Increased sales and enhanced management capabilities through SDG initiativesSaburo Kato (Corporate Adviser, Japan Association of Environment and Society for the 21 Century, and Director Research Institute for Environment and Society)
<Series 3 (Total 4 series)>
There are 17 "Goals" alone set forth in the SDGs, and 169 “Targets” which are more specific. For that reason, it is necessary to study a wide range of viewpoints in order to determine the optimal goals for the company. There is no better clue for this than the success stories of other companies. Therefore, the third article in the series describes specific success stories in SMEs.
◆What are SDGs?
SDGs or the Sustainable Development Goals are a collection of global goals adopted by the United Nations General Assembly in September 2015 for the years 2016 through 2030 under the "2030 Agenda for sustainable development". The agenda consists of 17 goals, such as, "poverty", "hunger", "climate change", "energy", and "education", and a total of 169 targets laid down for more specific goals under these 17 goals for achieving a sustainable human society. Created in succession to the Millennium Development Goals (MDGs) formulated in 2001, the SDGs were adopted in the presence of heads of over 150 member nations. At the September 2017 session of the United Nations General Assembly, 232 indicators were adopted for measuring the progress of each of the targets.
Avoid management risks and create growth opportunities
The SDGs aim to provide integrated solutions for a wide range of challenges related to the continued existence of human society, such as the economy, society, and environment. They serve as a “defensive” tool to avoid management risks by fulfilling social responsibilities, and also as an “offensive” tool that creates opportunities for new growth as mentioned in Series 2.
“An example from the energy industry makes this clear. Considering fossil fuel depletion and global warming, it is too risky to maintain the fossil fuel business as a major source of revenue. So in fact, many gas companies and power companies are looking for an opportunity to make a radical shift in their business in the decades ahead. "
SMEs also need to avoid such risks and create opportunities. A good example of this in practice can be seen in the winners of the “Manager 'Environmental Capabilities' Grand Prize” sponsored by the Japan Association of Environment and Society for the 21 Century, where Kato serves as a Corporate Advisor.
Create shared value with society to achieve SDGs
Kanagawa Prefecture's Ohkawa Printing Co., Ltd. (capital: 20 million yen, approximately 40 employees) received the same award in FY 2012 and stands out for its clear support of SDGs.
“The company aims to become a “social printing company” by using non-VOC inks that do not contain petroleum-based solvents and FSC forest certified paper that has been proven to not originate from illegal logging. They have provided a high value-added service called “environmental printing” that is environment-friendly and gentle on the human body at a reasonable price. ”
After winning the award, they developed new products related to the SDGs, such as a memo pad listing the 17 SDG goals. As a result of these efforts, new transactions with large companies and organizations interested in sustainability have increased, and sales have also increased. In the name of SDGs, organizational capabilities and cooperation with external stakeholders have been strengthened.
The next example is Hotman Co., Ltd. (capital: 80 million yen, approximately 400 employees) in Tokyo which won the award in FY 2018. The company manufactures products such as towels and regards “manufacturing sustainably while improving quality to be the duty of manufacturers”. It has promoted environmentally conscious management, using SDGs as a tool to review its own management.
“The environmental response at factories and in-house manufacturing as well as their relationship to SDGs are clarified and visualized to deepen employee understanding, while utilizing SDGs for external communication. In addition, as a result of manufacturing and selling Japan's first fair trade cotton towel made from Senegal cotton, new transactions with companies seeking sustainability are increasing. ''
Companies more engaged with the SDGs have better foresight and information collection
Lastly, the winner of the FY 2013 prize, Busyu Kogyo Co., Ltd. (capital: 40 million yen, approximately 160 employees), is based in Tokyo and handles sheet metal and pressing of metal parts for automobiles.
“We realized that the production equipment on the market was large and overengineered, and that the yield of the line production was not very good, so we made our own compact production equipment designed for our company, and made it so that a single person can manage the entire process. We are now able to produce products comparable in both quality and price to those of Southeast Asian countries.
Self-made equipment and downsizing lead to resource and energy savings. The investment is only 1/4 of what it would cost to purchase equipment with the same specifications from another company, and products can be customized according to customers' wishes.
To conclude the third article in the series, Mr. Kato told us the following about a corporate trend that links SDGs to business expansion.
“Today, many reknowned companies make a profit while actively taking environmental measures, which is well-received by society. In particular, managers' “environmental capabilities" have a large influence on the management policies and management decision-making of SMEs. The employees of all past award-winning companies share the same positive attitude toward reaching the SDGs. There is also a tendency for companies more engaged with environmental contributions and the SDGs to have better foresight and information collection. If the broader reputation of companies pursuing SDGs increases and trust in them improves, it is likely to benefit their ability to secure excellent talent, which is a source of concern for companies. ''
Coverage date June 25, 2019
＜End of Series 3＞
Series「Creating new value with SDGs as a compass and common language」
Series 1 Sustainable Development Goals (SDGs) have become an important management
Series 2 Various business opportunities to be found within SDGs
Series 3 Increased sales and enhanced management capabilities through SDG initiatives
Series 4 Creating new value with SDGs as a compass and common language
Corporate Adviser, Japan Association of Environment and Society for the 21 Century / Director, Research Institute for Environment and Society
Born in 1939. In 1966, he completed a master's degree in engineering from the University of Tokyo and joined the Ministry of Health and Welfare (currently the Ministry of Health, Labour and Welfare). Transferred to the Environmental Agency in 1971, and was appointed founding director of the Environmental Agency - Global Environment Bureau in the 90s. He has been involved in the formulation of an action plan for the prevention of global warming, the creation of the Basic Environment Act, and preparation for the “Earth Summit”. He retired in 1993 to found and serve as director of the "Research Institute for Environment and Society", and was also appointed representative director of the "Forum to consider environment and civilization in the 21 century" (currently · Japan Association of Environment and Society for the 21st Century). He currently serves as a member of Mainichi Shimbun newspaper's “Japan-Korea Ministry of the Environment” review board, as chairman of PRESIDENT Inc.'s “Environment Photo Contest” review board, and as a member of NK Industrial Research Institute's “Green Forum 21” conference.
Main authored and co-authored works
・“Environmental Thought: Encouraging a Reflective Lifestyle" (PRESIDENT Inc. / co-authored) 2010
・"The Environmental Century: Views of 22 Leaders in Politics and Industry" (Mainichi Shimbun) 2001
・"Conditions for Creating a Recycling Society" (Nikkan Kogyo Shimbun) 1998, et al.
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Creating new value with SDGs as a compass and common language
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