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Industry leaders at core of Japan’s sustainability drive

Article - May 11, 2016

There is an increasing trend toward environmental sustainability and social responsibility throughout Japan, especially following the 2011 Tohoku disaster, but also thanks to the globalization push instilled by Abenomics


Prior to the G7 Summit in Mie Prefecture later this month, the respective environment ministers from each G7 nation will meet in Toyoma to exchange views and build consensus on global environmental issues.

The meeting is momentous for a number of reasons.  As the first major inter-governmental environmental meeting since the historic UN Convention on Climate Change (COP21) held last December in Paris, further high-level negotiations will be required in Toyoma to implement fresh climate change procedures, including the newly agreed 2030 Agenda for Sustainable Development.

The May 15-16 gathering in Japan is also noteworthy for being the first G7 environment ministers’ meeting since 2009, making it a key forum for dialogue to harmonize G7 nations’ policies in this area. What’s more, with Japan being one of the world’s most important economies, Toyoma is also a chance for the country to seriously communicate its efforts towards creating a better and more sustainable global environment.  

At the recent COP21, the Japanese government made a pledge to cut carbon emissions by 26% from 2013 levels by 2030, which compares favourably to the pledges of other G7 nations made in Paris, including the U.S. which has targeted reductions of between 18% and 21% by 2025, relative to their most recent emissions. As well as allowing Japan to further outline its strategy for achieving it carbon cutting goal, the Toyoma meeting will also see how the country plans to implement its objective of realizing a 35% improvement in energy efficiency by 2030 – the other vow made by Prime Minister Shinzo Abe at COP21.

Having set itself such ambitious targets, going forward the Japanese government will need all the help it can get from Japanese industries in order to realize them. Thankfully, it seems many domestic companies are up for the task. There is an increasing trend toward environmental and social care throughout Japan’s private sector, especially following the Tohoku earthquake in 2011 (which killed over 16,000 people), and more recently the two Kumamoto earthquakes, but also thanks to the globalization push instilled by Prime Minister Shinzo Abe’s Abenomics policy which has triggered a common concern towards sustainability and the adherence to international corporate social responsibility (CSR) standards.

“Environmental issues are very important to us,” says Mitsuharu Terayama, President and CEO of Asahi Holdings, conveying a sentiment felt widely across the country and its businesses. “I believe that the world’s interest in the environment has decreased somewhat in recent years because of various political issues we are facing. The leaders of the world must take climate change into consideration more seriously.”

Following COP21 and the recommencement of the G7 environment ministers’ meeting this month, governments are beginning to catch on says Mr. Terayama, however he stresses that it is vital for the private sector to set a good example too.  Since its establishment in 1952 for instance, Asahi Holdings has been recycling precious metals and has continually aimed to be the foremost company in eco-business, working to develop technologies, products and services, and leading other firms in activities to preserve the global environment.  

Aside from air pollution, one of the biggest environmental issues in Japan today is waste management.  Modern day cultures produce a lot of trash, and on a small island nation like Japan, there is only so much room. Asahi Holdings, which specializes in waste disposal, is at the forefront of tackling this problem, detoxifying and properly disposing all types of waste, and promoting the realization of a sustainable, recycling-oriented society.

“I believe that it is of the utmost importance as a business to be contributing to the conservation and improvement of the environment,” explains Mr. Terayama. “It is something which has been entrusted to us by the next generation, and we must not destroy it while it is in our hands.”

AGC Asahi Glass is another company that abides by this ethos.   “How are we going to address environment issues through the products we offer the market?” asks President and CEO, Takuya Shimamura.  “Well, in the area of glass, we offer high insulating glass, in the chemical segment we produce air conditioning gas to reduce CO2 emission, and in ceramics, by applying inorganic ceramics on the roads we can alleviate UHI (urban heat island phenomenon) by almost 10%.”

Such responsible measures taken by large businesses like AGC Asahi Glass to reduce their contribution to UHI and carbon emissions from their everyday operations will be vital as Japan faces up to its environmental issues on a macro-scale. As the world’s fifth-biggest emitter of CO2, there is a particular onus on Japan to combat climate change, and one of the most important facets of the country’s strategy to reduce carbon emissions and improve energy efficiency by 2030 is to increase the use of renewable energies. Indeed Japan has undergone a renewable energy revolution since the Fukushima disaster in 2011 which led to all of the country’s nuclear reactors being shut down, with the country’s solar power capacity having shot up from 4.9 gigawatts (GW) that year to 23.3 GW today.  Now Japan wants to more than double its solar capacity to 53.3 GW over the next 14 years, and helping to realize that goal will be companies such as TMEIC.  

“TMEIC currently promotes ‘Triple-E’ as our company catchphrase,” explains Kiyotaka Machida, President and CEO of the Toshiba and Mitsubishi joint venture. “The three ‘Es’ refer to energy, efficiency and ecology, and signify our idea of contributing to the environment by making efficient use of energy.”  

We are recognized as an excellent company that exists in a sound manner. In Japan we always try to sustain a company for the long-term rather than create momentarily big profits.

Suichi Kato, Chairman & CEO, K’s Holdings

By developing high cost-performance and high quality generators and power converters, and using cutting-edge technologies of rotating machinery and power electronics, TMEIC is instrumental in promoting green energy systems in Japan and the use of renewable energies globally through its operations across the world.   “The basic concept of CO2 reduction and energy saving is to use renewable energy to the highest extent possible while not wasting electricity,” explains Mr. Machida. “In this respect, I believe that as a company, we truly contribute to promoting widespread use of renewable energy with our PV inverters (a device that converts currents from solar panels onto an electrical grid), while also offering power sources, motors and systems that are the basic elements for converting electricity into physical energy.”

Mr. Machida continues: “We are very unique in the world in a way that we are a specialized manufacturer possessing motors, power electronics and system solutions as core technologies. We will leverage these three core technologies as we strive to contribute to solving various environmental and energy issues.”

The efforts of TMEIC are undoubtedly indicative of the augmented focus of Japanese businesses over recent years to implement more sustainable practices, not only with regards to environmental responsibility but in their contribution to society in general.  While CSR initiatives are nothing new to Japan (in fact many attribute the traditionally high level of social awareness of Japanese businesses to the country’s ancient virtue of Omotenashi, or hospitality), the growing trend of sustainability amongst domestic firms is said to have been sparked by another national corporate trend – globalization.    

TMEIC promotes ‘Triple-E’ as our company catchphrase. It  refers to energy, efficiency and ecology, and signifies our idea of contributing to the environment by making efficient use of energy.

Kiyotaka Machida, President & CEO, TMEIC

With sustainability having become an important criterion for business conduct in the global economy, social responsibility has become essential for the increasing number of Japanese companies looking to invest in overseas markets.  As Teruhisa Ueda, President and CEO of Shimadzu Corporation explains, this drive towards globalization combined with the inherent Japanese morals inspired by Omotenashi is in turn propelling more sustainable practices. “Through our 140 years of history, we have learned that simply pursuing high numbers and sales results will not allow us to achieve our objectives,” he says. “In fact, by always thinking how we can contribute more to society and create high value services that meet the demand, the results inevitably follow. Today, we are contributing to society by collaborating with all our customers in Japan and overseas.”

As more and more Japanese firms follow in the footsteps of Shimadzu and either begin or expand their international operations over the coming years, expect to see Japan Inc. fly the flag for environmental and social responsibility both at home, and abroad.