Green Business Practices in Japan:
Lessons for Countries Greening their Business Sector



Hari Srinivas
Case Study Series E-075. May 2020.



With Japan being a high-income OECD member with a globalized and interlinked economy, reducing the environmental impacts of its economic activities has always been a priority for businesses, their customers, and governments. Such priorities are different for each of the stkeholders, but interlinked:

Stakeholder Priorities
Businesses Avoid disruptions due to environmental risks, reduce overall costs through water saving, energy efficiency, waste mainimization etc.
Customers Purchase eco-products and adopt environmentally friendly lifestyles
Local and national governments Reduce negative impacts of environmental problems and climate risks, improve quality of life for its residents through a clean environment

◼ Environmental context for business action

Japan's Commitment to the Paris Agreement on climate change 25% reduction, which is premised on the establishment of a fair and effective international framework in which all major economies participate and on agreement by those economies on ambitious targets (for a base year 1990) [1] This, however, was drastically reduced to 3.8% emission reduction in 2020 compared to the 2005 level.[2]

More recently, with Japan playing an increasingly important role in the United Nations efforts towards sustainable development, particularly in meeting the Sustainable Development Goals (SDGs), the pressure to drive change within the economic and social spheres (without affecting the overall quality of life, (QoL) or the competitiveness of the economy) has always been high.

For example, the SDG #13 on "Take urgent action to combat climate change and its impacts" has been promoted as a means to reduce CO2 emmissions that Japan has committed tounder the Paris Agreement.

Sustainable Development Goal 13: Take urgent action to combat climate change and its impacts Climate change is now affecting every country on every continent. It is disrupting national economies and affecting lives, costing people, communities and countries dearly today and even more tomorrow. Weather patterns are changing, sea levels are rising, weather events are becoming more extreme and greenhouse gas emissions are now at their highest levels in history. Without action, the world's average surface temperature is likely to surpass 3 degrees centigrade this century. The poorest and most vulnerable people are being affected the most.

Affordable, scalable solutions are now available to enable countries to leapfrog to cleaner, more resilient economies. The pace of change is quickening as more people are turning to renewable energy and a range of other measures that will reduce emissions and increase adaptation efforts. Climate change, however, is a global challenge that does not respect national borders. It is an issue that requires solutions that need to be coordinated at the international level to help developing countries move toward a low-carbon economy.

To strengthen the global response to the threat of climate change, countries adopted the Paris Agreement at the COP21 in Paris, which went into force in November of 2016. In the agreement, all countries agreed to work to limit global temperature rise to well below 2 degrees centigrade. As of April 2018, 175 parties had ratified the Paris Agreement and 10 developing countries had submitted their first iteration of their national adaptation plans for responding to climate change. [4]

The above priorities was driven domestically by a number of high profile pollution cases in the 1960s and 70s (such as the Minamata disease or the Itai-itai disease) and internationally by Japan's signing of a number multilateral environmental agreements (such as the Paris Agreement on climate change).. Operationalizing these commitments at the national levl has resulted in a number of government policies and laws that protect the environment and reduce human imapcts on it.

List of some of the Japanese environmental laws

     Basic Environment Laws
  • Basic Environment Law
  • Japan Environment Corporation Law
  • Environmental Impact Assessment Law
Laws related to Material Reduction
  • Basic Law for Establishing a Recycling-Based Society
  • Law Concerning the Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities
  • Law for Promotion of Effective Utilization of Recyclable Resources
  • Law for Promotion of Sorted Collection and Recycling of Containers and Packaging
  • Law for Recycling of Specified Kinds of Home Appliances
  • Food Recycling Law
  • Construction Materials Recycling Act
  • Waste Management (Disposal) and Public Cleansing Law
  • Law for the Control of Export, Import and Others of Specified Hazardous Wastes and Other Wastes
Laws on Earth/Ecology
  • Overview of Laws Concerning Natural Environment Conservation
  • Law Concerning the Promotion of Measures to Cope with Global Warming
  • Law Concerning the Protection of the Ozone Layer through the Control of Specified Substances and Other Measures
  • Law Concerning the Recovery and Destruction of Fluorocarbons
  • Law on the Exclusive Economic Zone and the Continental Shelf
  • Law Relating to Protection of the Environment in Antarctica
  • Nature Conservation Law; Natural Parks Law; Forest Law
  • Basic Law on Forest and Forestry
  • Wildlife Protection and Hunting Law
  • Law for the Conservation of Endangered Species of Wild Fauna and Flora
  • Law Concerning the Protection and Control of Animals
Laws on Energy/Transportation
  • Overview of Laws Concerning Energies
  • Electricity Utilities Industry Law
  • Gas Utility Industry Law
  • Atomic Energy Basic Law
  • Law concerning the Rational Use of Energy
  • Law on Temporary Measures to Promote Business Activities for the Rational Use of Energy and the Utilization of Recycled Resources
  • Law Concerning Promotion of the Use of New Energy
  • Law Concerning Promotion of the Development and Introduction of Alternative Energy
  • Road Transportation Vehicle Law
Other laws
  • Other laws have also been developed on the themes of Air, Water, Waste, Chemicals, Pollution, Land etc.
Along with these measures, consumer awareness of detrimental effects of products on the environment, both direct and indirect, have promted many companies to incorporate environmental measures in the manufacturing, administration, purchase, sale and other stages. Measures have, for example, concentrated on an expanded and inspired version of the original 3Rs: reduce, reuse and recycle.

All of these trends have highlighted the business sector's green business practices that maintain and sustain good environmental quality, which have not only directly reduced risks and costs for the businesses, but has also increasingly becoming a vital component of their economic competitiveness.

Figure 1: Japan's multistakeholder partnerships

The key aspect Japan's efforts in reducing its CO2 emissions has been a multistakeholder approach that brings together governments, businesses and citizens - each aiming to reduce their environmental impacts using priorities and tools that are relevant to them. For example, the compulsion for businesses to implement changes in their manufacturing processes that are friendly to the environment is essentially for -

  • to save costs, for example, minimizing waste generated and recycling them can reduce costs of disposal and of buying outside resources
  • to reduce risks that could disrupt their businesses, for example pollution risk that can disrupt the businesses' supply chain or production processes.

Figure 2: Cost savings and profit maximization from reducing climate change and environmental risks

◼ Review of Actions taken by Japanese businesses

A survey [4] of company websites and sustainability/environmental reports has shown them to be addressing CO2 challenges by reducing climate risk and by reducing broader environmental risks. Both of these are risks are ultimately grounded in the overall economic goal of reducing costs and increasing profits. A quick summary of the survey results are illustrated in the table below:

Risks Actions Details
Reducing climate risks Less waste Produce less wastes and recycle/reuse materials as much as possible
Less Pollution Use design and technology to reduce air, water and land pollution
Less GHG Emissions Change product design and manufacturing processes to reduce GHGs, especially CO2
Reduce broader environmental risks Water saving Ensure that amount of water used in manufacturing processes is low, and reuse water where possible. Clean up waste water before releasing into the environment.
Energy saving Reduce energy used; Increase energy efficiency; Reduce use of fossil fuels; Increase use of renewable energy sources
Material efficiency Use less natural resource Reuse and recycle as much as possible; Use alternative reusable, recyclable materials

Specific examples of companies and their actions are illutrated in the table below

Theme Company Actions
Less waste Glico Recycled raw garbage generated in the cafeteria. Aims for "zero emissions" throughout the Glico Group
Starbucks Abolished the use of plastic straws at approximately 28,000 stores worldwide, including stores in Japan.
Disneyland Eliminated disposable plastic straws and muddlers from all theme parks and resorts owned and operated by the company.
Skylark Abolished plastic straws and utensils in all its establishments.
Less pollution NTT Nishi-Nihon Increased the use and utilization of ICTs in its operation, to reduce virgin materials and wastes.
FujiFilm Changed production processes to create "pollution free" companies
Taisei Kensetsu Developed soil remediation technology to tackle land pollution
Nihon NUS Implemented measures to reduce marine waste
Less GHG Emissions SONY Developed energy-saving air-conditioning system that reduces more than 65% of CO2 emission
YAMAHAModified production and manufacturing processes to significantly reduce CO2 emissions
Kirin BreweryImplemented a "Cool Choice" Challenge
Asahi BrewaryImplemented a programme - "Asahi Carbon Zero", implemented car sharing in the office, and used eco-drive
Water saving Ebisu Marine Company Developed water quality equipment that eliminated the use of chemical agents
Suntory BrewaryImplemented measures such as 3R for water, contributing to the natural water cycle, reduced the water used to make its products and modified its production process to increase reuse of water
Toshiba Developed technologies to reduce water intake during its production process
Material saving Mitsuo SumitomoEliminated the use of plastic straws and cups
Nanami InternationalImplemented a campaign called "Spring has Come" that deplasticized bags
NTTHigashi-Nihon Reduced the use of paper with electronic systems
MiniStop Implemented measures for food recycling and oil recycling
Nihon FoodSet up an "Ecology Center" to reduce food losses and wastes
Energy saving Looop Implemented technologies towards "Power liberalization" to reduce energy consumption at homes, PPA business and industries with solar energy.
Nihon Natural Energy Developed initiatives such as "Green Power Certificate" and "Green Heat Certificate"
Orix Company Set up the Mega Ssolar Project
Mediotech Company Initiated a new power service "Direct Power" utilizing cutting-edge IT technology such as block chain and AI

◼ Business Action for the Environment

Some of the measures that businesses have taken action on are listed below. They can be listed under five categories: (1) Resource input measures such as energy efficiency, packaging, recycling and waste reduction, resource conservation; (2) Pollution prevention measure such as air pollution prevention, water pollution prevention; (3) Management measures such as Environmental Management Systems; (4) Non-production measures such as environmental building design; (5) Community measures such as environmental philanthrophy

Figure 3: Five categories of measures implmemented by Japanese businesses


1. Resource Input Measures

Energy Efficiency

The survey showed that there are many issues that are generally covered under 'energy efficiency'. These include:

  • Utility Cost Reduction
    Businesses aim to reduce energy usage and therefore utility costs to the greatest extent possible. Such aims cover, for example, heating, cooling and ventilation, lighting levels and water conservation.
  • Energy Conservation
    Businesses first perform an energy audit, covering loads, devices etc. Enabling future improvements, such audits focus on time-of-use, conservation measures possible etc. and propose measures that are both operational and technological in nature. Measures include cost, ease of implementation, energy saved, as well as cost reduction in general.
  • Water Conservation
    Water conservation efforts included the conversion of water cooling systems to closed-loop systems, recirculating the water instead of piping in public-supply water, and the elimination of nonessential processes and modification of piping and timer systems.
Employee awareness and participation are an important contribution to efforts in achieving energy efficiency.

Recycling and Waste Reduction

Recycling and waste reduction is a recurring theme that is an integral part of most of the above environmental measures taken by businesses. Most popular and tangible among these measures have targeted paper. Efficient use of paper, streamlining processes and tasks that need excessive paper, paper source sorting and disposal systems (both in-house and external systems), are covered here. Other wastes such as glass, aluminum, cardboard, wooden pallets, polyurethane and polystyrene foam, furniture etc. have similarly been targeted for source sorting and disposal systems.

Besides cost consideration, companies have included waste disposal methods and techniques, recycling efforts etc. as criteria to select trash contractors.

Another measure incorporated by companies is the purchase of recycled materials for office supplies. Products with higher percentages of post-consumer content, reused copy/printer toners cartridges, recycled tissue and napkins etc. have been incorporated in purchasing decisions.

Online internet and intranet networks have been used as an alternative to inter-office memos and conventional communication methods. Centralized information, leadership, and a corporate commitment have been found to be critical in developing a culture for the 'reduce, reuse, and recycle' corporate environment.

Packaging

Packaging issues have come to the fore for businesses due to increasing quantities of municipal waste, with a significant portion coming from consumer goods packaging. This has highlighted the need to both increase recycling and minimize the amount of material used in packaging. This would reduce waste and decrease the use of virgin/new materials.

Most efforts to streamline packaging have focused on three aspects:

  • using as little packaging material as needed;
  • using recycled material wherever it is environmentally and economically sound; and
  • making packaging as recyclable as possible.

Resource Conservation

Water, electricity, office supplies, manufacturing and production materials, building materials etc form resources that a company uses. Conservation of such resources is an important environmental measure taken by companies. These include restrictions and reductions in the use of resources, recovery of (re)usable resources from waste products, recycling of resources after adequate processing. Companies also resort to the use of certified products that have had minimum environmental impact, and have been included in a comprehensive resource recovery cycle, including post-production processing.

Thus company purchasing decisions are increasingly including environmental concerns in their choice of supplies, materials and refills.

Resource conservation measures have also covered maintaining regulatory compliance, chemical source reduction, emissions control, equipment review and construction support, and product stewardship. Increased 'returnable' content in a product or its packaging has also been used in conservation efforts.


2. Poluution Prevention Measures

Air Pollution Prevention

Air pollution prevention efforts of businesses have generally focused on both source and waste reduction, and on reuse and recycling. Preventing air pollution within a company's manufacturing processes remains the key approach. Cleaning and processing, switch to non-polluting technologies and materials, reduced generation of waste water, converting hazardous by-products to non-threatening forms, etc. have been attempted in this regard.

Indirect air pollution prevention measures by businesses also cover transportation. Examples of such measures include: providing company transportation to employees; offering commuting information and selling public transit passes; and encouraging employees to carpool and use public transportation. Businesses have also initiated successful programmes such as the use of bicycles to commute to work, telecomuting, and work-at-home etc. to reduce pollution due to commuting.

Water Pollution Prevention

Measures taken by businesses to prevent water pollution essentially strive to conserve and protect water quality - in terms of its use reduction and disposal, waste water treatment, procedural changes and recycling.

Water conservation programmes have also included the substitution/reduction of hazardous materials and the generation of hazardous wastes. Employee awareness, education and training in pollution identification and reduction is critical in achieving successful results.


3. Management Measures

Environmental Management Systems

Environmental Management Systems are tailored to each businesses' own needs. While the results can vary, self-audit programs focus on company-specific environmental issues, enabling among other things, a high awareness of environmental issues. Implementation of EMS covers areas such as policy, organizational restructuring, marketing identity and standards etc.

Businesses achieve this by developing checklists, marking realistic environmental compliance targets, encouraging transparency and accountability, and similar measures. Effective communication of such measures, internally and externally, remains critical to better understanding, acceptance and compliance. It also serves as a focus to challenge all involved to develop new approaches to environmental improvements


4. Non-Production Measures

Environmental Building Design

The survey showed there are many ways in which efficient building design has lead to efficient energy use. Such measures are taken both in the architectural design of the building itself, as well as in the various infrastructure and services that are installed in it.

These include: proper building to site orientation, high efficiency lighting, optimized daylighting, oversized low restriction ducts, variable speed drives in the HVAC units, increased building insulation, heat mirror glass, reflective roof coating, occupant sensors throughout the building, and efficient office equipment.


5. Community Measures

Environmental Philanthropy

A committed approach to environmental improvement goes beyond mere cost-benefit analyses and concerns broader, universal issues. Many businesses do not rule out philanthropy as a means to achieve environmental consciousness. Those favouring this typically take measure such as access to environmental technology, access to engineering support, free educational classes, staff volunteering in community programmes, information dissemination of activities and measures, and assistance in publishing research and promotional materials.

Besides supporting existing environmental efforts and actions, companies are also directly involved in activities such as tree-planting.

◼ Conclusions

The emerging lessons of Japan's green business practices point to an increasingly "enlightened" business sector that not only focusses on its economic goals of reducing costs and increasing profits, but also using these goals to address environmental challenges. These lessons are critical for a sustainable future where multistakeholder partnerships between customers, businesses and governments will help the country meet its local environmental problems and global commitments.

As the lessons illustrated above show, the ultimate driver for businesses to undertake action on environmental issues lie in not "greening" the environment, but in ensuring cost ssavings and profit maximization that result for those actions. This is a key policy objective that has to be kept in mnd when developing programmes that target climate action by businesses . ?


References

[1] Japanese Government's submission to the United Nations Framework Convention ofn Climate Change, January 26, 2010. https://unfccc.int/files/meetings/cop_15/copenhagen_accord/application/pdf/japancphaccord_app1.pdf

[2] Japanese Government's submission to the United Nations Framework Convention ofn Climate Change, November 29i, 2013. https://unfccc.int/files/focus/mitigation/application/pdf/submission_by_the_government_of_japan.pdf

[3] UN, "Sustainable Development Goal #13: Taking Urgent Action to Combat Climate Change and its Impacts. United Nations: Sustainable Development Platform. https://sustainabledevelopment.un.org/sdg13

[4] Data of company actions listed in the table was collected by Junrai Sugiyama

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Contact: Hari Srinivas hsrinivas@gdrc.org