Green Business, in the Land of the Prius

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by: Joel Makower

If you had asked me even a week ago whether Japan or the United States was further along in the greening of mainstream business, I’d likely have answered Japan. That country is, after all, the birthplace of the Prius and other eco-efficient vehicles and advanced technologies.

It’s the homeland of Sharp, the world’s largest manufacturer of solar panels. It is a society known for longer-term thinking — quarters of a century, not quarters of a year — and for imbuing its citizenry with a sense of national purpose and commitment.

But after my visit to Tokyo over the past few days, meeting with companies and thought leaders in the green business sphere, I’m not so sure. Japanese companies, like their counterparts in the U.S., are engaged and involved in environmental issues like never before. But the conversations I had were strikingly similar to those I have regularly with American firms. Japanese companies are struggling to make the business case for integrating sustainability into core business activities, often working ardently to make what appear to be only incremental improvements. They’re frustrated at the lack of government leadership on the topic and trying with only moderate success to turn green commitments into competitive advantage in the marketplace, encountering consumers who say overwhelmingly that they are deeply concerned about the environment, but who seem less than willing to channel that concern into purchases of greener products and services.

Sound vaguely familiar, Americanos?

During my brief visit to Tokyo (en route to Bangkok for a speaking engagement), I had the opportunity to sit down with representatives of Panasonic, the electronics manufacturer, and Sekisui Chemical Co., which makes among other things makes eco-friendly pre-fab modular housing. Both companies are engaged in some form of green marketing campaigns. I spoke at a meeting of the Frontier Network, a consortium of some of Japan’s leading corporations working jointly on sustainable supply-chain management and other “frontier” issues, operated by the consultancy E-Square, my Tokyo host.

And I met with two of Japan’s green business thought leaders: Tachi Kiuchi, formerly CEO of Mitsubishi Electric America and now chairman of Future 500 and CEO of E-Square; and Kazunori Kobayashi, co-founder of Japan for Sustainability, an NGO promoting Japanese companies’ green initiatives, as well as a consultant to many of these companies.

As in America, interest in the greening of business in Japan has accelerated over the past year or so. Al Gore’s movie seems to have played a leading role: Just about everyone I spoke with brought it up. “The movie changed the whole atmosphere,” Kobayashi told me. One global food company based in Tokyo made it required viewing for all company executives, he said. “They said that those ninety minutes were more important than all of the lectures they’d be hearing for years.”

I was six thousand miles from home, but I could have been anywhere in the U.S., given the stories I was hearing. The company efforts and struggles sounded very familiar. One technology company (the Frontier Network event was off the record, so I can’t name some names) had developed an e-learning module on environmental issues that it was rolling out to its employees worldwide to make the issues personal and relevant, but the company hadn’t done any studies to determine whether the program was having an effect. A financial services firm had launched a socially responsible investment fund, but was struggling to define what stocks should qualify. Panasonic described an “Eco Ideas” label it was applying to its green products, claiming that more than ninety percent of its products qualified. (Katsumi Tomita, from Panasonic’s Environmental Planning Group, told me that the company will be rolling out the label in the U.S. in the coming weeks.)

Japanese consumers, for their part, sound just as confounding as Americans. A survey released last week by Accenture — based on responses from more than 7,500 consumers in seventeen countries in North America, Europe, and Asia — showed the Japanese even more concerned with environmental issues than the carbon crazy Brits. Accenture asked, “Are you concerned by climate change?” Ninety-five percent of Japanese said they were “extremely” or “somewhat” concerned, compared to 81 percent of Brits (and 73 percent of Americans). Panasonic told me their research found 77 percent of Japanese saying they’d like to buy from environmentally responsible companies, comparable to U.S. numbers. But, Tomita said, while Panasonic’s research showed that Japanese consumers are more aware of environmental issues than those in most other countries, his company was uncertain about whether and how much environmental concerns weigh on Japanese purchase decisions.

And so it goes. The mainstreaming of green in Japan, as in America and elsewhere, is far from simple or easy.

Tachi Kiuchi told me how clean technology is on the march in Japan. It’s no longer simply a matter of taking others’ technologies — such as American-invented solar panels — and making them cheaper and better. Now, Japan is creating its own innovations. “From that standpoint, I’m pretty optimistic,” he said. “In two or three years time, we’ll have things other countries will want.”

But Kiuchi isn’t as optimistic about the greening of Japanese business. He said change inside companies is coming “gradually, very gradually. Our biggest obstacle is indifference. It’s a gradual process and we have to wake them up.”

He might as well have been speaking about companies in my country, and in many others.

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