information disclosure
Q. Of information released/disclosed over the past year by yourcompany/organisation (including reports and online sources),
how was SDGs-related information included? (multiple
responses)

2017

2018

2019

2020

Expression of issue
recognition by leaders43.6% 61.7% 71.5% 76.4%

Reflection on priority
issues and policies

35.0% 50.6% 60.8% 66.8%

Mapping of CSR activities

33.1% 57.2% 53.2% 53.4%

Declaration of SDGs goalof focus

17.8% 27.2% 36.6% 38.9%

Connections to business

27.6% 52.8% 59.7% 75.0%

Announcement of launchof new project

4.9%

7.8%

9.7%

13.9%

Other (please specify)

9.2%

5.6%

3.2%

5.3%

No information included

28.2% 11.1%

7.5%

4.8%

12

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

In reporting and communicating, "SDG-washing", whenorganisations act as if they are addressing the SDGs
when in fact they are not, must be avoided. We asked
respondents if they had heard of SDG-washing and foundthat awareness was high among GCNJ companies andorganisations, reaching 87% in 2020 (Figure 4). We also
asked respondents to write free responses on how they
were going about avoiding it. The following box showssome typical answers.

100％
87%
80％
76%
60％

40％
24%
20％

0％

13%

2019

2020

Yes

No

Figure 4: Level of awareness on "SDG-washing"

Examples of efforts to avoid SDG-washing
✓

✓

✓

✓

✓

13

 e have created a system by which employeesW
first consult the SDG/ESG Promotion
Department, thus creating an atmosphere where
employees do not fall into the SDG-washing trap.
Internal information dissemination to ensurethat careless labelling does not take place
and that the SDGs are not used in advertising/promotion to increase sales; internal training
to ensure that people understand the natureof the SDGs.
Identifying key CSR themes, linking them to theSDGs, and reporting on annual performance interms of specific progress.
Presentation of medium- to long-term direction
and concrete solutions and KPIs for sharedissues.
Disclose information on the SDGs only after
verification of the actual situation / Do notmention SDGs if the activities are irrelevant.

3.7 Challenges in addressing the SDGs
In terms of challenges faced in addressing the SDGs,
some have changed since 2016 and others have not(Table 13). Areas that have changed include "low societal
awareness", "undefined method for internal deployment","limited commitment by top management" and "unclear
government policy, lack of government involvement", all ofwhich have seen a decrease in responses.
On the other hand, "low understanding among middle
management", "low understanding among generalemployees", "unclear evaluation methods such as
quantitative indicators" and "lack of resources (finance,
capability, technology, etc.)" were continuously identified
as challenges between 2016 and 2020. As for the level ofunderstanding among middle management and generalemployees, awareness on the SDGs has begun to increase,as discussed in Section 3.2. In addition, discussions on
quantitative indicators and other evaluation methods areunderway not only in Japan but also internationally, and it
is hoped that these issues will be resolved in the future.

Table 13: Challenges in promoting SDGs
Q: What are the main challenges in working on SDGs? (multiple
responses)

2016

2017

2018

2019

2020

Low societal
awareness

63%

47%

28%

17%

23%

Low understanding
inside company

66%

―

―

―

―

Undefined method
for internal
deployment

66%

52%

44%

43%

36%

Limitedcommitment by
top management

31%

31%

19%

16%

14%

Low understanding
among middle
management

―

47%

48%

42%

47%

Low understanding
among generalemployees

―

40%

47%

41%

46%

Low understandingof directors

―

20%

18%

6%

12%

Unclear evaluation
methods suchas quantitative
indicators

52%

47%

43%

51%

51%

Lack of resources(finance,
capability,
technology, etc.)

33%

25%

27%

41%

39%

Uncleargovernment policy,
lack of government
involvement

30%

18%

9%

8%

14%

Appropriate partners
cannot be found

10%

4%

3%

10%

5%

Other (please specify)

5%

6%

4%

5%

8%

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

3.8 Business continuity planningand basic policy on
COVID-19 responses
We will now look at responses to questions specific to the
COVID-19 pandemic. First, we asked respondents aboutbusiness continuity plans (BCPs). A BCP refers a plan thatsets out methods and means to ensure the continuationor early recovery of a business while minimising damage
in the event of an emergency, such as a natural disaster.
When asked whether they had prepared a BCP to deal
with pandemics, such as COVID-19 or new strains ofinfluenza, 92% of companies with sales over 100 billion
JPY answered "Yes" (Table 14). Meanwhile, the figure forcompanies and organisations with sales of under 100
billion JPY, including non-profit organisations, was 60.6%.
Some of the executives interviewed mentioned having
reviewed their BCPs after the start of the COVID-19
pandemic, and it appears that such companies andorganisations are not few.
When asked about basic policy on pandemic response,
including BCPs, most companies and organisations
included elements such as ensuring the safety of
employees and their families, prevention of secondary
infections, and early recovery and continuation of businessactivities (Figure 5). Likewise, roughly half of respondents
also have policies in place on fulfilling commitments
in local communities and supply chains. From theperspective of the SDGs, if companies simply change
the areas in which they operate or the suppliers fromwhich they source, there is a concern that people living
in such areas may be left behind in a crisis. Ideally, morecompanies and organisations will take steps during normal
times to prevent this from happening.

Table 14: Status of BCP preparation
Q. Does your company/organisation have a business continuity
plan (BCP) to deal with pandemics such as the COVID-19 ornovel influenza?

Q. What elements are included in your basic policies on COVID-19(including BCP)? (multiple responses)
Priority given to the safety of
employees, their families and visitors

91.8%

Prevent secondary
infections and limit damage

88.9%

Strive for early recovery andcontinuation of business activities

79.8%

Make contributions tolocal community

45.2%

Fulﬁl responsibility insupply chain

50.5%

Other (please specify)

4.3%

0%

20%

40%

60%

80%

100%

Figure 5: COVID-19 response policies

3.9 C
 hanges in medium- and longterm planning in the wake of
the COVID-19 pandemic
Another question, which asked about changes tomedium- to long-term planning, revealed that changes
were occurring particularly at the level of management
strategies and action plans, followed by reviews ofbusiness portfolios (Figure 6). Not all companies andorganisations have experienced positive changes, as someindustries were negatively affected by the pandemic,
putting the survival of their business at risk. Nevertheless,tracing the causes of the outbreak and the spread of
the novel coronavirus has provided us an opportunity toreconsider the current state of society and the positionof companies and organisations within it. It is thus hopedthat contributions to the SDGs will be taken a step further,as suggested by the following discussion of recognition by
top management and strengthening of initiatives.
Q. What changes have you made or are you considering making
to your company/organisation's medium- to long-term plans in
response to the COVID-19 pandemic (multiple responses)?

Yes

No

Sales under 100 bil. JPY (n=71)

60.6％

39.4％

Vision/mission

Sales over 100 bil. JPY (n=137)

92.0％

8.0％

Management strategy

9.6%
41.8%

Business portfolio

18.3%

Action plan
Other
(please specify)

48.6%
6.7%

Nothing in particular,
not considering
0%

28.4%
10%

20%

30%

40%

50%

60%

Figure 6: Changes and review of medium- and long-term planning14３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

3.10 Changing perception ofsustainability/SDGs by top
executives
Of total respondents, 47.1% reported a change inperception of sustainability/SDGs at the top as a result of
the COVID-19 pandemic (Figure 7).
When respondents that chose "Yes" were asked what
specific perceptions had changed, 17 responded thatchanges were related to sustainability/SDGs/ESG, and 15
responses concerned remote work and reformed ways ofworking. Likewise, six responses involved the role of thebusiness or product (such as perception as an essential
business), four said changes were related to business
continuity, four mentioned human rights and poverty,
three referred to supply chain management, and two
mentioned digital transformation. Some specific answers
are given in the box below. Meanwhile, we assume thatsome of the companies/organisations that answered "No"have always attached great importance to sustainability/
SDGs and have maintained their commitment in spite of
the pandemic.

Specific examples of changes in perception at
the top
✓

✓

✓

✓
✓

✓
✓

Q. Has there been any change the way sustainability/SDGs areperceived among the top management of your company/
organisation as a result of the COVID-19 pandemic?

✓

52.9%

Re-examination of business activities,
reaffirmation of the importance of basic humanrights and livelihoods, and reaffirmation of therole of the company in this context.
Global changes in society and the environment
are accelerated by the spread of COVID-19,
and a strong awareness of the magnitudeof climate change risks and the progress ofdigitalisation aimed at a better recovery.
The protection of employees with infection
control measures promotes better business
continuity.
Acceleration of work style reforms and DX
promotion.
Reconfirmation of our commitment as an
essential business, and reaffirmation of our roleand responsibility in society as a company.
Potential risks will always manifest themselves.
Re-recognition of the importance of harmony
with the global environment and society.
Further promotion of "people-centred
management". Seeking post-COVID ways ofworking on the assumption that we will not
return to previous ways.
Even stronger commitment to strengthening
ESG activities, including environmental
activities, in the context of the COVID-19
pandemic.

47.1%

Yes
No

Figure 7: Changing perceptions in response to the
COVID-19 pandemic

3.11 Working to grow stronger
in "with-COVID" and "postCOVID" times
In terms of efforts to strengthen companies andorganisations during with-COVID and post-COVID times,
92.3% or most respondents were promoting work
style reforms (Figure 8). It is worth noting that this maylargely be a response to the government's stay-at-homerequests. However, it is also notable that many companies
and organisations have reviewed their performance
evaluation systems (67.8%) and strengthened measures
on information leaks, personal information and security(56.7%) in order to make the new ways of working takeroot. In addition, we can infer that reviews of companywide crisis management systems and reinforcement of
weak links in supply chains have been carried out fromthe perspective of business continuity.
On the other hand, responses for "address human rights/
labour issues arising at suppliers" were low at 12.0%,
suggesting the need for more efforts to "leave no one
behind".

15

３. Current State of Initiatives on the SDGs by GCNJ Companies and Organisations -Developments over the past five years and initiatives during the COVID-19 pandemic-

Q. What is your company/organisation doing to become stronger
in with-COVID and post-COVID times (multiple responses)?
Review of business content

26.0%

Review of company-wide crisis
management system

59.6%

Reinforcement of weak links insupply chain

42.8%

Further promotion of work stylereforms with digital work andnetwork systems as mainstays
Enhanced measures on
information leakage, personal
data and security
Review of performance reviews andmechanisms for working from home,
online work and telecommuting

92.3%
56.7%
67.8%

Review quality of information
disclosure to shareholders andinvestors and in investor relations

16.3%

Address human rights/labour
issues arising at suppliers

12.0%

Strengthen cooperation within
industry, and with participatingorganisations and other companies

23.1%

Ability to makerecommendations to and inform
national and local authorities

8.2%

Enhance donations and social
contribution activities
Other (please specify)

24.0%
1.9%

0%

20%

40%

60%

80%

100%

Figure 8: Activities in place to become stronger during
with-COVID and post-COVID times

3.12 Summary of survey results
In this chapter, we have followed the steps of the SDG
Compass to see how GCNJ member companies andorganisations have tackled the SDGs over the past
five years, and what changes have been made during
the COVID-19 pandemic. On the whole, the following
conclusions can be reached.
・ GCNJ companies and organisations have made some
progress in integrating the SDGs into management. Thiscan be explained in terms of the level of penetration of
the SDGs throughout organisations, efforts to address
the SDGs through core business, improvements inorganisational structures, and efforts from a long-term
perspective.
・ P rogress has been made on initiatives that address
climate change, circular economy including plastics,
work style reforms, diversity/women's advancement,
and regional revitalisation and partnerships with local
administration-led initiatives on the SDGs. On theother hand, there has been less progress on tacklingsocial issues such as poverty and human rights, and in
addressing biodiversity.
・ M ethods to measure and evaluate initiatives on the
SDGs remain a major issue. With less than 10 years
remaining until the deadline for achieving the SDGs, it isimperative to accelerate the debate both domesticallyand internationally, as the appropriate evaluation ofprojects and investments that contribute to the SDGs is
key to accelerating their implementation.
・ T he various social problems revealed by COVID-19
pandemic have made the leaders of companies andorganisations more aware of the SDGs. The pandemic
has also led to the establishment of new ways ofworking and the strengthening of business continuity.

16

4．The Future of Business and Society-Contributions from SDGs Task Force members-This chapter consists of five contributions from membersof the GCNJ SDGs Task Force. Based on the results of thequestionnaire survey in the previous chapter, they discuss

the future of business and society and the role of the
Global Compact from a diverse array of perspectives, suchas corporations, the consultant and the expert.

The Global Compact's significance in achieving the SDGs from the perspective of theSDGs Task Force
Masahiro Kawatei

GCNJ SDGs Task Force Leader

Hakuhodo DY Holdings Inc.

The Decade of Action started from 2020 following a political declaration at the SDG Summit in 2019. However,
the global COVID-19 pandemic worsened, and UN Secretary-General Guterres said at the remote 2020 High-Level
Political Forum that the clock had been turned back due to the pandemic, making the achievement of the SDGs
even farther off. Yet, he also called for the SDGs to be used as inspiration to overcome the pandemic and build
a sustainable society. Since the adoption of the SDGs, Mr. Arima, Chairman of the Board of the Global Compact
Network Japan (GCNJ), has been calling on us to "see the SDGs as an opportunity, not a risk". I believe that the
COVID-19 crisis has tested our ability to view the SDGs this way.
In the roundtable discussions run by the SDGs Promotion Headquarters of the Japanese Government, the issue of
publicity has been raised as a necessity to accelerate the penetration of the SDGs into Japanese society. As oneof the measures to address this issue, a public relations subcommittee was established within the roundtable topromote discussion, and the Japan SDGs Action Promotion Council was established as the parent body of a publicprivate partnership campaign to spread information and calls for concrete action.
This voluntary organisation was established by the following: Ministry of Foreign Affairs of Japan / Cabinet Office/ Financial Services Agency / Ministry of the Environment / Ministry of Economy, Trade and Industry / Nippon
Keidanren (Japan Business Federation) / Japan Association of Corporate Executives / Global Compact Network
Japan / Junior Chamber International Japan / Japan Civil Society Network on SDGs / SDG-SWY / Next-Generation
Platform for Promoting SDGs / Regional Revitalization SDGs Public-Private Collaboration Platform / Kanagawa
Prefecture / Keio University SFC Research Institute xSDG Laboratory. It aims to achieve the SDGs by overcoming the
COVID-19 pandemic and promoting the Decade of Action. Many companies have agreed to join the initiative andhave begun to take action.
"Many companies use the SDGs icon in their reports and wear a pin on their suit. While it is good to showcommitment to the SDGs, what are the guidelines on this? Given that the SDGs were adopted by the UN, whatsort of information is the Global Compact (GC) in Japan sending out?" When I attend sessions on the SDGs, I am
increasingly asked these questions, especially recently. The adoption of the SDGs has raised expectations on thesocial responsibility of companies in their core business. We are very grateful that the GC, which was launched at
the UN headquarters in 2000, is attracting attention.
The SDGs Task Force, an organisation that promotes the SDGs within the GCNJ, aims to provide opportunities andtools to support Japanese companies in gaining a deeper understanding of the SDGs and incorporating them into
their management strategies. Volunteer members of the board of directors, member companies and the secretariat
meet regularly to carry out activities. The first step in this process was the translation into Japanese of the "SDG
Compass", which was published in late 2015. Since 2016, we have conducted corporate surveys to understandthe actual state of initiatives in Japanese companies towards achieving the SDGs, and to continue sharing anddisseminating this information.

17

4. The Future of Business and Society -Contributions from SDGs Task Force members-

In 2020, the GC published its strategy for 2021-2023, which falls into the first half of the Decade of Action. The
strategy states, "The GC Ten Principles are intrinsic to a company and serve as the enabler for contributions
towards achieving the SDGs and the Paris Agreement." In other words, the GC will take the initiative to ensure thatas many companies as possible become aware of, sign and implement the GC Ten Principles in order to achieve
the SDGs. This is the role of the GC.
Also, back in December 2018, the UN General Assembly adopted a resolution entitled "Towards global
partnerships: a principle-based approach to enhanced cooperation between the United Nations and all relevant
partners", a seven-page document that describes many of the GC's roles in achieving the SDGs. I have summarised
the main points as follows.
• Commit to a balanced and integrated approach across the economic, social and environmental dimensions• Address barriers through responsible business practices, respecting the GC Ten Principles• Heed the GC Ten Principles in strategic partnerships between the UN and the private sector• Support the PRI and GC Ten Principles toward business models that take into account ESG impacts• Heed the GC Ten Principles when UN agencies consider partnerships with corporations of all sizes• Welcome the collaboration of the GC, GRI and WBCSD to emphasise and encourage sustainability reporting andpromote integrated reporting• GC local networks play a key role in supporting local implementation of the SDGs
• GC's local networks promote UN values and the Ten Principles and greatly facilitate partnerships• GC's local networks contribute to SDG 5 (gender equality)
The SDGs Task Force will further discussions on this resolution in order to localise it to the Japanese perspective
within GCNJ's mission to achieve the SDGs, and to stimulate activities to increase the value of our organisation.

Our COVID-19 pandemic experience and the ideal society and corporations of the future
Tadashi Arimoto

GCNJ SDGs Task Force Member

ESG Promotion Department, Japan Airlines Corporation
Aviation has played a role in the development of global society by facilitating the rapid movement of people andgoods. However, that very movement is now linked to the spread of COVID-19.
Our mission as an airline is to deliver our passengers to their destinations safely, and safety implies protecting lives.
This is the most important requirement of an airline. In the wake of the COVID-19 crisis, we had to go beyond our
traditional responsibility of ensuring safety and security in air travel and stop the movement of people. Meanwhile,
we had to ensure the movement of medical personnel, medical cargo and daily commodities in order to maintainthe social infrastructure under these circumstances. The need to respond to the pandemic and to secure necessarymeans of transport, to stop operations and simultaneously not to stop them, is applicable to the response to theglobal warming issue of whether to operate aircraft, even at the cost of emitting CO2.
Thus, it seems to me that the mission of airlines and the response to various social challenges are interrelated, eventhough they may be contradictory to the 17 SDGs and even the 169 targets. This is a further reminder that it is very
important for corporations to consider these issues as their own and continue to find comprehensive solutions inorder to survive in the future.
By drastically reducing the number of flights we operate in the face of risks posed by the COVID-19 pandemic, wehave had more time for the people who support our flights, such as pilots, cabin crew and ground staff. This madeour employees have more time to think more deeply about our company's raison d'être and social issues. This has
led us to think about what we can do and to take action. I am confident that we will find these experiences usefulafter overcoming the pandemic.
The SDGs are becoming even more important for living in these new normal times. It is of utmost importance thateach and every one of us thinks and acts from the perspective of the SDGs (SDGs mindset), and that we view the18

4. The Future of Business and Society -Contributions from SDGs Task Force members-

COVID-19 pandemic not only as a crisis, but also as an opportunity.
In the future, it will be increasingly difficult for corporates to grow sustainably on their own. Recognising that there
are some problems that we cannot solve by ourselves, we must set concrete goals, create roadmaps and declare
our intentions, while also acquiring knowledge and cooperation from others. The COVID-19 pandemic has mademe highly aware of the fact that collaboration between corporates that complement each other is linked toaccelerating efforts to achieve the SDGs.

Can we truly integrate the SDGs into management?
Hiroshi Tomita

GCNJ SDGs Task Force Member and SDGs Subcommittee Co-Manager
General Manager, Cre-en Inc.

Achievement of the SDGs, considered difficult even before COVID-19, has been rendered even more difficult due tothe global pandemic. On the other hand, the present sense of crisis has also resulted in major changes to people's
sense of values around the world, as people have had the chance to focus consumption on what they really value
and governments to make climate change an essential policy.
As the results of this study show, more and more companies are integrating the SDGs into their management.
As a consultant, I have seen this marked trend in my work with companies. However, many companies have notfully grasped the aforementioned worsening social conditions and changes in values, which are preconditions forbusiness.
I believe that in order to embrace these changes, the SDGs must be integrated into management according tothree approaches. The first is to integrate the SDGs into values. For many companies, making expanding profits
their goal prevents them from expressing their raison d'être. Even when they have formed ideas on their reason forexistence, these are rarely taken into account in decision-making processes such as product design and investment.
It is becoming increasingly difficult to make real contributions to achieving the SDGs and to gain approval from
customers when values do not match society's expectations. As such, it is essential for companies to re-think their
purpose and to make their social and environmental value more visible, using such methods as measuring impacts
and internal carbon pricing.
The second approach is integration into the business model. The SDGs make us more aware of how environmental
resources can become a constraint on management capital. They can also be a strong driver for forming
partnerships with new stakeholders and giving rise to open innovation. In other words, we must switch to a morecompetitive business model that takes into account not only internal but also external capital. However, many
companies fail to make this connection and focus on management of the indicators required by external reviews.
To manage competitive advantage well, companies need to take a holistic view of the resources that create value
in the management of key indicators.
The last approach is the integration of strategy into time horizons. The world is now aiming to transform oursocieties by the target year of 2030. In these uncertain times, a long-term social vision, established by the will ofmany, is an important perspective for strategic planning. By backcasting the above values and business model froma long-term ideal vision, we can strategise to build companies that are truly needed by society.
Answering these questions is crucial to the sustainable growth of companies, and is the minimum social change
required to achieve the SDGs. With less than a decade to go before 2030, I hope that many companies will deepen
their understanding of what it means to integrate the SDGs into their operations and take action.

19

4. The Future of Business and Society -Contributions from SDGs Task Force members-Society and corporations in the post-COVID era
Toshihiko Goto

Advisor, GCNJ SDGs Task Force

Board Member, GCNJ

Achievement of the SDGs, considered difficult even before COVID-19, has been rendered even more difficult due
to It is difficult to know when the pandemic will subside, I would like to hope it will at some point. History has
shown that societies change dramatically following a pandemic, but the reality seems to be that changes that werealready underway before the pandemic.
Even before COVID-19, the current age was referred to as the VUCA20 era. The explosive industrialisation of the
post-World War II era, population explosion, the negative effects of globalisation, and so on, have all reached theirlimits making a paradigm shift inevitable. COVID-19 has just accelerated this paradigm shift.
The paradigm that has prevailed since the beginning of modernity, presupposed on limitless "growth" and"progress", is coming to an end. This paradigm, based on the assumption that the earth's environment andresources are also limitless, is causing all manner of problems, from the climate crisis and resource depletion, tobiodiversity loss and an increase in animal-borne infectious diseases, among others.
The global population of 2.5 billion in 1950 is on its way to reaching 10 billion by 2050, and it is clear that the
Earth's carrying capacity will not last with a business-as-usual approach.
Faced with this situation, human society adopted a new paradigm in 2015 as a starting point.
The new paradigm is the sustainable development underpinning both the SDGs and the Paris Agreement. Whentranslated into Japanese, "sustainable development" (the old paradigm) sounds wrong. At the very least, thetranslation should use the Japanese words for sustainable "evolution (or progression)".
Starting with the scientific revolution in the West, we have built a great industrial civilisation based on the ideathat humans manage nature, and yet human activities have vastly exceeded planetary boundaries. The concept ofsymbiosis, where humans and nature are one and the same, with humans being just one member of nature, must
form our base going forward. It is an old idea in the East, and evidently was the same in the West for the ancient
Celtic civilisation. For Japanese society, it is a matter of using "Western talent" but exercising a "Japanese spirit".
So, how has COVID-19 has accelerated the paradigm shift?
Many countries are working to move towards a green recovery, as seen in the European Green Deal and EU
Circular Economy Action Plan. The key concept is decarbonisation and the recycling of resources. Likewise, theUnited States, China and many other countries are working to implement major changes based on similar concepts.
It would not be an exaggeration to call our industrial civilisation since the industrial revolution a fossil fuelcivilisation. Decarbonisation implies a major transformation of the socioeconomic system. We must transform
our system of extracting resources from the environment and using fossil fuels as fuel and resources to produce
industrial products, which we use and then dispose—in other words, extracting resources, making products andselling them as a system of transfer of ownership.
The buzzwords Maas, PaaS, XaaS, subscription business, sharing economy, and shift from possession to utilisation
are just a few examples. So, what about Japan?
For the time being, the declaration of carbon neutrality by 2050 was made, but this call for decarbonisation stilllacks substance. Nuclear power is being discussed as a "base load power source", which is an obsolete term, butthere is no public debate about small reactors. Rather, the debate mainly revolves around light water reactors,
which historically started as plutonium producing reactors, and will never pay for themselves. Not to mention there
are breakdowns in the fuel cycle, making it pointless. There are also high hopes for CCS, premised on the use of20

VUCA is an acronym for Volatility, Uncertainty, Complexity and Ambiguity.

20

4. The future of business and society -Contributions from SDGs Task Force members-

fossil fuels, but its feasibility on the Japanese archipelago is questionable due to poor ground conditions.
Even conservatively calculated, solar and wind power alone have the potential to generate of 2 to 2.5 times Japan's
total energy use. Yet utilisation of renewable energies has been slow to take off due to conflicts of interest withvested interests.
In the area of resource recycling, the 3Rs are still based on the premise of waste, with an overemphasis on
recycling, and there has been little movement to change the business model. The solution to plastic waste cannot
be found in this model alone.
Inevitably, if companies are constrained by trends in Japan, they will be ousted from the marketplace. They will notsurvive unless they change their strategies to anticipate global trends.
Global companies, domestic companies and citizens alike should form partnerships to influence local governments.
Fortunately, in Japan, numerous municipalities have announced their intention to become zero carbon cities,
reaching 332 municipalities with a total population of 105.16 million (as of 22 March 2021). Partnerships on carbon
neutrality could also lead to business opportunities. The Ministry of the Environment's concept of a regional circularand ecological sphere is also interesting.

Thinking beyond the SDGs (Undercurrents and Bird's Eye View)
Mari Iizuka

GCNJ SDGs Task Force Member

Doshisha Business School, Doshisha University
One of the features of this study is the longitudinal observation of penetration of the SDGs into companies since
their inception in 2016. As of 2020, awareness of the SDGs is spreading from the management level of companies
to employees. The fact that companies and all of people who make up companies have lifted their gaze to global
issues and are talking about the SDGs is a truly remarkable achievement that will go down in the history ofJapanese management.
But wait. With so much talk of the SDGs, people inevitably have a lot of questions. The UN-led SDGs also havesecurity implications for Japan. I also believe that Japan, as a nation and as a society, is standing on the edge ofa precipice due to the rapidly declining birth rate and population, and that the only way for it to recover is for theremaining members of society to share this major objective, pool their resources and bring about social innovation.
But while the SDGs are indeed important, for better or worse, the Japanese, as a nation, respond to crises withcollective action and are highly influenced by the "atmosphere" around them. When national, regional and local
governments, business associations, educational institutions and the media all work together to promote the SDGs
under the imperial standard of the United Nations, I am worried that this may lead to a "cessation of thinking"or, conversely, that there will be no criticism of activities to address the SDGs. (As shown in Figure 4, many
respondents in this survey were concerned about SDG-washing).
Focusing on the relationship between companies and the SDGs, we have come up with three types of criticism thatcompanies could potentially face.
● Criticism Type 1: "Making a mountain out of a molehill"
To raise money for ESG finance, very minor activities on the SDGs are exaggerated.
● Criticism Type 2: "Get-out-of-jail-free card"
SDGs are used as a cover to pardon stakeholders that are not fulfilling their responsibilities.
● Criticism Type 3: "Dangerous deeds"
Companies taking the lead to do things in areas where they should not be involved under the guise of the
SDGs. In the long term, this will harm society as a whole.
In reality, the above three types may often occur in combination, but Type 1, "Making a mountain out of a molehill",
is a simple problem that will end if discovered. The more serious are likely Type 2, "Get-out-of-jail-free card", and21

4. The Future of Business and Society -Contributions from SDGs Task Force members-

Type 3, "Dangerous deeds". First, we should think about why companies would be criticised in the first place, fordoing something good for the world, like the SDGs. There is an inherent problem for companies that lies within the
SDGs themselves.
In the first place, the 17 SDGs are a set of goals and classifications created by the United Nations, made up ofnational governments, for national governments. Nevertheless, in our increasingly globalised society, the power ofcorporate giants is essential to the success of the SDGs, both for the UN and for humanity. This may be the wrong
way to look at it, but the SDG Compass, which is central to this study, can been seen as a measure made throughthe diligent efforts of the UN to encourage companies to participate in the SDGs, which are deeply governmentoriented. (This is not to deny the value of the SDG Compass. It is clear from this study that the SDG Compass has
had a significant positive impact on the management of Japanese companies, including leading them to take along-term view, to engage in backcasting, and to broaden their antennae to global issues.)
The fact that the SDGs are aimed at governments poses two problems for companies. Firstly, in relation the "Getout-of-jail-free card" type of criticism, the 17 goals are a very broad assortment and, although details are specified,they do not thoroughly address the responsibilities of individual companies towards their stakeholders. There isinevitably some laxity in terms of a company's responsibility to its stakeholders in difficult business environments.
Secondly, and related to criticism type 3, "Dangerous deeds", as a matter of course, the SDGs designed forgovernments include areas where governments and civil society should take the lead, where companies are
unsuited to respond. Awkward practices can become bad practices, leading to inefficiencies in society. If a
company is ambitious and committed to the SDGs, there is a danger that, in the name of the SDGs, it may enter
into areas where companies should be regulated, or engage in SDG activities that threaten democracy (or lead tocorruption, depending on your point of view).
So where does that leave us? This is a troubling situation for Japanese companies. At least in the case of large
corporations in Japan today, if they do not incorporate the SDGs into their management, they will be seen as
stragglers. (Also, as noted above, Japanese society is on a precipice.) But the SDGs were never intended forbusinesses in the first place. And the more a company brands itself with an image that is seen as good for society,like the SDGs, the more that image will come back to haunt them when things go wrong, causing the company to
be attacked by society. What can be done?
In addition, the SDGs have a clear deadline of 2030. Considering the lifecycle of the SDGs (a social commodity) in
our country, it is unclear whether they will continue to be as powerful as they are now after the Olympic Gamesand Osaka Expo (2025), events on which national prestige (and budget) hangs, are over. How should we deal with
the SDGs in this context?
It is against this backdrop that we have begun work on "Thinking beyond the SDGs". It is our intention to confirm
the undercurrents flowing beneath the SDGs, and to take a bird's eye view of where they are headed. Then, we will
look at how, for the remainder of the decade, we can dynamically step to the beat of the SDGs and make them aforce for good, for our companies and for society. Below I outline my personal views related to the SDGs on threepoints: the COVID-19 pandemic, the new UNGC strategy and hints for management.
1. The COVID-19 pandemic
The UN and various other organisations have made predictions on how the COVID-19 pandemic will affect the 17
SDGs. As the pandemic is ongoing, impacts will arise over the short, medium and long term. In order to provide
more clarity to those reading this report, I have included the following abridged version of a table (compiled in
November 2020 by Mitsuru Omori of the Japan Research Institute, based on UN reports). There are no rightanswers, and the table is designed merely to stimulate thinking on this matter. In addition, in 2021, the UNGC
published its strategy for the period up to 2023, indicating five of the 17 goals (5, 8, 13, 16 and 17) that the UNGC
will give particular focus. We have highlighted those sections for further discussion. Moreover, the percentage ofcompanies giving priority to each goal, also shown in Table 6, has been added to this table.
In thinking about the post-COVID SDGs, I think that five points are important: (1) the progression of DX, (2)widening disparities, (3) global human consciousness, (4) the sharpening of stakeholder orientation (social
orientation), and (5) the expanded concept of wellbeing.

22

4. The Future of Business and Society -Contributions from SDGs Task Force members-

Firstly, the digitaltransformation (DX) is
irreversible and shows thepotential to facilitate theresolution of SDG issues by
involving people around theworld. Secondly, if a systemof aggregating international
opinion goes online, it
could have an impact on
the current UN-centredinternational governancesystem, and may weaken
the UN or change the way
it functions. In addition, thenature of capitalism itself
could change if the voicesof stakeholders are moreeasily aggregated andtracked in various ways,
or if online shareholder
meetings become thedefault. (At the sametime, DX raises questions
about growing inequality
and what it means to be
human.) In other words,
the progression of DX
foreshadows a major
shift in the way the UN,
capitalism and corporations"play the game" concerning
the SDGs.
Likewise, in terms ofdisparity, if disparities thathave been further widenedby the pandemic become
fixed and society is unable
to function properly, theSDGs will be difficult toachieve in the long term.
As evidenced by Black
Lives Matter and othermovements, the UN and thepeople of the world need
to work harder to achieve
the goals on inequality andhuman rights.

Table 15: Impact of COVID-19 pandemic on each of the SDGs, weighting
in the new UNGC strategy and ratio of priority initiatives of
responding companies
Goal

KeywordImpact of COVID-19 (1)*added by authors

New
UNGC
strategy (2)Ratio ofpriority
initiatives(3)

1

Poverty

Stagnating economic development

C Follow

20%

2

Hunger

Supply chain interruption, worsening
economic access to food

C Follow24%

3

Health andwelfareDamages to health, and negative
influence on mental health

C Follow

69%

4

Education

Development of distance learning
infrastructure
Short-term educational gaps due tolockdowns

C Follow47%

5

Genderequality

Greater freedom in ways of working
Domestic violence (burden on women*)

A Lead59%

6

Water andsanitation

Global acceptance of hygiene for
infection prevention

B Cooperate

34%

7EnergyLower demand for power due tostagnating activity

B Cooperate

62%8Ways ofworking

Greater freedom in ways of working
Increased unemployment (burden on thevulnerable*)

A Lead75%

9Industrial andtechnologicalinfrastructure

Changes in level of resilience demanded

B Cooperate

69%

10

Inequality
betweenpeople andnations

Negative impact on income growth rate
Reduced mobility of immigrants andspread of virus in developing countries

B Cooperate

45%

11

Community
building

Changes in ideal communities andbuilding structures for infection control

C Follow63%

12

Responsible
production andconsumption

Danger of food supply chain disruption
and preference for the "disposable"

B Cooperate

75%

13

ClimatechangeLower GHG emissions due to stagnant
economic activity (sensitisation to global
warming*)

A Lead76%

14

Sustainable
use ofoceansPreference for disposable containers
Recovery of marine resources due toreduced demand for seafood

B Cooperate

38%

15

Sustainable
use of land

Restoration of natural environment due toslowed human activity

C Follow39%

16

Peace andjustice(inclusion)

Concerns about increase in domestic
violence and child abuse (growing
importance of inclusion and diversity*)

A Lead41%

17Partnerships

Decline in ODA investment andinternational cooperation
Unilateralism? (DX progress*)

A Lead62%

Let us not forget the
Sources: (1) Omori, M. (Japan Research Institute, 13 Nov. 2020), (2) UNGC Strategy 2021-2023,
profound effect that the(3) Prepared by authors based on this research study.
COVID-19 pandemic
has had on the inner workings of our minds. In a survey of 2,000 people conducted by this author in June 2020
immediately after the state of emergency was lifted, on the subject of "wellbeing and telecommuting", many people
said that they felt more strongly about being useful to society. If you think about it, the pandemic has caused
people all over the world "hunker down" and reflect. It also forced us to think about death and the meaning of ourlives. In addition, infectious diseases that cross borders have strengthened a "global human consciousness", the23

4. The Future of Business and Society -Contributions from SDGs Task Force members-

belief that (in the words of the Roman Catholic Pope) "we are all in the same boat", with nowhere to escape. In
this context, the desire to be of service to society has grown stronger, as has the desire for wellbeing (health andhappiness in the positive sense—including individual, corporate, social and global), which involves more than justhuman rights in the legal sense. These are the undercurrents of the SDGs, which will eventually emerge as a great
wave and shape the future world.
2. New UNGC strategy
Let us turn now to the UNGC's new strategy (2021-2023). The UNGC was originally founded out of concern for
the negative implications of globalisation, and has focused on human rights, labour, the environment and anticorruption. Its philosophy is humanistic and sustainability-based. When the SDGs came about, "leaving no one
behind" was in line with these humanistic principles to date, but as I mentioned earlier, it has not necessarily been
easy for corporations to apply the SDGs.
Then came the pandemic. Disparities, which impact death rates, have become a matter of life and death, withwomen and the vulnerable suffering the most. We are reminded of the importance of human rights, diversity andinclusion by the tragedies occurring before our eyes. Our awareness of being "all in the same boat" with no escapedemands a shrewder response to climate change.
In this context, the UNGC has formulated its own new strategy. This new strategy has classified the 17 SDGs into
three groups and weighted them. These groupings were developed by the UNGC in the context of its relationships
with other UN organisations and do not imply a weighting of the SDGs for individual companies. However, evenso, these weightings represent conclusions reached by the UNGC, the UN agency that deals with the relationshipbetween companies and the UN, after analysing its own position and special characteristics. We believe that thisstrategy can serve as a reference for Japanese companies in carrying out SDG activities in the future, so we present
it below.
●●●

Group A (priority goals), "Lead and Shape"SDG 5: Gender equality, SDG 8: Decent work and economic growth, SDG 13: Climate action, SDG 16: Peaceand justice (inclusion), SDG 17: Partnerships
Group B, "Cooperate with Others"
SDG 6: Water and sanitation, SDG 7: Energy, SDG 9: Industry, innovation and infrastructure, SDG 10: Reduced
inequalities, SDG 12: Responsible consumption and production, SDG 14: Life below waterGroup C, "Follow and Amplify"
S DG 1: No poverty, SDG 2: End hunger, SDG 3: Good health, SDG 4: Education, SDG 11: Sustainablecommunities, SDG 15: Life on land

Again, the UNGC's main focus is narrowed to gender, labour, climate change, justice (inclusion) and partnerships.
The other goals are divided into areas where the UNGC will not take the lead, but rather cooperate or follow.
These five priority goals reaffirm the humanistic, sustainability-based principles on which the UNGC was founded. At
the same time, these groupings can be interpreted as discouraging companies from taking the lead in advocating
SDGs in unsuitable areas, discussed above as "dangerous deeds". The message is that companies should first fulfil
their responsibilities to their stakeholders and embody the GC principles in their management on their own true
playing fields (Figure 9).
I would like to point out two words in particular that appear in the UNGC's new strategy and support its
framework. They are "ecosystem" and "responsible", and will be discussed in the next section.

24

4. The Future of Business and Society -Contributions from SDGs Task Force members-

Pre-SDGs

Early
periodSDGs

・GC Ten Principles Labour Human rights Environment Anti-corruption
・Undercurrents: humanistic + sustainability-based

・17 Goals (dissemination; goals not necessarily for companies)
・Undercurrents: "Leave no one behind" humanistic + sustainability-based・Progression of DX (game changer) Widening disparities
COVID-19 ・Undercurrents: global human consciousness; sharper stakeholder (society) orientation;
focus on wellbeing
pandemic・Three groupings in new strategy for UNGC's own engagement with the 17 SDGs (top priority for Goal 5--gender,
Late period Goal 8--decent work, Goal 13--climate change, Goal 16--peace and justice (inclusion), and Goal 17--partnerships)
・Undercurrents: reaffirmation of humanistic + sustainability-based principles; expanded concept of wellbeing
SDGs
・Ultimate question: focus on delivering value to stakeholders and ethics (being "responsible")・Undercurrents: humanistic + sustainability-based ➡ wellbeing (individual, company, society,
Post-SDGs
planet)Figure 9: Happenings involving the SDGs and their undercurrents
3. SDGs and the management transition
How do the SDGs affect management? Figure 10 shows key words used to roughly capture the changes inmanagement and organisations in the period prior the SDGs, the pre-COVID early period of the SDGs, and postCOVID latter period. (While perhaps an oversimplification, it is intended to give a general idea of the flow of
events.)First, in the period prior to the SDGs, when companies were operating on the GC Ten Principles alone, CSR
departments were largely responsible for responding to the negative implications of globalisation and running the"defence" of organisations. They were using "tactics" rather than strategies, and only certain parts of organisations
were involved.
In the early period of the SDGs, organisations were "shining the light" on global issues as business opportunities,
and companies went on the "offence" for the SDGs, with efforts like CSV becoming the topic of discussion. Partly
due to the influence of ESG finance, the SDGs came to be positioned as a strategy involving multiple departments(and entire organisations), including top management, corporate planning and human resources.
・"Defence" (1)・ Response to negative implications of globalisation
Pre-SDGs ・"Tactics"
・ Partial involvement by organisations (e.g. CSR departments)

Early
periodSDGs

・"Offence" (1)・"Shining the light" on global issues as business opportunities
・"Strategies" (e.g. backcasting, SDG Compass)・Involvement of entire organisation (or nearly entire)

・"Foundation" (1)・ U ltimate question: What is the company's value and ethical
Late period responsibility to stakeholders
・Strategies based in philosophy (principles) (e.g. wellbeing)
SDGs
・Organisations as ecosystems (involvement and engagement) (DX)
Note (1): See Monitor Deloitte (2018) for an explanation of theterms "offence strategies", "defence strategies" and "foundation".

Figure 10: The SDGs and transition of management25

4. The Future of Business and Society -Contributions from SDGs Task Force members-

So, what will happen in the post-COVID late period of the SDGs? The following three points could give us someclues.
(1) Scrutiny of the company's value and ethical "responsibility" to its stakeholders
As glimpsed in the UNGC's new strategy, the role of companies in society will be increasingly scrutinised going
forward. In the post-SDGs era, companies will be held even more responsible to their stakeholders. The ultimate
question will be: how much value have companies delivered to stakeholders—shareholders, employees, customers,
suppliers, industry, civil society, governments and the planet—and how ethical have companies behaved (have they
acted "responsibly"?)? This will be the most fundamental. It will be essential for companies to maintain the focus on
global social issues that they nurtured through the SDGs, and also to scrutinise their relationships with stakeholders
to develop firm footholds to embody the principles of the SDGs.
(2) Strategies based on the philosophy of wellbeing
I mentioned earlier that being "responsible" will be the most fundamental, because at the end of the day, strategies
are based on philosophy and principles. The humanistic and sustainability-based principles that form the bottom
line of the Global Compact and the SDGs are, in other words, human rights, human dignity and measures toaddress global warming. However, since the pandemic, these concepts seem to have expanded even more. In
this age of revolutionary technologies such as AI, labour is no longer only about management versus workers,
and human rights are not just legal rights. In a sense, human rights have been upgraded to more fundamental andphilosophical questions, such as how we can be happier in our work, and how we can lead brighter lives within the
global ecosystem. I believe that a philosophy and management perspective focused on wellbeing (for individuals,organisations, society and the planet) will become more important, as human beings are no longer viewed in termsof their economic value or as "human capital", and the earth is no longer viewed in terms of its material value.
(3) Ecosystems (strategic involvement and engagement)
One of the two pillars of the UNGC's new strategy, alongside being "responsible", is the concept of the "ecosystem".
This term evokes the cleverness of Apple, but it might be easier to understand if we interpret it as strategic
involvement and engagement. I mentioned earlier, DX is changing the way consensus is built and "the way we play
the game", but the progression of DX is also making it remarkably easier to form ecosystems. In order to increase
the positive influence of companies for the good of society, it will be important for companies to take advantage of
DX to build systems that successfully involve other players in the SDGs agenda, and consciously engage themselvesin the moves of other players. As the ways of playing the game have changed, developing the ability to be
strategically involved and engaged will be an asset for companies in the post-SDGs era.
Finally, I would like to discuss involvement with GCNJ. GCNJ provides an excellent platform for companies to stepto the beat of the SDGs and build their capacity to get involved and engaged. Particularly in Japan, thanks to theefforts of our predecessors, the GCNJ is not merely a UN-supervised body, but also a forum that boasts a numberof active subcommittees. It has also grown independently as a meeting place for a wide range of organisations,
including NGOs. We would encourage everyone to get actively involved, not only as a forum for learning andinformation gathering, but also as a place to work for good and build the capacity to get involved and engaged in
the context of the SDGs.
Referenced sources:
Omori, M. (2020) "COVID-19 and the SDGs", Japan Research Institute, https://www.jri.co.jp/page.jsp?id=37651
Monitor Deloitte (2018), “The Future of Management in the Era of the SDGs”, Nikkei Business Publications
UN Global Compact (2021) "UN GLOBAL COMPACT STRATEGY 2021-2023", https://ungc-communications-assets.s3.amazonaws.
com/docs/about_the_gc/UN-GLOBAL-COMPACT-STRATEGY-2021-2023.pdf

26

5. Conclusion

The global COVID-19 pandemic and the resulting
lockdowns have stalled or set back progress on thesocial dimension of the SDGs. Meanwhile, on theenvironmental side, the negative impacts on naturefrom CO2 emissions and air pollution have temporarily
seen a significant decrease. This is a clear indication of
how human economic activities are placing a burden on
the environment. To restate the current world situationin extreme terms, if we stop our economies, societies
will be destroyed, and if we mobilise our economies,
the environment will be destroyed. We are in a difficult
predicament. Moreover, it is always the weaker membersof society that bear the greater burden and sacrifice.
From another perspective, most infectious diseases,
including COVID-19, are zoonotic and include a range of
illnesses such as yellow fever and tick-borne encephalitis.
Environmental degradation is a main cause, and the riskof infectious diseases will increase as climate change
progresses. Furthermore, as the world transitions to
a decarbonised and resource efficient society, a "justtransition" is needed to ensure that those working in
affected industries are not left behind. For this reason,
inclusive and sustainable development serves as a guiding
principle. This is also why there have been calls for a great
reset, a better recovery, a green recovery and a redesign.
Efforts to achieve the SDGs, which were not on track in
the first place, must be increasingly accelerated in order torecover from the setbacks caused by the COVID-19 crisis.
Finally, we introduce some of the key points from the UN
Global Compact's annual Progress Report on the GC Ten
Principles and SDGs, while making some comparisons tothe survey results of GCNJ members that were discussed
in Chapter 3, and look ahead to actions required in the
period of just under ten years leading up to 2030.
The latest version of the GC Progress Report was
published in June 2020.21 The status of initiatives on the
SDGs and high and low priority goals are as follows.
・ Of total respondents, 84% are taking concrete action
to promote the SDGs. Of these, 46% have integrated
the SDGs into their core business strategy, 61% havedeveloped products and services that contribute to theSDGs, and 37% have designed business models that
contribute to the SDGs.
・ The SDGs with the highest priority were, in order, Goal
8 (decent work and economic growth: 65%), Goal 3

2127

https://globalcompact.no/wp-content/uploads/2020/06/publikasjon.pdf(health and well-being for all: 55%), Goal 12 (responsible
consumption and production: 54%), Goal 13 (climate
action: 54%) and Goal 5 (gender equality: 53%).
・ The lower priority SDGs were, in order, Goal 14 (lifebelow water: 13%), Goal 2 (zero hunger: 18%), Goal 15(life on land: 21%) and Goal 1 (no poverty: 22%).
The state of GCNJ members' initiatives as viewed
through the lens of the SDG Compass shows that 47.4%
are working on Step 4 and Step 5. While not an exact
comparison, descriptions in the SDG Compass suggeststhat there is no difference between Japan and global
trends, as integration into management is considered tobe the same as integration into core business strategy. For
the most part, both the top five high and low priority SDG
goals also overlapped. (The highest priorities for GCNJ
members were Goal 13 (76%), Goal 8 (75%), Goal 12(75%), Goal 3 (69%) and Goal 9 (industry, innovation andinfrastructure: 69%), while the lowest priorities were Goal
1 (20%), Goal 2 (24%), Goal 6 (34%), Goal 14 (38%) and
Goal 15 (41%)).
As many of the GCNJ's members are major companies
with global operations, this similarity is perhaps to be
expected. The point, however, is not to suggest that weshould rest easy and continue to work as is. Rather, theDecade of Action requires us to raise our ambitions for
the SDGs and bring about even greater impacts. This point
is made throughout the GC Progress Report, includingin the opening remarks by Lise Kingo, former CEO and
Executive Director of GC.
Turning to the individual goals, for the lower priority
goals 1 and 2, certainly efforts can be made within corebusiness to contribute to addressing human rights issues
among our suppliers and business partners. In addition,
relative poverty is an issue in the Japanese context,
and companies can make contributions in this areaby re-examining employment conditions and working
environments, for example employing single parents who
are willing but unable to work. In fact, many companies
are creating new services by reviewing their pay
systems, setting up day-care centres in their offices andpromoting the employment of women with children. Many
GCNJ members are working on diversity and women's
advancement, and now that the pandemic has caused us
to rethink ways of working, we hope that measures will betaken not only to change the system for the people insideorganisations, but also to be inclusive of and make the5. Conclusion

most of diverse human resources outside of organisations.
The internal and external perspective in relation toorganisations can also be applied to Goals 14 and 15.
As COVID-19 has focused attention on rethinking therelationship between people and nature, a global target
for 2030 will be developed at the Biodiversity COP in
2021. In the future, policies that incorporate elements ofnature, as well as finance that takes into account impacts
on nature and biodiversity, are expected to increase.
Although the effects of nature degradation and biodiversity
loss are difficult to see, what was once considered to be
an external issue for organisations will now have to be
seen as an internal one, as in the case of marine plastics.
Goals 12 and 13, which are of high priority both in Japanand globally, are goals that had not been moving in thedesired direction even before COVID-19. On climatechange, policies on carbon neutrality have finally been
established both domestically and internationally, andthere have been numerous announcements on zerocarbon cities by local authorities. While this study revealed
that many welcomed the government's policy, the successof carbon neutrality and limiting temperature increase
to 1.5 ℃ will depend on how targets are translated into
action.
Including challenges associated with these individual
SDGs, the GC Progress Report sets out the following
business benchmarks required by the Decade of Action.
Companies may wish to refer to these benchmarks whensetting their medium- and long-term goals.
・Gender balance at all levels of management
・100 per cent of employees earn a living wage
・ Science-based emissions reduction targets in line with a
1.5℃ pathway
・ Net-positive water impact in water-stressed basins
・ Zero waste to landfill and incineration・ 100% resource recovery, with all products and materials
recovered and recycled or reused at end of life・Zero discharge of pollutants and hazardous materials
・Land degradation neutrality, including zero deforestation
・100% of raw materials sourced sustainably according to
the highest possible standards
・Zero instances of bribery
The GC Progress Report also calls for raising ambition on
the SDGs and for change at the systems level to bringabout greater impacts. The systems referred to in thereport are the following seven areas: energy, natural
resources and basic materials; industrial manufacturing;food, beverage and consumer goods; healthcare and life
sciences; mobility and transportation; telecommunications
and technology; and financial services. The key toachieving system-level change is a business environmentthat promotes action on the SDGs (e.g. enhanced
customer and consumer demand, appropriate regulatory

and market signals), clear metrics (at individual andsectoral levels) and collaboration at all levels—at theindustry level, sector level and across sectors. The
specific ways in which these elements work and howtransformations can be achieved will need to be examinedin the future.
Finally, we would like to share a statement on theimportance of leadership taken from the context of theinterviews we conducted with top executives in the
preparation of this report. We hope this report will help
all to see where we are today and where we want to
be in the future, as the deadline for achieving the SDGs
approaches in less than ten years.
"To seriously deliver on sustainability outcomes,
organisations need to focus on making their sustainability
efforts sustainable. This is not a question of strategy,
policy or process, but fundamentally a question ofleadership and people. If an organisation is a collectionof individuals working together for a common purpose,and a corporate culture is a manifestation of the sharedbeliefs and behaviours of individuals, then embedding
and identifying employees and leaders throughout theorganisation who are motivated to drive sustainability andhave the skills and experience to do so is the surest path
to long-term success…boards and top management havea great opportunity to put sustainability at the heart of theleadership culture of the organisation. How companies
develop and select the leaders of tomorrow will havean ongoing impact on our collective progress towards
sustainability goals."

Table 16: Comparison of the state of UNGC and GCNJ
initiatives

Integrationof SDGs andmanagement

High-priority
SDGs

Low-priority
SDGs

UNGC

GCNJ

46％

47.4％

Goal 8（65％）

Goal13（76％）

Goal 3（55％）

Goal 8（75％）

Goal12（54％）

Goal12（75％）

Goal13（54％）

Goal 3（69％）

Goal 5（53％）

Goal 9（69％）

Goal14（13％）

Goal 1（20％）

Goal 2（18％）

Goal 2（24％）

Goal15（21％）

Goal 6（34％）

Goal 1（22％）

Goal14（38％）

Goal16（24％）

Goal15（41％）

28

Putting into Practice: Executive Interviews■

Masao Asami■

Kenta Tsukamoto

President and Representative Executive Officer, EBARA Corporation
Representative Director and President, COMANY Inc.
■

Takeshi Shimotaya■

Hideya Takashima■

Jun Aoki

Executive Director, The Global Alliance for Sustainable Supply Chain (ASSC)
President and CEO, Sapporo Breweries Limited
Executive Officer and Chief Social Value Creation Officer, Shiseido Company, Limited■ Kazushi Shimizu
Representative Director and President & CEO, Sumitomo Riko Company Limited■ Yuki Kawahara
President and Representative, Taiyo Jyuken Co. Ltd.
■ Katsuhiro Teramoto
Representative Director, President & CEO, Nabtesco Corporation■ Akiyoshi Hiraoka
President & CEO, CHO, Nihon Unisys, Ltd.
■ Michiyo Morisawa
Japan Head, PRI Secretariat*The SDG initiatives of the companies and organisations introduced here, as well as the titles of persons interviewed, werecompiled by the authors of this report based on information available at the time of interviews conducted in November andDecember 2020. Please refer to the websites of the respective companies for a complete picture of their initiatives and recent
updates.

29

Putting into Practice: Executive Interviews

Supporting our globe with technology andpassion towards sustainable societies

Masao Asami

President, and Representative Executive Officer
EBARA Corporation

Our management policy andthe “EBARA Way”
Our Group was founded in 1912 as a start-up company ata university that manufactured Inokuchi-type volute pumps.
Throughout Japan’s modernisation, post-war reconstruction,
period of rapid economic growth, and as the times have changed
towards a more sustainable, diverse and inclusive society; wehave continued to provide the products and services requiredby each era through our three main business: Fluid Machineryand Systems, Environmental Plants, and Precision Machinery. At
the top of the Group’s business ethics framework is our founding
spirit of “Passion and Dedication.” The embodiment of the “EBARA
Way,” including this spirit, is our long-term vision “E-Vision 2030”
and our “E-Plan 2022” medium-term management plan, whichwere formulated in February 2020.

“E-Vision 2030” and “E-Plan 2022”
According to UN population projections, the global population
will increase from 7.7 billion in 2019 to 10.9 billion by 2100,

The
The EBARA
EBARAWayWay

mainly in Asia and Africa. Running parallel to population
increase, global warming is advancing, bringing about increased
concerns over abnormal weather conditions, more severe
natural disasters, rising sea levels, and the depletion of foodand water resources. In the future, many parts of the world
are expected to experience changes similar to those that
occurred during Japan’s period of rapid economic growth.
In our E-Vision 2030, we set out a vision for the future of ourGroup according to our mission, “Technology. Passion. Support
our globe”. This vision is based on our desire to support
the creation of sustainable societies that evolve in a more
technologically advanced and efficient way than past periods ofrapid economic growth. Typically, manufacturers focus on how
to sell what they already have. At EBARA, our starting point is
the outcomes expected by the recipients of our products, andwe aim to enhance both social and environmental value andeconomic value. In terms of social and environmental value,
we aim to reduce greenhouse gas emissions by the equivalentof roughly 100 million tonnes of CO2, to provide water to 600
million people worldwide, and contribute to the developmentof ICAC51 by rising to the 14Å (angstrom, one ten-billionth of ameter) challenge for miniaturisation of semiconductors. In terms

Founding
FoundingSpirit
Spirit Passion
Passionand
andDedication
Dedication
Both
Boththetheemployees
employeesandandthethecompany
companyshallshall
strivestriveforforgrowth
growthwith
withpassion
passionand
anddedication
dedication
totobring
bringforth
forthoriginality
originalityand
andingenuity,
ingenuity,rather
ratherthanthansimply
simplyfulfilling
fulfillingthe
thetasktaskatathand.
hand.
Corporate
CorporatePhilosophy
Philosophy
We
Wecontributecontributetotosocietysocietythroughthroughadvanced
advanced
technologies
technologiesandandhigh-quality
high-qualityservices
servicesrelating
relating
water,airairand
andthetheenvironment.
environment.
totowater,
CSR
CSRPolicy
PolicyWe
Weconduct
conductallallour
ourbusinessbusinessinina ahighly
highlyethicalethicalmannermannerand
andbuild
buildgood
goodrelationships
relationshipsofoftrust
trust
with
withallallstakeholders.
stakeholders.
Management
ManagementPolicy
PolicyE-Vision
E-Vision2030:
2030:Vision
Visionforfor2030
2030
E-PlanE-Plan2022:
2022:Medium-term
Medium-termManagement
ManagementPlan
Plan(2020-2022)(2020-2022)

EBARA
Group
Business Ethics
EthicsFramework
キャプション
キャプション EBARA
EBARA
Group
Group
Business
Business
EthicsFramework
Framework
130‌ An acronym used within the EBARA Corporation to stand for IoT, Cloud, Artificial Intelligence (AI), Car(automatic driving), and 5th Generation Mobile
Communications System (5G).

Putting into Practice: Executive Interviewsof economic value, we aim to achieve a ROIC of at least 10.0%
and turnover on the scale of one trillion JPY.
However, it is difficult to suddenly start practicing our ideal for2030. Thus, we have compiled what we need to achieve inthe first three years into our E-Plan 2022 based on backcastingfrom our ideal vision and issues that were clarified in the review
of our previous medium-term management plan. The plan has athree-pronged approach: to ensure that profitability of existing
business is improved as necessary, to grow where necessary,and to explore, test, and nurture new business that capitalises
on EBARA’s strengths. In terms of growth initiatives, for example,
if we increase our current share of standard pumps by 5%, wewill be able to deliver water to 600 million people in Africa,
Latin America, and other regions in need of a stable supplyof water. An example of a new challenge is our investment inReal Tech Fund. This fund supports start-ups that aim to solve
challenges facing societies in Southeast Asia. We decided
to invest in this fund in the hope that our investment would
translate into opportunities for new business and partnershipsthat would contribute to societies in Southeast Asia. We would
like our employees to gain a wide range of experience throughreal communication with start-up companies so that they will
return to serve as leaders in internal start-ups in the future.

Our COVID-19 response andthe importance of messaging fromgovernment
In terms of our response to the COVID-19 pandemic, ourGroup is recognised as an essential business for maintaining
various systems in society, including waste treatment and water
infrastructure. As a result, we have emphasised communication
with employees to prevent infections while also maintaining
our business operations which support society, industry, and in
turn, us, our families, our customers, local authorities, and our
suppliers. Specifically, we aim to have 70% of our office staff
working from home, while manufacturing and other technicalstaff work in shifts. Furthermore, viewing the COVID-19 crisis
as an opportunity to reform our working environment, humanresources systems, and IT systems to provide an optimalbalance between health and efficiency, we have accordingly
promoted both telecommuting and remote working. Knowingthat new viruses may emerge even after the COVID-19
pandemic concludes, we need to work harder than ever torealise greater well-being and safe, secure, and sustainable

societies that will evolve due to ICAC5. In this sense, Prime
Minister Suga’s declaration of carbon neutrality by 2050 has
given businesses a clear direction to head in and has given
employees a vision of what a future society might look like.
When it comes to policies on energy and national resilience,
it would make it easier for us to contribute if the government
would clearly state, “This is what we are going to do, and wewant companies to follow along.”

Enhancing structures to promotesustainability
We are also working to strengthen our structures for promoting
sustainability. In addition to a Sustainability Committee, which ischaired by myself and comprises all the executive directors, wehave added a function to the Corporate Planning Department topromote sustainability management. We also integrated IR, SR,
and PR under the Corporate Planning Department to enhance
information disclosure and ensure greater consistency. Close
communication, both internally and externally, is crucial to our
public relations activities. Furthermore, we have expanded ESG
information on our website, and as a result, received high praise
and won various awards.
I had a series of meetings with investors in North America andEurope in the autumn of 2020, and what they had to say wasvery clear. In particular, European investors are highly awareof green investment. They explained to me quite explicitlythat the possibility of investing would depend on how wewere contributing to ESG issues via our business. As for ourgovernance, seven of our ten directors are independent
directors. Of the remaining three internal directors, I am
the only one in charge of business execution, so I do all the
explaining concerning business execution at board meetings. I
work with a sense of urgency and awareness of the fact that weare a company with designated committees and that I am fully
responsible for the execution of business.
Based on my fundamental belief that a great future only
awaits us if we challenge ourselves, I feel that our Group cancontribute to creating a sustainable society by taking on avariety of challenges. We have many like-minded employees,
and we will continue to make these contributions while
enhancing our company’s structures by appointing leaders who
aim to move in the same direction.

Climate change response
Reduce greenhouse gas
emissions by the equivalent of
about 100 million tonnes of CO2
Deliver water
Deliver water to 600 million people
ICAC5 evolution
14Å challenge
キャプション

Examples of E-Vision 2030 goals and the SDGs

Examples of E-Vision 2030 goals and the SDGs

31

Putting into Practice: Executive Interviews

Promoting the SDGs andresponding to the COVID-19 crisis
with people-focused management

Kenta Tsukamoto

Representative Director and President
COMANY Inc.

Our company's core values are "humanity and fraternity", and weplace value on heart-to-heart relationships in our management.
Our corporate philosophy is based on the idea that being ofservice to the world is what makes us a true company. There
was a time when companies were only interested in making
money. While making money is important, that money-making
must not have any negative impacts on other areas of society.
Since first encountering the SDGs, we have felt global support
for all we have said and done. Our corporate philosophy andthe SDGs are highly compatible, and our employees quickly
came to identify with and support the approach of the SDGs.
Our business is in partitions, which are used everywhere in theenvironments in which we work, learn and live. In running ourbusiness, we are not only concerned with partitions for creating
environments and spaces, but also with the development ofpeople. The actions of people will determine the future of ourplanet. We want to create environments that contribute to theminds of the people living there, for a sustainable future for ourplanet.

in both social contribution and business activities. In fact, ourcompany does not separate social activities from our businessactivities. If there are people in need, the humanitarian thing to
do is to help them. When business is involved, we get paid forit. When there is an earthquake, we go to help people in need.
When an employee comes back from volunteering having been
told "thank you", he or she begins to understand that this is thefoundation of business. That employee can then begin to talkabout what it means to be truly helpful to others in his or her
own words, not merely just saying that the customer comes
first. Developing human resources in a company is not about
having employees memorise management principles. It is about
having them experience what it means to be useful to others
and to society in a real sense, to have a positive influence on
those around them, and to grow as individuals.

In 2018, we announced the "COMANY SDGs Declaration". Since
then, we have been ranked among the top listed companies
in the Hokuriku area that people want to work for (4th and2nd place). In fact, the number of students who come to us
mentioning SDGs as a keyword is increasing. They are notmerely interested in income or their careers, or in gaining
stability by working for a listed company. In addition to ourcommitment to the SDGs, we are also actively involved insupport for Cambodia, as well as disaster volunteer work.
More and more students want to work with us because they
can relate to our work, even if it seems far from profitable.
Of course, we ask them not only to volunteer, but to engage

When all kinds of problems began to arise in the COVID-19
crisis, we were able to complete the development of a productused to protect against exhaled droplets in one week. The idea
came from an employee who had volunteered in a disasterarea. The energy that comes from following one's conscience ismany times more powerful than any order coming from a boss.

COMANYSDGs Declaration

Various initiatives in the SDGs

Bearing in mind that it is essential forcompanies to participate actively in the
SDGs to realise a sustainable world, weannounced the "COMANY's Declarationin support of SDGs" on 2 April 2018. We
will align our management philosophy,
policies, and strategies with the
Sustainable Development Goals, andcontribute to their realisation bypracticing them in our concrete
operations.

Using our COVID-19 response as aspringboard

The speed by which we have been able to develop ourbusiness in response to the pandemic, not only in regards tothis anti-droplet product, would have been unthinkable in thepast. Office environments are changing and meetings are now
held online, even when employees go to the office. In the past,

We actively participate in activities and initiatives related to the SDGs inorder to improve our knowledge and enrich our content.
August 2018
October 2018
April 2019
June 2019
June 2019

Signed UN Global Compact, Joined GCNJ
Joined Japan-CLP
Launched Sustainability Management Promotion Division
Formulated the COMANY Group Human Rights Policy
Signed a partnership agreement with Komatsu City topromote SDGs
October 2019 Joined RE Action, Renewable Energy 100 Declaration
February 2020 Endorsed the "Declaration on Action" by a group of maleleaders who will create "A Society in which Women Shine"
July 2020
Announced "Declaration of Partnership Building"Main activities related to the SDGs

32

Putting into Practice: Executive Interviews

the trend was toward open offices that were not separated,but now the demand for private offices is on the rise as people
are increasingly wary of noise around them or of having others
watching. As companies do not have enough rooms when
conference rooms are occupied, the demand for solo work
spaces (where individuals stay in one room and focus on online
meetings and work) has increased. Thus, we immediately
developed a product called the "Remote Cabin". We also
launched an anti-bacterial and anti-viral coating service foroverall spaces. This coating applies an air-catalyst technologythat has a lasting effect of inactivating viruses. We continue toreceive many enquiries about it.
In the COVID-19 pandemic, when I communicate withmanagers of other companies about the SDGs, I find discussions
follow two different patterns. The manager of one company will
say there is no need to worry about the SDGs in the midst of
this difficult situation, while the other will argue that the SDGs
and a sustainable environment are important now more thanever. Personally, I think that we must be sustainable. The SDGs
remind us that a company is only as good as its planet. When
we think about the future of the company and raise the layers,
it is inevitably connected to the future of the planet.

Implementation of the SDGs and theimportance of like-minded partners
In fact, implementation of the SDGs in management brings a
global perspective to decision-making. Naturally, we need tocreate a positive impact on society in our business activities, but

we also need to understand that sometimes there are negative
impacts on the environment and to think about how we canturn these into positive impacts. For example, we are currently
working on ISO certification. As we insert the issues, risks andopportunities in each department into our annual management
plan, we link them with particular goals of the SDGs each
item contributes to, as well as the SDGs that are negatively
impacted. When making investment decisions, we used tomake assessments based on economic benefits, but now welook at how energy or and waste issues are related. If an initialinvestment is high, but the project is more energy efficientand creates less waste, we will now make a different decision
looking at the overall picture. I think this is what implementing
the SDGs is all about. We created a business model that wecall the "COMANY SDGs ∞ (Mobius) Model" to maximise ourcorporate value by implementing the SDGs in management
and providing solutions to social issues, thereby operating "abusiness management which contributes to the well-being of
everyone involved”.
In order to further promote the SDGs, we believe that national
governments, local authorities and investors need to work
together to strengthen partnerships. To do this, I think it isimportant for us to work with people whose principles, ideas
and visions we share. In collaboration with like-minded partners,
we can develop relationships that are not about profit and loss,
but about playing to each other's strengths without waveringon our beliefs. Such partnerships will ultimately bring excellent
business gains to both parties. As awareness and momentum
surrounding the SDGs grow, we would like to further increase
opportunities for dialogue.

To provide opportunities for the material and spiritual well-being of all our employees,
and through our joint eﬀorts, contribute to the advancement of society and humankind.
Governance

Products and Services

Think intechnology,

Employees

Shareholders/Investors

Communities

Suppliers

Global Environment

satisfyneeds
with
comfort

Offices

working better

PublicFacilities

living better

Factories

working better

Make the World
Comfortable

Hospital andWelfare Facilities
living better

Schoolslearning better

COMANY SDGs ∞ (Mobius) Model

33

Putting into Practice: Executive Interviews

Partnership is key for sustainable supply chains

Takeshi Shimotaya

Executive Director
The Global Alliance for Sustainable Supply Chain (ASSC)

Informing Japanese companies about
the importance of partnerships andsupporting their action
There are limits to what individuals and companies can do on
their own to promote sustainable supply chains. Therefore, in
Europe and North America, NGOs are taking the lead in setting
up international initiatives and partnerships with companies
to create Initiatives for discussing solutions to social andenvironmental challenges. In my own work in Europe, I realisedthat it is not easy for Japanese companies to participate in suchinitiatives with some barriers and limitations. With the exceptionof certain sectors such as palm oil, I found there to be a lack ofunderstanding among Japanese companies of the importanceof such initiatives and partnerships.
I have always had an interest in solving environmental problems
and was involved in the business of tackling environmental
issues at my former company. In 2007, I decided to enter
graduate school in the UK in hopes of finding more ways tocontribute. I studied environmental science, environmental
management, carbon offsetting and waste management, andthen also did an MBA in the UK to translate this knowledge
into a business setting. Subsequently in 2010, I started my own
company in London, specialising in solutions to sustainability/
CSR challenges. Based on the belief that companies must also
tackle issues aside from the environment, my company has
been working to bridge the gap between Japan and Europe on
sustainability by informing Japanese companies about policies
in the EU and European companies' best practices in CSR andsustainability. In 2011, the UN Guiding Principles on Businessand Human Rights were released. While European companies
were actively learning about human rights issues through the
UN Forum on Business and Human Rights and various trainings
and struggling to take action, there were initially few Japanesecompanies participating in such learning opportunities andtaking action. We have worked to disseminate relevant
information to Japanese companies and raise awarenessthrough the Japanese media and seminars.
In order for Japanese companies to take action, they must firstunderstand international trends discuss and share wisdom. In
the run-up to the Tokyo 2020 Olympic and Paralympic Games,
we expected that Japanese companies would receive more
attention, particularly with regard to human rights. Thus, we set
up ASSC in 2017 to support Japanese companies in this area.

34

Since its establishment, ASSC has utilised networks in Europe,
North America and Asia to share international information
with Japanese companies and support their actions to build
sustainable supply chains.

Strains by COVID-19 crisis went
upstream in the supply chain
The COVID-19 pandemic has affected supply chains in various
ways. In the apparel industry, for example, demand is down
and the burden of cancelled orders is affecting the supply chain
all the way upstream. Japanese companies are looking at Tier
1 companies in the supply chain, but seem to fail to consider
the situation of more vulnerable people upstream, such as
cotton farmers. Furthermore, trading companies are involved insupply chains in Japan, making it difficult for clothing brands toascertain issues in the supply chain themselves. Likewise, trading
companies cannot act without instructions from brands, creating
a situation where action is at a standstill for both of thesereasons. The key to overcoming this situation is a commitment
from corporate management to promote sustainability, as wellas collaboration between trading companies and brands onactions to resolve issues. We have raised the discussion onthese Japan-specific issues and are working in cooperation with
Cotton 2040, a global initiative to promote sustainable cotton,
to get Japanese apparel brands involved. We are also planningto set up an initiative in Japan to promote sustainable cotton.
This initiative will promote discussion on the issue and sharing
of information from around the world on cotton in Japan, as
well as transmit information from Japan.

Using an app to take workers' voices
ASSC has been developing Self Assessment Questionnaires(SAQs) and conducting social audits to support Japanesecompanies in their CSR procurement. However, the pandemic
has made it impossible for us to conduct on-site audits, so wehave begun to conduct remote audits online. Companies need
to work together, with the understanding of their suppliers,
to improve their code of conduct in their factories related toenvironmental and social issues. However, when there is alack of understanding of their code of conduct, workers may
be subjected to discrimination and exploitation, as well as
situations that amount to forced labour. This is why, together
with our members, we have introduced the ASSC Workers
Voice grievance mechanism and the "Genba-wise" smartphonePutting into Practice: Executive Interviews

Establishment
Establishment
Establishment
Establishment
of ofa hotline
a hotlineof a hotline
throughofthrougha hotline
throughthetheintroduction
through
introduction
the introduction
theofintroduction
of
ASSC
ASSC
of ASSCof ASSC“Genba-wise”“Genba-wise”“Genba-wise”“Genba-wise”
app
app
as as
one
app
one
of
asof
app
grievanceone
grievanceasof onegrievancemechanisms
ofmechanisms
grievancemechanisms
mechanisms
Emotional
Emotional
surveysurvey
Emotional surveyEmotional"Workstylesurvey"WorkstyleSelf-Check"Self-Check""Workstylefunctionfunction
Self-Check""Workstyle
Consultation
function
Consultation
Self-Check" Consultation
function
Consultation
HotlineHotlinefunctionfunction
Hotline function Hotline function
Users (workers)
Users (workers)
can Users
tapcantheir(workers)
tap their can
Users
tapThis(workers)
theirfunction
This canfunctionallowstap theirThisallowsusers
functiontousers toallowsThisusers
function
ThistosectionThis
allowssectionlists
users
questions
lists
This
to questions
sectionaboutlists
about
questionsThis section
Thisaboutfunction
lists
Thisquestions
functionenablesThisenablesabout
workersfunction
workers
to enables
This
to workers
function to
enables workers tomood formood
theforday.
theAllowsmoodday. Allows
for early
thefor
day.
early
mood
Allowsrecordforfortherecordearly
theirday.working
Allowstheir working
record
for
hours
early
their
by
hours
workingby record
hours
issuestheir
byissues
inworking
the workplace.
in thehours
workplace.
issuesbyIf inany
theof
If workplace.
any
the issuesof the inhave
If theanyconsultations
workplace.
of
have
theconsultations
If via
any
have
chat.
ofconsultations
via
the
The
chat. Thehave
via consultations
chat. The
via chat. The
identification
identificationof factories
identificationof factories
with a withof factories
identificationathemselves.
withthemselves.
aof factoriesthemselves.
with athemselves.
answers
answers
apply toapply
a worker,answers
to a worker,
selectapply selectto answers
a worker,
content
apply
selectcontent
toof atheworker,ofchatthecontent
canselectchat
becan
deletedof bethedeletedchatcontent
can beofdeleted
the chat can be deletedlarge number
large numberof "ANGRY"
largeof "ANGRY"
numberorofor "ANGRY"
large number
or of "ANGRY" oring them
ingherethemenables
hereingenables
athem
consultahere
a consultaenables
ing them
a after
consultahere
itafterhas
enablesbeen
it hasapostedconsultabeen
afterposted(manageit has been(manageposted
after it has(managebeen posted (manage"SAD""SAD"
taps. taps. "SAD" taps.
"SAD" taps.
tion totion
be conducted
to be conductedtionsmoothly.
to besmoothly.
conducted
tion tosmoothly.
ment
be conducted
will
ment
keep
willsmoothly.
akeep
record).
ment
a record).
will keep a record).
ment will keep a record).

Function of the ASSC “Genba-wise” app

app, which serve as elements of supplier management.
If this mechanism is used in a way that gains workers' trust, it
will enable them to communicate their views and complaints,
as well as information on human rights violations, leading toopportunities for remedy. The COVID-19 pandemic has madepeople recognise the importance of this more and more. ASSC
will continue to do our best to pick up the voices of thesevulnerable workers and to improve working conditions.

An environment that supports theactions of Japanese companies
The international trend to promote human rights due diligence
initiatives in line with the UN Guiding Principles on Businessand Human Rights is growing stronger. In the background of thistrend are the formulation of the Guiding Principles on Businessand Human Rights in 2011, the creation of national action plans
mainly in Europe, the enactment of the Modern Slavery Act2 in
the UK in 2015, and legislation being put in place, first in France,
to urge companies to undertake human rights due diligence.
Some globally-operating Japanese companies have alreadyundertaken human rights due diligence, as well as disclosureof their efforts, from the perspective of legal compliance. Japan2

also formulated a National Action Plan in October 2020. If theJapanese government can follow the international trend andinclude legislation on human rights due diligence in this National
Action Plan, I believe Japanese companies will be able to makefurther progress in their initiatives.
Companies will need to set not only medium-term businessplans but also long-term targets in line with the goals of the
SDGs. There is an international expectation that companies
make a backcasting from their long-term targets, set milestones,
and disclose the achievement of their targets. Companies
generally tend to avoid disclosing negative information suchas missed targets, but leading companies in other countries
disclose negative information as well as information on why
they did not achieve the targets and how they will implement
it in the future. With regard to human rights due diligence, it isalso necessary to plan initiatives within the context of long-termgoals.
However, there are limits to what a single company can doon its own. Partnerships with NGOs and other companies
are essential to achieving the SDGs, which are founded upon
human rights. ASSC, through our partnerships with companies,
will continue to support the actions of Japanese companies inbuilding sustainable supply chains.

‌ law that aims to ensure that companies have processes in place to identify and eradicate the risk of human rights abuses, such as forced labour and humanAtrafficking, in their supply chains, and to disclose this information.

35

Putting into Practice: Executive Interviews

Solving problems through "collaboration",making way to the SDGs from thefoundational spirit of our company

Hideya Takashima

President and CEO
Sapporo Breweries Limited

Corporate philosophy
Sapporo Breweries has always aimed to "remain unflagging in ourcommitment and enthusiasm for traditional craftsmanship since
the founding of the original Kaitakushi Beer Brewery, providing
value that enriches the lives of our customers through all of ourinitiatives." This is the management philosophy and raison d'etreof Sapporo Breweries. Sapporo Breweries' strength lies in our
many long-beloved products. I believe this is the result of basing
our marketing style on our management principles that encouragecustomers to discover joy in our products for themselves, without
us pushing our products on anyone.

Our founding spirit, connected to the
SDGs
The start of our manufacturing business was in 1876. At thattime, Sapporo's population was under 3,000, and we started
from scratch in this unsettled land. The business faced aseries of challenges. The idea was to create an agriculturalindustry in the uncharted land of Hokkaido, and to create avalue-added product from agricultural produce, which led tothe brewing of beer. The first Japanese craftsmen, trainedin Germany, imported hops from the USA and malt from
Europe to brew beer. However, as the main objective was topromote agriculture, they began to devise their own methodsof cultivating ingredients that could withstand the cold, snowy
climate. They began to work together with growers on selective
breeding to improve the crops.
By 1880, all barley for brewing was grown in Hokkaido. By
1881, all hops were grown in Hokkaido. Today, the largest
growing area for beer barley is the Kitami Abashiri area in
the Okhotsk region. Because the land there is covered byaccumulated volcanic ash, in the past soil was easily blown
away with the wind. Today, however, the people who cultivate
the land tell us that because they have been working with
Sapporo Breweries for 40 years on improving the soil, soil nolonger flies away even when strong winds blow, and the use ofchemical fertilisers and pesticides have also been reduced.
In short, the spirit of traditional craftsmanship that we havecultivated for more than 140 years since our founding isnaturally linked to the SDGs. This is what we tell our employees.
We also tell them that we should try even harder from here on
to take actions that lead to creating a sustainable society.

36

Selective breeding initiatives for beer barley"To be somebody's first company,
somebody's first shining star"
In order to materialise our management principles, over the
next five to ten years, we aim to become "a brand / company
that creates the future of alcoholic beverages and people withstories which move the hearts of customers". We ask eachand every one of our employees in each respective position
maintain a "Be KAITAKU", or "pioneering” spirit towards "moving
the hearts" of people.
We have made "Be somebody's first shining star" the key phraseof our activities. The "somebody" could be a customer, a family
member, a community member, an employee, a shareholder or
any variety of stakeholder, but something for every individual
employee to decide. Human beings are happiest when we bringjoy to someone. Our social nature is built into our DNA. Make
someone else happy and let us become happy ourselves. Forme, that somebody is our employees. I have always said, "I
won't leave anyone behind", and the SDGs say very much thesame thing.

Response to COVID-19
There is one thing I have been continually telling our employees
since I took over as President in January 2017. It is that healthand safety come first. Work comes after that. I have repeatedly
told them that if they are healthy, they can do anything. And inPutting into Practice: Executive Interviews

the midst of the COVID-19 crisis, this message has remained
the same. We were quick to act. We announced the suspensionof shop-floor activities very early on. This was shortly before thestate of emergency was declared. This pandemic seems to havemade employees realise that the company President actuallymeant it when he said that health and safety come first.

In the past, we used to indicate best-before dates as early or
mid-month. This meant that lots had to be sorted by differing
times of the month, which meant more storage space in thewarehouse. It also meant that trucks spent more time in thewarehouse when they were being loaded. It was more workand took more time.

We also operate under the idea that we do the best that canbe done now, and that there is always something that can be
done. Restaurants are facing very hard times. The nature of
our response is continually changing. Early on, we collected
information on hygiene practices from the Ministry of Health andWelfare's website and shared this know-how with restaurants.
Subsequently, we responded to a variety of situations at
different restaurants and were able to assist in changing
business models. As an example, there is a restaurant district
along a street on the west side of Kanda station, which is
closed to vehicles after 5 pm. One of our sales representatives,
who loves the Kanda area, lobbied the authorities andconverted that street into open-air outdoor seating. What mademe happiest was that he also approached other breweries,
saying that he would talk to the authorities himself. Sapporo
Breweries has been supported by the restaurant market, so wewill continue our efforts to support the restaurants.

In addition to selective breeding our own beer barley, whichis resistant to changes in aroma and taste, Sapporo Breweries
was the first in the industry to extend the shelf life of its beer
by implementing measures to avoid the deterioration of quality,
such as establishing a method of production that does not
expose the beer to oxygen during the production process,transporting at a controlled temperature, and preventing
vibration during transport. A longer shelf life means less waste.
In addition, the labelling of best-before dates with only theyear and month eliminates the need for shelf-life management
beyond the month. We also expect that our improvements inlogistics based on more efficient warehouse operations will leadto shorter waiting times for trucks and less CO2 emissions from
idling.

Priorities in COVID-19 times
In the wake of COVID-19, opportunities and the momentum
to work together are becoming more and more important.
Concerns around "division" (i.e. taking care of oneself is goodenough) exist even in the international context. How can webring about more collaboration? How can we come together
around shared values? We want to create a brighter society, fullof smiles. That is our priority.

Working together on solutions

The key is collaboration. There is the shipper, Sapporo
Breweries, and then there is the logistics company thattransports the product, which is delivered to the retailer, where
the customer buys the beer. Results cannot be produced indealing with logistics challenges unless all actors in the logistics
process work together. When manufacturers work hard,creating a positive chain of events in the industry, everyone ishappy. If everyone shares a little of the burden, extra room ismade for everyone.
Alcoholic beverages are not a necessity, but a luxury. Without apromising and hopeful society, alcohol is not a good choice. We
need a society full of smiles. Based on a spirit of collaboration,
we intend to make many people smile through our corebusiness.

Let us look at logistics from a collaborative perspective. The
challenges of logistics are closely linked to the challenges offood loss.

Reducing food loss by extending shelf life

Ensuring no exposure to oxygenin production process
Flavor-retaining malt

Preventing deterioration inquality with controlledtemperature transport andprevention of vibration

Extended shelf life of beer products* from 9 months to 12 months*Domestically manufactured canned and bottled products

Extending shelf life after reconfirming quality improvement
successes accumulated over many years
Reducing food loss by extending shelf life37

Putting into Practice: Executive Interviews

Creating value through organisational reforms
that bring out the bestin every employee

Jun Aoki

Executive Officer and Chief Social Value Creation Officer
Shiseido Company, Limited

Realising "a Better World" by adding
culture (C) to ESG
Our mission is "Beauty Innovations for a Better World". Beauty
has different meanings in different countries and regions, but
the basic concept is a positive one. We want to make the world
a better place through beauty. With this in mind, a few years
ago we included the phrase "a better world" in our mission.
This "better" has environmental, social, cultural and governancedimensions. Many refer to ESG management, to which we haveadded "culture" to form ESCG management.
In terms of E (Environment), we are committed to reducing ourenvironmental footprint, developing sustainable products andpromoting sustainable and responsible procurement in order tocreate a richer global environment where beauty can be truly
enjoyed. In terms of S (Society), we aim to advance a societythat embraces diversity through respect, and supports lives ofbeauty. In addition to the issues of gender equality and respectfor human rights, we are expanding our activities to empower,
through the power of beauty, the elderly and people suffering
skin problems caused by serious illnesses. The G (governance)
aspect of our business is to ensure that we achieve our
medium- and long-term goals in the environmental and social
fields, even when our management structure changes. In
addition to governance, C (culture) is a mechanism inherent inour organisation. In other words, since its foundation, Shiseido
has long had a corporate culture based on pursuing social
value, and this culture has continually been passed on to ouremployees. If anything, we have taken the ESG perspective for
granted. In addition, as a Japanese beauty company, we havebeen actively communicating our sense of beauty to the world.
This sense of beauty and values pursued within the Japaneseculture, based on virtues such as "truth, goodness and beauty",
involves not only external beauty, but also internal beauty.
I believe that in these current times, when people harbour
concerns over the impacts of the COVID-19 pandemic, climatechange and other issues, it is the right time for each and every
businessperson to adopt a forward-thinking mindset and to step
up work in ESCG management.

Putting "People First" is key to smoothtransition to telecommuting in the
COVID-19 crisis
In the period between the start of the spread of the COVID-19
in Japan and the first state of emergency declaration, we
transitioned to telecommuting to put the health and safetyof our employees first. We were able to make this transition
quickly due to the organisational reforms and other measures
we had previously put in place.
While implementing our VISION 2020, a transformation project
launched in 2015, Shiseido put the idea of "People First", which
we consider to be one strand of our DNA, at the forefront as
we worked on various personnel and organisational reforms
to enable employees to have vitality and a sense of fulfilment
in their work. For example, we renovated our offices to makeemployees feel proud to work for us and to look forward tocoming to work on Mondays. We were changing our ways ofworking by creating an office where people could choose thespace that best suited their work on any given day. Employees
no longer had their own desks, and we reduced the amount of
paperwork that each employee had handled to about one fifth,
an amount that could be fit into a single small locker.

Activity-based Working

38

Putting into Practice: Executive Interviews

Manager training

We also implemented reforms in our human resources system
to help each employee fulfil his or her potential and bring out
their vitality. The biggest challenge facing Japanese companies
today is innovation. In order to create innovation, each
employee must be able to think freely and to bounce ideas offothers without fear of opposition. To do this, we needed tomove away from membership-style lifetime employment andseniority-based ranking systems. Leaving behind a world where
people were too watchful of their surroundings to do anything
innovative, we needed to shift towards a job-based system,a world where people with the skills to fill necessary roles
could do so without restraint and to the best of their ability. In
undergoing this major transformation, we conducted training
for all managers. Having undergone these office renovationsand HR system reforms made the transition to telecommuting
much smoother. Likewise, our measures to improve one-on-one
communication between supervisors and subordinates camein handy in supporting and evaluating each employee whenworking from home.

Collaboration with other companies is
key in the medium to long term
The values and behaviour of consumers will change irreversibly
due to the COVID-19 pandemic. In the medium to long term, I
think there will be four changes.
1) Increased awareness of health and hygiene: "Beauty" willdevelop as part of the concept of health, and we will
be called upon to provide a new kind of value throughcollaboration with other companies and mergers andacquisitions.
2) Value for money: There will be an increased focus on how
to get more value for money by spending less. Surplus in theindustry will fall in the long run, so we need to find creative
ways to increase productivity.
3) M ore online and remote working: business models arechanging, and industries that used to be labour-intensive will
become more digitally driven.
4) Increasing corporate interest in the public good andsustainability: With the shelf life of the competitive advantage
becoming shorter, there are many things that cannot bedone by just one company. In addressing issues like climatechange, we will come to work via partnerships and coalitions
and to learn from the most capable people and companies.
For example, the 30% Club Japan, which aims to increase

the ratio of women on corporate boards to 30% by 2030, is
working together with companies across Japan. Within the
Keidanren, individual companies and industries are being
called upon to break down barriers and work together
to tackle similar issues by exchanging best practices andmentoring each other. We also need to keep up to datewith the latest practices of leading companies overseas tofill in the gaps in our own company. Interestingly, the use ofdigital technology during the pandemic has actually made itmuch easier for CEOs to meet with each other. Collaboration
and alliances between companies will become stronger andstronger.

Pursuing both economic and socialvalue
In 2020, Shiseido received the Social Value Award at the Nikkei
SDGs Management Grand Prix. In addition to the "People First"
programmes mentioned above, Shiseido's culture of placing
importance on social value and our philosophy that company
and business activities are made possible by sustainability
in society, contributed to this recognition. The growth of acompany can only be sustainable when a virtuous cycle exists
in which economic and social value are mutually enhanced.
While economic value is necessary for the survival of a business,
we believe that social value is what makes a company neededby society. For instance, sustainability issues and the SDGs are
becoming increasingly important factors in customers' choicesof products and services. Likewise, employees increasingly wantto join a company not because it is a trillion-yen company, but
because it provides some value to society. I believe that if acompany does not properly engage in sustainability practices,
the company's existence itself will not be tolerated.
When we first embarked on our organisational reforms, westarted by creating a video representation of what kind ofcompany we wanted to be. Transforming a company meanschanging the organisation, but the truth is that people do notchange so easily. It is hard enough to change yourself, much lessother people. However, while it is not easy, you can awaken
the innate qualities of the people in an organisation. People do
adjust to the atmosphere of an organisation. We believe thatchanging the atmosphere of a place, creating a new place, istantamount to a company transformation.

39

Putting into Practice: Executive Interviews

Enhancing corporate value and public value evenduring the COVID-19 crisis

Kazushi Shimizu

Representative Director and President & CEO
Sumitomo Riko Company Limited

Sumitomo Riko's vision
The Sumitomo Riko Group has set our corporate vision to bea "Global Excellent Manufacturing Company," a corporationthat contributes to the safety, comfort, and environment ofpeople, society, and the Earth. In May 2018, we released the"Sumitomo Riko Group 2022 Vision (2022V)" as our mid-termbusiness vision. Under the 2022V plan, the Group aims touse its core competencies in “polymer materials technology”
and “comprehensive evaluation technology” to achieve further
growth in our existing businesses, as well as to research anddevelop materials and technologies that create new value,
aiming to create social value by developing products andservices in the four areas of automotive (mobility), infrastructureand housing environment, electronics, and healthcare. We
believe that the creation of social value is only possible byimproving both corporate value (financial targets) and public
value (non-financial targets). In 2029, our Group will celebrateits 100th anniversary, and we aim to be an indispensable part ofsociety at that time. Thus, we ask our employees to approach

their work in the spirit of our Management Philosophy as wellas "Shinyo-kakujitsu3," "Fusu-furi4" and "Banji-nissei5" embraced in
the Sumitomo Spirit. We aim to always be worthy of trust andto be sincere in all our businesses.

Our growth and contribution to society
during the COVID-19 pandemic
In terms of the business environment, in July last year weannounced our annual earnings estimate at a loss of 7.2
billion yen in operating profit. However, when we published
our financial results in February of this year, we forecasted arecovery to an annual operating profit of five billion yen. Thiscan be attributed to the fact that we did not have to carryout any large-scale personnel cuts, but rather shut down
the company when there was no work to be done, allowing
everyone to take a break. In addition, we took the opportunity
to rethink improvements in factories that we had been unable
to do in normal times, resulting in improved productivity andMechanism for Creation of Social Value

3
4
5

40

‌“Place importance on integrity and sound management.”“Do not act rashly or carelessly in pursuit of easy gains.”“Do your sincere best, not only in business, but also in every aspect of your life.”

Putting into Practice: Executive Interviews

ways of working. The improvements are an accumulation of
extremely small steps. For example, we always talked about
the need to completely separate the paths of forklifts frompeople to ensure safety in our factories, but changing factory
layout was very difficult while production continued. So, we
took the opportunity to stop everything and start all overagain. In the business unit, most of our employees who wereposted overseas returned to Japan, but advances in IT and thedevelopment of local staff’s capability kept work flowing. Our
first quarter results, which were our biggest worry, were readyon time. From the standpoint of business continuity throughout
the supply chain, we once again thoroughly enforced rules
throughout all companies in accordance with the Subcontract
Act. At the same time, even when we had to change theproduction site of one of our overseas locations due to thecontinuous shutdown of operations, we were able to ship
quality-assured products from the new location. I feel that thissuccession of events has led to considerable growth.
One of our contributions to society during the COVID-19 crisishas been our Body Motion Sensor, a unique technology thatenables the simultaneous measurement of vital data such asheart rate and respiration. Using this technology, a research anddevelopment team including Osaka University are developinga system to detect early signs of respiratory deterioration.
There is great concern over sudden changes in the condition ofpatients with COVID-19 infections. With this system, it will bepossible to monitor patients online at all times, allowing thosecaring for patients to respond quickly without having to keep
making rounds of the hospital. Alternatively, with increasingstrain on the number of hospital beds across the country, thistechnology could lead to safer recuperation at lodging facilities
or at home. This technology contributes to reducing the risk ofsevere infections due to sudden changes in condition and also
helps to reduce the risk of infection among healthcare workers.
These efforts have been the focus of our contributions related
to the current COVID-19 pandemic.

In anticipation of support frominvestors and government
Unlike the automotive sector, which is our mainstay, thehealthcare sector into which our Group has newly entered, is
not yet at a stage where sufficient profits can be generated.
However, we are operating our business with the hope ofcontributing to society and believe that we must be actively
involved in creating public value through our business. I
hope that investors will recognise these efforts and give us
positive ratings. I would also like to emphasise our strong
commitment to environmentally-friendly vehicles in theautomotive sector. We manufacture fuel hoses for petrol cars,
and people sometimes say to us, "What will happen when
everyone switches to electric cars and your hoses aren't
needed anymore?" However, even the ultimate eco-car, run
on a fuel cell, will still need hydrogen fuel hoses to carry thehydrogen. Likewise, electric cars, which are mainly motor andbattery powered, of course use a lot of anti-vibration rubber
to provide stability and comfort. We also offer a wide range oftechnologies, products and solutions, including a new range of
products for battery cooling. In consultation with our customers,
car manufacturers and suppliers, we strive to find ways to makecars more comfortable to drive, lighter, more fuel-efficient andmore environmentally friendly. We would like to highlight eachone of these activities for investors’ further understandings.
In order for eco-friendly vehicles to become widespread, widescale infrastructure, such as charging stations and hydrogenstations, is required. This is an area where we would like to see
a strong commitment from the national government. In Japan,
regulations are so strict that compared to the one billion yen
required to set up a single hydrogen station, a petrol station
can be built for around 100 million yen. A petrol station used
to cost about one billion yen, but became much cheaper to
set up once they were more common. China is making a lot ofprogress under the leadership of its government, and if Japan
does not look ahead and make the necessary changes, I am
worried that we will be left behind in the world.

Looking to the future

Body Motion Sensor that measures biometric data such as heart
rate and respiration

Under the Sumitomo Spirit, which is the foundation of ourGroup's management, we focus on creating social value by
working to provide solutions to social issues through ourbusiness activities, and by engaging in new business with aview to what the future will bring. The COVID-19 pandemic
has changed the world dramatically, and demand has alsochanged considerably. As such, we have begun to consider
new strategies for our next mid-term business vision. We are
not yet at a stage where I can talk about specifics, but we haveno intention of changing our basic philosophy of combining
corporate value with public value, and we are discussing thedirection in which the business as a whole should move while
maintaining this balance. For example, we intend to strengthen
our efforts in decarbonisation and introduce these types of
initiatives into our activities overall.

41

Putting into Practice: Executive Interviews

Listening to and working together with community
members to solve problems

Yuki Kawahara

President
Taiyo Jyuken Co. Ltd.

Being the person that comes to mind
when help is needed
Taiyo Jyuken is a construction company based in Yokohama,Japan, with solar power and the home renovation business as
our mainstay. Our mission is "to enrich our customers' homes
through our work, just as the earth is enriched by the blessingsof the sun". We strive in our work to make a good impression
on our customers and to make them feel happy that they chose
Taiyo Jyuken. That is why we believe in putting forth +1% effort
on top of our one hundred percent.
We aim to be a company that is needed by the community
and to contribute to society through our core business. In
2013, we were awarded the highest level of certification as
a company that contributes to the local community by thecity of Yokohama. Furthermore, in 2019, we were selected as
one of only five companies to receive "Premium Certification",
an honor even higher than the highest level of certification.
Our contribution to the SDGs through the installation of solar
panels and utilisation of vacant houses was what led us to thisrecognition.

Opening up a part of our company to the community as an"Urban Design Centre" is another reason why we have a strong
connection with the local community. As we became more
integrated into the town, I felt strongly about providing a place
where townspeople could gather and relax, so we opened
up part of our office. It is also used by local administrationand neighbourhood associations. When we opened up ourcompany, people began to bring up problems faced by thetown, and we began to work together to find solutions.
Nowadays we get a lot of enquiries, such as on the day aftera typhoon. We are very grateful we are the people who cometo mind, and who people contact when problems arise. Now,
solutions to the problems of the local community have taken
shape in the form of our vacant house project.

Utilisation of vacant houses fordecentralised disaster management
during the COVID-19 crisis
I often go to various places as a disaster recovery volunteer.
In Kumamoto, I witnessed problems like a collapsed local
community hall that was intended to be a community
evacuation centre but could not be used, and evacuation
centres that were located too far away for people to reach.
While noticing the difficulty of evacuation and the vulnerabilityof homes, I also knew that the number of vacant houses wasincreasing. Thus, the idea of turning vacant houses into bases

The opportunity to begin contributing to the local community
came in our second year of operation. The business environment
was harsh, and when I reflected on the situation, I realisedthat although we were a local company, we did not have asingle job in the local area. I felt something
had to be done, so I started to take part inlocal clean-up activities and neighbourhood
Preparing for earthquakes
associations. Gradually, the people of the town
began to recognise me. I also began to notice
the problems faced by the local community andgot involved in providing solutions through ourbusiness. We learned that to get involved withthe community, we must first go out and get toknow the town ourselves. Currently, I serve asa team leader of the Yokohama South team ofGreen Bird, a certified non-profit that organises
community clean-up activities. I am also active asa board member of the certified non-profit Shimin
Sector Yokohama, the representative director of
the YOKOHAMA Living Lab Support Office, anda district coordinator for the Yokohama SDGs
Earthquake-proof shelter “GOU-KEN”
Design Center.

Vacant house

Community evacuation site
Solar panel
modulesCreate×

Miyata Iron Works Co., Ltd.

(sturdiness)

Hybrid power
conditioner

Save

See

Visualisation
unit

Lithium-ion
battery

Taiyo Jyuken Co., Ltd

Turning vacant houses into bases for disaster prevention

42

Taiyo Jyuken Co., LtdPutting into Practice: Executive Interviewsfor disaster prevention was born. If vacant houses could be
used as disaster prevention bases, they would be particularly
useful for a decentralised evacuation during the COVID-19
pandemic and also as emergency shelters for pets. Accordingly,
in collaboration with a local company, we installed solar panels
and an earthquake-proof shelter at a vacant house. We havealso done the same in the vacant houses that we rent, providing
a decentralised source of energy at the time of disasters.
The ground floor of the "YWai Hiroba", which serves as an
example of utilisation of vacant houses, serves as a community
space and is free of charge for the local community to use. The
second floor is occupied by businesses that want to connect
with the community and that pay us rent for the space. We
once did a DIY project with local people using this community
space. This led to the creation of a new activity during the
pandemic that we called "Solar Crew". The aim of the projectis to renovate vacant houses across Japan hand in hand withlocal people, converting these houses into spaces for learning,playing, working and lodging. We involve local people inthe creation stage (SDG Goal 12: responsible consumption
and production), and work together to create "sustainablecommunities" (SDG Goal 11).
On the other hand, the pandemic has made it more difficult to
install solar panels on welfare evacuation shelters. Originally,
we had set the goal of installing solar panels at 432 welfare
evacuation shelters in Yokohama by 2030, contributing
to 19,440 kW (12.15% of the total target for solar panel
installation in Yokohama), and we involved people withdisabilities in the installation. However, during the COVID-19
pandemic, even relatives are unable to visit family members
in welfare facilities, and we have been unable to continue
operations. In order to cover these losses, we began to workwith new power producers and suppliers on installations underthe "Zero Yen Solar" scheme led by Kanagawa Prefecture.
The "Zero Yen Solar" scheme allows customers to install solar
panels for zero yen and purchase the electricity produced. We
now have a vacant house with solar panels and an earthquakeproof shelter installed where tours are conducted. In the future,
we intend to further promote our business in making homes
safer.

Taking our work to the world stageand expanding our partnerships
When our company started working on the SDGs, we wereconnecting our existing activities to a few of the SDGs.
However, when asked about our company goals for 2030, wewere unable to answer. That is when I started to seriously study
the SDGs. The difficult part was linking the SDGs, which areglobal goals, to our company's goals. However, after reading
the city of Yokohama's action plan on global warming, wewere able to identify the city's solar goals and link them to ourcompany goals. Then, we were able to hold discussions among
employees and develop a 10-year business plan.
In 2019, we took to the stage at a side event of the UN Highlevel Political Forum on Sustainable Development in New
York to share our SDGs efforts with the world. It was a great
opportunity for us to review our initiatives to date in depth,
and it gave our employees a boost of confidence. The peopleof our community were very pleased about this presentation.
Likewise, we were able to expand our network with like-minded
companies.
We would like to continue to work closely with the town andlocal administration. In particular, we would like to work withlocal care homes and social welfare councils that are awareof the community's problems and activities. In our energy
business, we have set goals that we cannot achieve on ourown, so we intend to work hand in hand with other businesses
in Yokohama. We believe the goals for solar energy set by the
local administration will be achieved by companies like ours.
We are grateful if the administration shares information on our
activities because this leads to the greater credibility of ourcompany.
To date, we have communicated our goals and progress inrelation to the SDGs in our SDGs Report. From 2020, we
began holding an annual "Local SDGs Conference" to engage
in dialogue with our stakeholders. We will continue tocommunicate our efforts to the world through our reports andconferences, while remaining close to our local community.

Energy project division Toward 2030
Target 7.2

Target 8.5

By 2030 achieve full andproductive employment anddecent work for all women andmen, including for young people
and persons with disabilities, andequal pay for work of equal value

Decent work and Creation
with Solar Power(Welfare Evacuation Shelters)

36 Welfare
Evacuation
Shelters
2019 (10th term)

By 2030, increase substantiallythe share of renewable energy inthe global energy mix

Indicator 7.2.1

Renewableenergyshare in the total final
energy consumption

432 Welfare evacuation
shelters x 45 kW= 19,440 kW(Contributes to 12.15% of
Yokohama's solar installation target)

Indicator 8.5.1

Average hourly earningsof employees by sex,age, occupation andpersons with disabilities"Working for everything"
Target 17.16

Enhance the global partnership for sustainable
development complemented by multi-stakeholder
partnerships that mobilise and share knowledge,
expertise, technologies and financial resources tosupport the achievement of sustainable
development goals in all countries, particularly
developing countries

2030 (22nd term)

2030 targets for energy projects and related SDGs

43

Putting into Practice: Executive Interviews

Top-down and bottom-up approaches
to ESG challenges

Katsuhiro Teramoto

Representative Director, President & CEO
Nabtesco Corporation

ESG initiatives in The Nabtesco Way
Nabtesco was born from the merger of Teijin Seiki and Nabco
in 2003. Nabtesco's business expands to a wide range offields, including industry, daily life and the environment, witha focus on motion control technology that moves and stops
objects with precision. Precision reduction gears for industrial
robot joints, brake systems for railway vehicles, flight control
actuation systems for aircraft flight control, travelling units
for excavators—many of our products function in less visible
areas, but their reliable performance supports the safety,
security and comfort of people around the world, as well as theinfrastructure of our society.
In 2012, ten years after the merger, we established "The
Nabtesco Way", consisting of our corporate philosophy, theNabtesco Promises and our Action Guidelines, in order toenhance the cohesive power of our organisation, which had
expanded along with business growth. The Nabtesco Way is acode of conduct shared by each and every employee that forms
the basis for approaching work and decision-making. Throughits implementation, we seek to meet the expectations of our
stakeholders. In our medium-term management plan, whichbegan in 2017, we have made "focus on solving ESG issues"
one of our commitments. Specifically, we have established ourmateriality and have been working on solutions for each ofthem.

One good example of one of our initiatives is our response
to climate change. Alongside setting targets for reducing
CO 2 emissions in 2020, 2030 and 2050, based on 2015
emissions, we have established concrete measures, such as
the introduction of solar power systems. Progress towards ourtargets, along with other environmental indicators, is reported
monthly at executive board meetings. Furthermore, with the aimof becoming a resilient organisation
for sustainable growth, we place
great importance on BusinessContinuity Power (BCP). As such,
we have promoted acquisition of
Resilience Certification (Certification
for Organisations Contributing to
National Resilience) for all domestic
Group production sites. We also offer
a diverse array of training menus,
including BCP awareness seminars
and development courses, so thatAn example ofour clients can benefit from the BCP
resilience certification
know-how we have acquired.
We try to quantify these efforts as much as possible so thatthey can be visualised as outputs. These are some of the ways
in which we are working to "focus on solving ESG issues".

[Corporate Philosophy]
The Nabtesco Group, with our unique motion control
technology, will provide safety, comfort and a sense of
security in daily lives as well as any form of transportation.
Corporate
Philosophy
Our Promises

Action Guidelines[Nabtesco's Promises]
1. V alue close communications with our customers
worldwide
2. Value each individual’s spirit of challenge and innovation
3. Continue to expand our business and profit
4. C ontinue to reinforce our sense of ethics and highly
transparent business activities
5. Value the environment and promote harmony with local
communities and cultures

The Nabtesco Way Conceptual Diagram, "Corporate Philosophy", "Nabtesco's Promises".

44

Putting into Practice: Executive Interviews

Awareness of the SDGs
What are the SDGs? From the perspective of Japan, forexample, Chapter Three of the Japanese Constitution, "Rights
and Duties of the People", already contains elements of theSDGs, such as non-discrimination on the basis of race, creed,gender, etc., rejection of slavery, and freedom from poverty. Of
course, the constitution does not mention CO2 emissions as it
is more than 70 years old. However, we recognise the SDGs to
be an extension of the ideas that Japanese people have longprotected and nurtured. They also add in contemporary issues
and giving us new insights. I believe that the SDGs express thewill of the people of the world regarding how we are to live on
one planet.

COVID-19 as the impetus for improving
ways of working and BCP
In the early days of the pandemic, we did not know how the
COVID-19 was transmitted or how to respond to it. We not
only encouraged hand washing and wearing masks, but also
adopted a rotating work scheme and encouraged employees
to work from home as much as possible. Even after the firststate of emergency ended, we did not immediately call off
telecommuting. Instead, we set up a response policy based on
maintaining management functions by striving to continuously
provide products and services, while placing the highest
priority on the safety and health of all stakeholders, including
employees, customers and suppliers. This policy continues
today. Alongside this policy, our move to online operations was
accelerated, but the transition has been smooth because we
had already been moving online in various ways as part of ourwork style reform initiative started in 2017. This move was apart of the ways of working reforms in our company and had
nothing to do with our COVID-19 response. It is not so muchthat COVID-19 changed our approach, but rather that it proved
we were moving in the right direction with our reforms.
We also created a smart bonus system to reduce overtime
work. The costs saved by reducing overtime work are returnedto the employees who cooperated in the reduction, rather thanconsidered company profit. We are now seeing the results of
our work style reforms, such as established telecommuting,overtime reduction and increased use of paid leave.
When it comes to business continuity planning (BCP), we hadoriginally envisioned natural disasters such as earthquakes,
floods and other water-related disasters. Even as South East

Asia was facing issues with malaria and dengue fever, the factthat we were not paying attention to infectious diseases has
been a point of reflection for us. Based on our experiences
during the present pandemic, we incorporated infectious
diseases in our BCP planning, including what should be done
first if something similar happens again. The pandemic has
also given us the opportunity to rethink our BCP in order to beprepared for any eventuality.

Top-down and bottom-up responses
At the beginning of the Suga administration, the Japanese
government declared its aim to achieve carbon neutrality by
2050 towards stopping temperature increase below 1.5℃ .
Applying this to Nabtesco, a simple calculation shows that
we need to reduce our CO2 emissions by more than double.
We have a long-term target for a 2℃ scenario, but I have alsoordered a simulation of the investment and workforce required
to achieve 1.5℃ target. The results of this study will be available
by about the middle of 2021. We feel that management needs
to be very conscious of the issue of climate change.
At certain times, such as in the case of our climate change
response, I give directives. However, in many cases, such as on
human rights issues or BCP, various departments or employees
become aware of an issue and raise it from the bottom up.
Recently, based on the opinion of one employee who wanted
to do something tohelp society, we began
producing face shields
for medical professionals.
This is an example ofusing our 3D printertechnology to contributeto the community,
led by the Production
Innovation Division.
I want all of ourFace shield
employees to feel
confident that all the work they do contributes to society.
Without the parts and components that we make, trains andplanes would not run and our social infrastructure would cometo a halt. We provide products that are indispensable to society
in the spirit of ensuring the safety and security of society. We
will continue to work together to create a better world byapplying our technology and know-how to solutions for oursociety.

45

Putting into Practice: Executive Interviews

An exciting future through the Digital Commons

Akiyoshi Hiraoka
President & CEO, CHO
Nihon Unisys, Ltd.

The corporate philosophy of the Nihon Unisys Group is to"work with all people to contribute to creating a society thatis friendly to people and the environment". This year marks
the 62nd anniversary of our founding. As a systems integrator,
we are proud of the contribution we have made to Japan's
information society and to providing solutions to our customers'
management issues.

Until about 10 years ago, before we started working on forming
business ecosystems, we were more passive, listening to ourcustomers' requests and developing computer systems for them.
Now, by advocating for business ecosystems, we are initiating
the work ourselves, which is very exciting. This excitement isbeing passed on to our customers and other participants in thebusiness ecosystem, leading to a number of new initiatives.

Contributing to society through a"business ecosystem"

Social issues that await solutions andareas of focus

In recent years, we have advocated the idea of "businessecosystems". This is based on the idea that the Nihon Unisys
Group can only do so much on its own, but that by creating an
ecosystem, we can achieve great things. By bringing together
the strengths of a wide range of companies from different
industries and working together, we are able to take on thechallenge of solving major social issues that no single company
or organisation can achieve alone.

Our focus is in areas where solutions to social problems areneeded, and where we can make the most of the assets (e.g.
capital, know-how) of the Nihon Unisys Group, as well as
the assets of participating stakeholders. To be more specific,
every year Japan suffers disasters that are said to occur only
once every 50 or 100 years. Rather than dealing with "climatechange", it is necessary to deal with the "climate crisis". It is also
important to create resilient communities where people can live
safely and securely even in the face of an epidemic. As regional

The Future Vision of the Nihon Unisys GroupTo create a sustainable society, we want to be a company thatprovides global digital commons that contributes to solvingsocial problems.

FutureUp to 2030

Provider of Digital
Commons
Up to 2025

Solve social issues

Hands-on company insocial implementation

Sustainable society

Solve social issues

Present

Business ecosystems that
address social issues
Addressing social issues
through business(creation of social value and economic value)

Business
ecosystem

More business
opportunities

Gain trust from
customers and society

Ideals/shared values

Strengthened relationships
with customers andbusiness partners
Materiality (important CSR issues)
ESG Environmental,
Social and Corporate
GovernanceSuper-smart society
Society 5.0

Sustainable
Development
Goals SDGs

The Future Vision of the Nihon Unisys Group46

Putting into Practice: Executive Interviews

development is not leading to regional revitalisation, addressing
the inequality between urban and rural areas is also a major
challenge. At the heart of our work is the desire to create adiverse and inclusive society where everyone can express theirindividuality and live with respect for others. We are drawing up
scenarios for the future, looking ten years ahead to 2030, thedeadline for achieving the SDGs.

Healthy sense of crisis and excitement
about the future as the driving force
The driving force behind the concept of a business ecosystem
is a sense of crisis and the desire to use this sense of crisis as aspringboard to do more exciting work.
As a systems integrator, we typically take action upon customer
request. On the other hand, IT and digital technologies can not
only be used to change business processes, but also to provide
new added value. We envisaged a situation where the customer
does not have an answer, meaning they have no way of making
a request to us. If customers are not coming to us with requests,
we realised that if we could show them some possibilities first,
we could inspire each other and challenge ourselves to create
new added value together. This kind of work is more exciting
for both our employees and our customers.
This was around the time when the words "start-up", "venture"and "open innovation" were emerging. Up to that point,
companies carried out thorough risk checks to ensure that theywould never fail. While this may be necessary, it is not exciting.
It is more exciting and easier to take on challenges when weallow room for failure and learning from failure. We often saythat the KPI for success is the number of failures. The corporate
culture has changed, as has the way our customers have cometo view us. They used to think that we performed our work
diligently enough, but something was missing. Now they see us
as a company that is working to stay a half a step ahead, andthat works with them.

Using the power of digital to change theworld, even during the COVID-19 crisis
In the process of reforming our corporate culture, we fosteredindependence and initiative. The proposal-oriented businessstructure that resulted was a key factor in our response to
the COVID-19 crisis. Our employees took the initiative to dowhat they could to help society and our customers who were
suffering as a result of the pandemic.
Not only do we provide telecommuting tools free of charge, but
we also provide free visualisation tools that can monitor what
is happening in various places. These are helping to support
airports, companies and other sites where disruptions haveoccurred. These tools can also be used in the event of otherdisasters unrelated to COVID-19.
We also created a system to distribute coupons digitally, using
blockchain, between smartphones. Restaurants were facing adifficult situation due to stay-at-home requests. We aimed tohelp with the shortage of funds by providing restaurants andhotels free of charge with a mechanism to distribute electronic

tickets for pre-paid reservations. The same mechanism isalso being applied to facilitate advance bookings to avoid
overcrowded situations.
We also observed difficulties faced by essential workers, suchas those working in supermarkets, during the stay-at-homeperiod. We thought that a system for placing orders using
AI would help them in their work and also reduce food loss.
Likewise, during the pandemic, we have sped up work on amajor project of the Cabinet Office to create a platform for
medical workers. Our employees are taking the lead in these
initiatives.

Why ESG investment?
ESG investment has been around for a long time, but it is notabout attracting investment by applying a CSR/CSV way of
thinking as is often thought. ESG is important because it isconnected to the SDGs and is about creating new markets. The
question is whether or not companies can discover business
opportunities with ESG. Investors essentially look not only at thestrength of the company, but also at the growth of the market
itself, and invest where the positioning is promising. Companies
that do not position themselves in this way will be forced tooperate in shrinking markets or markets with penalties, and will
be abandoned by investors.

An exciting future that we "WANT"
Going forward to the year 2030, the target year of the SDGs,
we would like to contribute to realising a sustainable society
by further developing business ecosystems and providing aplatform that can visualise, show and match services, products,
companies and users that enable solutions to social challenges
through the power of digital technology, as "digital commons".
At the same time, we believe that providing solutions to social
problems and the SDGs will be difficult to achieve if we view it
as something we "MUST" do.
It is more exciting and rewarding to engage in daily work with asense of "I want to do this" than a sense of "I ought to do this".
In the same way, we want our efforts to solve social challenges
to grow out of something we "WANT" to do, not something
we "MUST" do. When people engage in activities with passion
and enjoyment, amazingly many people are drawn in to work
together. When we work together to solve social issues andcontribute to society with a sense of excitement, behaviouralchange also takes place. I believe that each and every one ofus changing our behaviour can be a major force for change insociety. This is why I hope that as many employees as possible
will be inspired to approach their work in this way.
Let us find out what we "WANT". Let us have a corporate
culture that enables us to make what we “WANT” a reality. If
one company cannot do it alone, then let us involve various
companies to create a business ecosystem and develop it into
the digital commons. If we let our "WANTS" shine through andlight our way, we can create an exciting future where everyone
lives happily.
This is the message I always give to my employees.

47

Putting into Practice: Executive Interviews

Detailed corporate disclosure essential forinvestment:
reporting as a learning opportunity

Michiyo Morisawa
Japan HeadPRI Secretariat

ESG during the COVID-19 crisis
In terms of the impact of the COVID-19 pandemic on ESG
initiatives, social issues, the "S" within ESG, have begun toreceive more attention. There are gaps between companies,
even within the same sector, that have been able to respondand those that have not, in terms of how they utilise theiremployees and the work environments in which employees areplaced. Further, it is important not only to be able to respond,
but to be able to respond quickly. The ability to respond whensomething happens is linked to the evaluation of a company's
future growth and crisis management capacity.

Green recovery from the COVID-19
crisis and commitment to Net Zero
Meanwhile, the EU and other countries are promoting a postCOVID-19 "green recovery", which incorporates green elementsin economic remedies and other measures. In the backgroundof these efforts are commitments already made by the UK and
the EU in 2019 to be carbon neutral by 2050, the so-called
Net Zero commitment. The European Green Deal was alsoannounced in December 2019. The European Green Deal isa climate change policy designed to bring about behaviouralchange in all stakeholders towards net zero. It will likely lead
to behavioural change not only for companies, but also forinvestors.
In October 2020, Prime Minister Suga declared that Japan will
be carbon neutral by 2050, signaling a move in the directionof a decarbonised society. Likewise, measures have been
proposed by various ministries and agencies towards realisinga decarbonised society. It will be important not only to develop
new technologies, but also to make use of existing technologies
and to promote renewable energies. The direction investors
move in is also important. Where Japan's limited assets can bedirected and utilised will be important as well. Japan does nothave an adequate mechanism for asset owners to invest in thecreation of a decarbonised society. We need to change this.

Long-term investments that promote
corporate sustainability strategies
Long-term investment provides important support for companies
with long-term sustainability strategies in place. A company's

48

financial information, along with corporate ESG information, isused to assess its sustainability and growth. Materiality (keyissues) is a dynamic and evolving concept. Materiality changes
due to changes in laws and policies, risk-related changes,
and changes in societal expectations and norms. Engagement
happens when an investor, after having invested in a company
thinking it was a good investment, approaches that company
having judged that it is not keeping pace with changes. This
engagement takes place when the need arises to suggest
improvements in the corporate behaviour of an investee, toimprove potential returns or to reduce risk.
As I mentioned, materiality is a dynamic concept, evolving
with changes in law, policy, societal expectations and norms.
With the creation of the Stewardship Code and the Corporate
Governance Code, materiality has changed significantly. It isevolving even further after the declaration of decarbonisation
policy. For long-term investors like pension funds and insurancecompanies, looking at ESG issues is a way to manage risk andgenerate income. It is important to consider the future of thebeneficiaries who pay into pension funds and to look at thistype of responsible investment and ESG from the perspective of
fiduciary responsibility.

Detailed corporate disclosure isessential
In order to achieve a decarbonised society, it is important that
operating companies establish and implement mid- to longterm reduction targets in their business strategies. In the areaof climate change, publication of the TCFD recommendations
has created a globally-shared framework for disclosure. In
order for stakeholders to be able to assess how companies areplanning for the transition to a sustainable economy, disclosure
with a more long-term perspective, and in line with TCFD
recommendations, is ideal.
Likewise, investors must possess the capacity to evaluate
their investments to determine whether they are headed
towards decarbonisation, so educating them on the impactsof climate change is important. Investors and banks need tobe knowledgeable, consider scenario analysis as part of theirinvestment portfolio and investment and lending decisions,and engage with operating companies. This requires operatingcompanies to report accurately on their emissions. Mandatory
disclosure is required in addition to voluntary disclosure by

Putting into Practice: Executive Interviews

companies. In the UK, companies listed on the London Stock
Exchange have been required to report their emissions in theirannual financial reports since 2013.
In other countries, companies and investors have made progress
as a result of policies and regulations, and Japanese companies
with overseas investors have responded accordingly. However, I
hope that the number of companies that accurately report theiremissions and disclose their reduction targets will increase,bearing in mind that Japanese investors are also taking action.
This is an issue that urgently needs to be addressed.

Medium- and long-term planning of the
Principles for Responsible Investment(PRI)
The Principles for Responsible Investment (PRI), which drive
ESG investment, were launched in 2006 as a framework to
encourage institutional investors to invest for the long term. We
believe that taking ESG issues into account in the investment
decision-making process can drive value change. Ten years
after its launch in 2016, the PRI announced its plans for the
next ten years, and we have now reached the halfway point in
our activities. Broadly speaking, there are three main areas ofactivity.
We believe in the importance of "responsible investors", andtherefore are working to empower asset owners. We see
the need to support the incorporation of ESG issues, foster
a community of active owners and increase the number ofinvestors taking on leadership roles.
The existence of "sustainable markets" is important, as theychallenge the barriers to a sustainable financial system. We
also believe that ensuring meaningful data is widely available inmarkets is essential.
Concerning "a prosperous world for all", in 2015, two major
frameworks with global implications were established:
the Sustainable Development Goals (SDGs) and the Paris
Agreement. The PRI believes it is important to work towards
achieving these goals, and addressing them is one of our key
priorities for the next ten years.

Hope for public pensions following
GPIF
The role of public sector pensions is important in promoting
initiatives in Japan. GPIF becoming a signatory to the PRI and
its ESG initiatives have had a significant impact on Japanesecompanies. Unfortunately, however, for quite a long time,
there have been no other public pension funds to follow the
GPIF. Pension funds have large assets and are operated froma long-term perspective; thus, they can wield major impacts if
investment mechanisms change.
In December 2020, the Federation of National Public Service
Personnel Mutual Aid Associations announced its intention

PRI "Blue Print" vision for the next ten years

Responsible Investors• Empower asset owners• Support investors incorporating ESG issues• Foster a community of active owners• Showcase leadership and increase accountability• Convent and educate responsible investors

Sustainable Markets• Challenge barriers to a sustainable financial system• Drive meaningful data throughout markets

A Prosperous World for All• Champion climate action• Enable real-world impact aligned with the SDGs

The launch of A blueprint for responsible investment in 2017

PRI "Blue Print" and the six principles

The Six Principles for Responsible Investment
1. We will incorporate ESG issues into investment analysis
and decision-making processes.
2. We will be active owners and incorporate ESG issues into
our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by theentities in which we invest.
4. We will promote acceptance and implementation of the
Principles within the investment industry.
5. We will work together to enhance our effectiveness in
implementing the Principles.
6. We will each report on our activities and progress towards
implementing the Principles.
PRI "Blue Print" and the six principles

to promote ESG investment. This is a welcome move. if
other pensions are to change, the will of the people is key—
the people who will receive these pensions in the future.
We need to get people who are currently paying into theirpensions interested, but the challenge is the lack of widespread
education on finance and investment in Japan. Each one of us
must think about what kind of money movements are necessary
to achieve the kind of world we aim for. I hope that membersof the corporate sector will take a similar interest in corporate
pensions.

Reporting as a learning opportunity
We often hear about resistance to reporting and the burdenof it, but companies can make new discoveries in the processof reporting. This is true not only for companies, but also forinvestors. Transparency is enhanced when investors endorse
and sign the PRI and engage in reporting. There needs tobe more focus on what investors are doing across Japan.
Responsible investment is essential to tackle environmental
challenges and move towards a society that can achieve theSDGs. We need money to go to companies that work hard, andwe need to put in place the mechanisms to make this happen.

49

Annex:Overview of the Sustainable Development Goals
Report 2020

The original text is available here.

50

Overview

End hunger, achieve food security and improved
nutrition and promote sustainable agriculture

End poverty in all its forms everywhere
Before Covid-19

Food insecurity was
already on the rise

Before Covid-19

The world

was off track to

end poverty by 2030

21.3% (144 million)of children
under 5
ARE stunted

twice as likely to beliving in extreme poverty

2015

Population affected

as adult workers (2019)by moderate or severe

6.9% (47 million)

food insecurity

8.2%
6%

2010

likely to worsen

Young workers are

15.7%
10%

Stunting and wasting

among children arE

2019

2030

22.4%

25.9%

2014

2019

of children
under 5
ARE AFFECTED
by wasting(2019)

Covid-19 Implications

Covid-19 Implications

The pandemic is an additional

COVID-19 causes

threat to food systems

the first increasE

4 billion people

in global poverty in decades

CLIMATE SHOCKS

did not benefit
from any form ofsocial protection in 2016

+71 million people are pushed

into extreme poverty in 2020

$23.6 BILLION

Natural disasters
exacerbate poverty

Conflict

LOCUSTcrisisdirect economic losses(from 63 countries in 2018)

The Sustainable Development Goals Report 2020

Small-scale
food producers
are hit hardby the crisis

comprising 40%–85%
of all food producers
in developing regions

COVID-19

6

7

Ensure healthy lives and promote
well-being for all at all ages

Overview

Ensure inclusive and equitable quality education andpromote lifelong learning opportunities for all

Before Covid-19

Before Covid-19

Progress in many healthareas continued, but

The pandemic hasinterrupted
childhood
immunization
programmes

needs acceleration

Inequalities in education are

Progress towards

inclusive and equitable quality
education was too slow

exacerbated by COVID-19
In low-income countries,
children's school completion rate isin around

70 countries

maternal healthchild healthtuberculosis

hiv

79% in richest 34% in pOOREST

Illness and deaths

immunizations

Over 200 million children will
still be out of school in 2030

will spike

Covid-19 Implications

Remote learning remains

out of reach for

Healthcare disruptions couldat least

reverse decadesof improvements

500 million students
Service cancellations
will lead to100% increasein malaria deaths

Hundreds of thousands of additional
under-5 deaths MAY be expected in 2020of the global population

The Sustainable Development Goals Report 2020in sub-Saharan Africa

is covered byessential health services(2017)

8

20% of households

from communicable diseases

Covid-19 Implications

less than half

20% of households

School closures kept

90% of all students out of school
reversing years of progress on education

Only 65% of primary schools
have basic handwashing facilities
critical for COVID-19 prevention

9

Overview

51

Achieve gender equality andempower all women and girls
Before Covid-19

Ensure availability and sustainable
management of water and sanitation for all

Womenmust be represented fairly

Despite improvements,
full gender equality

in pandemic-related leadership roles

remains unreached

Women represent

Before Covid-19

Despite progress,

billions still lackwater and sanitation services

Two in five
health care facilities
worldwide havenosoap and water or
alcohol-based
hand rub(2016)

25%

Fewer girls are forced into early marriage

36%

in national
parliaments

in localgovernment(2020)(2020)

more women are in leadership roles

Covid-19 Implications

Women are on the front lines

2.2 billion people
lack safely managed
drinking water

4.2 billion people
lack safely managed
sanitation(2017)(2017)

Covid-19 Implicationsof fighting the coronavirus

Lockdowns are increasing the risk of

3 billion

violence against women and girls

people worldwide
lack basic handwashingfacilities at home

physicalsexualPSYCHOLOGICAL

women account for 70%

Cases of domestic violence

the most effective method for
COVID-19 preventionof health and social workers

have increased by 30%
in some countries

Women bear additional household burdens
during the pandemic

Some countries experiencea funding gap of 61% for achieving
water and sanitation targets

Women already spend about three times as many hours
in unpaid domestic and care work as men
The Sustainable Development Goals Report 2020

1011

Ensure access to affordable, reliable,
sustainable and modern energy for all
Before Covid-19

Overview

Promote sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for all

Before Covid-19

Stepped-up efforts
in renewable energy
are needed

Efforts need scaling up
on sustainable energy

1.6 billion workers

people lackelectricity

17%(2018)

in the informal economy
risk losing their livelihoods

share ofrenewables
in total energy
consumption

2.0%

GDP per capita growth(2010–2018)(2017)

Covid-19 Implications

Affordable and reliable ENERGY
is critical for health facilities

Energy efficiency
improvement rate

falls short of

1 in 4 NOT ELECTRIFIED
Financial flows to developing countries
for renewable energy are increasing$21.4
BILLION(2017)

12

1.5%

GDP per capita growth(2019)

is facing
unprecedented
challenges

Covid-19 Implications
GDP
per
CapitaTourism

The world faces theworst economic recession

3% NEEDED

since the Great Depression

1.7%

GDP per capita
expected to decline
by 4.2% in 2020

International
tourist arrivals
with COVID-19
2020 SCENARIOS-850 million-1140 million(2017)

In some developing countries (2018)

The Sustainable Development Goals Report 2020

Global economic growth
was slowing down
During the pandemic

789 million

52

Water scarcity
could displace
700 million people
by 2030

BUT
ONLY

TO
12% GOES
LDC s

COVID-19 could cause the equivalent of
400 million job losses in second quarter of 2020
13

Overview

Reduce inequality within andamong countries

Build resilient infrastructure, promote inclusive andsustainable industrialization and foster innovation
Before Covid-19

Before Covid-19

Manufacturing growth
was declining

Financing forsmall-scale industries
is needed for their survival
through the crisis

Income inequality
was falling in some countries

Global recession

could squeeze
development aid todeveloping countries

35%

Only
have accessto credit indeveloping
countries

Gini Index fellin 38 out of 84 countries(2006–2018)

due to tariffs and trade tensions

$420

$271

(2017)(2018)

billionInvestment in R&D
is growing but needs
to accelerate

Covid-19 Implications

Resource flows for development(2010–2017)

The aviation industry has suffered
the steepest decline in history

Covid-19 Implications

54%

The most vulnerable groups2010

are being hit hardest by the pandemic$2.2 trillion(2017)(COMPARED TO THE SAME PERIOD IN 2019)

Fewer than 1 in 5 people
use the internet in LDCs (2019)The Sustainable Development Goals Report 20202017

$1.4 trillion(2010)Air passenger numbers fell by 51%
from January to May 2020

Older persons Persons withdisabilities

children

women

15

Only half

the world’s urban
population has
convenient accessto public transport

Overview

Ensure sustainable consumption
and production patterns

Make cities and human settlements inclusive,
safe, resilient and sustainable

Share of urban population
living in slums
rose to 24% in 2018of countries
with data have acomprehensive set of
migration policies

migrants andrefugees

14

Before Covid-19

billion

The Gini index measures income inequality and ranges from 0 to 100,
where 0 indicates that income is shared equally among all people, and
100 indicates that one person accounts for all income

Before Covid-19

The world continues touse natural resources

Electronic
waste
grew byunsustainably

38%

but
less than(2019)

20%is recycled

500–1000 meters
distance

Covid-19 Implications

Over 90%of COVID-19
cases are inurban areas

Air pollution
caused 4.2 million
premature deathsin 2016

47% of population live within 400 metreswalking distance to open public spaces(2010–2019)

2010

2017

Global material
footprint
73.2 billion
Metric tons

Global material
footprint
85.9 billion
Metric tons

Covid-19 Implications

The pandemic offers an opportunity todevelop recovery plans
THAT BUILD A MORE SUSTAINABLE FUTURE

From 2017 to 2019,79 countries and theEuropean Union reported
at least one policy topromote Sustainable
Consumption and Production

Harvesting

Transport

Storageprocessing

16

$318
billion$427
billion(2015)(2018)

13.8%
of food is lost in supply chains (2016)

400m

The Sustainable Development Goals Report 2020

Risingfossil fuel subsidies
are contributing to
the climate crisis

17

Overview

53

Take urgent action to combat
climate change and its impacts

Conserve and sustainably use the oceans, sea andmarine resources for sustainable development

Before Covid-19

Before Covid-19

Global community shies awayfrom commitments required
to reverse the climate crisis

Only 85 countries

have national
disaster risk
reduction strategiesaligned to the
Sendai Framework

2019 was thesecond warmest year
on record

Global temperatures
are projected to riseby up to 3.2°C by 2100

CLIMATE FINANCE:

investment in

Covid-19 Implications

GHG

fossil fuelscontinues to be higher

COVID-19 may result in a
6% drop in greenhousegas emissions for 2020

than investment inclimate activites
800
600

still short of 7.6% annual
reduction required to limit
global warming to 1.5°C

Climate change continues to
exacerbate the frequency andseverity of natural disasters

Massive wildfires

The Sustainable Development Goals Report 2020

Droughts$781
billion400

pH

Hurricanes

Floodsfossil
fuel

46.0%

2000

2015

2019

sustainable fisheries
contribute to gdp

Covid-19 Implications

The drastic reduction in human activity
brought about by COVID-19
may be a chance for oceans to recuperatesmall island

1.55% developing statesin oceania

1.11%

billion10 x

global climate
financeaffecting more than
39 million people
in 2018

44.8%

acidity

A 100–150% risein ocean acidity is projected by 2100,
affecting half of all marine life

200
0Global marine key
biodiversity areas
covered by protectedareas increased

30.5%

2016
$681

least
developed
countries

the global average

97 countries signed the Agreement on Port State Measures,the first binding international agreement
on illegal, unreported and unregulated fishing

18

19

Protect, restore and promote sustainable use of terrestrial
ecosystems, sustainably manage forests, combat desertification,and halt and reverse land degradation and halt biodiversity loss

Before Covid-19

Overview

Promote peaceful and inclusive societies for sustainable
development, provide access to justice for all and build effective,
accountable and inclusive institutions at all levels

Before Covid-19

The world isfalling short on 2020 targets
to halt biodiversity loss
Forest areas
continue to decline
at an alarming rate,
driven mainly byagricultural expansion

Over 31,000 species
are threatened with which isextinction

27% of over 116,000
assessed species in
the IUCN Red List

Each year,
10 million hectares of forest
are destroyed (2015–2020)

Every day,
100 civilians are killed
in armed conflicts

despite protections

The global homicide rate
has declined slowly
5.9

5.8

per 100,000
population

per 100,000
population(2015)(2018)

translating to
440,000 homicide victims
worldwide

under international law

Covid-19 Implications

Covid-19 Implications

COVID-19 implications further threaten
global peace and security

Wildlife trafficking disrupts
ecosystems and contributes tothe spread of infectious diseases
Pangolins are possibly theintermediary animal thattransferred the coronavirus
The equivalent of
370,000 pangolins
were seized globally (2014–2018)

Two billion hectaresof land on Earth aredegraded, affecting some
3.2 billion people,
driving species to extinction
and intensifying
climate change

Only a third of 113 countries were on trackto achieve their national target to integratebiodiversity into national planning
The Sustainable Development Goals Report 2020

54

Ocean acidification continues tothreaten marine environments andecosystem services

20

Already in 2019, the number of people fleeing war,
persecution and conflict exceeded 79.5 million,
the highest level ever recorded

127 countries
have adopted
right-to-informationor
freedom-of-information

laws

60% of countries have prison overcrowding,risking the spread of COVID-19

21

Overview

Strengthen the means of implementation and revitalize
the Global Partnership for Sustainable Development

Before Covid-19

Before Covid-19

net ODA

totalled$147.4 billion
in 2019

but aid
to Africarose byalmostunchanged
from 2018

1.3%
from 2018

and aid tothe LDC srose by

2.6%

Children are regularly exposed tomultiple forms of violence
Global foreign
direct investment
is expected to
decline by up to 40%
in 2020from 2018

Nearly8 in 10 children(1-14 years)
suffered frompsychological or
physical aggression
at homeAlmost one thirdof detectedtrafficking
victims arechildren(2016)

based on data from 69 countries,
mostly low- and middle-income countries

Covid-19 Implications

Covid-19 Implications

Remittances
to low- and middle-income countries –an economic lifeline
for many poor households –are projected to fall

fixed-broadband
subscriptions

The Sustainable Development Goals Report 2020

50%

22

5X

the average rate

Existing patterns of
discrimination
may be entrenchedby the crisis

Developing
countries
11.2$445 billion in 2020

International funding fordata and statistics
was $690 million in 2017

The well-being of millions of children
and youth will be affected by the crisis

80-year-olds
are dying fromcoronavirus at

per 100 inhabitants in 2019
Developed
countries
33.6$554 billion in 2019

Leaving no one behind

only
half the level
it needs to be

An estimated379 million children
missed school meals
because ofschool closuresduring the pandemic

The global gains in
reducing child labour
are likely
to be reversed
for the first timein 20 years

23

3 in 10 people
with disabilities haveexperienced discrimination(2014–2019)

Overview

55