Green Business Practices in Japan:
Lessons for Countries Greening their Business Sector
Hari Srinivas
Case Study Series E-075. May 2020 [Revised February 2021].
Abstract:
Japan's journey towards green business practices offers valuable lessons for countries seeking to balance economic growth with environmental responsibility. This article delves into the strategies employed by Japanese companies, demonstrating how they have integrated environmental initiatives into their operations to achieve cost savings, profit maximization, and reduced environmental impact.
Key takeaways include:
Multistakeholder partnerships: Collaboration between businesses, governments, and consumers fosters a comprehensive approach to tackling environmental challenges.
Cost-driven motivation: Many green initiatives are driven by their potential to reduce costs and increase profits, making them attractive to businesses even beyond their environmental benefits.
Resource efficiency: Measures like energy and water conservation, waste reduction, and recycling not only benefit the environment but also directly translate into financial savings.
Pollution prevention: Businesses adopt cleaner technologies and processes to minimize air and water pollution, aligning with environmental regulations and protecting public health.
Community engagement: Companies contribute to broader environmental efforts through philanthropic initiatives, supporting education, technology access, and environmental projects.
By understanding these trends and the factors driving them, other countries can adapt and implement similar green business practices to their unique contexts. This will pave the way for a more sustainable future where economic prosperity and environmental protection go hand in hand.
Keywords:
Green business practices, Sustainability, Environmental challenges, Cost-saving, Profit maximization, Multistakeholder partnerships, Climate change, Economic development
Japan's experience with integrating environmental responsibility into the business sector offers a compelling example of how sustainability and competitiveness can reinforce each other. At the global level, environmental pressures, from climate change to resource scarcity, are increasingly shaping market expectations. In this context, Japanese companies have been adapting their strategies to not only reduce ecological impacts but also strengthen their economic resilience. Drawing on decades of policy evolution, consumer awareness, and industry innovation, firms across sectors have embedded environmental considerations into operations, product design, and corporate governance.
The objective of this document is to examine how Japanese businesses are responding to rising environmental challenges by adopting practices that reduce resource use, lower costs, and minimize pollution. These efforts reflect broader shifts in stakeholder expectations, where governments pursue rigorous environmental goals, consumers demand greener products, and companies find strategic advantage in sustainability. The lessons from Japan's green business practices provide insights for other countries seeking to balance economic growth with ecological stewardship.
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 stakeholders, but interlinked:
Stakeholder
Priorities
Businesses
Avoid disruptions due to environmental risks, reduce overall costs through water saving, energy efficiency, waste minimization 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 is a significant starting point, 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 emissions that Japan has committed to under the Paris Agreement on Climate Changr.
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 that resulted from industrial pollution) 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 level 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 illustrated 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
YAMAHA
Modified production and manufacturing processes to significantly reduce CO2 emissions
Kirin Brewery
Implemented a "Cool Choice" Challenge
Asahi Brewary
Implemented 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 Brewery
Implemented 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 Sumitomo
Eliminated the use of plastic straws and cups
Nanami International
Implemented 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 Food
Set 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 Solar 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 philanthropy
Figure 3: Five categories of measures implemented 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. Pollution 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, telecommuting, 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 day-lighting, 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.
Key takeaways include:
Multistakeholder partnerships: Collaboration between businesses, governments, and consumers fosters a comprehensive approach to tackling environmental challenges.
Cost-driven motivation: Many green initiatives are driven by their potential to reduce costs and increase profits, making them attractive to businesses even beyond their environmental benefits.
Resource efficiency: Measures like energy and water conservation, waste reduction, and recycling not only benefit the environment but also directly translate into financial savings.
Pollution prevention: Businesses adopt cleaner technologies and processes to minimize air and water pollution, aligning with environmental regulations and protecting public health.
Community engagement: Companies contribute to broader environmental efforts through philanthropic initiatives, supporting education, technology access, and environmental projects.
By understanding these trends and the factors driving them, other countries can adapt and implement similar green business practices to their unique contexts. This will pave the way for a more sustainable future where economic prosperity and environmental protection go hand in hand.
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 savings and profit maximization that result for those actions. This is a key policy objective that has to be kept in mind when developing programmes that target climate action by businesses.
[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
