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SDGs: Efforts of and Outcomes for Japanese Companies
For some years now, Nikkei Research has been supporting many clients, from global enterprises to local governments, in their efforts to tackle the challenges posed by the SDGs (or "Sustainable Development Goals"). By analyzing data from our proprietary surveys such as the Nikkei SDGs Management Survey and the Cities & Counties SDGs Advancement Survey, we are able to provide information on current conditions across Japan relating to this matter. Moreover, we are also able to help various individual organizations identify what they stand to gain (or lose) and the hurdles they must clear to achieve desired outcomes.
Below are some of the insights and information from case studies that we have gained so far.
Overall disclosure rate of companies still standing low.
There is a divide between companies that engage in disclosure related to environmental change and those that do not. While almost all leading companies that have made advances in responding to the challenges of the SDGs are disclosing such information, less than 40% of companies are currently making such information available. In terms of the supply chain, just slightly over 20% of all companies are making relevant disclosures that cover their supply chains.
Two major benefits of SDGs management: market value and brand strength
Japanese companies that have implemented SDGs-related management and advances feel confident that they are being constantly watched and evaluated by investors. In addition, they also feel that their activities in these areas have improved their brand strength. However, despite their efforts to disclose information, the effect on recruitment seems to be lagging. Companies might need to step outside the "norm" and make a greater appeal to the sharp-eyed members of the younger generations by emphasizing their passion, achievements and detailed future plans.
Companies delivering new statements from top executives perform better.
Our analysis showed clearly that when a company's top executives make SDGs-related statements, there are significant impacts on that company's market value. Such companies tend to easily outperform the TOPIX (Tokyo Price Index). It was also revealed that companies should continuously update their statements and make announcements periodically, rather than leaving things as they are.
Those who engage in SDGs-related activities and those who do not
We learned that 50% of those currently employed are somewhat involved in activities that contribute to SDGs. This is sometimes leveraged by the companies they work for, as some businesses, especially in the manufacturing and energy industries, are directly involved in matters relating to the SDGs. However, only a small number of people engage in SDGs-related initiatives at work, while the majority of those interested in such activities tend to undertake related measures in their personal lives. It is important for companies to be aware that the SDGs are giving rise to change at the individual level, as employees are also consumers who can affect products and services with their purchasing behavior.
Using survey data to promote SDGs effectively within the company
We interviewed key team leaders of Sumitomo Life Insurance Company to find out how they were effectively using survey results for internal promotion and penetration related to the SDGs. Our analysis of the survey data involved comparisons with other top-rated companies to capture differences as well as strengths and weaknesses. Moreover, by combining the results of our research with their own in-house surveys, companies are able to design and execute new measures.
Local governments need concrete plans involving localized renewable energy.
Since 2016, Japanese local governments have been required to establish action plans under the "Law Concerning the Promotion of the Measures to Cope with Global Warming." Our survey revealed that nearly 40% of cities and counties across Japan still lack solid plans. On the other hand, we uncovered information on successful cases in which some local areas had already established a circular economy utilizing local resources for renewable energy (i.e. solar power, geothermal energy, wind power, woody biomass and waterpower).
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