Japanese companies' initiatives toward a sustainable economy

JFS Newsletter No.1 (September 2002)

Many say we have to move from the current unsustainable economy to a sustainable economy in which environmental aspects are incorporated in all phases of economic activities.

Take an example from the businesses world. Traditionally, companies have only considered the environment in company departments that dealt with emissions, waste or pollutants from their factories. However, today some companies are moving to adopt "environmental management" practices in which environmental aspects are built into decision-making processes in all company divisions and at all levels.

Companies will create totally different in-company systems for manufacturing processes, personnel appraisals, and procurement. They will be providing innovative products and services when they try to integrate environmental aspects in their missions and goals, and then implement them.

In recent years, Japanese companies have started to include certain aspects of a sustainable economy in their business operations and their products and services.

One of the key points in sustaining economic growth without damaging the Earth is to create and implement a new business model to offer "functions and services" of products, rather than selling physical "products." In Japan, some companies have already started to implement this new business model.

The Information Center, a database on the Japan For Sustainability website, offers information on such new initiatives of companies, under the "Eco-products/Business" category. http://www.japanfs.org/db/index.html

Here is one example: Matsushita Electric Industrial Co., Ltd. started a new business in April 2002 called "Akari Anshin Service" which sells "lighting" as a service to factories and office buildings. Customers no longer buy fluorescent lights themselves, but rather the lighting provided by them. Click here to read more: Matsushita Sells Lighting Services

Nihonkai Gas. Co., Ltd., a medium-sized company in Toyama Prefecture, last year started a new business that sells "warmth" during the winter, instead of the usual gas heaters with fans. This business is highly appreciated by their customers. Click here to read more:
"We Sell Warmth, Not Heaters"

Another key point at companies working toward a sustainable economy is how to answer the question of internalizing environmental costs. Japan, as a country, does not have carbon tax system to internalize CO2 emissions. But Seiyu, a private company, started its own intra-company environmental tax system. Click here to read more:
Seiyu Introduces Intra-Company Environmental Tax

An increasing number of Japanese companies has included environmental performance as a factor in their personnel appraisal system. A survey of manufacturing companies found that 74 out of 820 companies now reflect environmental achievements in personnel appraisals, such as managerial bonuses. Click here to read more:
IBM Japan Tops Environmental Management Survey
IBM Japan Counts Environmental Improvements in Personnel Evaluations

The above articles represent some of the initiatives of forward-looking companies in Japan. They are not just trying to be "nice" to environment, but also regard environmental aspects of their business as their sources for competitive advantage. The Japan For Sustainability website will continually add new stories about such initiatives.