JOURNAL
THE AMERICAN CHAMBER OF COMMERCE IN JAPAN

Volume 58 • Number 5 • ¥1,000

THE VOICE OF GLOBAL BUSINESS IN JAPANSustainable
Business

What it means and how you can put plans into action

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PRESIDENT

Jenifer Rogers

5

Asurion Japan Holdings G.K.
CHAIR

The World
We Want

7

A pause in “normal” gives us a chance toachieve a sustainable future

Eriko Asai
GE Japan
TREASURER

PUBLISHER

8Ryann Thomas
PwC Tax Japan

EVENT

ESG
Disclosures

Yoko Furuyama (Kansai) P&G Japan G.K.

Finding Successthrough Diversity

Outside directors can play a key rolein your business and personal lives
12

Tackling legal and business challenges,
avoiding the pitfalls of greenwashing

VICE PRESIDENTSPRESIDENT

EVENT

IQVIA
Insights

Covid-19 impact on Japan pharmaceutical spend and outlook to 2025

Deborah Hayden Finsbury Glover Hering
Amy Jackson Pharmaceutical Research and Manufacturersof America (PhRMA)
Robert W. Roche (Chubu) Oak Lawn Marketing, Inc.
Eric W. Sedlak K&L Gates Gaikokuho Joint Enterprise
Yoshitaka Sugihara Netflix G.K.
Dave West Cisco Systems G.K.
GOVERNORS

Andrew J. Conrad Aflac
James C. Feliciano AbbVie
Harry A. Hill Better-U, Inc.
Mark Hosang (Chubu) Randstad K.K.
Douglas L. Hymas Fusion Systems Group
Tad Johnson Pratt & Whitney Aftermarket Japan KK
Saori Kanno REVLON K.K.

32

Embracing Sustainability

Mari Matthews The Bank of New York Mellon
Nancy L. Ngou EY Strategy & Consulting Co., Ltd.
Victor Osumi Delta Air Lines, Inc.

How can companies do it?

Frank Packard Synnovate Capital Partners
William J. Swinton Temple University, Japan Campus
Simone Thomsen (Kansai) Eli Lilly Japan K.K.
Megumi Tsukamoto Caterpillar Japan LLC

16

SPECIAL ADVISOR

Christopher J. LaFleur

PRESIDENTS EMERITI

Debbie Howard (2004–05)

19

Allan D. Smith (2008)
Thomas W. Whitson (2009–10)

Kumi Sato

22

COSMO
ACCJ EXECUTIVE STAFF

Executive Director
27

Christopher Bryan Jones
Publisher and Editor-in-Chief

Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai

38

Minato-ku, Tokyo, Japan 106-0041
Tel: 03-3433-5381 n Fax: 03-3433-8454 n www.accj.or.jp
The ACCJ is an independent membership organization not affiliated with any
government or other chamber of commerce. The ACCJ is a member of the Asia–
Pacific Council of American Chambers and values its relationships with Japanese,
American, and other nations’ business organizations.
Disclaimer: The ACCJ will not accept liability for any damages caused by thecontents of The ACCJ Journal, including, but not limited to, any omissions, errors,
facts, or false statements. Opinions or advice expressed in the The ACCJ Journal
are not necessarily those of the ACCJ.

20

DIVERSITY

Hiring Women
Leaders in Healthcare
MANAGEMENT

BeyondESG
CASE STUDYEngage &Inspire24

CASE STUDY

Water
Ways

Coca-Cola Japan’s 2030 Packaging Visionsees a world without waste

LAW

Study
GroupsWOMEN IN BUSINESS

Untapping Potential:
Second Case Studies

New toolkit shares how companies are
expanding diversity activity

28

ADVOCACY

Possibility for
Continuity

ACCJ leaders share what sustainability
means to them40

EY net-zero initiatives help clients,
suppliers, and the planet
42

IBC Legal
Webinar Series

Advocating for transparency in Japanese
government decision-making

Why sustainability is just one part ofbusiness successTo advertise or subscribe: comms@accj.or.jp
The American Chamber of Commerce in Japan

Blast off to
New Heights

Titan Consulting brings D&I Spotlight
Package to the Japanese market

Laura Younger

THE ACCJ JOURNAL

CHUBU

CHUBU

Practical advice on Japanese law related
to business, Covid-19, and more

Developing aerospace andmanufacturing in the Chubu region

Michael J. Alfant (2011–12)
CHAIRMAN EMERITUS

Finding Balancein Innovation

18

Status of development promotion policy
for medical devices in Japan

McLarty Associates

Charles D. Lake II (2006–07)

HEALTHCARE

CASE STUDY

Constructing
Communities

Caterpillar commits resources globallyto help those hit by the pandemic
44

COMMUNITY SERVICE

Nurture &SupportWildflower House founder talks about thedramatic rise in children who need care

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PUBLISHER

By C Bryan Jones

The World We Want5

A pause in “normal” gives us a chance to achieve a sustainable futureL

ike many people, when I hear the word “sustainability,” my first thought is the environment. But
having written about the United Nations (UN)
Sustainable Development Goals (SDGs) since their inception in 2015, I know that it encompasses much more.
Particularly when it comes to business, there are manythings beyond simple environmental issues that must be
considered if we are to have a sustainable future.
This special edition of The ACCJ Journal grew outof conversations with the American Chamber of Commerce in Japan (ACCJ) Sustainability Committee about
the definition of the term. What does sustainability
mean to you? That’s the first question we asked, andone to which the answer varies from person to person.
You’ll find thoughts from 10 ACCJ leaders and members
starting on page 28—a starting point for a plethora ofcontent related to sustainability in this issue.

Blueprint
Returning to the SDGs, the UN defines them as “a shared
blueprint for peace and prosperity for people and theplanet, now and into the future.” This is a great summary
for framing the wide range of issues that we are facing
and the precarious nature of our world. The 17 goals are:1. No poverty
2. Zero hunger
3. Good health and well-being
4. Quality education
5. Gender equality
6. Clean water and sanitation
7. Affordable and clean energy
8. Decent work and economic growth
9. Industry, innovation, and infrastructure
10. Reducing inequality
11. Sustainable cities and communities
12. Responsible consumption and production
13. Climate action
14. Life below water
15. Life on land
16. Peace, justice, and strong institutions
17. Partnerships for the goals
Development of the SDGs began with a document
entitled “The Future We Want,” adopted in June 2012 by
UN member states at the United Nations Conference on
Sustainable Development in Rio de Janeiro, Brazil. The
resulting 2030 Agenda for Sustainable Development,with its 17 SDGs, was adopted at the UN Sustainable
Development Summit in September 2015.

Needed Disruption?
Less than five years into the journey to 2030, the world
was hit by the coronavirus pandemic, which I believe
has really shed light on the importance of these goals.
Good health and well-being (SDG 3)—and accessto care that makes that possible—has, of course, beena challenge during this period of lockdowns and social
distancing. And decent work and economic growth(SDG 8) has been disrupted in ways that probably would
not have happened if not for Covid-19. The manner inwhich workers view their jobs and work–life balance,
as well as how companies function, has changed inways that are likely to continue reshaping the business world beyond the pandemic.

C Bryan Jones
Publisher andeditor-in-chief
cjones@accj.or.jp

The pandemic allowed us to hit
the emergency brake and lookaround. Now we have a chance
to really implement changes.
But the environmental issues that many think offirst are of particular note. With full or partial lockdowns around the world putting the brakes on transportation, commuting, tourism, manufacturing, andother activities that pour greenhouse gases into theatmosphere, measurable changes—of the sort neededto achieve environmental targets to curb global warming—were quick to come. Examples include: New York City air pollution in March 2020 was
half that of March 2019
 Air quality in Indian megacities improved by
50 percent
 Particulate matter concentration in Japan
dropped by 17 percent
As Inger Andersen, executive director of the United
Nations Environment Programme wrote in a piece for
The Telegraph in December: “‘normal’ was destroying
our health and prosperity. We cannot afford to return
to it after Covid-19.” As I see it, what we call normal
is the acceptance of things as they are, as they havelong been. We often accept this not because we don’tcare but because life in today’s world is sometimes likea runaway train, and we’re just along for the ride. The
pandemic allowed us to hit the emergency brake andlook around. Now we have a chance to really implementchanges that we’ve long talked about. n

Listen to this story:
accj.or.jp/sound

THE ACCJ JOURNAL • VOL. 58 • NO. 5

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PRESIDENT

By Jenifer Rogers

Finding Successthrough Diversity

7

Outside directors can play a key role in your business and personal livesI

t’s annual general meeting (AGM) season in Japan.
I will participate in a few for the boards on which I
serve as an independent director and anticipate
that this year will be quite exciting, because the calls
for greater independence of corporate boards are moreinsistent than ever. Indeed, some activist investors
are setting the table stakes at 30-percent independent
outside directors—in line with proposed changes toJapan’s Corporate Governance Code regarding Prime
Market companies—before they will even consider
voting in favor of a company-sponsored resolution.
Independent outside directors help to broaden
the perspective of the board and hedge against therisk of insiders simply following the company positionout of self-interest, loyalty, or groupthink. Studies
have shown that companies with boards that include
independent members tend to outperform those withboards comprising only insiders. As we seek reform inimportant areas—such as environmental, social, andcorporate governance, as well as diversity and inclusion—it is believed that boards with greater independence will push for more rapid change.
The American Chamber of Commerce in Japan(ACCJ) has been advocating for Japan to improve
corporate governance, so we are pleased to see, in the
proposed changes to the Corporate Governance Code,a greater focus on sustainability, a recommended
increase in the number of independent directors, and acall for companies to present a policy and targets fordiversity in senior management.

Many Voices
At the ACCJ, we’re fortunate to have a diverse boardthat could be viewed as being made up entirely of
independent directors. While all ACCJ board members are members of the chamber, our positions arevoluntary and not paid, and—except in rare cases—
we have no other business relationships with thechamber. As such, we could fall within the meaningof outside—or independent—directors.
As an organization, the ACCJ benefits from thistremendous diversity of backgrounds, experiences,and expertise, and the quality and range of the ACCJ’s
white papers, statements, and events are a direct resultof the diversity and depth of our membership. Having
been involved in many ACCJ committees, and in thedevelopment of our papers and positions, I can tell youthat divergent voices are the engine that drives ourability to effectively advocate on behalf of all members.
These experiences and imperatives got me thinking
about the role that diversity, inclusion, and independent
voices can play in our own lives and careers. When we
look at our personal networks of peers, colleagues, mentors, family, and friends, how often do we see a mirrorof our own experience and how often are we benefitingfrom a truly outside perspective?

Jenifer Rogers
ACCJ president

The quality and range of
the ACCJ’s white papers,
statements, and events are adirect result of the diversityand depth of our membership.
Broaden Your Network
In the corporate world, consultants and coaches are paid
to deliver their independent viewpoints and advice.
But beyond these formal arrangements, there’s much
we can do as individuals to broaden our perspectives.
It’s comforting to be in the company of like-minded
individuals, but staying inside your established circle
can sometimes lead to an echo-chamber effect—and
that’s not fertile ground for the type of innovation andconstructive change we need to feed our energy as
business leaders.
This month we’ve launched a revamped ACCJ Membership Directory and we’re piloting Wai Gaya—a newplatform designed to facilitate informal conversations
among members. Both initiatives offer opportunities
for discovery and connection to broaden your network
within the chamber.
I hope you’ll take this opportunity to get in the spiritof AGM season by not only expanding your ACCJ network, but by actively seeking out those with different
views. Instead of simply connecting with people acrossyour professional or industry sector, make a point ofreaching out to people whose resumes and experienceslook nothing like your own. Bring a few outside directors into your life. If the model holds true, you mightjust realize the same kind of performance benefits inyour own career that we hope to achieve by pushingfor more independence in corporate Japan. n

THE ACCJ JOURNAL • VOL. 58 • NO. 5

EVENT

By C Bryan Jones

ESG
Disclosures

8

Tackling legal and business challenges, avoiding the pitfalls of greenwashingE
Reiko Hayasahi
Director anddeputy president
BofA Securities
Japan Co., Ltd.

Tim Power
PartnerWhite & Case LLP’s
Global Environmental
Interest Group

Katie Schmitz Eulitt
Director, investor outreach
Sustainability AccountingStandards Board (SASB)

Natsuho Torii
Deputy secretary general
Japan Exchange Group (JPX)
Sustainability Committee

nvironmental, social, and corporate governance (ESG) is an area of growing importanceto businesses, and many countries require
disclosure of risk factors, earning potential, andmore. But the requirements differ by location
and are evolving. Around the globe, governments,
investors, and stakeholders are demanding greater
accountability and transparency about corporate
environmental and social performance.
On April 8, the American Chamber of Commercein Japan (ACCJ), the British Chamber of Commerce inJapan, and the Australia and New Zealand Chamberof Commerce in Japan jointly held a virtual event
entitled ESG Disclosures: Tackling Legal and Business
Challenges and Avoiding the Pitfalls of Greenwashing to discuss the changing landscape. The session,
co-hosted by the ACCJ Legal Services & IP and
Sustainability Committees, brought together a panelof four experts:
 Reiko Hayashi, director and deputy president of
BofA Securities Japan Co., Ltd.
 Tim Power, partner at White & Case LLP’s Global
Environmental Interest Group Katie Schmitz Eulitt, director of investor outreach at the Sustainability Accounting Standards
Board (SASB) Natsuho Torii, deputy secretary general of the Japan
Exchange Group (JPX) Sustainability Committee

ACCJ Sustainability Committee Co-chair and EYJapan Co., Ltd. Director Heather McLeish moderated
the discussion.
Framing the issues, McLeish explained that,when companies look at ESG, they are talking aboutrisk factors, and disclosing these risks is importantfor investor confidence. While disclosure in Japanis entirely voluntary at present, many countries aremaking it mandatory.
“We see the European Union, the UK, and, very recently, the United States moving forward on promotionof key factors that they think are financially relevant
for companies and may even have national interests—
certainly from a security perspective,” McLeish said.
Still, more than 90 percent of companies inJapan produce some sort of sustainability report despite not being required to do so by the government.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

Key Drivers
While there are various forces that drive ESG disclosures, Hayashi believes the three biggest are:
 Senior management’s commitment to enhance
ESG initiatives
 Organizational infrastructure that enables disclosure to stakeholders
 Regulations and external calls for transparency“If all stakeholders work together in a proper
manner, the disclosure should go forward,” she said.
“It’s not only by regulatory requirement, but also bycompany initiatives from top down, and organizational structure.”
Torii, who sits between companies and investors
in her position at JPX, agrees that these are the key
drivers. Also playing a particularly big role, she said,
are investors. They include institutional and retailinvestors, as well as asset owners and managers.
“Now more and more investors are signing up
for the stewardship code,” she said, referring to thegovernment document finalized in 2014 and revisedin 2017 and 2020. Japan’s Stewardship Code outlines
principles to enable responsible institutional investors to promote the sustainable growth of companies
through investment and dialogue.
“They start looking at the G in ESG, of course,
but also the E and S elements. The companies
themselves want to communicate their ESG efforts
to various stakeholders, including investors—andnot only investors, but other stakeholders, such as
local communities, NGOs, and the global community. And nowadays, they don’t see ESG disclosure asa burden, but as a value-creation driver. So, I thinkthey are positively working on ESG disclosure as well
as ESG activities.”
Another driving force, Torii said, is Japan’s Corporate Governance Code—compiled by the Financial
Services Agency and the Tokyo Stock Exchange(TSE)—which was published in 2015 and revised in
2018. The code establishes fundamental principles
for effective corporate governance at listed companies in Japan. It is currently undergoing revision inlight of changes to the business environment broughton by Covid-19 and preparations for the TSE’s shift toa new market segmentation in April 2022.

Proposed revisions include asking companies listed on the
TSE Prime Market to: Disclose climate change-related risks and earning opportunities, based on the recommendations of the Task Force on
Climate-related Financial Disclosures
 Disclose their initiatives on sustainability when disclosing
their management strategies
 Provide information on investments in human capital and intellectual properties in an understandable and specific manner Provide necessary information in English“The revised code mentions a lot of sustainability and ESG
elements, including climate change, so I’m very excited to see
this, and expect that more companies will start disclosing ESG
information,” Torii added.

The Right Data
What are the differences between what investors are looking for
and what companies are disclosing? How can you bring the twosides into sync? According to Eulitt, it is important to think about
who your audience is and what information they are seeking.
While 96 percent of G250 companies—the world’s 250 largest
companies by revenue as ranked by the annual Fortune 500 list—
are issuing sustainability reports, only 29 percent of investors saythese reports provide the information they need. She said thatthree constant requests are:
 Comparability
 Consistency
 Reliability
Many investors are dissatisfied with the quality of theinformation they are receiving in these areas. That’s in part due
to the fact that a lot of it is binary. “It’s a yes or no answer tothe question of do you have a policy in place about a particular
topic,” Eulitt said.
“That’s useful for some stakeholders, but not in an investor
context about how to price the risk inherent in whether or not acompany is managing risk properly, depending on whether they
do or don’t have a policy in place. It’s impossible to know. Whatyou really want as an investor is to see how a company is managing an issue over time. You need data,” she explained.

To better deliver that data through disclosure, you need aframework. But with more than 400 types of reporting instruments in 64 countries, how can a company choose?
Eulitt said JPX’s ESG guidance is “one of the most comprehensive tools I’ve seen that can help companies think throughhow they would go about choosing a tool.” She also cited a paper
in which her organization, SASB, participated.
“This was a joint statement that was really meant to do anumber of things,” she explained. “One was to start disabusing
people of the notion that [ESG disclosure] was alphabet soup,which we often hear, and to think of it more as a system of puzzle
pieces, if you will, and that the puzzle does fit together. But you
can’t just cram in one piece where another one ought to go.”SASB joined the four other major disclosure players:
 CDP, a non-profit charity that runs the global disclosuresystem for managing environmental impact
 The Climate Disclosure Standards Board (CDSB), a non-profit
international consortium of business and environmental NGOs
 The Global Reporting Initiative (GRI), an independent international group that enables organizations to be transparent
and take responsibility for their impacts
 The International Integrated Reporting Council (IIRC), a
global coalition of regulators, investors, companies, standardsetters, the accounting profession, academia, and NGOs
These framework- and standards-setting institutions, which
Eulitt affectionately calls the Group of Five, worked together
to produce the Statement of Intent to Work Together Towards
Comprehensive Corporate Reporting, to align on a definitive sharedvision and resolve confusion surrounding sustainability disclosure.
“It’s unlikely that there’s ever going to be a single standard thatwins them all,” Eulitt said. “It’s much more likely that we’ll have asystem. And what we’re talking about quite extensively throughthe Group of Five, as we work with the [International Financial
Reporting Standards] trustees on building out a comprehensive
global system for reporting, [suggests] it’s much more likely that it
will be a sort of building block system that will have a foundational
level for investors, supplemental building blocks looking at impact
for other stakeholders, and then, on top of that, regional nuancesthat a particular jurisdiction may choose because of the nuancesin their particular environment.”

Top 3
Investor
Requests

29%

Comparaof Fortune G250
companies are issuingsustainability reportscyof investors say thesereports provide theinformation they need

lity
bi

96%

ConsisteniabilityRel

THE ACCJ JOURNAL • VOL. 58 • NO. 5

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Legal Perspective
The call for, and process of, sustainability disclosure
is evolving in complex ways from a legal standpoint—
particularly as there is no uniform set of requirements,
while expectations differ from country to country.
Power, a lawyer with more than 30 years of experience in environmental and climate-change issues,
said that governments are reacting by adopting one
of two models: Promulgating guidelines
 Legislating enforceable obligations
One concern with corporate regulators setting
guidelines is that they could be too narrow. Power gave
the example of Australia, where he is based. He shared
how guidelines there focus on areas such as climatechange risk and future financial performance, but failto address other sustainability and ESG issues.
As an example of evolving legislative approaches,
he talked about the European Union’s Taxonomy
Regulation, which went into force on July 12, 2020,
and will apply from January 1, 2023.
“The Taxonomy Regulation will require large
European companies to quantify, in terms of their

However, with regulations differing by country
and region, complexity mounts.
“The challenge of all this, of course, is that thecompliance task of meeting the Australian requirements, the European requirements, and the Japaneserequirements can be not insignificant for organizations
with global footprints,” Power said.

11

Further
Reading

FutureWhether through guidelines, regulations, or sustainability goals, Hayashi—who has been heavily involved
in Japanese government discussions surrounding sustainable finance with the Financial Services Agency
and the Ministry of Economy, Trade and Industry—sees more unity and hope in recent events.
She noted that there has been no clear consensus among corporate willingness and government
attitude. However, things have changed, she stated,since Prime Minister Yoshihide Suga announced in
January that Japan aims to achieve net-zero carbon
emissions by 2050.
“Suddenly, everybody is going in the same
direction, because the government is committed
to carbon neutrality and is working together withcorporations, JPX, and financial institutions to have a

Practical Handbook
for ESG Disclosure

Download the JPX
Practical Handbook for
ESG Disclosure
bit.ly/jpx-journal

Investors are really becoming much more articulate about
these topics and, therefore, I think the conversation aroundconnectivity is resonating with more people.
turnover or capital expenditure, the extent to which
they are undertaking activities that meet a defined
economic sustainable activity,” he explained.
To qualify as economically sustainable per the
regulation, an economic activity must meet four
conditions. It must provide: Provisioning services (i.e., food and water)
 Regulating services (i.e., control climate and disease) Supporting services (i.e., nutrient cycles andoxygen production)
 Cultural services (i.e., offer spiritual and recreational benefits)“So, the EU looks to be adopting a very transparent
financial model where it will be very readily apparent
to regulators—and to shareholders and investors—towhat extent Company A is spending money and generating revenue from sustainable economic activities
as opposed to Company B,” he said. “And, in a sense, I
think—from a market perspective—that’s what investors want to see.”more efficient way to achieve the goal and share theburden,” she said. “I’m trying to deliver the message,
not only to the government but also to the client, that
this should be done. Of course, there are different
attitudes, depending on the region and industry, but
the goal is the same. We have to share the same goal
and then discuss openly, with transparency, how toachieve the goal. I think that will go well. We knowthat we need to deliver a beautiful planet to the next
generation. It’s clear to everybody that we should dosomething now before it is too late.”
Eulitt also sees changing attitudes that bode wellfor the future. “Investors are really becoming much
more articulate about these topics and, therefore, I
think the conversation around connectivity is resonating with more people.
“So I would agree that, in the beginning, it may
have been, for some people, a compliance exercise—or, ‘I don’t know why I’m doing this but everyone
else is doing it, so I ought to.’ But if you’re thoughtful
about [disclosure],” she explained, “then it can reallybe tied into enterprise value creation and, hopefully,
the avoidance of erosion.” nStatement of Intent toWork Together Towards
Comprehensive Corporate
Reporting
Summary of alignment discussions amongleading sustainability and integrated reportingorganisations CDP, CDSB, GRI, IIRC and SASB
Facilitated by the Impact Management Project,World Economic Forum and Deloitte

September 2020
DISCLOSURE INSIGHT ACTION

Download the joint
Statement of Intent
bit.ly/ccr-journal

Listen to this story:
accj.or.jp/sound

THE ACCJ JOURNAL • VOL. 58 • NO. 5

EVENT

By C Bryan Jones

IQVIA Insights

12

Covid-19 impact on Japan pharmaceutical spend and outlook to 2025

T
Alan Thomas
Director ofthought leadership
IQVIA Solutions
Japan K.K.

he impact of Covid-19 is wide reaching, affecting day-to-day life, business operations, andplanning for the future. For the pharmaceuticalindustry, disruption comes from not only the need toswitch gears to combat the coronavirus, but also patient
behavior. The reduction in face-to-face doctor visits hascompounded ongoing challenges of research and development (R&D), pricing, and coordination with Japan’s
National Health Insurance (NHI) system.
On April 7, the American Chamber of Commercein Japan (ACCJ) Healthcare Committee welcomed Alan
Thomas, director of thought leadership at ACCJ Corporate Sustaining Member company IQVIA Solutions
Japan K.K., to deliver an update on the state of pharmaceutical spending in Japan and the effects of Covid-19.
He shared data points from 2020 that have impacted
patient and prescriber behavior, explained how themarket has shifted over the past five years, and offeredan outlook for the industry covering the next five.

Costs of Corona“The Covid-19 outbreak, in terms of the pharmaceutical market, has really created a considerable patient
backlog, and delayed treatment initiation and switch
therapies,” Thomas said.
The prescription market can be divided into
three broad categories: Dynamic market
 Static market
 Lost patients

IQVIA Covid-19 Resources
www.iqvia.com“The dynamic market covers prescribing thateither starts, accelerates, or shifts a patient journey,”he explained. It comprises three categories: Newly diagnosed patients
 Existing patients switching brands
 Existing patients prescribed an additional brand

Listen to this story:
accj.or.jp/soundThe static market comprises—as the namesuggests—patients continuing with their current
prescription and brand.
Lost patients, meanwhile, refers to those whohave switched to either another brand or a generic, or
who have delayed an expected follow-up prescription.
The dynamic market in particular has been affected by the pandemic. “During the past 12 months,
we’ve seen an overall decline in new patient starts
within the dynamic market, and also lower levels of

THE ACCJ JOURNAL • VOL. 58 • NO. 5

switch and add-on activity due to an overall decline
in patient visits in 2020,” Thomas explained.
“This was evident across nearly all doctor specialty
areas,” he added, “and was a direct result of patients
refraining from visiting their healthcare professional—maybe in part for fear of coming into contact witha Covid-19-positive patient, hospital and clinic restrictions, or community states of emergency restricting
unnecessary movement.”
He said that a patient’s risk/benefit perception in adisease area where symptoms may not be immediately
present or detectable by the patient may have also
played a role.
New patient starts were lower in 2020, with a number of therapy areas reporting 65–70 percent the levelof 2019. “This was most evident during the first national
state of emergency, from mid-April through May, which
is basically weeks 14 through 26,” he said.
New active substances (NASs) that were launchedover the past 12–24 months have been most impacted.
“A NAS generally requires more frequent monitoring,
and with patients refraining from visiting their healthcare professionals, the ability for prescribers to follow
guidelines and monitor patients on a new therapy
was a challenge, given that there was a decline in, orlack of, willingness by patients to revisit their institutions. So that new switch and add-on for newly or
recently launched products was very challenging,”
Thomas explained.
The number of NAS launches, he added, was slightly
higher in 2020 than in 2019, but the contribution fromthose products was only about ¥27 billion, comparedwith ¥60–65 billion in a usual year. The NASs launchedin 2018 and 2019 were also affected, showing flattersales trajectories than had been expected in 2020.
This decline in the dynamic market was offset
somewhat by an increase in the length of prescriptions
and the number of treatment days per prescription.
With more patients wishing to avoid clinic visits,
doctors were writing more prescriptions extended forfour-plus weeks. Prior to the pandemic, 37 percent ofprescriptions were for more than four weeks (38 dayson average). This jumped to 45 percent and a 44-day
average for the March–December 2020 period.

Physician Interaction
The pandemic has also changed how physicians preferto interact with pharma companies.
“Hospital and physician restrictions on face-to-facevisits during the first state of emergency resulted

13

The healthcare professional’s choice to engage with the rep at their conveniencesaw more effective use of that detailing time, and there was an increase in the score ofeffectiveness, usefulness, and intent to prescribe as a result of that digital interaction.
in a noticeable shift in promotion strategy,” Thomas said. “Thatcontinued throughout 2020 and is evident into 2021. Pre-Covid,
45–47 percent of promotional activity was digital, and we saw aconsiderable shift within digital platforms.”
IQVIA tracks detailing activity globally on a weekly basis, andhas seen a decrease during the Covid-19 outbreak. Pre-pandemic
levels in Japan were 28–30,000 details per week. But, Thomas
explained, the drop has not been as severe in Japan. “In the US
and across Europe, the total number of details decreased about
70 percent, whereas in Japan they decreased 30–35 percent, witha shift from face-to-face to established digital platforms and the
expansion of digital platforms.”
Digital share peaked at 91.1 percent in the week ending May 15,
2020. The pre-pandemic average (January and February) was
47.6 percent, and the March–December average was 74.4 percent.
“We have seen considerable investment and shifting focus to digital channels and the emergence of remote detailing as opposedto the traditional e-detailing approach that many companies tookprior to Covid.”
In remote detailing, there is still an interaction between thepharma representative and the doctor, a group of doctors, or key
opinion leaders.
“One of the clear outcomes,” Thomas said, “was that a lot of thedetailing was done after standard office hours, where a physician
or healthcare professional—when time was made available forthem to contact a rep at their convenience—was willing to havethat interaction. And the length of interactions, the time spent
discussing, was actually longer than the historical average for faceto-face [interactions].”
Normally, face-to-face detailing is done during office hours
and many healthcare professionals do not have much time tospend with reps.
“So, the healthcare professional’s choice to engage with the
rep at their convenience saw more effective use of that detailingtime, and there was an increase in the score of effectiveness, usefulness, and intent to prescribe as a result of that digital interaction,”he explained.
While face-to-face sessions will be an option after the
pandemic, Thomas expects digital to remain dominant, with aprobable 60/40 split.

Profit Potential
The total pharma market for Japan has been in decline over the
past five years, dropping from ¥10.598 trillion in 2015 to ¥10.372
trillion in 2020, a decline of ¥226 billion. Losses in 2020 attributable to Covid-19 are estimated to be ¥147 billion. In addition to
the pandemic, other factors, such as the out-of-cycle NHI pricerevision at the time of the October 2019 consumption tax hikefrom eight to 10 percent and the government’s quarterly pricerevision for drugs, played a part.
But that doesn’t reflect the opportunities for R&D- andinnovation-driven pharma companies, Thomas said, as there werea number of brands that shifted from protected to long-listed
product (LLP) status between 2016 and 2020, thus impacting
top line brand growth. Products facing loss of exclusivity, andtherefore risk of generic erosion, accounted for 37.5 percent—or¥2.2 trillion—of total protected brand spend in 2015 and notprotected in 2020.
“Products that remained protected actually grew 5.7 percent[compound] over the past five years,” he stated. “This does notinclude any new product that was launched in the past five years.
So, looking at apples to apples, in the existing protected brandspace, we actually saw nearly six-percent growth, not the halfpercent growth of the top line.”
If you include the contribution from branded, new active substances launched in the past five years, Thomas added, then about¥1.2 trillion (20 percent) of total protected brand spend in 2020
came from newly available innovations. “In 2015, the protected

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Hospital/physician restrictions on face-to-face visits
and the first state of emergency resulted in a shift
in promotion strategy that continues

14

Digital share of total details

Average weeks 1–8
January–February 2020
Pre-Covid-19

Week ending
May 15, 2020 (week 19)
Peak share

47.6%

Average weeks 9–52
March–December 2020

91.1%

74.4%

Face-to-face = MR detailing and meetings. Digital = e-Detailing (email from company, self-guided/automated internet presentation) andr-Detailing (email from MR, live internet/telephone detailing, e-meeting with MR). Source: Japan Thought Leadership Team analysis.
IQVIA ChannelDynamics. All rights reserved.

market was only ¥3.6 trillion, because those brands that shifted to
LLP are being excluded. So, realistically, we’re looking at around10.5-percent growth in the innovative branded space today.”The ¥1.2 trillion contribution was indeed lower than the historical five-year average—impacted last year by lower contribution
from 2020 launches as well as shallower sales trajectories for manyother recent launches, and IQVIA forecasts that the contribution
from new products will remain relatively low over the next two years.

Welfare in 2015—essentially was met by the target date of March 31,
2021, the end of FY2020.
“We hit the target in Q1 this year, so we are there. It has
slowed, but we will continue to see that increased impact on thegenerics market,” Thomas added.
More generics and higher NHI price cuts have impacted thevolume dynamics in the unprotected market. Total long-listed
spend dropped 6.1 percent over the five years from 2015 to 2020,Those companies that are investing in launch and have robust
R&D pipelines are showing strong growth and will continue to bewell positioned into the next five years.
But Thomas said that, as patient backlogs are slowly covered,continued or expanded contribution from new launches are
expected toward the end of IQVIA’s forecast, which stretches out
to 2025.

Going Generic?
“I’m often asked about the ongoing use of generics in Japan,”Thomas said, “and if we have a look at generic utilization, it
continues to expand. If a generic was available in Q4 last year,
one was dispensed 79.6 percent of the time.”
This means that the NHI system’s target of 80-percent
generic use—a goal set by the Ministry of Health, Labour and

THE ACCJ JOURNAL • VOL. 58 • NO. 5

from ¥2.6 trillion to ¥1.9 trillion. New LLPs introduced in 2015–19
accounted for ¥932 billion in 2020 and existing LLPs ¥963 billion.
“That increased generic utilization has impacted the volume
dynamics in the unprotected market, so there is that volume
decline in long-listed products compounded by higher pricecuts as a result of patent expiry, for example,” Thomas shared.
“So that’s putting additional pressure on portfolios for thosecompanies that may still have a predominantly higher share of
their business in Japan coming from long-listed products.
“Given the increased use of generics over the past three to five
years—and the considerable decline and higher impact on price,
as well as decline in volume—the shift to innovation and the need

Generic utilization continues to expand as of Q4 2020.
If a generic was available, one was dispensed
79.6% of the time.

15

October–December year-by-year comparison

100%
90%
80%

Generics 79.6%(+2.6 vs. Q4 2019)

70%
60%
50%
40%
30%
20%

LLP 20.4%

10%
0%
2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: IQVIA Solutions Japan.
Japan Thought Leadership analysis. IMSBase JPM (Japan Pharmaceutical Market). All rights reserved.

to reinvest in launch in Japan is at the top of most pharma-company decision pyramids,” he added. “Those companies that areinvesting in launch and have robust R&D pipelines are showing
strong growth and will continue to be well positioned into thenext five years.”

Beyond Covid
IQVIA’s updated forecast for 2021 predicts a ¥40–45 billion impact(minus 0.4 percent) from Covid-19. This will depend in part on
Japan’s vaccine rollout, which has so far been extremely slow.
Vaccinations will play a key role in patient behavior returning topatterns seen before the pandemic, with more doctor visits.
“We’re assuming that long-term prescribing will remain at thelevels we’re seeing today through our forecast for 2025,” Thomassaid. “Because long-term prescribing will remain relatively unchanged over the next five years, we’re forecasting there will be
no change in the average length of prescriptions.”
Further out-of-cycle revisions to pricing are expected to continue impacting the market. The NHI normally revises pricing
every other year, but there were additional revisions in 2019 andthere will be again this year. IQVIA expects the annual pattern tocontinue in 2023 and 2025, which should be off years.
“We’re not encouraging these forecasts and additional pricecuts by any means,” Thomas said. “But I think it’s inevitable that
we will see some out-of-cycle impact, and we have decided tokeep that in our forecast modeling.”
Whether changes will be total market, and whether they will
be higher or lower on average than a standard biennial revision,

remains unclear. Thomas said that he assumes the impact will
be lower than a standard revision. He also believes that the levelof discounting and price differentiation in the generics and LLP
markets will stabilize, which will result in the price survey results
being lower than the historical average, potentially resulting inlower price cuts.
Thomas predicts price harmonization in the unprotectedmarket, which is seeing considerably higher price cuts at the
moment, and strong growth in the protected market, relatively
in line with the historical growth that was reported in 2020.
“We have assumed the continuation of the price maintenancepremium, and that eligible and innovative brands will continue to
see that deferred NHI price revision,” he said. “I think it’s imperativethat the current pricing methodology stay in place and continue tofocus on rewarding innovation and rewarding those companies that
continue to invest in better patient outcomes in Japan.
“And if we see the elimination of—or reduction in—these
positive pricing policies,” Thomas cautioned, “I think we’ll see a
return to some of the old metrics in Japan that were considerablyslower than in the rest of world.
“Most important is the drug lag, which today is 16–17 months—
half as long as it was eight to 10 years ago—and, in my opinion,that is a direct result of the positive rewards that have been
given around pricing for those companies that were investing
and bringing these products to market in Japan,” he continued.
“Halving the wait time has really improved patient access andoutcomes, and it’s imperative that we do not see a return to drug lag
or a shift away from Japan focus for launch and development.” n

THE ACCJ JOURNAL • VOL. 58 • NO. 5

HEALTHCARE

By Shohei Nakano

Finding Balancein Innovation

16

Status of development promotion policy for medical devices in JapanI
Shohei Nakano, PhD
Executive director
Japan Association for
the Advancement ofMedical Equipment(JAAME)n my opinion, Japan’s medical device industry, which
was shining in the 1980s, began to stagnate in the
mid-1990s after the collapse of the bubble economy.
Initially, the cause was thought to be Japan’s regulatory system, and discussions to revise the systemwere given priority.
In the mid-2000s, the social issue of the “device gap”
emerged, and the regulatory system was reformed withthe aim of creating a global standard while listening tothe opinions of the US industry. Thanks to these efforts,
the regulatory system has reached the point where it issaid to be at the same level as that of the United States—and even ahead of the US in some of its initiatives.

Medical Device and Medical Technology Industry
Vision in September 2008 and the Medical Device
Industry Vision 2013, in June of that year.

The Basic Plan
Replacing the MHLW’s industrial vision is the Basic Planfor the Promotion of Research, Development, and Dissemination of Medical Devices to Improve the Qualityof Medical Care Received by the Public, also known as
the Medical Device Basic Plan. This was approved by
the Cabinet in May 2016 and is the Japanese government’s first basic plan dedicated to medical device
policy based on the Medical Device Promotion Act.

AMED’s Medical Device and Healthcare Project will conduct
R&D on medical devices and healthcare that contribute to
the advancement of diagnosis and treatment, prevention,and improvement of quality of life by integrating AI and theInternet of Things.
Policy Matters

Learn more about JAAME
www.jaame.or.jp

However, reform of the regulatory system alone will
not revive the Japanese medical device industry.
Even if the system is up to international standards,
promising medical technologies need to be developed
before they can be approved. In other words, innovation policies that encourage this development are also
extremely important.
In March 2001, the Medical Engineering Technology
Industrial Strategy Consortium was established throughthe joint efforts of industry, academia, and government.
Various discussions were held until March 2013 with theaim of improving industrial technology and strengthening the international competitiveness of medical
devices, since they contribute to the advancement of
medicine and people’s health.
In March 2003, the Ministry of Health, Labourand Welfare (MHLW) announced the Medical Device
Industry Vision, with the aim of providing superiorand safer innovative medical devices. The vision set
the next five years as a period of focus to promote
innovation and formulated an action plan to strengthen
the international competitiveness of the industry bysupporting specific fields. It was revised as the New

THE ACCJ JOURNAL • VOL. 58 • NO. 5

This basic plan outlines the core policies and measures to be comprehensively and systematically implemented for the research, development, and dissemination of medical devices to ensure that Japan will continue
to have access to the most advanced medical care. At thesame time, it aims to make the medical device industry adriving force of the domestic economy and an industrial
field that is expected to grow and develop further.
The various measures based on this basic plan
are implemented not only by the MHLW, but also by
the Cabinet Secretariat; the Ministry of Education,
Culture, Sports, Science and Technology; the Ministryof Economy, Trade and Industry; the Japan Agency
for Medical Research and Development (AMED), andother related ministries and agencies.

Growing Ecosystem
Thanks in part to the support of these innovation
policies, Japan’s medical device development trends
are gradually showing signs of improvement.
The number of Japanese physicians launching theirown startups has been increasing since around 2012,
and there have been successful cases of these startups
obtaining approval and insurance reimbursement.

17

Progress in the field of digital health is particularly
noteworthy, and the development of medical devices
and software using artificial intelligence (AI) is becoming increasingly popular. The 2015 introduction in
Japan of Stanford University’s Biodesign, a projectbased course for graduate and post-doctoral students
keen to become entrepreneurs, has also been a driving
force and this trend is likely to continue.
The number of companies providing commercialization support is also growing. In the past, only
pharmaceutical affairs consulting was available, but
now there is an increasing number of companies thatoffer a wide range of commercialization assistance,
including research support, design, manufacturing,
regulatory affairs, sales channel development, andincubation, as well as venture capital companies
specializing in medical devices and healthcare. An
ecosystem is being established in Japan.
In the past, the development of therapeutic devices
was not a strong point, but over the past few years there
have been some success stories creating such devices
as well as treatments. These include: Drug-eluting stents
 Stent grafts
 Catheters to remove emboli from central circulation
 Non-absorbable local hemostatic agents for thecentral circulation
 Photodynamic therapy
 Thermoregulatory systems for cooling the brain Boron neutron capture therapy
 Nicotine addiction treatment applications
 Ventilators

Phase 2
As further enhancement of innovation policy is
expected, the second phase of the Health and Medical
Care Strategy, which defines a higher-level researchand development (R&D) strategy for the medical
field, began in FY2020. What was previously referred
to as the Medical Device Project has been modified
into a broader initiative called the Medical Device
and Healthcare Project.
AMED’s Medical Device and Healthcare Projectwill conduct R&D on medical devices and healthcarethat contribute to the advancement of diagnosis andtreatment, prevention, and improvement of qualityof life by integrating AI and the Internet of Things,
measurement technology, robotics technology, andmore. The budget for FY2021 is ¥10.9 billion.
At the same time, the government will provide
the necessary support to enable researchers andcompanies outside the medical field to conduct R&D
in an appropriate manner, and plans to build an
infrastructure for data utilization with an awarenessof the global trend of digital transformation.
In recent years, Japan’s medical device industry,
which had been stagnant since the mid-1990s, has
finally begun to show signs of recovery.
In the medical field, the balance between innovation policy and regulation policy is extremely
important, and it seems that equilibrium has finallybeen achieved. I hope that Japan’s medical device
industry will regain its brilliance, and I look forward
to investment from the United States. n

Listen to this story:
accj.or.jp/sound

THE ACCJ JOURNAL • VOL. 58 • NO. 5

CHUBU

By Jeffrey Jackson

IBC Legal
Webinar Series

18

Practical advice on Japanese law related to business, Covid-19, and moreT
Jeffrey Jackson
Gyoseishoshi lawyer
Jackson Sogo
Gyoseishoshi Law Office
Co-chair, ACCJ-Chubu
Independent BusinessCommittee

he Chubu chapter of the American Chamberof Commerce in Japan (ACCJ) has long had
a reputation for promoting and supporting
entrepreneurs as well as small and medium-sizedenterprises. The ACCJ-Chubu Independent BusinessCommittee (IBC), in particular, has served as the vehicle
for this support, providing a platform for businessminded individuals and companies to network and growtheir operations in the Chubu region and elsewhere.
As part of its mission to support the business
community, the Chubu IBC has begun a series of legal
webinars specifically tailored for business owners andmanagers in Japan. The aim is twofold: To fill a growing demand for seminars offering
practical advice on Japanese law
 To respond to the growing uncertainty surrounding
legal issues and questions related to the pandemic

Early Sessions
I presented the first webinar in the Chubu IBC Legal
Webinar Series on December 9 in my capacity as aJapanese gyoseishoshi and co-chair of the Chubu
IBC, and my committee co-chair, George Van Horn,moderated. The session, which attracted a lively groupof attendees and included more than 20 minutes offree-form Q&A, addressed revisions to the Japanese
Civil Code from early last year that impact businessowners and managers—specifically changes to therules governing: Unlimited guarantees
 General contract terms and conditions
 Interest rates for late payments

Listen to this story:
accj.or.jp/soundChanges to statutes of limitations on claims for
unpaid debts and receivables were also discussed.
The second webinar was held on April 5 anddelivered by Masanori Tanabe, a Japanese bengoshi
and vice-chair of the Chubu IBC, and I served asmoderator. This latest event addressed the topic oflabor law in relation to Covid-19 and covered remotework options, salaries and salary adjustments, andlayoffs resulting from the coronavirus pandemic.
Once again, an engaged group of attendees were able
to ask questions during the three Q&A sessions built
into the program.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

The event addressed the topic oflabor law in relation to Covid-19.
Reception
So far, feedback has been very positive, with the vast
majority of attendees praising the quality of the programming and the speakers, as well as the value forthe money. Building on that momentum, the Chubu
IBC is planning to present additional webinars aspart of the series and hopes to attract an even larger
number of attendees for its future events. Topics
under consideration include: Small-business mergers and acquisitions with afocus on how to sell a private, unlisted company(including finding buyers, valuation, tax matters,
and doing the deal) Future Covid-related changes to Japanese immigration law and enforcement
The precise timing of these events has not been
determined, but we hope to host additional webinars
quarterly over the course of this year and possibly
into early 2022.
The Chubu IBC is continuously looking for ways
to engage more members, respond to their needs, andsupport our membership and the business community
at large. The committee invites you all to join us for one
or more of the events and looks forward to developing and expanding the series. n

CHUBU

By Julian Bashore

Blast off to
New Heights

19

Developing aerospace and manufacturing in the Chubu region

In March, the American Chamber of Commercein Japan (ACCJ) Board of Governors approved the
newly rebranded ACCJ-Chubu Aerospace andManufacturing Committee. I am serving as chair and
Britt Creamer, project management and planning operations representative, senior staff at Lockheed Martin
Corporation, is vice-chair. Britt’s three decades of experience in the aerospace industry are complemented by
my own quarter-century background working at Tier 1
and Tier 2 suppliers to the automotive sector.
Previously, this committee was focused exclusively
on aerospace, but we are now greatly delighted to expand
our focus and accept new members from aerospace andnon-aerospace industries, including from the Tokyo andKansai chapters. Through our collaboration, our key
mission is to increase new business opportunities for
ACCJ members who work in the aerospace, automotive,
general industrial, electronics, and related industries.

Many other member companies in the region also
contribute to this Japanese manufacturing ecosystem.

Revving Up Awareness
The Aerospace and Manufacturing Committee, incollaboration with the ACCJ-Chubu Programs Committee, held our inaugural event on March 19. Our
guest speaker was Walter Lindsley, who spoke about
the leadership skills he developed in the US Air Forceand at Lockheed Martin Aeronautics Company. Speaking remotely from his office in Texas, he offered candid
advice that was also applicable to ACCJ members
in non-manufacturing sectors. And on May 28, we
hosted a webinar entitled Embassy Experts Discuss
Japan’s Revised Guidelines for Defense Exports.
While the slate for upcoming months is still verymuch in the planning stages, the rest of 2021 may
include webinars and/or in-person seminars on subjects such as how to sell to the heavies and navigate
the nebulous supply chain in Japan, advance yourcareer in manufacturing, and use trading houses anddistributors to grow your business in Japan.

Location, Location, Location
Nagoya, the largest city in the Chubu region, has often
been informally referred to as the automotive capitalof Japan. In fact, according to a January 2021 study
published by the Ministry of Economy, Trade andIndustry, 44 percent of transportation equipment
manufacturing in Japan takes place in Chubu, which
comprises Aichi, Mie, Gifu, Toyama, and Ishikawa
Prefectures. If greater Nagoya were a country, it would
rank among the world’s top 20 in terms of gross domestic
product. And the export-friendly Port of Nagoya makes
this area the main international hub for Japan’s humming factories, since it operates around the clock.
Appropriately, the chamber counts many of thelargest manufacturers and innovators as stakeholders in our organization, including:

As Britt and I extend our wings, we’re thrilled that
our committee is now actively recruiting prospective
members, and you can join from anywhere in Japan byregistering online through the Member Data Center.
We are also searching for guest speakers—in any
time zone—who feel that they have a compelling story
to share. Subject matter experts may also choose toparticipate in future panel discussions.
We endeavor to build strong, lasting relationships,
as well as to facilitate sustained, powerful growth formember companies in the aerospace and manufacturing-related industries in Japan. n

Chair, ACCJ-Chubu
Aerospace and Manufacturing
Committee

Britt Creamer
Project management
and planning operations
representative
Lockheed Martin
CorporationVice-chair, ACCJ-Chubu
Aerospace and Manufacturing
Committee

Illustration: Cruz Hernandez Oscar Boeing Japan K.K.
 GE Japan General Motors Japan Limited Honeywell Japan Ltd.
 Lockheed Martin Mitsubishi Heavy Industries, Ltd.
 Northrop Grumman Japan Pratt & Whitney Japan K.K.
 Raytheon Technologies Corporation
 Toyota Motor Corporation
 Yazaki Corporation

Taking Flight

Julian Bashore
General manager andrepresentative director
MacDermid Performance
Solutions Japan K.K.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

LAW

By Eric Sedlak

Study Groups

20

Advocating for transparency in Japanese government decision-making

O
Eric SedlakPartner
K&L Gates Gaikokuho
Joint Enterprise
ACCJ vice president

ne element of the decision-making process
in Japan is the formation, by ministries andother bodies, of study groups (many called
shingikai or kentokai) to address policy issues. Unfortunately, for many years, non-Japanese stakeholders,and even major industry participants, were not invited
to join these groups, and policy was made behindclosed doors—at least perceived to be closed to nonJapanese interests.
About 10 years ago, the American Chamber ofCommerce in Japan (ACCJ) began to advocate formore openness in the operation of study groups andfor more non-Japanese participation. By that time,some ministries, to their credit, had become more
open to non-Japanese participation. Others lagged,
but we persisted.
While not all of those forming study groups haveaccepted our members, over the past decade many
more have and I would like to relate my experience.

Advocate for Change
Through more than a decade of Legal Services Committee work on reforming the process for registering
foreign lawyers in Japan, the Ministry of Justice (MOJ)
has come to know me as an untiring advocate for
eliminating unnecessary requirements for registration and reducing the administrative burden.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

In 2019, the MOJ asked me to participate, as arepresentative of the ACCJ, in a kaigi (council) on its
ongoing project to translate Japanese laws and regulations. The first session took place in person in late2019, and a second was held online early this year.
The group included representatives of the Government of Japan, academics, bengoshi (Japanese-admitted lawyers), and company representatives, and wasabout one-quarter non-Japanese. The then-ministerof justice Masako Mori, a fellow NYU law alum, opened
the first session.
The proceedings were conducted in Japanese, withinterpretation provided on request. As my spoken
Japanese belies my ability to employ the more complex
structures and vocabulary required to understandsuch proceedings, I took up the interpretation offer—aside from my self-introduction.
A digression here: interpretation and translation
are distinct and require overlapping but specific skills.
Interpretation is, for example, converting Japanese
speech to English speech. Translation is converting
Japanese writing to English writing.
Returning to the council session, the proceedings
were, to my surprise, somewhat brief—about twoand-a-half hours for each session—and fairly formal.
While in some cases there is concern that the mindsof the decision-makers have been made up by the timea shingikai is convened, in this case, I felt that the MOJ
was soliciting views with genuine interest in hearing adiverse set of opinions.

21

Chamber View

Government Resources

The ACCJ has not adopted a formal policy positionon legal translations. So, as then-chair (and now vicechair) of the External Affairs Advisory Council (EAAC),
I had to be sure that I was playing by the same rules
as I myself enforce. The EAAC must ensure that every
policy position adopted—and certainly every position
that we present—is consistent with the ACCJ’s Core
Advocacy Principles and approved by the council andthe Board of Governors.
At my request, the chamber polled the most likely
ACCJ stakeholders (I often refer to them as “advocacyactive committees”) to identify laws and substantive
areas that are of sufficient interest to merit translation
into English, as well as the stakeholders’ thoughts onwhether we should make specific recommendations

The MOJ has a reasonable, but not unlimited, budget forthis work. To translate every Japanese law and regulation would cost an enormous amount of money (notto mention the capacity issues that would arise, since
there are relatively few well-qualified Japanese-toEnglish legal translators in the world). So, it is usefulfor the MOJ to use its limited resources to translate
laws that would be of the greatest utility to users.
There are a number of academics who handle
Japanese-to-English legal translation, but I was perhaps a bit overly vocal in insisting that the principle oftranslating or interpreting into one’s native language
should be adopted earlier in the translation process—not just as a touch-up at the end. The internal logic
should be smooth; sometimes a literal translation is

The ACCJ members and committee leaders who responded in2020 expressed interest in laws relating to healthcare anddigital. Before the 2019 session, requested areas of focus had
included healthcare, pensions, and tax.
about the translation process. Because discussions
were underway about approaches to translation andthe listing of substantive areas where our members
wanted the translations to focus, the ACCJ externalaffairs staff confirmed that my presentation would
not represent policy positions.
The ACCJ members and committee leaders who
responded in 2020 expressed interest in laws relating
to healthcare and digital. Before the 2019 session,
requested areas of focus had included healthcare,
pensions, and tax.
A key consideration in relation to the English legaltranslation program is who will use the translations of
the laws and regulations.
In some cases, the companies that are most affectedhave substantial staffs of Japanese regulatory specialists, who can work entirely in Japanese and have little
need to report specifics to their overseas regulatory
affairs or legal departments.
Other laws are of greater interest to Japanese andnon-Japanese law firms, as well as legal departments,
non-Japanese academics, Japanese academics writing for foreign audiences, international organizations, and foreign governments.

not clear enough, particularly for a legal rule. Those
using the translation need to be able to rely on it tomake go/no-go or compliance decisions.

Takeaways
Following my participation, a few points stand out.
 AI-based translation for legal documents is improving rapidly, but relying on that alone is premature.
 For companies operating in Japan, promptly
receiving English summaries of the key points
will be more useful than receiving line-by-line
English translations after a year or more.
 Our suggested focus on laws related to foreign direct
investment and digital were in the special request.
 Notwithstanding the high praise AI translation
was accorded by some of the presenters, the draft
minutes arrived for my review in Japanese and mysection was not entirely clear when run throughcommon translation software.
I very much appreciate the ACCJ having been
included in the proceedings. We want our voices tobe heard—and they were. n

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THE ACCJ JOURNAL • VOL. 58 • NO. 5

DIVERSITY

By C Bryan Jones

Hiring Women
Leaders in Healthcare

22

Titan Consulting brings D&I Spotlight Package to the Japanese market

I
Sophia Plessier
Business development
manager

Daniel McGrath
Partnert has been two decades since the Japanese government set its target of having women in 30 percent
of management positions by 2020—and the country
has fallen far short of that goal. More recently, thegovernment has acknowledged that it has had to push
off its target to 2030. According to the Global Gender
Gap Report 2021, published by the World Economic
Forum in March, just 14.7 percent of senior and managerial roles in Japan are filled by women. This puts
Japan dead last among the 29 members of the Organisation for Economic Co-operation and Development
and continues to leave so much of the country’s talentand potential untapped.
Titan Consulting K.K. Business Development Manager Sophia Plessier certainly noticed the imbalanceon her arrival in Japan. Coming from San Francisco,where discussion of diversity and inclusion (D&I) andsupport for women in business are a part of everyday
life, she found it striking how few Japanese companies
were promoting these important issues. To foster discussion and raise awareness, she founded the podcast

ship team are well established, but building that teamcan be more of a challenge in healthcare—especially inJapan—due to the somewhat conservative nature of theindustry.” The way in which these companies approach
screening adds an extra layer that must be overcome,he explained, “but with this challenge come opportunities, and if you’ve got something which can potentiallyremedy that, then the most conservative industry is
probably where you want to try and apply the solution.”
The solution he speaks of is the D&I Spotlight
Package, which Titan has created, inspired by anotherproduct they offer to clients which focuses on medicaldoctor hiring. The package helps clients who wish tostart putting their D&I policies into action through talent acquisition do so in the most effective way possible.
The D&I Spotlight Package is a 12-month commitment from Titan Consulting which starts with an
in-depth discussion to understand the client’s current
situation and business needs. Titan takes the time tounderstand the areas on which the client is aiming tofocus their D&I hiring and the foreseeable challenges.

Titan offers the opportunity to turn D&I hiring ambitions
into reality for companies that are serious about evolving
their business.
Sean LindleyBusiness operations
manager

Learn more about the
D&I Spotlight Package:titanconsulting.jp

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Women in Healthcare—Japan along with a networking group of the same name where women can cometogether to empower other women in the industry.
That ties into her work at Titan, where she helps
clients increase the diversity of their leadership. It’s anatural progression of her career in executive recruitment for the pharmaceutical, biotechnology, medical
devices, and technology industries. She began thatjourney in 2015 in the United States, where she partnered with leaders of top healthcare companies to fill
key spots in their management.

Focus on Diversity
Filling those positions is about more than just reaching a percentage. It’s about benefiting society throughthe innovation and solutions that emerge from teams
built on diverse views, experiences, and backgrounds.
And Titan’s area of focus—healthcare and life science—
requires a little extra attention.
As Business Operations Manager Sean Lindley
noted: “The benefits of having a more diverse leader-

THE ACCJ JOURNAL • VOL. 58 • NO. 5

This offers a close partnership in which Titan provides detailed market analysis, access to an extensive
network of professionals, a market map that identifies candidates, and ongoing, proactive support.
Whether the client just wants a market map, needs
to hire for a couple of key positions, or has extensive
hiring needs, Titan is ready to support all projects
with a tailored service.
“We work with the client to pinpoint what typeof professionals they want to engage with,” explainedPartner Daniel McGrath. “Some clients have urgent
and immediate needs while others are more focusedon casual exploratory meetings for pipelining. Whatever their situation, Titan offers the opportunity toturn D&I hiring ambitions into reality for companies
that are serious about evolving their business.”
Doing that is one way in which the cost structureof the Spotlight Package really boosts a company’s D&I
efforts. There is a commencement fee for the program,but the fee for the first placed candidate is waived. Any
additional placements are treated as contingent.

Marcom/
digitaldirector
R&D
head

Country
managerDrug safety/PV
director

Sales
director

CFO
RA/QA
director

Medicaldirector

23

Business
unit head

Operations
director
MarketingdirectorFemale Leadersin the Titan Network

Commercial
excellence
director

Diamond in the RoughOne thing Plessier, McGrath, and Lindley all noted isthat sometimes the perfect candidate or opportunity
may not jump off the page. This is especially true inJapan, where modesty may lead a candidate to discounta chance if their resume doesn’t check every box, while
a company’s inflexible or overly strict hiring criteria
might cause them to overlook someone who hasn’t
had a particular job title. And in a country where
women hold so few management positions, there’s agood chance of this happening.
“A lot of our clients say, ‘We would like women forthese positions, it’s very important for us to get more female leaders,’” Plessier said. “We’re very transparent withthem and explain that there’s a lack of female leaders inthis country, so identifying these candidates is not easy.
We might find eight or nine men for every one woman.”
Noting the smaller pool, Lindley added: “Part of thereason the Spotlight Package addresses this issue is precisely because of the close partnership with the client.
We are able to match solutions to identified businessneeds rather than just a candidate to a job description.”
And it’s not just from the company side. Plessier
said Titan also works with candidates to build bridges
across perceived deficiencies in experience. “We makesure that they have the confidence to go for these roles
that they might not naturally pursue. In Japan, you will
send a role over to a candidate and if she’s not a 99.9or 100-percent match—for example, she has five yearsof experience instead of the seven listed—she won’t
even apply,” Plessier explained. “So, a lot of it is for us
to coach them, to tell them that the company is trying
to promote diversity and will be impressed with you.”a position which had never been held by a female
leader, and the company had been unable to identify
any strong female candidates in their pipeline. To solve
this issue, Titan tapped into their international networkand supported a candidate from overseas to transition
back to Japan and into this role.
In another case, a medical device client, which
was focused on Japan and had an entirely male executive team, was given a big incentive from the global
executives to push for more diversity. They needed
to replace their head of research and development,
so decided to invest in diversity hiring and workwith Titan. In just six weeks, the final candidate wasselected from three finalists.
McGrath feels that now is the right time for morecompanies to make such moves. “We’re seeing thereaction to Sophia’s podcast interviews with womenleaders in healthcare, and some genuine interest
among companies to diversify management,” he said.
If you’re ready to strengthen your management
team with more female leaders and greater diversity ofvoices and ideas, Titan Consulting is ready to help. n

Presented inpartnership with

If you are looking to hire in
Japan and have questions, pleasecontact Sophia Plessier at:
sophia@titanconsulting.jp+81-(0)3-4550-2860

Real World Results
Plessier shared two examples of successful placements.
In one, a US biopharmaceutical client was searching for
a new head of pharmacovigilance and safety. It was

THE ACCJ JOURNAL • VOL. 58 • NO. 5

WOMEN IN BUSINESSBy C Bryan Jones

Untapping Potential:
Second Case Studies

24

New toolkit shares how companies are expanding diversity activities

T
Corinne Johnson2020 WIB Committee
Co-chairhe American Chamber of Commerce in Japan(ACCJ) is highly active in advocating for womenin business (WIB) through its annual WIB
summits, collaboration with Japanese business andgovernment, and white papers such as the Women in
Business Toolkit Untapping Potential: Case Studies.
Published in 2019, the survey provides examples ofconcrete business initiatives to increase the number ofwomen in management and leadership roles in Japan.
Now, building on the first edition, the ACCJ WIB
Committee has published an updated survey entitled
Untapping Potential: Second Case Studies. The project
was led by 2020 WIB Co-chairs Corinne Johnson andJiana Leung, with 2019 Chair Ryann Thomas, and brought
to publication by 2021 Co-chairs Nuala Connolly andDebbie Reilly.

Broader Focus
Jiana Leung2020 WIB Committee
Co-chair

Whereas the first edition followed a detailed process
to identify case studies from companies that have beenrecognized by the government or other organizationsas promoting gender diversity in the workplace, thesecond edition takes a different approach by reaching

Nine Stories
To provide a comprehensive look at the overall workforce and the issues facing human resources departments, the toolkit is divided into four chapters:
 Workstyle Reform Increase Male Support for Diversity Programs Improve Human Resource Policies
 Appreciation of Different Employee Perspectives
Across these four chapters, stories of reform, innovation, and success are shared by nine companies:
 Gilead Sciences K.K.
 Discovery Japan, Inc.
 Shimizu Corporation
 Cisco Systems G.K.
 Micron Memory Japan FIL Investments (Japan) Limited
 Sonoda & Kobayashi IP Law
 EY Japan Visa Worldwide (Japan) Co., Ltd.

Ryann Thomas
2019 WIB Committee
Chair

Untapping Potential:
Second Case Studies
Download the toolkit
www.accj.or.jp/
women-in-businessout to ACCJ member companies about experiencesthat would be useful to share with other members.
In addition, Untapping Potential: Second Case Studies
highlights some of the more varied diversity-related
activities in which many companies are now engaged.
What began in most companies as a focus purely on
gender diversity has become a much broader discussion, around diversity in general and workplace changethat benefits all—including LGBTQ+ employees andemployees with disabilities.

Building on the 2019 First Edition of the Women in Business“Untapping Potential” Case Studies, this survey provides
examples of concrete business initiatives to increase thenumber of women in management and leadership roles
in Japan.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

These companies represent a cross section ofindustries and organizational sizes. Both multinational
and Japanese companies are included, providing a
range of examples of what companies in Japan are focusing on now, in terms of inclusion and gender diversity.
The nature of the initiatives differs depending on
the company. Some are top-down, while others are
grassroots-driven. Some are focused on key performance indicators and metrics, while others are more
informal, prioritizing gender diversity or a broader
definition of inclusion. And still others are focused on
different stages of the employee experience, from recruitment to promotion.

CHAPTER 4

25

Appreciation ofDifferent Employee
Perspectives

Visa Worldwide (Japan) Co., Ltd.

PAYMENT NETWORK BRAND
Number of employees: Can’t disclose

Some companies are also collaborating with external institutions such asuniversities and Women20, one of theofficial G20 engagement groups that proposes policy recommendations related to
women. Many more are leveraging newtechnologies to facilitate communicationand flexibility.

• Focusing on diversity in the hiring
process: The company establisheda policy for diverse interview panels
that are made up of interviewers fromdifferent functions/backgrounds/
genders. The company has also
expanded its hiring to include can­didates from around the world.

43% of employees are female

Key Themes
The first chapter, “Workstyle Reform,”
focuses on flexible work arrangements that help attract, develop,
and retain employees from diverse backgrounds(Gilead Sciences), and a new office space that helps
create an environment where both male and female
employees can be more engaged, involved, productive, and in tune with the company’s global culture(Discovery Japan).
Increasing male support for diversity programs isthe focus of Chapter 2, with a story from the construction industry where Shimizu is pioneering reformby putting in place policies, systems, and procedures
to address the challenges that the industry faces and tocounteract traditional mindsets.
In Chapter 3, Cisco shares how they are promoting a conscious culture and creating a workplace
where employees of all backgrounds can be at theirbest. Micron Memory, meanwhile, shows how they
initiated a plan to enhance their male­-to-female ratio,
hire and promote more females to senior positions,and increase recruitment of female college graduates.
In addition, the company was looking to boost hiringof Millennials, non­-Japanese, and employees withdisabilities. Then FIL Investments, which has more
female employees than male, talks about the steps
they are taking to recruit female employees to senior
positions, where men still outnumber women.
Appreciation for different employee perspectives
is the theme of Chapter 4, and stories from Sonoda& Kobayashi IP Law, EY Japan, and Visa Worldwide
highlight the importance of diversity and inclusion

Employees help drive company culture• Inclusion and diversity (I&D): I&D
has been established as a key factor
in the company’s business strategy
and leaders at Visa understand thatthey are accountable for creating
a diverse and inclusive culture.
I&D­related questions are includedin the company’s annual Employee
Engagement Survey (EES) in orderto gauge employee satisfaction as
well as to gather suggestions andthoughts about how the company
can improve.
• Internal I&D activities: The I&D
team in Japan was formed in 2018;
it is a volunteer group established towork on I&D­related matters and toserve as an enabler and ambassadorof I&D culture. The team has its own
business plan, KPIs, and budget.

• Locally hired non­Japanese employees
increased fourfold during the sametime period.

• In 2018, the company adopted a flex
office hours program—including “working
from home”—that was suggested by
employees. Many employees make use of
the program, including working mothers,
working fathers, and employees withaging parents.

POLICIES

The company is constantly
looking to create an excellent
work environment for its
employees. Some of its chiefareas of focus are achievinga more inclusive and diverse
workplace, fostering work–lifebalance, and making the officea safe and productive place
to work.

• The percentage of female employees atthe company increased from 38 percent
to 43 percent between 2016 and 2019.

• The 2019 EES showed a 14 percent
increase (from 74 percent to 88 percent)since 2018 in the number of employees
who believe that Visa is committed topromoting a culture that values diversity,
including diversity of thoughts, opinions,and ideas.

Grassroots activity brings about institutional change
FOCUS

KEY LEARNINGS AND IMPACT TO DATE

www.visa.co.jp
MOVING FORWARD• Making the office even more inclusive and diverse, such as by increasing thenumber of young professionals on staff and increasing intra­company hiringfrom outside of Japan.
• Reaching a 50–50 gender balance in the company’s leadership positions.

30

31

in today’s business operations. Sonoda & Kobayashi
believes that employees who come from a homogenous
background are more likely to reach the same conclusions and less likely to be creative and think outside
the box. So they embraced a set of policies thatwould attract talent qualified in technology, law, andlanguages from a wide range of nationalities, genders,
work locations, and work-time arrangements.
EY Japan shares with readers their external efforts to support female entrepreneurs and internal
efforts to support female members and the company’s
LGBTQ+ members, while Visa Worldwide shows how
grassroots activity can bring about a more inclusiveand diverse environment, fostering work–life balance,and making the office a safe and productive place inwhich to work.

Nuala Connolly
2021 WIB Committee
Co-chairInspiration
In their introduction, Johnson, Leung, and Thomas say,
“We hope that this second edition of the toolkit provides
further food for thought as [ACCJ] members—and allcompanies operating in Japan—strive to improve thediversity and inclusion of their workforce.”
Indeed, the 32-page publication is filled withideas and actionable steps that can help any company—large or small—create inclusive environmentsthat embrace diversity and foster sustainable business practices that not only lead to greater success, but
a better world for everyone, at work and at home. n

Debbie Reilly
2021 WIB Committee
Co-chair

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THE ACCJ JOURNAL • VOL. 58 • NO. 5

MANAGEMENT

By Jesper Koll

Beyond ESG

27

Why sustainability is just one part of business successT

he Covid-19 pandemic has helped turbochargea change in global investor priorities to investment strategies based on environmental, social,and corporate governance (ESG). Total assets invested
in ESG funds more than doubled last year and now
account for one-third of the approximate $150 trillionof global investment assets.
It all makes good sense. Yes, companies are supposed
to make a profit. But to ensure the profit is sustainable
and contributes to future generations, corporate leaders
are now held accountable for raising standards and forthe overall impact of their actions on the environment,
society, and all stakeholders of their enterprise.
Japan has been a pioneering advocate of ESG
investing. Most importantly, the Government Pension
Investment Fund went beyond merely advocating
and talking about the importance of ESG and actually
allocated ¥1 trillion of its portfolio to help seed-funddomestic ESG funds. Make no mistake—ESG investment is Japan-style Capitalism 2.0. Unlike the UnitedStates, Japan’s management philosophy never thoughtof profit maximization or capital efficiency as goals
sufficient to achieve sustainable prosperity.
So, the good news is that single-minded pursuit ofprofits and greed is out, and a high-minded and morally
aspirational management style is in.

Beyond Simple ESG
This sounds good. Indeed, many of my naturally
cynical investor friends suggest that ESG stands for“everything sounds good.” But the real challenge isthat both the relentless pursuit of profits and ESGfocused strategies must go hand in hand.
The research is very clear. Study after study confirms that implementing best-in-class ESG measures
is totally insufficient to achieve a company’s outperformance (against peers). First and foremost, a traditionalsales growth and profit strategy must be in place. However, among companies with high capital efficiency,
those that also have exemplary ESG strategies in place
are outperforming their peers. Clear-speak: an ESG
focus alone will not make you a good company; but
it does help you become a truly great one when combined with a firm focus on profits.
Here, corporate Japan has much work to do. If the
ESG focus does not, at the same time, trigger a greater
focus on improving capital efficiency and profitability,
Japan Inc. is poised to remain a global underperformer.
The biggest obstacle is the absolutely astounding
cash hoardings accumulated. Listed companies cur-rently hold record cash balances equivalent to about
160 percent of gross domestic product (GDP), up fromabout 40 percent 10 years ago. In comparison, the global
runner-up is the United States, where listed companies
hold cash to the tune of about 55 percent of GDP.
Of course, any company will want to hold a cash
buffer for tough times, and a war chest to buy a competitor, a new business, or expand. But surely hoarding theequivalent to 160 percent of national income is excessive
and has led to almost half of all listed companies holding as much cash as they have shareholder equity.
The link to high-minded ESG priorities is this:how can it be good governance to prioritize hoarding
cash over paying your key stakeholders, your employees? Because yes, corporate Japan ranks very low whenit comes to distributing profits back to its employees.
Specifically, workers’ compensation is barely 33 percent of corporate value-add in Japan, significantly lower
than the 48 percent in the United States and 78 percent
in Germany. Yes, Japanese companies are extremely
kechi (stingy) when it comes to paying their workers.
Why does the leadership of a multi-stakeholder,
for-profit enterprise choose to hold more of a zeroreturn asset rather than invest in one of its stakeholders
where there must be a positive return?

Jesper Koll
Global ambassador
Monex Group Inc.

Productivity Deficit
To add insult to injury, all corporate leaders agree
that, yes, Japan must boost productivity. All too often,
productivity gets confused with process efficiency. Just
trying to save costs and streamline process efficiencies
may get you higher efficiency—and even higher profit
margins—but if you use these profits to simply hoard
cash, your productivity of capital is unlikely to go up.
You’re sweating your workers and your factories
harder and harder, only to add a dead-weight, zeroreturn asset to your balance sheet. Return on assets
or return on capital will stay flat at best, despite greater
efficiency (and, probably, ever unhappier and frustrated
employees). To raise productivity of capital and labor,
you’ll need to invest in future returns by, for example,
buying better productive capital (e.g., technology) and—most importantly—mobilizing better use of humancapital within your enterprise (e.g., pay for performance).
All said, we should very much welcome the newfound global focus on ESG and multi-stakeholder investment. But we must stay razor-focused on improving
the overall efficiency of our business, incentives, and,in particular, rewards of our employees. ESG alone isinsufficient to raise Japan’s global competitiveness. n

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THE ACCJ JOURNAL • VOL. 58 • NO. 5

ADVOCACY28

By C Bryan Jones

POSSIBILITY FORCONTINUITYACCJ LEADERS SHARE WHAT SUSTAINABILITY MEANS TO THEM

THE ACCJ JOURNAL • VOL. 58 • NO. 5

29

W

hat is sustainability? The termmeans different things to different
people. For many, the first thingthat comes to mind is the environment. But sustainability encompasses numerous
areas of society, as evidenced by the wide spectrum
covered by the United Nations (UN) Sustainable
Development Goals (SDGs). Not only does sustainability involve the environment, but also economic
and societal matters as well as environmental, social,and corporate governance (ESG).
To capture the range of issues that fall under thesustainability umbrella, The ACCJ Journal asked
leaders and members of the American Chamber ofCommerce in Japan (ACCJ) to share what sustainability means to them.

Eriko Asai
President, GE Japan / ACCJ chair
I am delighted to bring you thisspecial edition on sustainability.
The word encompasses many
areas but, needless to say, climatechange is one of urgent global priority. It
cannot be solved without advancements in technology, where the private sector plays a key role, and takes
cross-industry collaboration to engage with governments to introduce adequate policy and regulations.
For 2021, the ACCJ has decided to focus on sustainable society as one of our four key advocacy priorities.
We have established the Sustainable Society Advocacy
Coordination Group, led by ACCJ Governors Andrew
J. Conrad and Frank Packard, along with me as ACCJ
chair, to ensure that we take a holistic approach incovering topics such as energy transition and ESG.
In April, Japanese Prime Minister Yoshihide Sugaand US President Joe Biden agreed on the Japan–U.S.
Clean Energy Partnership, which includes cooperation on implementation of the Paris Agreement, cooperation on clean energy technology, and accelerating
decarbonization in the Indo-Pacific region.
As an example of pioneering such US–Japan cooperation, GE and Toshiba have recently concluded
a strategic partnership agreement on offshore wind
power to jointly support the Japanese government’s
Green Growth Strategy and its effort to install 30–45
gigawatts of offshore wind generation by 2040.
I am excited to be part of a great team of professionals at the ACCJ and look forward to our journey ahead.

I PERSONALLY BELIEVE THAT THE ACCJ AND
ITS MEMBERS ARE DEDICATED TO ENSURING
A MORE SUSTAINABLE FUTURE AND THAT
THE CHAMBER CAN CONTRIBUTE TO THATDIALOGUE IN JAPAN IN A MEANINGFUL WAY.
Jenifer Rogers
General counsel Asia
Asurion Japan Holdings G.K.
Non-executive director
Mitsui & Co., Ltd.; Kawasaki
Heavy Industries, Ltd.;
Nissan Motor Co., Ltd. / ACCJ president
I am very pleased that we are producing a special
edition of The ACCJ Journal focused on sustainability.
One of the key things I wanted to do when I became
ACCJ president was to reconsider the areas on which
the ACCJ should focus its advocacy—especially inlight of Covid-19.
With the ongoing pandemic, it has become clear tome that sustainability-related issues are finally getting
the attention they deserve, that they are growing as afocus area and becoming even more critical, especiallywith respect to issues around climate change.
Serving as a non-executive director on corporateboards, I have been very aware of the increased focus
on sustainability, over the past few years, as an areathat stakeholders are concerned about. But it became
even more critical to business management, and agreater priority, as the pandemic highlighted theimportance of this focus.
In addition, with the change in the Japanese and
US administrations—with Japanese Prime Minister
Yoshihide Suga and US President Joe Biden taking
office—it became clear that both governments werealso prioritizing the issues related to sustainability.
That is why we formed the Sustainable Society Advocacy Coordination Group.
The topic of sustainability is so broad, but what itmeans to me is creating a balance between economic
growth and harmony with nature, so that we leave
the planet in good shape for future generations. I
believe a focus on sustainability for advocacy allows
the ACCJ to lead the discussion on so many important topics regarding which Japan needs to improve,
including social aspects such as diversity and inclusion, as well as corporate governance and climatechange aspects such as carbon neutrality.
I personally believe that the ACCJ and its members are dedicated to ensuring a more sustainable
future and that the chamber can contribute to that
dialogue in Japan in a meaningful way.

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THE ACCJ JOURNAL • VOL. 58 • NO. 5

30

Heather McLeish

Mike Benner

Director, EY Japan Co., Ltd.
Co-chair, Sustainability Committee
Sustainability is a great big umbrella of aterm that means so many different things todifferent people. That is part of the reason it
can be an overwhelming term! I like to keep things simple whentrying to define sustainability.
From a business perspective, I like to think that sustainability
is at the crossroads of purpose and strategy. It is the place westop and consider our direction and choose the best way we canat the time. It is the starting point for averting risks and uncovering new opportunities.
From a personal perspective, I feel sustainability means having“enough,” focusing on quality over quantity for the choices I makeand the activities I pursue. Sustainability is, above all, a life choice
and a journey—one I choose to take.
My experience is that individuals who try to incorporate sustainability as a pillar of their life journey have an increased senseof integrity and purpose. Above all, they have a joyful foundation
for living well and feeling connected to their surroundings.
As co-chair of the ACCJ Sustainability Committee, I want
to help bring feasible sustainability actions, best practices, andinspiration to others in our community.

Co-chair, Information, Communications,and Technology Committee
Vice-chair, Energy Committee
Sustainability is core to my business focusof bringing new distributed energy technology
solutions to Japan, and assisting Japanese energy players to accelerate wide-scale adoption of renewables and distributed energy.
This includes innovative models for rapid deployment of battery
storage and software platforms, to optimize how and when grid-edge
resources (e.g., water heaters/chillers, heat pumps, HVAC systems,
electric vehicles) are used to match supply and demand.
Technologies at work in these solutions combine hardware,
software, the Internet of Things, cloud computing, and artificial
intelligence (AI). Adoption of these new models will result incompanies and residents operating more efficiently and having
lower energy costs, often turning unused assets into revenue
streams. It also lessens the reliance on the central generation ofelectricity using fossil fuel-powered plants.
Additionally, as president of Tokyo American Club, I launcheda broad-based sustainability initiative to measure the club’s total
carbon footprint and implement ways to reduce it. Beyond acting
on energy efficiency, the club is also aggressively looking at the
reduction of plastics use and food waste.
As stewards of our planet, it is beholden on all of us to act
decisively—and now—on the major sustainability challenges
which will impact not just future generations but our own lives.
These challenges are not only existential threats but businessmegatrends and opportunities to rethink society as we know it.

Manabu Yamanaka
Engineering manager,
Building Construction
Products Division, Caterpillar Japan LLC
Co-chair, Sustainability Committee
Sustainability has many meanings and includes
various aspects of life. But for me, it means to preserve a beautiful
world for my children and grandchildren, so they can enjoy thesame—or even more wonderful—experiences than those withwhich I am blessed.
My company, the construction equipment manufacturer Caterpillar, has been focusing on sustainability for the past 20 years
as the top priority for our customers working with the infrastructure, energy, and resource needs of tomorrow. Without thesustainable perspective of customers, our company would not be
successful. Without the sustainable development of the world’s
energy resources and infrastructure, our customers, in turn,would not be successful. So, these are closely connected. There is
no winner or loser in this ecosystem. We must work, strive, andenjoy prosperity together with customers and the world.
Many of our customers are private companies that havebeen in business for multiple generations. The owners are working hard for their company’s sustainable future, so that they canpass the business along to their children. I see the similarity
between my personal thoughts and corporate policy, and learn a
lot from our corporate approach that I can carry over to my personal life. As co-chair of the ACCJ Sustainability Committee, I
would like to listen to, and learn from, fellow chamber members
to refine, improve, and grow sustainability-related thinking forboth my private and corporate perspectives.

Hannah Perry
Director, Finsbury Glover Hering
Vice-chair, Sustainability Committee
Sustainability as a concept still conveys
diverse meanings to both individuals andbusinesses, and is highly sensitive to context.
I see great value in that flexibility, such that it remains open tointerpretation, with the concept continuing to evolve while weevolve as a society.
I find the term interesting to analyze in its Japaneseconstruction: 持続可能性 (jizoku kanosei). If you separate thecomponent characters, 持続 (continuity) and 可能性 (possibility),
the literal translation becomes “the possibility for continuity.”This notion of continuity echoes the idea of creating a future
informed by resilience, growth, and long-term success.
A sustainable business is now closely associated with theconcept of the 3Ps: people, planet, and profit. For me, sustainability is at the core of this matrix and, when correctly interpreted,
is what holds the three elements together.
Being respectful of the 3Ps, as representing the possibility
for transformation, has the potential of ensuring that environmental and societal factors are core considerations in businessdecisions to produce the continuity required for the creationand maintenance of a sustainable society.

I FIND THE TERM INTERESTING TO ANALYZE IN ITS JAPANESECONSTRUCTION … THE LITERAL TRANSLATION BECOMES“THE POSSIBILITY FOR CONTINUITY.”

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Ken Haig

Keith Kirkham

Chair, Energy Committee
The UN group that oversees the now ubiquitous SDGs defines sustainable development
as “development that meets the needs of thepresent without compromising the ability of
future generations to meet their own needs.” I like this definition, as it is pretty close to how I think about sustainability,
which is: What do we need to be doing now to pass on a habitable planet—and all of the benefits that we’ve enjoyed from avibrant economy and society—for our children to be able to passon to their children and beyond.
As I recently learned (from my own children’s investigations
into the SDGs for school, no less), the goals that I am most directly
focused on these days—both personally and professionally—are:

Senior commercial officer
Embassy of the United States, Tokyo
It’s common—and correct—to think ofsustainability in terms of the environment;
whether our world’s resources will continue tosupport some human activity indefinitely.
Some cases are clear. We can consider the pressure of
population growth, assume a rate of consumption, and forecast
how long a resource such as codfish or cobalt might last. Other
questions are more difficult. How far into the future can wesustain our business models, our ability to innovate, and ourpath to deliver solutions into a competitive market? Will thesemechanisms all be eclipsed by a catastrophic shock, an abruptchange in geopolitics, or will they improve and flourish?
Assessing the risk of unsustainability is different from therisks of natural disasters or political risk. And today, when weseem to turn on a hinge of history, it is hard to know if tomorrow
opens to progress or just disruption. Greater computing powerand AI have accelerated our entry into a new age of discovery,
but understanding social psychology may be as important tosustainability as resource availability.
Ironically, to reach our goals for environmental sustainability,
we need a sustainable system—one that creates accurate incentives
for behaviors—by which consumers, stakeholders, and government
can make decisions and set policy. The Ministry of Economy, Tradeand Industry credits its feed-in-tariff (FIT) policy for renewableenergy as the incentive that successfully reduced the cost of renewable energy in Japan. FIT was then replaced (as fiscally unsustainable) by an auction system. This is an example of how sustainability is both the destination and the steps along the way.

 13: Take urgent action to combat climate change and its impacts
 7: Ensure access to affordable, reliable, sustainable, and modern
energy for all
But there are so many other worthy goals that need to be
met, and I take heart from the fact that many ACCJ colleagues
are working on these from many angles as well.

Frank Packard
ACCJ governor
Chair, Alternative Investment Committee
This is a great time to be in my line of workin finance and investment. Increasing awareness of climate information is driving newdeals in ways unimaginable even five or 10 years ago.
This moment is exciting, as the creativity of technology solutions
and financial structures meet new disclosure requirements.
Sustainability for me is personal. I grew up in the northeastern
United States with lots of outdoor activities, including hiking, rockclimbing, winter mountaineering, and sports such as collegiate rowing. The outdoor environment was an integral part of growing up.
These days, “sustainability” seems to be increasingly in vogue,
perhaps due to our growing awareness of its absence in our lives.
To date, we have often measured economic and investment
activities only by the benefits to owners, and have avoided measuring their true costs. To me, sustainability means addressing
this tragedy of the commons with verifiable and comprehensive
disclosures according to widely accepted standards.
Two ACCJ leaders, Chris Wells and Debbie Reilly, recently
framed the issue succinctly: transparency drives action. I
believe that when we have developed sensible disclosure
requirements, common sense and financial markets will makeeducated and sustainable choices.
To be sure, sustainable investing goes far beyond transparency
itself. ESG disclosures are quickly becoming requirements for key
industry participants, such as institutional investors and listedcompanies. At the same time, these disclosure requirements concerning climate-change information should be viewed as a design
opportunity rather than a burden.
Beyond transparency, sustainability means bringing to thetable all our best human resources to pursue all possible sourcesof solutions, including the 50 percent of us who are women.
And sustainability remains personal for me. For 32 years, wehave celebrated our wedding anniversary on Earth Day.

Eddie GuillemetteCEO, Midori no Ki K.K.
For us, sustainability is about giving morethan you take, caring for the environment,
and treating everyone with respect. We
incorporate these ideas into our real estate andhospitality businesses.
Our EdVenture kids camp focuses on outdoor education, so
we spend time on farms, in the forest, and on the water aroundNiseko, Hokkaido. The kids plant trees to offset their carbon
footprint and we encourage all guests to use our compost centerto improve the soil and reduce waste.
Our real estate business uses timber construction, orientsproperties facing south, uses double- and triple-glazed windows,
and ensures there is cross ventilation (to avoid the need to use air
conditioners). Our goal is to build properties with more sustainable
materials and renewable energy sources—although the additional cost of these products in Japan is generally unacceptableto many customers.
Our hospitality business is partnering with Goyoh, a local
company, to measure the total impact from a guest stay and theproperties we manage. The goal is to share this data and allow
guests to offset their carbon footprint via tree planting, forest
restoration, and land preservation.
To have a sustainable business and society, we believe that
it is critical to promote awareness of the issues and provide
simple, cost-effective solutions. n

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31

ADVOCACY

By Malcolm Foster

EMBRACING
SUSTAINABILITYHOW CANCOMPANIES DO IT?

As businesses big and small increasingly
wake up to the importance of sustainability,
some are not really sure where to start.
Others have quickly begun to align theirbusiness practices to reduce waste and environmental
damage, protect human rights, and seek sustainablesources of energy—all aspects of this catch-all term.
Recognizing sustainability as a priority has prompted many companies to go through a “re-visioning process” to redefine their objectives and purpose. Someof these steps question the basic tenets of capitalism,
said Ben Fouracre, the Japan representative at businessadvisory company Berkeley Research Group, LLC.
“It’s no good just to make money anymore. Businesses need to be profitable, but earn that profit without
damaging the planet or society,” he said. “Companies
are realizing they need some kind of ethical purpose
for existing.”
But it’s not just about doing good things; it’s about
survival. Businesses are realizing that taking action on
climate change, plastic waste, and worker exploitation makes good business sense and is closely linked
to their own futures. Ignoring these issues is perilous.
“Is our company, our existence sustainable?” Fouracre
said companies are asking themselves, “Is our businessstill going to be relevant in 20 years?”
Sustainability also has a personal meaning for many.
Dieter Eckert, chief executive officer of TÜV SÜD
Japan Ltd., a unit of the German safety, security, andsustainability solutions company, recently became agrandfather. “I have a great interest in ensuring thatmy grandson will experience an environment andconditions which are worth living in.”Wrestling with questions about how to createa sustainable world—and what that means for corporate and individual behavior—are the first steps
companies and organizations need to take, according
to consultants interviewed by The ACCJ Journal.
“Companies need to recognize and understandtheir role in the global ecosystem,” said Tove Kinooka,
director and co-founder of Global Perspectives K.K.,
a sustainability integration consultancy. “When you
start to zoom out, you see how interdependent everything is, and how a company’s actions have ripple
effects beyond its supply chain.”Wake-up Call
The Covid-19 pandemic has dispelled any doubts aboutthat broader impact, driving home how interconnected
our world is. “It’s been a massive wake-up call,” Kinooka
said. “The pandemic seems to have really catalyzed atrue desire for action, rather than just talking about
things. We’re seeing a lot more companies saying,‘We want to do something,’ which is very cool.”Once companies are convinced about the importance of sustainability, it’s vitally important that thevision be embraced at the top. This must be done as a key
part of the corporate identity, not treated as a compliance issue or a reaction to activists or investors, theconsultants said. “It can’t just be window-dressing,”

said Fouracre. “At the very top of the organization, theleadership team has to define where they stand.”In the past, sustainability issues were often
lumped together under corporate social responsibility(CSR) and, usually, delegated to a department that hadvery little power or decision-making ability.
That term isn’t used very much anymore, because
the “responsibility angle makes it seem that it issomething you don’t really want to do,” said Heather
McLeish, a director at EY Japan Co., Ltd. and co-chairof the American Chamber of Commerce in Japan(ACCJ) Sustainability Committee. Sustainability now
is becoming a core part of corporate identities.

Mapping It Out
The first step toward this is mapping out a company’svalue chain—all the points at which the businesstouches people and the environment—and zeroingin on the biggest sustainability risks, as well as thebiggest opportunities, the consultants said.
Most companies already have risk profiles, so
it may mean reconstructing these in light of issues
such as environmental impact, human rights, waste
management, and gender equality. That can mean amajor overhaul.
One helpful way to break down sustainability goals
is to think of them in three inter-related categories,
which can pair with the 3Ps:
 Social (people)
 Environmental (planet) Economic (profits)
Another acronym that’s often heard to summarize this is ESG, for environmental, social, andgovernance criteria.
Risks vary widely depending on the industry.
For a coffee producer, for example, looking at theirbusiness through this lens would mean examining thenatural environment in which the coffee is grown, theliving and working conditions of the people who growand pick the beans, as well as their communities andthe way the coffee is transported, processed, packaged,
and delivered to customers. There’s waste and energy
use to consider, too.

33

Ben Fouracre
Japan representative
director, Sustainable
Corporation Programs
lead, Berkeley ResearchGroup, LLC

Tove Kinooka
Director and co-founder
Global Perspectives K.K.

Dieter Eckert
President and CEO
TÜV SÜD Japan Ltd.

Key risks include: Impact on climate change Exploitation of workers
 Use of child labor Exposure to hazardous chemicals
 Lack of access to education and healthcare
Any of these, if exposed, might damage the company’s reputation, and hurt sales from increasingly
conscientious consumers, Kinooka said.
For manufacturers, the value chain is more complicated because parts and raw materials come fromall over the place and involve thousands of suppliers

Listen to this story:
accj.or.jp/sound

THE ACCJ JOURNAL • VOL. 58 • NO. 5

United Nations Sustainable Development Goals
34

Zero hunger

No poverty

Quality education

Good healthand well-being

Clean waterand sanitation

Gender equality

and transporters. It’s hard to know each one’s labor orenvironmental conditions.
Major concerns include: The source of raw materials
 The carbon footprint of transporting materials
 Parts and labor practices among suppliers“The factory may be careful about its waste management and other things, but where do all these particularelements actually come from? And how do they get tothe factory?” said Kinooka. “There are lots of hidden
risks. There’s potential for corruption and exploitation. It can get murky.”Decent work andeconomic growth

Affordable andclean energy

Industry, innovation,and infrastructure“But another way to look at this is that it is possibly the biggest opportunity, in terms of job creationand economic growth, [so far] in the 21st century,”
Lewis said. “It’s a huge opportunity for companies tofundamentally transform what they’re doing, accessnew consumers, and grow their market share.”Pick a Few
The United Nations Sustainable Development Goals(SDGs) can provide a helpful framework for companies trying to identify objectives that are related totheir businesses.
But the commitment needs to be genuine.
Sometimes, companies have done very little, despite
paying lip service to the SDGs by posting the color-

PEOPLE AND PROCESSES NEED TO BE ALIGNED. YOU CAN’T
TRANSFORM IF YOU FORGET ABOUT THE PEOPLE SIDE OF
THINGS … AND IT TAKES BOTH INTELLECTUAL UNDERSTANDING
AND EMOTIONAL ENGAGEMENT TO MOVE PEOPLE TO ACTION.
Strategic Opportunities

Learn more about
the UN SDGs
sdgs.un.org

On the flip side, companies should also use this process to see strategic opportunities that come frompaying more attention to sustainability.
If a coffee business builds good relationships withthe growers and invests in schools, health centers,
and farmer training, “then they not only get a healthier, better-educated workforce, who can understandand implement new techniques for improving yields
and reducing environmental degradation, but theyalso have a strong story with which to engage consumers,” Kinooka suggested.
Initially, people may tend to see prioritizing sustainability in a negative light—having to restrict or sacrifice
things, such as avoiding plastic, limiting travel, or evennot eating meat, said Robin Lewis, co-founder of mymizu,
a platform that aims to reduce plastic bottles by providing information about 8,500 free water-refill locations
around Japan and thousands more around the world.

THE ACCJ JOURNAL • VOL. 58 • NO. 5

ful ring emblem prominently on their website andclaiming to be contributing to certain goals. “There’s
a lot of SDG-washing going on,” said Kinooka.
Once companies have mapped out their entire
business, they can categorize their activity according
to the 17 SDGs, making it easier to choose which goals
best align with their operations, said Eckert of TÜVSÜD Japan, which provides safety testing, inspections, and certification.
Generally, it is better to pick a few goals andtake meaningful action on them, rather than spreadyourself too thin, the experts said. “It’s much morecredible to focus on a few [goals], especially forsmaller companies, and to be able to show what you
are doing,” said Hannah Perry, a director at Finsbury
Glover Hering and vice-chair of the ACCJ Sustainability Committee.
“Companies get this wrong all the time, because
they try to do too much,” said EY’s McLeish.

35

Sustainable cities
and communities

Reducedinequalities

Cimate action

Responsible consumption
and production

Easy Wins
Educating and engaging employees is the next vitalstep—and without this, the venture will fail, theconsultants said.
Companies that invest time and effort in informing workers about why sustainability is important,and getting them emotionally engaged, generally
have more successful outcomes. Workers need theintellectual reasoning behind these new priorities,
as well as an invitation to be emotionally invested
and to be shown how they can make a difference.
That gives them a sense of ownership, rather thana feeling that they are simply doing things because
they were told to do so by their boss. “If employees
see sustainability as a compliance issue or a top-down
demand, it’s not going to last,” said Lewis, who is also
co-founder and director of Social Innovation Japan, aplatform designed to bring together entrepreneurs,
nonprofits, governments, big business, and academia
to tackle real-world problems.
Joy Jarman-Walsh, a Hiroshima-based consultant
at Inbound Ambassador, the sustainability-focusedcompany which she founded, agrees that talking withyour staff is critical. Encouraging and training employees to look out for wasted water, food, or electricity will
make them feel that they are contributing to efforts
that make a real difference—and it will also save thecompany money, she said. “Then the employees feelbetter about the brand because it’s more ethical, it has
more integrity.”Once staff are engaged, start looking for “easywins,” Lewis suggested. Plastic waste is a huge problem that employees can immediately start addressing
by being encouraged to bring their own bags andwater bottles, and some companies have even started
banning single-use plastic items.
To inject some fun into the endeavor, Lewis’s
non-profit runs the mymizu Challenge that helps
companies set up competitions between departments
to see which department can most reduce the use ofplastic bottles over the course of a month.

Life on landLife below water

Partnerships

Peace, justice, andstrong institutions

For hotel or restaurant chains, food waste may be
an issue. Employees could connect with local farms andsee if they have a compost system, or donate to Second
Harvest, a group supported by the ACCJ Community
Service Advisory Council that feeds homeless people,
Jarman-Walsh suggested.
Pandemic-related travel restrictions have also
prompted companies to reconsider how much travel—
a big generator of carbon emissions—is really necessary,the experts said.
Proactively seeking input from staff—asking
them, What’s important to you? What do you think weshould change?—will also motivate them and lead tomore sustainable business practices, said Fouracre.
Employees have detailed knowledge of their segment of the business, so may come up with creative
alternatives to things such as packaging or energy usethat will probably benefit the company.
With growing calls for supply chain transparency,
some companies are looking at setting up hotlines for employees to report problems they see in the supply chain.
And expect to get calls, Fouracre said. “Before you
set up a hotline, make sure you’re prepared, and makesure you’re serious about making changes, because if
people report it, they expect to see some action.”
One company that did this was surprised to get a
lot of sexual harassment-related calls, which they were
not expecting, he added.
Sitting down together with key stakeholders—investors, employees, local leaders, and non-governmentalorganizations—to hear their top concerns and how they
view the company is also a valuable exercise, said EY’s
McLeish. “It’s always surprising. At every stakeholder engagement that I’ve been a part of, the management goesaway saying, ‘I don’t know why we didn’t do this earlier.’”

Not a New Concept Here
European companies are considered the global leadersin sustainability, largely because legislation there has
progressed the fastest, requiring companies to meetvarious environmental and human rights standards.

Heather McLeish
Director
EY Japan Co., Ltd.
Co-chairSustainability Committee

Manabu Yamanaka
Engineering manager,
Building Construction
Products Division,
Caterpillar Japan LLC
Co-chairSustainability Committee

Hannah Perry
Director
Finsbury Glover Hering
Vice-chair
Sustainability Committee

THE ACCJ JOURNAL • VOL. 58 • NO. 5

36

But while Japan may lag in implementing sustainability practices, many businesses here have welcomed the concept and are
eager to put them into action, the consultants said. That’s probably
because there’s a long history to the idea that companies have asocial responsibility to care for their employees and surrounding
community, as well as the environment.
“Japanese companies have always been set up with the
purpose of providing a benefit to society. They’re looking forlong-term relationships and have a community ethos,” explained
Fouracre, who said that Japanese trading companies he’s engaged
with have been particularly proactive.
At Marubeni Corporation, for example, employees highlighted their own corporate philosophy of using the 4Rs—reduce,reuse, recycle, and return to earth—which they felt was a simple
but obvious way to approach sustainability, he added.
McLeish said she has never had to sell the “why” a company
should be doing this. “Never once in Japan. What we’ve had to sellis the ‘how’ to make it work.” EY is in a good position to show this byexample, thanks to its own carbon-negative ambitions and success,which is outlined in a case study starting on page 38.
Still, some Japanese businesses are reluctant to make changes
as the rest of the world moves ahead, and many consumers don’t
weigh sustainability factors very much when buying products,
some experts said.
“Japan is being left behind in terms of sustainable infrastructure, and that’s a real worry to me,” said Jarman-Walsh.
McLeish sees anecdotal evidence that suggests consumers
are becoming more sensitive to these issues, “but, overall, mostpeople don’t seem to care. They don’t boycott companies or pushfor change,” she said. “Young people do seem to care more.”
Tackling sustainability can seem like a huge goal, so McLeishrecommends setting up short-term milestones, so that management and employees can see their progress.

The Long View
Going green can take money. Committing to sustainability goals
often requires upfront investment—in cleaner forms of energy
or better waste disposal, for example—that can dent short-term
profits. That’s a challenge for listed companies under pressure
from investors to produce results every quarter.
But increasingly companies are realizing that making thoseinvestments for the long term—a key to sustainability—is not
only good from an ethical standpoint, but it makes goodbusiness sense, experts said.

reduce“It’s not just about looking good and being nice. It’s realizingthat if we want to protect our supply chain, our resources, andour people, we need to invest now or we’re going to have a big
problem in the future,” said Kinooka.
Caterpillar, for instance, is investing in a power source thatwill eventually replace the diesel engines it uses in its excavationand construction equipment, said Manabu Yamanaka, engineering manager of the Building Construction Products Division andco-chair of the ACCJ’s Sustainability Committee. Electric motors
can power smaller vehicles, such as passenger cars, but currently
are not strong enough for the large tasks and heavy-duty workrequired of backhoes and reloaders.
Investing in new technologies to explore every possible solution
is imperative from a corporate survival standpoint, he said.
“We cannot yet say what the major solution for powering small
and large construction equipment will be, but we are investingin this area to prepare and look for all potential opportunities,”
said Yamanaka, who shares a detailed case study of Caterpillar’s
activities starting on page 40.
Sometimes, small business owners will balk at the upfront
costs of solar panels or electric vehicles, for example, but usuallythose investments end up reducing costs over the long term—
and they will give your brand a boost among consumers, said
Jarman-Walsh.
Astroscale, an international company headquartered in Japanthat aims to remove, and prevent the creation of more, space junk,sees one of its chief purposes as keeping Earth’s orbits safe and sustainable for the future. “We often describe ourselves as space environmentalists,” said Group Chief Operating Officer Chris Blackerby.
Astroscale is developing spacecraft that will capture defunctsatellites and rocket upper stages, which are circling the Earthalong with millions of tiny pieces of debris—all of which could
damage existing satellites that provide us with communication
and ways to analyze weather and climate patterns. The company
successfully launched its End-of-Life Services by Astroscaledemonstration (ELSA-d) mission on March 22.

reuse

recycleThe 4Rs
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return to earth“We want to make sure that the global commons—in this case the orbital environment—is usable for
future generations,” Blackerby said. “As a society, we
are wholly reliant on data from satellites, whether it’sfor exchanging money, communicating, or understanding our climate … I don’t think people really are awareof how much we benefit from satellites in orbit, andhow big a problem this is.”Blackerby said it’s “very short-sighted” to avoid
investing in sustainability practices that bring longterm benefits. “There will be negative impact on
future economic activities if we don’t pay attention to
the environmental, societal, and governance context.”

Youth Wave
The younger generation is more concerned and passionate about sustainability—after all, they will inherit
the earth—and that has big implications both for consumers and recruiting talent, the consultants said.
If companies aren’t taking meaningful steps
regarding climate, energy, human rights, and genderequality, they will be facing growing ranks of consumers who may reject their products and services, andinstead turn to competitors who are.
They may also have a hard time attracting talent.
“Future employees will be saying: ‘Sorry, if you can’t showme that you’re really serious about this, I don’t want towork for you. I’m going to go work for that other company that actually is doing something,’” said Kinooka.
This line of thinking extends to diversity and genderequality. Some companies may have a hard time seeing
this as part of the people/social side of sustainability,
which they may equate more with labor standards andhuman rights. Reframing the issue may be necessary.
“Isn’t equal treatment a basic human right?” asked
Kinooka. “If we look at equal treatment of all people—
whether that’s gender-based, racial, LGBTQ, disabilities,
or whatever type of diversity we’re talking about—when
it comes down to it, it’s fundamental human rights, andwe’re serious about being fair and equitable.”That means not excluding anyone from the workforce, supply chain, or customer base, she said.

Gender Roles
Gender balance is a huge challenge for Japanesecompanies, the consultants agreed. Jarman-Walshsaid setting quotas for women in management or key
departments is the only way to rectify this.
McLeish said companies need to do a better job ofbringing women into the leadership pipeline. Somecompanies will come to her and say they want to put
women in senior management, but don’t have any, shesaid. “I tell them, ‘Well, that’s a corporate fail. How areyou planning succession for the future?’”This requires a big rethink on gender roles andreal changes in family, company, and society, McLeishsaid. Some women will turn down promotions because
they are expected to assume most of the child-rearing
and household duties, as well as take care of elderly
parents, and they don’t want to spend long hours at

the office or out entertaining, as is required of senior
executives, she pointed out.
The solution may have more to do with reeducating and helping men revise their own understandingof their roles, particularly in the home, McLeish said.
There are plenty of seminars about what it means to
be a working mother, but none about what it means to
be a working father. “We’ve spent a lot of time talking
about changing gender roles for women, but we’veneglected to talk about the changing gender roles formen,” she pointed out.
“I believe we’ve just left men hung out to dry: justkeep your head down, work hard, and you’ll get promoted and move forward,” McLeish added. “I feel that’s
led to a great deal of confusion as to what their role is.”Getting men to think more flexibly about their roleand offering more support at home might free women toplay a more active part in business and politics, she said,
and help Japan narrow its gender divide, which shows up
in the wage gap between men and women and the tiny
fraction of women in corporate and political leadership.

37

Robin Lewis
Co-foundermymizuCo-founder and director
Social Innovation Japan

Gaining Credibility
Communicating what you’re doing as a company on sustainability is also important because you want people toknow—but it must come across as credible and genuine.
This can be a tricky balance, as some businesses are
doing great things but are too modest to broadcast theiractivities, or aren’t very good at publicizing them effectively. Others will hype things too much, and increasingly savvy consumers and activists may be able to tell they
are being deceived. That will backfire. “Behaviors arechanging, and many consumers now consider sustainability in their purchasing decisions,” Perry said.
One way to bring credibility to a company’s efforts
is to get third-party certification that your company isreally meeting targets and making a difference, said
Jarman-Walsh. “You can then put that on your website
and branding materials so that consumers will trustyou.” TÜV SÜD’s safety inspections and certificates
could help with this.
Social media has become an increasingly important way of doing public relations, and Jarman-Walshsuggests tapping influencers on Instagram and YouTube. You may invite those who already have a reputation for talking about zero waste and sustainability tovisit your company or try your products.
“They can introduce your business to their fans,
who are already motivated to look for sustainability,” shesaid. “Then you would have a really good inroad, and it’s
probably a lot cheaper than traditional marketing.”
Overall, it’s important to understand that sustainability involves executing a strategy, but it is also about
people and focusing them on a unifying purpose, theconsultants said. “We really want companies to understand that people and processes need to be aligned.
You can’t transform if you forget about the people sideof things,” Kinooka said. “And it takes both intellectual
understanding and emotional engagement to movepeople to action.” n

Joy Jarman-Walsh
Founder andsustainability consultant
Inbound Ambassador

Chris Blackerby
Group chief
operating officer
Astroscale Holdings Inc.

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By Julian Ryall

ENGAGE &INSPIREEY NET - ZERO INITIATIVES HELP CLIENTS,
SUPPLIERS, AND THE PLANETO

f all its sustainability and corporate social responsibility
initiatives, Ernst & Young Global Ltd. (EY)—along with
American Chamber of Commerce in Japan (ACCJ) Corporate
Sustaining Member company EY Japan—is particularly proud of its
ambitions in the area of carbon emissions. And rightly so.
In late January, the company unveiled plans to build on its
NextWave strategy, first announced in 2020, and become carbon
negative this year. That is to be achieved by setting targets tosignificantly reduce absolute emissions across the company,
as well as removing and offsetting more carbon than the globalorganization emits.
If that were not enough, the seven key components of the planare designed to reduce EY’s total emissions 40 percent and achieve
net-zero emissions as early as 2025. That percentage is consistent
with a science-based, greenhouse gas-reduction target to cut
an organization’s emissions in line with climate science and thegoals set in the 2015 Paris Agreement to limit global warming to
1.5 degrees Celsius above pre-industrial levels.
The campaign has become an integral part of EY’s NextWave
strategy, designed to create long-term value for all stakeholders andsupport the company’s plan to build a better work environment.
“We believe that combating climate change is a vital elementof building a better working world,” said Carmine Di Sibio, EY
global chairman and chief executive officer, in a statement.
“While this challenge is unique and different for each organization, we are inspired by those that are setting ambitious targets,
despite the difficulties they face,” he said. “EY people are passionate about tackling big challenges and, with the power of 300,000of them, we will not only transform EY to become a leader insustainability but also help EY clients do the same.”

Leading by Example
The main tenets of the plan are broad in their scope and ambitious
in their reach. They could also hold lessons for other companies
looking to follow in EY’s green footsteps.
On a global basis, the company aims to reduce business travelemissions 35 percent by fiscal 2025 from the fiscal 2019 baseline.
It estimates that air travel accounted for 75 percent of its total
carbon emissions in 2019. Solutions include using virtual collaboration technologies and adopting new tools and tech to help staff

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make better travel choices and encourage greener alternatives
whenever possible.
A reduction of 35 percent in travel-related emissions translates
to a cut of more than two million tons of CO2 between 2019 and 2025.
The company will also narrow its overall electricity usage andis committed to procuring 100 percent of its energy needs fromrenewable sources by 2025. This achievement will earn EY membership in the RE100, an organization that brings together more than
300 of the world’s most influential companies, all of which rely on
renewable sources for 100 percent of their electricity needs.
Implementation of innovative ways of working has alreadyenabled EY to reduce its real estate occupancy figure from 13.8
square meters per person in 2009 to 7.6 today. That has resulted ina decline in power consumption of more than 150 kilotons of CO2
equivalent, which matches the annual energy use of 17,830 homes
or 612 million kilometers (380 million miles) driven by average
passenger vehicles.
In addition, EY is structuring its electricity supply contracts
through virtual power purchase agreements with solar and windfarms to introduce more than twice the amount of electricity
that it consumes into national grids from 100 percent renewableenergy. That will offset the company’s office electricity emissions,
reduce total electricity costs, and help to decarbonize the electricity
generation sector.
Under the scheme, EY teams will have the tools that enable
them to calculate, and then work to reduce, the amount of carbon
emitted when carrying out work for EY clients. And the feedback
from clients has been positive, the company told The ACCJ Journal,
with many saying they want to work even more closely together toreduce the collective impact on the planet.
Furthermore, EY has set suppliers the goal to meet their sciencebased targets by no later than 2025 and is committed to working
with those companies to help them meet the goals.

Collaborative Support
The seventh and final element of the program is premised on
the belief that the biggest difference that EY can make is to help
clients on their journeys to decarbonize their businesses. This
move creates value for all stakeholders through sustainable action,
including financial value for their investors. EY is increasing invest-

ments in the services and solutions that will make the company
a global leader in sustainability, including in its Climate Change andSustainability Services teams, as well as its strategy, consulting, andtax service lines.
Announcing the initiative, Steve Varley, vice-chairman of EY
Global, said that, “EY has set this ambition because it is increasingly clear that, collectively, we need to do even more to help avert
a climate change disaster.
“EY people are proud that we met our ambition to becomecarbon neutral in 2020,” he said. “Inspired by them, and others undertaking major steps, we challenged ourselves to go further, faster.
“We are deeply concerned about the science and what thatmeans for our planet,” Varley added. “We believe that becoming
carbon negative in 2021 and net zero in 2025, reducing our emissions
in line with a science-based target, is the right ambition to have.
“We realize that these challenges are different and more difficult
for certain industries. That is why there are also investments in
new solutions and services to help EY clients protect and create
value by becoming more sustainable, too.”

Making a Difference
As well as helping the planet and generations to come, EY isconfident that it will help the company in the more immediate

future. Being carbon-negative will not only “engage and inspire”
the present workforce, the company said, but it “will also build
EY member firms’ reputations as employers of choice, attracting
talent who increasingly want to work for responsible businesses.”
To further bolster the company’s commitment to reducing
its environmental impact and driving sustainable growth, EY
has recently launched two initiatives: one with the Sustainable
Markets Initiative set up by His Royal Highness The Prince of Wales,
and another with the S30, a forum of 30 C-suite sustainability
leaders divided into three working groups that focus on accelerating business action on sustainability. Further, the company
has joined the Terra Carta, a green recovery charter for business.
Launched by The Prince of Wales earlier this year, it places sustainability at the heart of the private sector.
EY is also playing a leading role in the sustainability conversation in the World Economic Forum’s International Business Council,
which has drawn up a core set of common metrics and disclosures
on non-financial factors for investors and other stakeholders.
EY was the first of the big four accounting firms to becomecarbon neutral. The other three have set 2030 as their net-zerotarget year. Achievements to date put EY in the same bracket forworld-class sustainability leadership as fellow ACCJ member
companies Microsoft, Google, Salesforce, and IKEA. n

BEING CARBON - NEGATIVE WILL NOT ONLY “ENGAGE AND INSPIRE”
THE PRESENT WORKFORCE … IT “WILL ALSO BUILD EY MEMBER FIRMS’
REPUTATIONS AS EMPLOYERS OF CHOICE.”

Listen to this story:
accj.or.jp/sound

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CASE STUDY

40

By Julian Ryall

CONSTRUCTINGCOMMUNITIESCATERPILLAR COMMITS RESOURCES GLOBALLYTO HELP THOSE HIT BY THE PANDEMIC

I

n a year of unprecedented disruption—on both corporate andpersonal levels—Caterpillar Inc. has gone above and beyond
what was already an impressive devotion to sustainability, extending a helping hand to those less able to withstand the impactof the global health crisis.
“Caterpillar has a long-standing commitment to sustainability;
it’s one of our five Values in Action,” Manabu Yamanaka—engineering manager of the Building Construction Products Division atCaterpillar Japan Inc.—told The ACCJ Journal. “It is part of who
we are and what we do. It inspires us to help our customers build
a better world through products and services that fulfill society’s
basic needs—such as shelter, clean water, education, and reliableenergy—in a sustainable way.”

Time of NeedDuring the pandemic—which has seen a sharp economic downturn
piled on top of the rapid spread of the coronavirus to virtually
every corner of the world—that promise to deliver sustainability
has proved more important than ever.
In 2020, the Caterpillar Foundation—launched in 1952 topromote the resilience, sustainability, and economic strengthof communities around the world—committed $10 million to
support response efforts and help organizations directly impacted
by the coronavirus. This was followed by an additional $3.4 million
for 2021, Yamanaka said. The investment is having a global impact
as it supports the world’s most pressing needs by partnering with
the United Nations (UN) Foundation and the World Health Organization (WHO) Covid-19 Solidarity Response Fund.
This commitment includes a two-to-one match on eligible
US employee and retiree donations, while the foundation also iscollaborating with Caterpillar facilities around the world to donate
to local charities, responding to the need for coronavirus-related
health, housing, food, and other basic requirements in communities the company’s employees call home.
India has been in the headlines in recent months, with millions
of people at risk of contracting the virus and not having access toadequate healthcare. This comes on top of their often-irregularaccess to routine medical services, food, and water. One of thebiggest problems has been an acute shortage of bottled oxygen
needed to treat those with serious cases of Covid-19.

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The Caterpillar Foundation is giving $1 million to help India’s
health system deliver care to families and communities acrossidentified hot-spot locations by funding the purchase of critical
medical supplies and equipment such as oxygen concentrators, aswell as the optimization of oxygen plants.
In addition to the foundation’s efforts, Caterpillar India isproviding an initial contribution of $1.4 million, enabling an
additional supply of oxygen, and donating beds with ventilator
support to hospitals. The company is also supporting vaccination
drives and setting up temporary relief shelters. Independent
Caterpillar dealers are contributing oxygen solutions to address
the shortage as well.
Brazil is another of the hardest-hit countries, and the foundation
is donating $250,000 to help coordinate with local partners to deliver
essential medical aid and basic supplies to hospitals and communities. The aim is to halt the rising number of new Covid-19 cases andput a cap on deaths.

Communities that Thrive
More broadly, the Caterpillar Foundation is working in partnershipwith the UN Foundation and the WHO to support the Covid-19
Vaccines Global Access initiative, more commonly known as
COVAX, to promote equitable access to coronavirus vaccinations
with a $500,000 gift.
In addition, to continue emergency relief work and address
vaccine hesitancy—particularly among rural, Black, and Hispanic
communities in the United States—the foundation is investing$250,000 to support the US-based non-profit Ad Council and theCovid-19 Vaccine Education Initiative of the COVID Collaborative, adiverse and comprehensive team of experts, leaders, and institutionsin health, education, and the economy. The slogan of the group’s
vaccination campaign is, “It’s up to you.”
Representing one of the largest public education efforts in
US history, the initiative is designed to reach multiple distinct
audiences throughout the country, answering key questions andempowering Americans with the information they need to makeinformed decisions for themselves and their families about coronavirus vaccines.
Yamanaka said the philanthropic arm of Caterpillar “hasbeen on a mission to improve lives since its founding in 1952.”

“Today the foundation is focused on building resilient communities that thrive in a rapidly changing
world,” he added. “Just as our company and customers
work to build infrastructure, the Caterpillar Foundation helps build stronger individuals, communities,
and economies around the world.
“Covid-19 has affected every community that
Caterpillar and the Caterpillar Foundation serve,” hesaid. “The foundation’s investment of $13.4 million in2020 and 2021 to assist response efforts supports its
mission of building communities that thrive.”
At the same time as helping people in the communities that Caterpillar already serves, the company’s
staff have still had to go about their work, adapting todramatically changed circumstances, while staying
safe and ensuring access to the products and services
that customers depend on to get their jobs done.
“We have prioritized the safety, health, andwell-being of our production, distribution, andsupport employees who have continued to come into
our facilities by implementing safeguards to protect
our team members in accordance with regulatory
requirements and guidance from health authorities,”
Yamanaka explained. “Additionally, to prevent the
spread of the coronavirus, some of our global teamhave been working remotely.
“The return to the workplace will vary aroundthe world as the pandemic evolves, but our commitment to workforce safety will not.”Environmental Care
As if that weren’t enough to keep the company busy, it
has this year been playing a key part in the One Tree
Planted initiative, a non-profit organization dedicatedto advancing the United Nations Sustainable Development Goals (SDGs) through global reforestation efforts.
Caterpillar has invested $1 million in the charity.
It’s just the latest in the company’s 95-year commitment to building a better world, and through the
donation Caterpillar will collaborate on tree planting
missions in 95 communities across the globe.
The company “is on a mission to help build resilient communities that thrive in a rapidly changing
world,” Yamanaka said. Part of that strategy involves
restoring local ecosystems to help communities growstronger and become more sustainable.
As a result, the One Tree Planted partnership isabout much more than planting trees, he explained.
It is about contributing to restored forests, cleaner air
and water, stabilized soils, and improved biodiversity.
In Japan, Caterpillar has selected two key locations—the cities of Akashi, in Hyogo Prefecture, andYokohama, in Kanagawa Prefecture—where it will
work with local partners to carry out the initiative.

“In addition to metrics, we believe the best way todrive a culture of safety excellence is to create an environment where our team is accountable for their own
safety, as well as the safety of those around them,” hesaid. “We relentlessly strive to ensure our workforce
returns home safely every day.”From day one, every new hire the world over isprovided with the knowledge they require to performtheir job without incident, with leaders regularly
undergoing training in their role in standards andregulation compliance, thereby setting an example
to reinforce the strong culture of safety, he added.
And that commitment has paid off, with the company last year having delivered its best recordable injury
frequency (RIF) performance on record, and having
improved on the previous record, set the year before.
The company’s new goal is to further reduce RIF
by an additional 50 percent for the period 2018–30
and to remain an industry leader in terms of safety.
Maintaining lasting risk reduction will require
even further maturity of our safety culture, said
Yamanaka, adding that the company’s plan includes
fostering a culture of caring by involving employees indeveloping solutions, listening to their concerns, andensuring they feel comfortable talking to their peers
about unsafe behaviors.
Continuing to provide learning opportunities for
our leaders, safety professionals, and employees will
enhance the company’s efforts, he added.
The result is Caterpillar holding one of the covetedspots on the Dow Jones Sustainability World Index—alist of global sustainability leaders as identified by
S&P Global through its annual Corporate Sustainability Assessment—for a 21st consecutive year. The
ranking represents the top 10 percent of the largest
2,500 companies in the S&P Global Broad Market
Index, based on long-term economic, environmental,
and social criteria. n41

Manabu Yamanaka
Engineering manager,
Building Construction
Products Division,
Caterpillar Japan LLC
Co-chair
ACCJ Sustainability
Committee

Listen to this story:
accj.or.jp/sound

Safety FirstThe well-being of the company’s employees remains
a critical focus and is at the forefront of its strategic
goals and metrics, supported clearly and visibly bymanagement, Yamanaka said.
Caterpillar ensures that all workers are well trained to do their job safely.

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By Julian Ryall

WATER WAYS
COCA - COLA JAPAN’S 2030 PACKAGING VISIONSEES A WORLD WITHOUT WASTE

F

rom canned coffee and energy drinks to bottled water,
fruit juices, green tea, ginger ale, and the drink that madethe company a household name around the world, Coca-Colamarkets more than 800 products in Japan. A business on thatscale would typically consume vast amounts of raw materials andproduce a great deal of trash—but the company has ambitions to
help achieve a world without waste.
In May, the Shibuya-based unit of the global beverage giant
announced that more of its bottled products on sale here are
adopting 100-percent recycled plastic material, known as rPET,
including those from Coca-Cola and Georgia Japan Craftsman.
As a result, American Chamber of Commerce in Japan Corporate
Sustaining Member Coca-Cola (Japan) Co., Ltd. and its five bottlingpartners—The Coca-Cola System in Japan—will be able to cut CO2
emissions by as much as 60 percent per bottle, meaning a reductionof about 35,000 tons per year. It will also equate to approximately
30,000 tons saved by not utilizing new plastic from petroleumbased materials.

PET plastic. But the company intends to boost that to 50 percent
by the end of 2022, as it continues its shift to the use of 100-percent
rPET for its flagship lines.
And by 2030, 90 percent of each bottle will come from recycledplastics, with 10 percent from plant-derived plastics.
At a press conference on May 13, Coca-Cola Japan President
Jorge Garduño unveiled the company’s latest plans: “I am glad toannounce that, on May 31, the Coca-Cola System will be introducing
100-percent recycled PET bottles for our flagship brands, Coca-Colaand Georgia, in addition to I LOHAS. I believe this step puts us on an
accelerated pace towards realization of a world without waste.”

Vision for Tomorrow

In addition to using sustainable materials in its bottles, thecompany is reducing the amount of PET plastic in each bottle.
A 1.5-liter bottle of Coca-Cola weighed 75 grams in 1982, but a mere
42 grams in 2012.
The label-free bottles for I LOHAS water are easier to sort anddispose of because individual bottles bear only a stylish design
worked into the plastic. The product is only sold in cases, with the
cardboard packaging bearing information about the ingredientsand other statutory data that is usually found on the product label.
The company supports Japan’s PET bottle collection drive, which
already sees 93 percent of bottles being collected, thanks to the efforts

Coca-Cola Japan unveiled its 2030 Packaging Vision in January 2018
and raised the bar with higher targets in July 2019. The vision isdesigned to promote bottle-to-bottle recycling—the collection andrecycling of post-consumption PET bottles to transform them into
new PET bottles—and to completely eliminate the use of newly
produced petroleum-based materials in its PET bottles by 2030.
The first 100-percent rPET bottles were introduced for I LOHAS
water last March and the label-free version of the product thefollowing month. Also last year, some 28 percent of the bottles
used in Coca-Cola’s soft drink business were made of recycled

Sustainable Pillars
To meet that goal, Coca-Cola’s Packaging Vision has three pillars: Design
 Collection
 Partnerships

The Coca-Cola and Georgia coffee lineups have joined I LOHAS in 100-percent-recycled PET bottles.

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Photo: Coca-Cola (Japan) Co., Ltd.

Photo: Coca-Cola (Japan) Co., Ltd.

of companies, government, and communities. In its sustainability report, Coca-Colasaid it wants to avoid a single one of its cans orbottles ending up in the ocean. In 2019, when
250 of its employees took part in a beachcleanup campaign in Chiba Prefecture, theycollected enough litter to fill a two-ton truck.
Under its partnership program, in 2019
Coca-Cola worked with the Nippon Foundation, a non-profit organization dedicated tosocial innovation. The goal was to identify themechanisms by which waste is transferredfrom land to Japan’s rivers. With the joint
report, it was hoped that previously unknown
routes marine litter takes could be identified.
Coca-Cola Japan President Jorge Garduño and actress Haruka Ayase at the May 13 press event.
That knowledge could then be used to devise
effective prevention strategies and promote
the cyclical reuse of PET bottles and other plastic
In a further effort to preserve the environment,
resources, the company said.
the company’s new generation of vending machines
are cooled using hydrofluorocarbon-free refrigerants,
Cut Waste and Purify
which have no impact on the ozone layer and minimal
Another area in which the company is working to reduce global warming potential. All 880,000 machines are
its consumption and waste is water. Coca-Cola isalso equipped with LED lighting as standard.
introducing measures to cut the amount of water that
People Matter
it uses during the production process. In 2019, theIn parallel with the company’s commitment to the encompany used 16.27 million cubic meters of water, avironment, Coca-Cola is just as invested in providing a
year-on-year reduction of 1.84 million cubic meters.
fair and free working space for its employees, of whom
Coca-Cola plants are designed to ensure that
there are 20,000 at 22 plants across the country.
wastewater, used for the washing of packaging and
As of December 2020, fully 42.2 percent of theequipment, or for cooling, is appropriately processed
Coca-Cola Japan workforce comprised women, with
before being released into sewers or rivers. The wastethe ratio of men to women close to one-to-one.
water is purified on site using microorganisms in the
Similarly, 30.7 percent of the company’s leadership
activated sludge process and is verified against standards
specified under Japanese law and the Coca-Cola Oper- positions in December 2019 were held by women,a vast improvement on the average of eight percent
ating Requirements, also known as KORE.
across all companies in Japan.
Coca-Cola conducts surveys to identify plant water
The company has been carrying out a wide-ranging
sources—and the vulnerabilities of those sources—asreform of its global operations since last year, designed
well as participates in water stewardship initiatives
around the world. The company follows the same tried- to bring about future growth. The percentage of womenin management roles is seen as one of the most imporand-tested path in Japan, locating water sources for its
tant issues in that evolution. This means that some 35.7
manufacturing facilities based on scientific surveys,
percent of Coca-Cola’s leadership positions in Japan andassessing their vulnerabilities, and then formulating
South Korea were held by women as of March 2021.
source protection plans.
The aim, the company says, is to create working
environments that are “truly diverse” and it will continue
Solid Plan
to make efforts to promote the employment, skills
It’s a similar story with solid waste at Coca-Cola facilidevelopment, and career progression of women.
ties, with a portion of used tea leaves recycled into
Globally, the target is to increase the ratio of women
livestock feed or agricultural fertilizer. The Tokai
in leadership positions to 50 percent by 2030, althoughplant of Coca-Cola Bottlers Japan operates a methane
Coca-Cola Japan is already moving quickly and is aimfermentation system to convert coffee grounds, used
ing to hit its target by 2025.
tea leaves, and wastewater treatment sludge into an
The company is actively supporting its LGBTQ+
energy source.
staff and employees with disabilities. Respect for diverAnother area that has been addressed is distribusity is part of the company’s core values in terms of its
tion and transportation, with the company optimizing
growth and sustainability strategies.
delivery and sales logistics by centralizing distribution
It has been part of the Valuable 500 disability inclusionbases and reviewing routes to maximize efficiency.
organization since January, and is currently drawing
Coca-Cola staff are undergoing training to promote
up employee welfare programs and work regulations
eco-driving, the company’s fleet of vehicles is beingthat provide same-gender partners with equal treatListen to this story:
reduced, and hybrid and other low-energy vehicles
accj.or.jp/soundment as spouses in a legally recognized marriage. n
are being introduced.

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COMMUNITY SERVICE

44

By Tad Johnson and Minako Kichiraku

NURTURE &SUPPORT

WILDFLOWER HOUSE FOUNDER TALKS ABOUT THE
DRAMATIC RISE IN CHILDREN WHO NEED CAREL

How have things changed since you opened the home?
Hanazaki: Thirty years ago, there were very few children whocame to us because they were being abused. In those early days,
we had lots of cases where the father had custody after a divorce,but found himself too busy with work to look after the children,
or both parents had a serious illness at the same time. In thesesituations, once the parents’ lives settled down, they intended tostart taking care for their children again.

ocated not far from the coast in Kisarazu, Chiba Prefecture,
Wildflower House—known as Nonohana-no-ie in Japanese—
is a privately-run children’s home established in 1985 thatcares for children of all ages—infants through high school. Some
57 children are presently living at the home.
The facility has been recognized and awarded by the United
Nations Educational, Scientific, and Cultural Organization as wellas the prime minister and emperor of Japan. As an independent
non-profit, it receives some financial support from the national
and local governments, but it is not enough to cover all expenses,
with additional funds needed for things such as building repairs,
educational opportunities, and extracurricular activities.
The American Chamber of Commerce in Japan (ACCJ) has
donated to Wildflower House a number of times since 2007, andthose donations have paid for, among other things, a floor-heating system for part of the home’s great hall.
In March 2016, we talked to founder and general director
Misao Hanazaki and facility director Mitsutaka Nakao to learn
more about the home. The following are edited excerpts, anddata has been updated.

Nakao: I’ve been here 20 years. In the early days, parents would
often come to visit their children. Sometimes on weekends,
parents would come out and help us mow the lawn with theirchildren, help us cook, or they’d play sports with their children
outside—things like that.
Hanazaki: That’s right. There were lots of cases in which theparents were sick or financially constrained, but they stillwanted to participate in the care of their children. They evenformed a group to allow parents from various families to cometogether to talk and do things for the children and Wildflower
House. But recently, the number of children who come to us
because of abuse has really skyrocketed. Of course, they can’t beallowed to see their parents anymore.

Tell us about the children living at Wildflower House.
Hanazaki: About 85 percent of our children were taken into
protective custody because they were abused or neglected bytheir parents. Indeed, we see that, nationwide, about 80 percentof the children in children’s homes are there because of abuseor neglect. Japan has 600 children’s homes with about 39,000
children under care.

Has child abuse really become that bad?
Hanazaki: Yes. If we look at the figures from the Ministry of
Health, Labour and Welfare, we see that, in 2013, there were about
73,800 cases in which the child welfare authorities got involved.
There were 88,800 in 2014, and during the pandemic year of 2020
the number topped 100,000 for the first time, with police reporting 106,960 cases. That means the current level is about six times
the year 2000 figure of 17,700 cases.

s

Could more people become foster parents?
Hanazaki: Currently, there are fewer than 10,000 people registered as willing to become foster parents nationwide, and only
about 6,000 children living with foster parents. So, looking at the

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Founder and general director Misao Hanazaki (left)
and facility director Mitsutaka Nakaototal number of children in (broadly defined) protective custody, we see that 85 percent of them are inchildren’s homes, and only 15 percent are with foster
parents. The fact that it is so hard to get more people
to become foster parents is a distinguishing aspect ofchild welfare in Japan, and it’s something I think weneed to look at.
Why has abuse increased so dramatically?
Hanazaki: One reason is that many parents today werethemselves abused as children, and they end up doing
the same—it’s a vicious cycle. Another is that, as aresult of divorce, the number of single-mother families
has been increasing, and over half are impoverished.
The mother is often forced to work multiple jobs andis unable to look after her children. Exhaustion andstress lead to child abuse or neglect.
Another is that there seems to be an increase in
the number of children with mental or developmental
disabilities, or ADHD, and parents find it difficult tocommunicate with them. This also ends up in abuse.
How do privately- and government-run homes differ?
Hanazaki: Here in Chiba Prefecture, there is one government-run home, while there are 19 privately-run homes.
The government makes payments to the latter based on
the number of children living there. These payments
are divided into a portion to cover staff salaries and a
portion to cover the direct care expenses of each child.
But the government uses a lower rate per staff member and per child for privately-run homes than what isallocated to the government-run facility. There, the staff
are paid in accordance with the (generous) government
employee pay scale, and this usually works out tobe more than what the government gives the private
homes to cover staff salaries. Further, the government
facility operates on a higher staff-to-child ratio than
the government uses when calculating the payment
made for staff at a private home.
Roughly how much money does a private home getfrom the government?
Hanazaki: Private homes receive a combined so-calledsochihi payment from the national and local governments. This is basically calculated as a certain amountper child plus an additional amount for staff salaries,
calculated at the rate of one staffer for every four children. This staff-pay allotment is far too low and is a real
problem for private homes.
I should add that the national government does
give a supplement to cover the cost of psychiatrists
and family counselors should we hire them.
How do you cover the other half of staff costs?
Hanazaki: There’s nothing we can do except ask for
donations. Some homes that don’t receive enoughdonations will reduce the number of staff overall, or
the number of staff on night duty, but I absolutely do
not want to compromise our children’s care or safety.

45

Fortunately, because we receive donations fromthe ACCJ, as well as directly from various foreign
capital companies in Japan and private individuals,
we somehow manage to get by without cutting staff.
But we really can’t do it with just the donations,so we end up having to save on our non-personnel
operating costs wherever we can and apply thosesavings to staff salaries. For example, when we receive
donations of food, we can move some of our food budget over to cover staff salaries. By saving here and there,
we somehow manage to pay our staff.
How much of your budget depends on donations?
Nakao: Our annual budget is about ¥300 million.
The government payments we receive comprise about
95 percent of that, and donations from organizations
and individuals cover about three percent.
How else do you use donations?
Hanazaki: We use them to cover the cost of extracurricular activities for our children. Because of the donations we receive, they can attend juku (cram school)and participate in other activities along with theirfriends from school who are not living at Wildflower
House. This is psychologically very important for them.
Lots of our children have come to us from troubled
homes where they didn’t have a quiet place to study.
Some weren’t even going to school. I really want to ensure that these children get at least basic academic skills.
Nakao: Starting a few years back, the government
began giving us additional payments to cover extracurricular activities and juku costs for our middle-school
children—but these payments are only for middle
school. Of course, our high schoolers participate in
extracurricular activities and go to juku, too, so wemust cover those costs with donations.
When they are able to participate in activities outside school, they can form friendships and connections
with children and their parents from various schools
in the area—not just their own—and the connections
they make with others in the area are really important.
With the help of the donations we receive, we’regoing to keep doing our best to create an environment
in which our children can grow up healthy and enjoy
good life experiences as they become young adults. n

Tad Johnson
ACCJ Community Service
Advisory Council member
ACCJ governor

Minako Kichiraku
Journalist

Listen to this story:
accj.or.jp/sound

THE ACCJ JOURNAL • VOL. 58 • NO. 5

Corporate Sustaining
Member Companies
The ACCJ thanks these organizations for their extensive participation, which provides a cornerstone in the chamber’s efforts topromote a better business climate in Japan. Information as of June 8, 2021.

PRESIDENT’S CIRCLE

3M Japan Limited

EY Japan

MSD K.K.

Abbott Laboratories/Abbott Japan LLC

Facebook Japan

Naigai Industries, Inc.

AbbVieFederal Express Japan Godo Kaisha

Nippon Boehringer Ingelheim Co., Ltd.

Adobe KK

Freshfields Bruckhaus Deringer Tokyo

Northrop Grumman JapanAflac

GE JapanNTT

AIG Companies in Japan

Gensler and Associates/International, Ltd.

Oak Lawn Marketing, Inc.

Amazon Japan G.K.

Gilead Sciences K.K.

Oshidori-MGA Japan K.K.

Amway Japan G.K.

Goldman Sachs Japan Co., Ltd.

P&G Japan G.K.

AstraZeneca K.K.

GR Japan K.K.

Pattern Energy Group Inc.

Asurion Japan Holdings G.K.

Hard Rock Japan LLC

Pfizer Japan Inc.

Bank of America

HiltonPrudential Financial, Inc.

Bayer Yakuhin, Ltd.

IBM Japan, Ltd.

PwC Japan

Bloomberg L.P.

IHG ANA Hotels Group Japan

Qualcomm Japan LLC

Boeing Japan K.K.

IQVIA

Randstad K.K.

Bristol-Myers Squibb K.K.

Johnson & Johnson Family of Companies

Robert Walters Japan K.K.

Brookfield Asset Management

KPMG

salesforce.com Co., Ltd.

Caterpillar

Kraft Heinz Japan

Squire Patton Boggs

Chevron International Gas Inc. Japan Branch

Lenovo Japan Ltd.

State Street

Citigroup

Lockheed Martin

Stryker Japan K.K.

Coca-Cola (Japan) Co., Ltd.

Mastercard Japan K.K.

Uber Japan Co., Ltd.

Cummins Japan Ltd.

McKinsey & Company, Inc. Japan

Visa Worldwide (Japan) Co., Ltd.

Deloitte Touche Tohmatsu LLC

MetLifeWalmart Japan/Seiyu

Delta Air Lines, Inc.

Microsoft Japan Co., Ltd.

The Walt Disney Company (Japan) Ltd.

Discovery Japan, Inc.

Mitsuuroko Group Holdings Co., Ltd.

Western Digital JapanELC Japan K.K.

Morgan, Lewis, & Bockius LLPWhite & Case LLP

en world Japan

Morgan Stanley Japan Holdings Co., Ltd.

Zimmer Biomet G.K.

Want to join the American Chamber of Commerce in Japan?
We offer membership programs for entrepreneurs, executives, individuals, and companies of all sizes—
from small and medium-sized enterprise to multinational companies.
For details, visit accj.or.jp/join-us.

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Affiliated associations: Japan Securities Dealers Association, The Financial Futures Association of Japan and Type II Financial Instruments Firms Association
Important Matters Concerning Foreign Currency Deposits
Foreign currency deposits entail some risks such as loss of principal. When conducting foreign currency transactions, please be sure to make the investment
decision on your own after confirming the “Important Matters Concerning Foreign Currency Deposits” on our English website.