"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 12
"SOMPO JAPAN SEEKS TO EMBED CORPORATE SOCIAL RESPONSIBILITY INTO ITS COMPANY DNA" (Sompo Japan Insurance Inc.)

What can companies in the insurance and finance industries do to help create a sustainable society? One way is to fulfill their corporate social responsibility (CSR) by reducing environmental impacts. Another is to improve the industry's sustainability as a whole by providing products and services related to environmental risk response and socially responsible investment (SRI). One company in Japan has taken the lead in realizing the importance of the role that insurance and finance companies need to play, and is working to improve its corporate value by focusing on CSR. This company is Sompo Japan Insurance Inc., or Sompo Japan for short.

http://www.sompo-japan.co.jp/english/index.html

Sompo Japan is the second largest insurance company in Japan; automobile insurance is its main service. With more than 16,000 employees, its net premium worth was 1.264 trillion yen (about U.S. $12.156 billion) as of the end of March 2003. Founded in 1888, the company presently has 764 domestic and 39 overseas sales offices. It also has more than 76,000 sales agencies nationwide.

Sompo Japan began making environmental efforts before its competitors, and established a Global Environment Department in 1993. Advancing steadily with ongoing activities such as advocating energy and resource conservation, the company is now putting together an initiative to promote CSR. "Participation," "initiative," and "persistence" are the key words that have been chosen to characterize these activities.

The number of Japanese companies interested in CSR has increased in recent years, but Sompo Japan is already ahead of the crowd. Based on the idea that measures taken on CSR issues should be tailored to each industry and individual company, more so than in the case of environmental issues, the company has already launched an effort to imbue CSR into its corporate culture by asking the question, "What should Sompo Japan do?"

Virtuous Circle of Customer and Employee Satisfaction

While searching for answers to this question, Sompo Japan found a hint on how to pursue CSR - enhance the satisfaction of both its stakeholders and employees. By improving customer satisfaction, the company can earn more support from stakeholders, which will result in the enhancement of employee satisfaction. Meanwhile, increasing employee satisfaction can help them develop a sense of worth about their jobs, which will lead to raising their awareness about customer satisfaction. The company believes that accumulating experience and continuing its efforts to develop this virtuous circle will enable it to implement CSR, even though this may take time.

So what is Sompo's approach to satisfying both customers and employees?

Measures to enhance customer satisfaction include making efforts to reflect customers' expressed needs in its insurance products and services, as well as to promote SRI, disclose information, and hold dialogues with stakeholders.

http://www.sompo-japan.co.jp/english/about/csr/report/download/re2003e_05.pdf

Also, in cooperation with civil society organizations, or CSOs (often used synonymously with the term non-governmental organization), the company contributes to environmental education for citizens, and to the cultivation of human resources involved in environmental fields, as well as offering financial support. A series of the company-sponsored seminars, called Citizens' Environment Seminars, has drawn a total of over 9,000 participants since the first seminar in 1993, and is now a pillar of the company's social contribution activities.

http://www.japanfs.org/db/database.cgi?
cmd=dp&num=305&dp=data_e.html

Sompo Japan also has created an original in-house volunteer organization called the Sompo Japan Chikyu Club ("chikyu" means the Earth in Japanese) with the aim of promoting employees' voluntary activities. Clubs have been set up at each sales office across the country, and all employees are Club members. Using each sales office's original ideas, the clubs work to make contributions to society.

This Year's Sompo Japan CSO Learning Scholarship Program Begins

In addition, a campaign around the theme of "Creating an Impression" was launched this spring to encourage each employee to declare and implement his or her original action plan to enhance customer satisfaction.

Meanwhile, employee satisfaction is being promoted mainly by the company's Human Esteem Promotion Headquarters. This department was established to enhance employee motivation and promote the prompt pursuit by the whole company of the following four types of activities: enlightening employees about fundamental working principles such as human rights, promoting an active work performance by women employees, reducing work hours, and promoting the maintenance of good health.

As for the effort to promote an active performance on the part of women, 16 female employees have established a Women's Committee, with a view to promoting the inclusion of women's voices in the planning of corporate policies. This committee has created a network exclusively for female employees and has held its own seminars, which are gradually bearing fruit. Meanwhile, the Human Capital Department has set up the Women's Iki-Iki Promotion Group ("iki iki" means vivid or very alive in Japanese) in order to improve the childcare leave system, hold seminars regarding women's and gender-free activities, and support women's career upgrading in cooperation with the in-house recruiting system.

http://www.sompo-japan.co.jp/english/about/csr/report/download/re2003e_08.pdf

Support of CSR through SRI

In addition to promoting CSR itself, Sompo Japan provides financial support for companies that want to promote CSR, in an effort to help increase the number of "green investors." The company started marketing an "eco-fund" named "Buna no Mori" (Beech Forest) in 1999 - this is a trust fund that invests only in environment-friendly companies. The fund's current net assets amount to 9.3 billion yen ($89.4 million).

http://www.sompo-japan.co.jp/english/about/csr/report/download/re2003e_05.pdf

In Japan, citizen awareness about CSR is generally low and the amount of investment in SRI funds is small compared to Western countries. However, inspired by growing SRI in Western countries, many Japanese companies have also started raising funds for CSR activities. Sompo Japan has received many inquiries about CSR from other companies. Using its relatively advanced experience and knowledge, the company provides consultation services on CSR and quality customer services. For example, the company provides the Beech Forest sales agencies, many of which are local banks, not only with information about the product but also about environmental issues and other support aimed at improving the public's environmental awareness.

Mainstream Western evaluation standards relating to SRI are said to involve negative screening that excludes anti-social companies, but mainstream Japanese evaluation standards are said to involve positive screening that selects companies actively engaged in CSR. In Japanese SRI, the emphasis is on supporting such companies.

Sompo Japan actively discloses and provides information to investors. In order to help Beech Forest investors further increase their awareness of environmental issues and sustainability, the company issues a quarterly investor newsletter, the Beech Forest News, that provides information regarding the latest environmental trends, a glossary of environmental issues and information about CSR activities by the companies that the Beech Forest trust fund invests in.

SR Activities improve Corporate Value

Sompo Japan's activities fall roughly two categories. One relates to taking advantage of its successful customer satisfaction and employee satisfaction campaigns in order to promote CSR activities. The other relates to taking advantage of its successful CSR activities and the support it receives from the business community to promote its corporate value. Its inwardly-directed activities and outwardly-directed activities are well-balanced and both have been successful. When all such activities are organically connected and favorably influence each other, corporate value invariably increases. Through these efforts, Sompo Japan is gradually achieving its vision - to become a well-established company that is highly regarded by customers, agencies and markets, resulting in continued high stockholder confidence.

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