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«14 CSR White Paper Economy ESG Investing as an e Unchanging Face of Japanese Antidote to Myopic Employment Management International A airs Japanese ...»

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This program has led to a significant increase in Volvic’s sales. Customers were attracted by the opportunity to support the lives of people in a far-off country simply through their purchase of mineral water.

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Helping Prevent Drunken Driving A third example is the launch of Kirin Free, a nonalcoholic, beer-like beverage. This product was born from the company’s desire to eradicate drunken driving. Japan’s liquor tax law classifies drinks containing less than 1% alcohol as “nonalcoholic.” But you would still be guilty of drunken driving if you operate a car after drinking such a beverage. Kirin Free is a drink with 0.0% alcohol. The company promotes Kirin Free for people who need to drive home from parties, golf trips, and barbeques.

As part of its marketing for the product, Kirin chose to support the “Designated Driver” campaign, under which one member of a group at a restaurant or bar is chosen as the driver. The designated driver does not consume alcohol, and the others (including shop employees) also make sure that he or she does not drink.

The driver is responsible for driving everyone back home safely.

While the immediate motive for creating this product was to address a social issue, Kirin Free caught on with consumers other than those interested in preventing drunken driving. It was embraced by a much broader segment of society, leading to the creation of a new, nonalcoholic drinks market.

Upstream Innovations

Kirin’s successes in creating new markets also include initiatives upstream in the value chain, including in the procurement of raw materials. Mercian, a member of the Kirin Group that makes wine, established the Mariko Vineyard in Ueda, Nagano Prefecture, in 2003 and launched its own grape cultivation with an eye to improving the quality of domestic wine and boosting consumption.

While the land was suitable for grape cultivation, it had lain idle for years. With the help of local volunteers, Mercian built a farm and began growing grapes. Seven years later, in 2010, Mercian sold its first vintage wine. It was immediately praised for its high quality, winning a gold medal at a domestic wine competition. This project enabled Mercian to not only expand the market for domestically produced wine but to also enhance the value of its brand.

Other value chain improvements include the development of lighter bottles that lessen the impact on the environmental and make them easier to handle for consumers. The weight of its large-size beer bottle was reduced by 21%, making it the lightest in Japan. It also developed the country’s lightest 330 ml single-use bottle for carbonated drinks.

As for cans, Kirin led the industry in reducing the diameter of the lid and using

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thinner material for the sides. It also introduced a can that does not require a cleaning process during its manufacture. By reducing the diameter and thinning the sides, Kirin achieved a 29% reduction in weight, cutting down on its use of aluminum. The total amount of raw material saved between 1994 and 2012 was approximately 270,000 tons, leading to the reduction 2.25 million tons in in carbon dioxide emissions.

In addition, Kirin introduced light, thin, and easily crushable PET bottles for some of its products, and it was the first in the industry to use cardboard cartons for canned drinks that have a triangular section trimmed from their corners.

These projects save the company money, reduce the amount of materials used, and save shipment costs. They, too, are examples of efforts to integrate the solution of social issues and its business operations.

Kirin realized from reviewing past successes that CSR and CSV are not new developments but initiatives that it has been implementing for years.

Sustainable Tea Farming in Sri Lanka

Kirin’s integration strategy was launched only in 2013, but by having employees at all levels revisit the success stories from the past, Kirin was able to make a flying start. One recent example involves improvements to its value chain.

Kirin uses large volumes of black tea. About 60% of such tea imported into Japan is produced in Sri Lanka, and about a fourth of that total is used for a Kirin product: Afternoon Tea.

Bearing this in mind, Kirin examined the sustainability of the tea farms in Sri Lanka and found that, due to financial difficulties, many farms in the country were unable to obtain certification in farming methods that protect the ecosystem.

To help interested farmers receive certification from the Rainforest Alliance, an international sustainable farming certification system, Kirin decided to provide the funds necessary for certification training. In 2013, the project’s first year, assistance was provided for 15 farms. In a related project Kirin is supporting the education of children brought up on these tea farms by donating textbooks.

From a short-term perspective, such a project will lead to higher costs; but a longer-term view will reveal that such efforts help to ensure a stable and sustainable supply of high quality tea. Since this contributes to meeting customers’ demands for safety and reassurance, there is a strong business argument for such investment.

Some consumers, concerned about chemical residues in tea leaves, are showing greater interest in where the tea is produced. This is a trend that may suddenly

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accelerate, so the company must be prepared for such risks. In that sense, Kirin’s decision to support sustainable tea farming in Sri Lankan was a wise and timely one from the standpoint of both meeting consumer expectations and ensuring business continuity.

Recovery and Reconstruction Support Kirin suffered considerable damage from the Great East Japan Earthquake of March 11, 2011. Tsunami waves as high as seven meters struck Kirin Brewery’s Sendai Plant, located next to the city’s port, toppling several large tanks. The grounds were strewn with wreckage carried by the waves, including employee cars, parts of prefabricated buildings, and equipment from the plant.

At a press conference in Sendai on April 7, 2011, the company pledged to rebuild the plant; on September 26, 200 days after the disaster, the plant returned to operation, and it made its first shipment © Kirin Co.

since the quake on November 2. A herculean effort was needed for these achievements, and it was no doubt propelled by memories of the role the Sendai Plant played following the 1923 earthquake, the strong links that have since been formed with the local community, and the conviction that resuming operations was the best way to help the disaster hit Kirin’s Sendai factory following the March 2011 area recover.

earthquake.

In thinking of what else it could do to support the reconstruction effort, Kirin launched a project aimed at creating shared value with the local community, donating part of the proceeds from the sale of certain products to support the recovery.

Six billion yen was raised over three years for the Kirin Kizuna Project, which the Kirin Group set up in July 2011 to strengthen kizuna (community ties) in disaster hit areas in three ways: by restoring the local food culture and food industry;

bringing smiles to children’s faces; and improving the mental and physical wellness of local residents.

Kirin’s strengths were particularly evident in its support for the local food culture and food industry. Since Kirin provides products that enrich the experiences and lives of consumers, the company’s main focus is generally considered to be on food. Healthy agriculture and fisheries are essential to getting food to the dining

13 CSR White PaPeR

table, though, and so are healthy secondary, food-processing industries and tertiary, service industries.

Kirin thus conceptualized its support according to the principle of a “senary industry” involving the vertical integration of the primary, secondary, and tertiary sectors to achieve greater value. To provide agricultural training in Tohoku, for example, it set up two projects: an agricultural leaders’ network in Tohoku and an agricultural producer’s curriculum in Tokyo. And in 2013 the company launched the second stage of its support based on the theme of “support from production to table.” Kirin simultaneously extended its assistance for brand development for agricultural and fisheries products and the expansion of sales channels towards the creation of a senary industry.

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ness needs is far more difficult. Such needs often appear incompatible from a short term perspective.

But the attempt to balance conflicting needs is precisely what leads to innovation. It may have been the highly competitive business environment in which Kirin operates that has enabled it to learn this important lesson. (Researched by Zentaro Kamei, Tokyo Foundation)

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September 9, 2015 Incorporating Diversity as a Core Business Value Dentsu Inc.

The Tokyo Foundation T he focus of Dentsu’s CSR activities is on human rights. As Japan’s biggest advertising agency, it has developed great sensitivity to and amassed a wealth of experience regarding human rights issues while helping client companies formulate and disseminate their message to consumers.

In general, the scope of most corporate human rights initiatives is limited to providing training and workshops for employees or setting up systems to answer employee queries. Dentsu goes much further, addressing a broad array of issues in many different ways. One example is its longstanding sponsorship of two human rights contests: the first calls on employees to submit human rights slogans, for which there were 9,866 entries in 2013; the second is for the design of human rights posters, which has evolved into a collaborative project with several art universities.

Promoting Cross-Sector Information Sharing

Dentsu also has what it calls Labs where employees from different departments can come together to work on projects that are not directly related to their daily responsibilities.

By the nature of its work, the company has ready access to the latest technologies and know-how, but such information tends to accumulate in disparate workplaces, such as departments that deal with client firms and the media, as well as sections for production and design and those in the solutions and management business. It was with the aim of pooling such expertise that Labs were created on the initiative of individual employees to promote the interdepartmental and cross-sector flow of information.

Labs are flexibly organized so members can engage in projects that are not directly related to their work. They are regarded as being part of the company’s normal operations, though, so as long as they have the understanding of their bosses and colleagues, employees can devote themselves to their Lab projects

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Eliminating discriminatory, Increasing awareness of people hate-inspired remarks on the In- with disabilities ternet Slogan: Who are you excluding Slogan: When is a “Send” button when you say, “Anyone can do it”?

like an “Attack” button? Meaning: Help people realize Meaning: Encourage people to that just because they can do think twice before making con- something easily does not mean demning online comments. that “everyone” can.

during working hours. Labs can apply for and secure their own operating budgets, and their activities are independent of any department within the company.

The Labs are generally organized to address various social issues. They not only help find solutions to those issues but also serve to maintain and increase the morale of employees who have an interest in such activities. By working with outside specialists, the Labs help the company to acquire new expertise. And they also bring benefits to Dentsu’s main business as an advertising company, fulfilling a function as an incubator of new ideas and approaches and contributing to its marketing operations.

A similar, well-known example of using working hours to address social issues is Google’s 20 percent time program, which is an outgrowth of 3M’s 15 percent time (one result of which was the Post-It Note.) At Google, employees are allowed to spend 20% of their work time—or one day per five-day workweek—engaging in research or a project of their own choosing. Some choose to apply themselves to addressing social issues, and the program is credited with having greatly broadened the range of services that Google provides.

In Dentsu’s case, participation in the Labs is optional, and there is no pre

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scribed amount of time one can devote to such activities. The Labs are not focused on the pursuit of personal interests, moreover, but on tapping employees’ enthusiasm for work that contributes to society’s well-being.

Designing a New Universal Font The largest Lab, with some 100 participants, is the Dentsu Diversity Lab (DDL), which has its roots in a request from a client. A consumer goods company was concerned about the small typeface used in its manuals and other documents and hoped to make them easier to read, especially for older customers and those with reading disabilities.

Japan’s Universal Communication Design Association points out that when a page of text contains more than a certain number of characters it becomes hard to read. A page crammed with too many letters may therefore be regarded as deliberately having been made difficult to read. This has now become common knowledge, so if companies want to act responsibly toward their customers, they must not issue such documents. This is an issue that affects all of society, not just individual companies or customers.

Dentsu gathered a team of specialists with various skills to find a solution to this client’s problem, which could also lend itself to addressing a concern for society as a whole. In June 2011, the company launched its development of Minna no Minna no Moji Minna no Moji is a universal design font developed by Dentsu, UCDA, and Iwata Corp.

Source: Dentsu website.

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