Leader’s Observations on
CBCC CSR Dialogue Mission to Sweden and the Netherlands(Provisional Translation)
December 2019
Masaya Futamiya
Chairman, Council for Better Corporate Citizenship (CBCC)
Outline of the Mission

I visited Stockholm, Sweden, and the cities of Amsterdam, the Hague, and Rotterdam in
the Netherlands from Nov. 18 to Nov. 22, 2019 as the head of the CBCC CSR Dialogue
Delegation. Although CBCC dispatched the mission to these two countries respectively
in the past, they have consistently been highly acclaimed in the international community
for their achievements relating to SDGs and CSR, so we decided to visit them again.
In Sweden, we engaged in discussions with the CSR Ambassador, officials of “TeamSweden,” -- which consists of representatives of the Ministry for Foreign Affairs;
Business Sweden, a government-private sector trade and investment promotionorganization; and the Swedish Export Credit Corporation (SEK) -- and government
officials from the Ministry of Enterprise and Innovation and other agencies. We also had
opportunities to hold dialogue with Ericsson, a leader in sustainability management;
Nordea, which provides financial support for sustainability; CSR Sweden, which offers
useful input to policymakers and corporate executives in the areas of education,
investigation, and research on CSR; and the Stockholm Environment Institute.
In the Netherlands, we were briefed by officials of the Ministry of Foreign Affairs, theNetherlands Enterprise Agency (RVO), and the Social and Economic Council of theNetherlands (SER) 1, which play the central role in promoting the SDGs in the Dutch
government, on such initiatives as the Agreements on International Responsible
Business Conduct (IRBC) 2, a major platform for advancing the SDGs in the country,
and engaged in an exchange of views on this subject. We also held separate meetings
with officials of Unilever, the world’s leader in sustainability management philosophy
1A multi-stakeholder forum consisting of representatives of the business sector, labor, and academia,and members of the Royal House serving as a consultative body to the Dutch government andparliament on social and economic policies.
2 Agreements on International Responsible Business Conduct: agreements drawn up based on theSER’s recommendations, signed by pension funds, corporate pension funds, government, labororganizations, NGOs, and various other organizations, setting the guidelines to be followed bydifferent sectors, such as the apparel and food industries.
1and practice; Heineken, which excels in devising practical measures, particularly in theenvironmental area; the ING Group, which is a global driving force in sustainablefinance striving to draw up principles for sustainable banking; and Keidanren’scounterpart, the Confederation of Netherlands Industry and Employers (VNO-NCW). In
addition, we also engaged in discussions with the World Benchmarking Alliance(WBA) 3, an international initiative on business impact assessment; the GRI (GlobalReporting Initiative), whose GRI Standards are familiar to Japanese companies whichrefer to them for their CSR/sustainability reporting; and Sustainalytics, a major ESG
rating agency.
During these meetings, members of the mission were not only able to learn about thediverse views and efforts being made by the government, private companies, economicorganizations, ESG rating agencies, research institutions, and various other entities; theyalso explained the CSR situation in Japan and the CBCC’s and Keidanren’s initiatives topromote CSR and the SDGs, as well as efforts being made by individual Japanesecompanies, in an effort to enhance mutual understanding.
Looking back at these meetings, the following report gives an assessment of the mission
and presents the observations of the mission leader.

1. Promotion of CSR/SDGs/Sustainability through Public-Private Collaboration

Sweden has a population of around 10 million, so it has a small domestic market. True
to its Viking tradition, it has a strong disposition toward overseas ventures and free trade.
On the other hand, the Netherlands has a population of 17 million and likewise has astrong interest in overseas business and free trade, as indicated by the history of theDutch East India Company. Both countries have a large number of small andmedium-sized enterprises (SMEs) and aspire to achieve economic growth under theglobal competition environment through the promotion of exports. We came tounderstand that in their pursuit of the best options for the country and its companies tomaintain sustainability and international competitiveness, Sweden and the Netherlands
are implementing a strategy of enhancing international competitiveness based on
CSR/RBC, SDGs, and sustainability through close coordination and cooperation
between government, the business sector, and individual companies.
3

Organization sponsored by the Dutch, British, and Danish governments launched in September
2018 for the purpose of encouraging corporate contributions to the achievement of the SDGs. It aims
at developing sector-specific impact assessment standards linked to SDGs to serve as benchmarks
for corporate efforts that are made public for free.
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Furthermore, like their European peers, both countries have powerful citizen and laborgroups. Their governments also attach great importance to holding multi-stakeholder
dialogue with these groups and the business sector in seeking solutions to social
problems and in the process of realizing a sustainable society and have consistently
adopted such an approach in their undertakings. Among the underlying factors of thisapproach is that Swedish citizens have a strong sense of involvement in solving social
issues. On the other hand, the Netherlands has a historically established system ofconsensus building and cooperation by the stakeholders (the Polder model) for disasterprevention purposes on reclaimed land in areas below the sea level. In both cases, we
had a strong impression that such a mature relationship between government, industry,and civic society that has yet to be established in Japan can only be built through earnest
efforts by all entities to tackle economic and social issues and constructive dialogue by
all parties concerned.
The meetings provided us with valuable insights on public-private sector cooperation,
but I would like to highlight here the system of intra-government cooperation and theengagement of private companies with the civic society.
In terms of intra-government collaboration, we learned that both countries have set up
teams made up of the relevant government agencies with clearly delineated roles thatwork closely together for the promotion of CSR/RBC and the SDGs. While in eachcountry the Ministry of Foreign Affairs is responsible for policy planning and strategy
development, their subordinate agencies and bureaus function as the implementing arm.
There is a very systematic collaboration mechanism for a variety of stakeholders towork together.
While we were very impressed with the positive approach of the European Commission
and the national governments in Europe on CSR policy in CBCC’s previous missions 4,
we also found this time that the Swedish and Dutch governments take strong initiativein promoting CSR/RBC and the SDGs. Particularly in their effort to motivate privatecompanies, they do not only work on enlightenment activities, but also focus on
concrete, practical measures. We learned that they support the introduction of suchmeasures in actual management and business operations by strengthening thedevelopment of specific tools that companies can use in their business operations andstepping up their consulting function. Although we do not believe that there are4

Previous missions visited Geneva and Brussels in 2018; Frankfurt, Berlin, and Munich inGermany in 2017; and Brussels, Paris, and London in 2016.
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limitations to Japan’s method of allowing private companies to promote CSR and SDGs
autonomously, such as Keidanren’s Charter of Corporate Behavior, the penetration andpromotion of sustainability management in the SMEs, which is also a main focus of theSwedish and Dutch governments, remains a major issue in Japan. Little progress can be
expected by relying solely on independent corporate actions and this may even result inJapan missing the opportunity to enhance its competitiveness as a nation. We felt thatJapanese government needs to learn from these two countries to put in place a system toprovide strong, comprehensive support for the SMEs.
As to the engagement of private companies with the civic society, Japan has particularlymuch to learn. Swedish and Dutch manufacturers and financial institutions are not
reluctant to dialogue with NGOs. Sometimes private companies even have devoted
teams responsible for frequent and daily communication with NGOs in their persistenteffort to build a relationship with them that facilitate constructive dialogue. We weretold that working on the assumption of difference of views with NGOs, the best risk
management option for private companies is to obtain the NGOs’ understanding of theirproblems at a very early stage by maintaining an open relationship with them. Above all,private companies and NGOs take advantage of each other’s rich specialized knowledge
and respect each other’s roles in working for a sustainable society. What should we doto build such mature relationships with NGOs in Japan? While efforts by individualcompanies alone may not be sufficient for doing so, this is indeed an indispensable
process for building a sustainable society. Japanese companies need to give serious
consideration to this issue from now on, and we felt that this will also be a major
concern for CBCC in the future.
2. Innovation as a Driving Force for Sustainability
Keidanren advocates a “Society 5.0 for SDGs” in order to contribute to the achievementof the SDGs by solving social problems through digital transformation and innovationand realizing a new human-centered “Creative Society” characterized by the true
well-being and contentment of each individual. Meanwhile, Sweden’s goal is to become
the world’s first fossil-free welfare state by 2045. Its government is banking on
innovation to achieve this ambitious goal and to solve the difficult issues it is facing
today. Its R&D spending is 3.33% of GDP, way above the OECD average of 2.37%. 5 It
ranks second among 126 countries and territories in the “Global Innovation Index” 6 and5

Based on data provided by the Swedish Ministry of Enterprise and Innovation (derived fromOECD statistics).
6 Ibid. (derived from Cornell University statistics, 2019).
4ranks first on the “Innovation Union Scoreboard” among 26 European nations. 7 Sweden
leads the world in the promotion of innovation and in creating the environment tofacilitate innovation.
According to the Ministry of Enterprise and Innovation, which is responsible forpolicies on innovation in the Swedish government, under the “Innovation PartnershipProgram” the government is currently advancing, after a high-level group discussion
involving industry, academia, the public sector, and various other stakeholders identifies
the strategic innovation areas, they will engage in the fields of skills and lifelong
learning, climate change, health and life science, and digital transformation. This
program reflects Sweden’s seriousness about generating transformative actions throughinnovation.
Likewise, the business sector also prioritizes innovation. At Ericsson, the chief
executives have issued instructions that all business units must take into accountsustainability and CSR. Not only have teams (ambassadors) responsible for monitoring
implementation been appointed, training on the philosophy of SDGs is also conducted
for all employees. Through such efforts, the notion of solving daily life issues,
regardless of the extent of their impact, has become the basic thinking of the engineers’
technical innovation efforts.
At Unilever, which adopts a “Sustainable Living Plan,” purpose-driven management not
only does not sacrifice profit, but rather enhances profitability. The management
philosophy of synchronizing the consumers’ and society’s expectations with thecompany’s goals by providing innovative and sustainable solutions to improve thepeople’s life, ultimately resulting in higher returns for the stockholders, has remained
firmly entrenched in the management even after the departure of CEO Paul Polman.

3. Trends in Impact Assessment

Information disclosure on progress made and assessment of impact is a major concernof companies in their promotion of SDGs. With a wide variety of assessment methods
by private groups on offer, the United Nations Development Program (UNDP) and otheragencies have launched the initiative to develop global standards for impact assessment.
Our dialogue with the WBA, one of such international initiatives, proved to be very
useful for understanding the latest trends in the international discourse on impact
7Ibid. (derived from European Union statistics, 2016).
5assessment. While the WBA was only launched in September 2018, it is actively
working to develop free, publicly available, and sector-specific benchmarks that show
companies’ contributions to achieving the SDGs.
Defining the seven major system transformations required to realize an inclusive andsustainable economy and society -- social, agriculture and food, de-carbonization andenergy, circular, digital, urban, and financial system – the WBA aims to identify“keystone companies” that will drive transformation in each sector and develop relevant
assessment standards. It plans to make public the ranking of 2,000 major global
companies by 2023. It will first announce by the end of 2020 the baseline for the foodand agriculture sector based on the companies’ publicly available data. An updated
baseline will be announced in 2021 through dialogue with the companies in the list.
While both the WBA and the GRI realize that harmonization is necessary as too manymethods of impact assessment and disclosure cause an increase in the burden oncompanies, they indicated that they are not optimistic about the convergence of thesemethods in the future. With regard to this issue, the CBCC intends to closely watch thediscussion and concrete actions of the relevant parties and continue to deepen its
dialogue with the WBA.

4. Trends in Sustainable Finance

Information on trends in sustainable finance in Europe provided valuable insights to themission members, who showed a strong interest in particular in divestment frombusiness projects related to the use of fossil fuels. In this regard, the Swedish and Dutch
financial institutions that met with us explained that while European institutions havebasically announced a policy of divestment, they do not intend to completely cut orback out of investments in fossil fuel, but plan to give careful consideration and search
for an appropriate approach with a sense of balance. The important thing is not to“desert” their corporate clients, but how to encourage them to take sustainable actions
through meticulous dialogue. We felt that they have a strong sense of mission that this isprecisely the responsibility of financial institutions which have an important role to playin the transition to a low-carbon society.
We found that these institutions adopt a level-headed attitude that attaches greater
importance to what their corporate clients think and what they plan to do forsustainability from now on rather than the current sustainability of their products andservices. I would like to emphasize again that this balanced approach is only possible
because of the continuing process of communication with the government, the NGOs,
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and other stakeholders. We realized once again the importance of more creative public
relation efforts by companies and more active dialogue with the stakeholders. Not many
Japanese companies are good in this area but we felt that they should update theirengagement efforts, including setting up specialized teams within the company.

5. Approach to Environmental Issues and Climate Change

Like Japan, around 70% of Sweden’s territory is covered by forest. Its people have astrong consciousness of nature and the environment based on their culture and traditionof enjoying visits to the forest. In the case of the Netherlands, about one-fourth of its
national territory, which is roughly the size of Kyushu, is below the sea level. As aconsequence, it is very sensitive to climate change issues, such as the rising sea level.
Against this background, it was observed that the government and companies of bothcountries adopt a positive approach to environmental issues and climate change.
As mentioned above, Sweden has set a goal of becoming the world’s first fossil-freewelfare state that does not use fossil fuels by 2045, and it has succeeded in reducing its
carbon dioxide emission by 24% from the 1990 level, as well as achieved power
generation with zero CO2 emission. Heineken is enhancing the efficiency of its
consumption of water resources, which are indispensable for beer production, andmaking efforts to reduce CO2 emission and increase the use of renewable energies at its
production plants. At Unilever, we were briefed on the present state and future goals of
its efforts to build a process for the recycle and reuse of plastic packaging materials
used for many of its products by tapping technology for sorted trash collection andplastic reprocessing. As recycled plastic is difficult to use in food product packaging, it
is undertaking joint research with universities on using certain catalysts to produce
packaging materials that can be used for food. The mission members were impressed by
Unilever’s passionate explanation that instead of taking individual steps, such as
reducing the size of packaging, it is building a “circular plastics value chain” throughtechnical innovation that will not only raise the value of plastic but also contribute tosolving social issues. The company official’s remark that partnership with thegovernment, universities, and the civil society is important in this endeavor left a strongimpression.
6. Business and Human Rights

Japan is currently working to draft a National Action Plan (NAP) on Business and7

Human Rights by June 2020. Human rights is an area that bears on all the SDGs, so it isessential that companies make efforts in this regard. Since this is an endeavor that
requires the strong leadership of the top executives, in October 2019 Keidanren drew up
the Japanese version of the “CEO Guide to Human Rights” published by the World
Business Council for Sustainable Development (WBCSD). Members of the mission
were eager to know how the UN Guiding Principles (UNGP) on Business and HumanRights adopted by the UN Human Rights Council in 2011 and the “OECD Due
Diligence Guidance for Responsible Business Conduct” (Human Rights DD) based on
the OECD Guidelines for Multinational Enterprises are implemented in the companies.
Society as a whole has a strong interest in human rights issues both in Sweden and theNetherlands. The NAP is due for revision in the Netherlands and work is ongoing toidentify and analyze the gaps. A review is also underway on the bill relating to Child
Labor Due Diligence in corporate supply chains approved by the Dutch Senate in June
2019. The industrial sector is concerned about the additional operational burden, so it isnecessary to watch further developments.

Conclusion

CBCC has been annually dispatching a CSR Dialogue Mission overseas since 2003.
Each time, it was felt that there are things that can only be learned firsthand. Rapid
progress is being made in recent years particularly in the area of sustainability, such as
in ESG, SDGs, and so forth. Probably even the parties involved are not totally certain
about which direction this area is heading and what efforts the relevant organizations
will make. We gained direct knowledge that the hard work of the concerned officials
who persevere in trial and error while grappling with various dilemmas on a daily basis
is behind the development potential of all aspects of sustainability, including policy
formulation and implementation, business, investment, and research. This was one ofthe valuable lessons that could only be learned on-site.
In addition, in our dialogue with the leading companies in sustainability management,
many executives expressed in particular a strong sense of mission to make social
contribution through their core business operations in light of the ongoing crisis inclimate change. We keenly felt that CSR, SDGs, and sustainability are becoming themainstream in corporate management. CSR is no longer simply one area in corporate
activities but is now the essence of corporate management and operation. Through ourdialogue with the Swedish and Dutch officials, we were able to share a common fervent
aspiration for the realization of a more sustainable society and were deeply inspired.
8This will be of great significance for all members of the mission, including myself, aswe think of what to do next.
Lastly, I would like to convey my gratitude once again to the members of the mission
who proactively cooperated in ensuring the efficient conduct of our meetings under atight schedule. In light of the broadening horizons in this area, I have great expectations
for dynamic progress to take place by the time we send our mission in the next fiscal
year. With that thought, I intend to continue to conduct our activities earnestly as CBCC
chairman.

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