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Japanese Companies' Activities in the Age of SDGs


No.437
March 2017

Senior Research Fellow, Takafumi Ikuta

ABSTRACT

The UN’s Sustainable Development Goals (SDGs), which officially came into effect in 2016 and which the international community have pledged to achieve by 2030, are structured around 17 goals with 169 targets between them, and can be seen as a global “common language” to account for initiatives to address the issues facing international society. Although SDGs are imposed on the governments of each signatory country, there are also high expectations for the contributions of companies endowed with human talent, technology and financial clout. Companies are encouraged to undertake initiatives by the demands relating to information disclosure, the value chain, and government support. For companies, SDGs are not only mechanisms for managing risk, but also ways of uncovering hints about how to approach business ideas that address societal problems. Accordingly, tools and guidelines for how to make use of SDGs in corporate strategy are being developed and put forward.


Interest among Japanese companies about SDGs is growing rapidly. 23% of major companies are examining SDGs and using them as reference points. Among industries including those that provide products to end consumers such as transportation equipment, electrical equipment, foodstuffs, chemicals and pharmaceuticals, as well as among financial and insurance businesses related to ESG investment, this rate is particularly high. 33% of major domestic companies, as ranked in Forbes Global 2000, have already made statements about SDGs, and the percentage of SDGs mentioned is particularly high among upper-ranked companies and manufacturers. Most of the companies which have so far have expressed awareness of SDGs, have done so through messages by company executives, but some companies are reflecting about and referring to SDGs in their policies and important issues analysis, undertaking to link their business practices with SDGs.


There are concerns that companies’ efforts related to SDGs may end up being a transient fad, if they satisfy conditions only through a "ex-post labeling" approach that associates existing efforts with SDGs without considering new initiatives for contributing to SDGs. It can be expected that outlooks on issues such as clarification of objectives, systematic response, ensuring correct understanding of SDGs, among others will improve through repeated trial and error experiments, as well as accumulation of knowledge and know-how by companies. The basic point when considering efforts for the strategic utilization of SDGs by companies is to grasp the risks and opportunities related to their business and SDGs with a view to understanding them as an important premise and examining how to concretely leverage an SDG viewpoint in individual business activities. Furthermore, in order to continuously undertake initiatives, evaluating the outcome from the perspective of SDGs, by utilizing a logic model for example, and working towards improvements, would be a beneficial approach.

More Information

  • The abridged text of this report is available in English from the link below.

    Download abridged English report here (775 KB).