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FOCUS December 2018 Volume 94

The Evolution of Strategic CSR through SDGs

Masao Seki

The Sustainable Development Goals (SDGs) adopted by the United Nations in 2015 have become a lingua franca. At the same time, they are also a matter of interest as risks and opportunities to companies around the world. Whether in the developed or developing nations, companies are increasingly integrating SDGs in their products and services as well as in their operating processes, and addressing them in their core business strategies and operations, to achieve an inclusive and sustainable society in the future. The view that companies need to provide solutions to social issues through their core businesses while simultaneously acting as engines of economic growth in order to ensure fair profit in the future is spreading. 

I participated in the SDG Business Forum, a part of the High-Level Political Forum, held in the United Nations Headquarters in New York in July 2018, after having participated in the Forum in 2017. Corporate interest in these initiatives has increased significantly, as 4,000 people applied to participate, a three-fold increase compared to 2017. It was a ten-fold increase compared to the First Forum held in 2016. This year, due to limited capacity of the venue, only six hundred people were able to participate.

Keidanren and SDGs
The Japan Business Federation (Keidanren) organized a delegation for the 2018 Forum, and Mr. Masaya Futamiya, Chair of the Keidanren Committee on Corporate Behavior & Social Responsibility spoke at the plenary of the Forum, presenting the initiatives taken by the Japanese business sector. Fortunately, we received tremendous response not just from numerous companies around the world but also from a broad range of participants including governments, the United Nations and other international organizations as well as think tanks. 

The presentation was about Keidanren’s strategies on SDGs. In November 2017, Keidanren revised its Charter of Corporate Behavior, which is an aspirational code of conduct among its member-companies, as well as the Charter’s Implementation Guidance. It was seven years since the last amendment, and the main objective of the latest amendment was to incorporate widely accepted international norms of behavior, such as the 2011 United Nations’ Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy,” Framework (UN Guiding Principles), the Paris Agreement on climate change and the SDGs. In particular, the Charter states in its preamble that the “role of a corporation is to take the lead in the realization of a sustainable society”1 and emphasizes that the corporate sector will contribute to the achievement of the SDGs through realization of Society 5.0 , a human-centered super-smart society.2

A significant feature of the Charter is the inclusion of a clause on human rights. It stipulates that members will conduct business that “respects the human rights of all persons” in line with the UN Guiding Principles which has become a bible in this field. It encourages corporations to take the following concrete actions; understand and respect internationally recognized human rights; create mechanisms to prevent human rights violations; and promote human rights through contributing to the creation of an inclusive society.

Human rights were an important topic for discussion at the SDGs Business Forum. The report, The Human Rights Opportunity, published in time for the Forum by the World Business Council for Sustainable Development (WBCSD) jointly with Shift (an organization promoting the UN Guiding Principles), is an inspiring publication.3 It provides good practices of progressive companies that have integrated the respect for human rights in their core businesses in the context of SDGs. Eliminating child labor and human trafficking in the supply chain is of course very important, but there are diverse human rights issues and approaches that companies should address. In that sense, the fifteen cases introduced in the report offer a wealth of inspirations on what constitutes efforts to respect human rights that contribute to the achievement of the SDGs. 

Many Japanese corporations are actively integrating SDGs in their operating strategies. For example, Sompo Japan Nipponkoa Insurance, uses its advantage of being an insurance company to develop and offer insurance in new areas in order to build a resilient and inclusive society, such as the weather index insurance that protects small-scale farmers in developing countries from droughts, and insurance developed in partnership with the World Bank covering catastrophic natural disasters and pandemics in vulnerable developing countries. Domestically, the company is vigorously promoting various services to prevent traffic accidents by using digital technology and group businesses addressing the super-ageing society, such as through nursing care and health care, while working on projects such as the SAVE JAPAN project, which engages in activities for bio-diversity conservation in collaboration with Japan NPO Center and local environmental not-for-profit organizations/non-governmental organizations as well as the citizens across Japan. 

Human Rights Underpinning SDGs
The SDGs consist of seventeen goals, but these goals are not scattered and arbitrarily put together. It is clear when you thoroughly read the whole text of the resolution adopted by the UN General Assembly that the underlying philosophy shared by all the goals is the respect for human rights and the human-centered principle. The concept pledged in the resolution, “leave no one behind,” expresses this very well.

However, “business and human rights” is a relatively new concept. Among companies around the world, environmental issues have been the main focus of the earlier CSR initiatives. The ISO14001 on environmental management systems was published in 1996. The process is now well-established in corporations around the world as well as in Japan and is widely known. But with human rights issues, the situation is completely different, and there are many corporations that are not well-prepared in terms of measures to address those issues. Basically, it should be the same as with the environmental issues; they should implement a PDCA (Plan-Do-Check-Act) cycle by setting up a basic policy, identifying risks, establishing a mechanism to prevent their manifestation, conducting regular follow-ups and disclosing the progress made. However, few companies have understood or implemented the process so far. It is only in the last two or three years that we have seen progressive global companies publish their own human rights reports and disclose information on their efforts. Such companies include Nestlé, Unilever and M&S. In Japan, ANA Holdings, Inc. published its first “Human Rights Report” in June 2018.  

The history of corporate efforts in the field of human rights is not as long as that in the field of environmental issues. But all companies are now urged to integrate the respect for human rights in their management. The seventeen goals and one hundred and sixty-nine targets of the SDGs provide clues on strategies and approaches that could be taken in engaging in this field.

The Tokyo 2020 as SDGs-supportive Olympic and Paralympic Games
The awareness on human rights issues of not just companies but also of various stakeholders remains insufficient in Japan, when compared to international level. A good opportunity to overcome the deficit would be the Tokyo Olympic and Paralympic Games to be held in two years’ time, in 2020. 

The Tokyo Organizing Committee of the Olympic and Paralympic Games published a Sustainability Plan (Version 2) in June 2018. It is a groundbreaking declaration to embrace the SDGs in the operation of the Tokyo Olympic and Paralympic Games. The Committee plans to seek ISO20121 certification, an international standard for sustainable management of mega-sports events. The contents of the Sustainability Plan (Version 2) is wide ranging, including consideration of the environment, human rights and labor issues, as well as promotion of participation and cooperation.

Of particular note of the Plan is the declaration to operate the Games based on the UN Guiding Principles. This will become mandatory for the host country from the Paris Games in 2024 onwards. It is therefore not mandatory yet for the Tokyo Games, but the Committee made the declaration voluntarily. Also noteworthy is the new procurement codes for paper, timber, agricultural products, marine products and palm oil. Included in those codes are considerations for the environment as well as for matters regarding human rights and labor, such as the rights of indigenous people and migrant workers.

Regrettably, domestic media interest in the plan is limited. The publication of the plan did not attract much attention from the mass media, and even when the media did take notice, they referred only to the environmental issues, calling it the “Eco-Games.” Abroad, the sustainability of mega sports events has attracted a much larger interest, and media coverage of the publication of the plan this time was well-balanced, including references to human rights and labor issues. There is a significant gap in awareness in Japan and abroad. That is all the more reason why the Tokyo Games, which will be watched globally, will be an extremely valuable opportunity to raise awareness of human rights issues in Japan. It is hoped that the Tokyo Games will become a turning point to mainstream SDGs and human rights in the Japanese society.

Masao Seki is a Senior Adviser on CSR, Sompo Japan Nipponkoa Insurance Inc.  He is also a professor of School of Business Administration, Meiji University.
For further information, please contact HURIGHTS OSAKA. 

UNDP Work on Business and Human Rights

Since 2016, UNDP Asia-Pacific has promoted regional efforts to implement the UN Guiding Principles, focusing on advocacy, policy development, technical support, and capacity building. In 2018, UNDP accelerated this commitment by launching the Business + Human Rights Asia (B+HR Asia) Unit.

B+HR Asia leverages UNDP’s trusted relationships throughout the region and convenes governments, private sector actors, civil society, and national human rights institutions for greater coherency on collective action for business and human rights progress.

Currently, B+HR Asia provides UNGP implementation support in the following countries: Bangladesh, India, Indonesia, Malaysia, Sri Lanka, Thailand, and Viet Nam.

With project activities aligned with the UN Guiding Principles, B+HR Asia works to:
Provide technical and advisory support to governments to develop National Action Plans or similar policy frameworks in furtherance of UNGP implementation and boosting the regional ‘race-to-the-top’
Boost regional peer learning and capacity building on the UNGPs for all sectors to maintain the momentum for Business and Human Rights progress
Support the business sector in the development of company human rights policies, programmes, and due-diligence protocols
Strengthen and support the role of civil society and national human rights institutions that provide access to effective remedy when human rights are at risk.

Transformative Impact
Implementing the UN Guiding Principles means:
A boost in jobs and improved livelihoods;
Increased access to basic services and assets;
Strengthened social care and protection systems;
Effective governance reinforcement;
Greater environmental protection and accelerated climate action;
Advancement in gender equality;
Expanded opportunities for trade and investment, including reduced reputational, operational, and legal risks in businesses; and
More just, inclusive, and peaceful societies as a result of fewer conflicts between the State, business, and citizens.

Source: www.asia-pacific.undp.org/content/rbap/en/home/programmes-and-initiatives/BusinessandHumanRights.html.

 1 See revised version of the Keidanren Charter of Corporate Behavior, www.keidanren.or.jp/en/policy/csr/charter.html

 2 The vision for the fifth stage in the evolution of human society advocated by the Japanese Government, following its previous stages as a hunter-gatherer society (Society 1.0), agrarian society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0). A humanity-oriented, super-smart society in the near future is envisioned. See http://www.keidanren.or.jp/en/policy/csr/2017reference2.pdf.

3  Full report available at Shift, www.shiftproject.org/media/resources/docs/TheHumanRightsOpportunity_Shift-07-17-2918.pdf?utm_source=website&utm_medium=button-SDGs&utm_campaign=SDGs_Download-PDF.

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