'Good Companies in Japan' (Article No.3): Seeking Ways to Develop Societal Contribution along with Core Businesses

JFS Newsletter No.188 (April 2018)

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The JFS newsletter introduces a selected series of examples of good companies in Japan, referring to the book "Jizoku Kano-na Shihon Shugi" ("Sustainable Capitalism," written in Japanese) by Kazuhiro Arai, director and asset manager of Kamakura Toshin, a Japanese investment company. In this article, we introduce companies that really care about the communities their businesses are based in and one company undertaking business in innovative environmental technologies themselves.

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Japanese Ministry Revises Guidelines for Private Sector Engagement in Biodiversity

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Japan's Ministry of Environment (MOE) announced on December 8, 2017, that it has revised its Guidelines for Private Sector Engagement in Biodiversity, a set of guidelines for private businesses and other organizations working on biodiversity issues. The revision was the first in eight years since publication of the first edition in August 2009.

In 2010, shortly after the first publication, the Aichi Biodiversity Targets were adopted, providing direction for the international community to pursue the conservation and sustainable use of biodiversity, and giving a major push to Japanese enterprises toward addressing biodiversity issues. Then, in 2015, the Sustainable Development Goals (SDGs) were adopted, and with the revision of ISO 14001, international standards for biodiversity became effective.

During this time, the idea of 'natural capital,' in which the natural environment is perceived as an asset critical to the lives of individuals and the operation of organizations, has gained popularity. The social context surrounding biodiversity has also changed rapidly. One example is the expansion of ESG (Environmental, Social, and Governance) investment, in which investors consider whether companies are consciously addressing ESG issues when selecting companies for investment. The responsibility of private companies to tackle biodiversity issues is thus greater than ever before.

The second edition of the MOE guidelines lays out basic information and approaches necessary for addressing the conservation and sustainable use of biodiversity, presented in a manner easily understandable to businesses that are not familiar with biodiversity issues, and useful for experienced businesses that want to be more effective. Key features of the guidelines are summarized below.

1) Clarifies the role of business in addressing biodiversity issues, with additional information on current trends and an explanation of the risks and opportunities these issues present to business organizations.

2) Describes the potential of business in contributing to the conservation of biodiversity; business activities can not only have a negative impact on biodiversity but can also improve it.

3) Explains how biodiversity is related to various value-chain processes, such as raw materials procurement, production, and processing. The explanations are provided for each industry, since a commitment to biodiversity should be made by businesses of all kinds, not just those in specific industries.

4) Offers a key message, basic concepts, practical tips, and case studies for each stage in a biodiversity program, from organizing a team to setting goals.

Biodiversity efforts can work most effectively when supported by organic and flexible cooperation among various stakeholders. MOE plans to disseminate the guidelines not only to businesses but also to local governments and NGOs, which have a deeper understanding and greater expertise on local issues.