Stakeholder Dialogue in FY2018

Dialogue on SDGs

In March 2019, KDDI invited Mr. Hidemitsu Sasaya, a CSR/SDGs consultant, to the company's headquarters and held a stakeholder dialog session on the theme of "Know the SDGs and explore KDDI's role." KDDI is already engaged in a range of sustainability activities and, with the new medium-term management plan that defines its work on the SDGs as a key challenge under the company's stated mission of "achieving a truly connected society", it is committed to further contributing to the global effort to bring about a sustainable society.

Participants

<Participating expert>

Mr. Hidemitsu Sasaya, CSR/SDGs Consultant and Corporate Advisor to ITO EN, Ltd.

<KDDI participants>

Akira Dobashi, Executive Officer, Sustainability General Manager, General Manager, General Administration & Human Resources Division, Corporate Sector
Shingo Niori, Administrative Officer, General Manager, Life Design Business Strategy Division, Life Design Business Sector
Akihito Fujii, Administrative Officer, General Manager, Solution Business Planning Division, Solution Business Sector
Toshiyuki Suzuki, Administrative Officer, General Manager, Global Business Planning Division, Global Business Sector
Manabu Nemoto, Group Leader, General group, Consumer Business Strategy Department, Consumer Business Strategy Division, Consumer Business Sector
Makoto Sugiura, Deputy General Manager, Technical Planning Division, Technology Sector
Haruhiko Masuda, Administrative Officer, General Manager, Media and CATV Business Division
Mikinori Naitou, Deputy General Manager, Product Planning Division, Product & Customer Service Sector
Eriko Kimura, Group Leader, Planning 3 group, Corporate Strategy Planning Department, Corporate Strategy Planning Division
Minoru Tanaka, Administrative Officer, Deputy General Manager, General Administration & Human Resources Division, Corporate Sector
Kentarou Torimitsu, General Manager, Sustainability Department, General Administration & Human Resources Division, Corporate Sector

• The titles/positions of participants are as of end of March 2019. Mr. Sasaya left ITO EN in April 2019 and is now a visiting professor at the Graduate School of Information & Communication.

Japanese companies need to be better at communicating

KDDI: The KDDI Group has been engaged in various activities to promote sustainability with the aim of fulfilling its stated mission of "achieving a truly connected society." The new medium-term management plan, which is currently being drafted and is to start from fiscal 2019, states that we seek to be a company that contributes to the sustainable growth of the society, and will include KDDI's SDG targets.

Sasaya: The first thing I say to any business working on SDGs is that you should strengthen your ability to communicate your message. The Omi merchants of yore were known for their "sampo yoshi" motto, meaning "good three ways: good for me, good for you and good for society." But another motto they held was "intoku zenji", or "hide your virtue and good deeds." Many Japanese companies still seem to have this mindset and keep quiet about the good things they do, but what used to be common sense in a homogenous society is no longer valid as Japanese companies increasingly operate on a global scale. To work with people from different countries and also with the millennial generation in today's diverse world, it is crucial that you keep telling them about what you do.

Use mainstreamed SDGs as CSV tools

Sasaya: While the trends in sustainability demands change rapidly, the concept of ESG seems to have been embedded into the thinking, with investors in particular monitoring ESG. The SDGs, or Sustainable Development Goals, arrived in this era of ESG focus. Even though the name contains the word "development", these goals are not just for developing countries; SDGs should be understood as a common language through which to explore the idea of sustainability on a global scale.

Unlike their predecessors, the Millennium Development Goals (MDGs), the SDGs give businesses have an important role to play. Not only governments, academia and civic societies but also private corporations are expected to be actors in the effort to solve social challenges. The Keidanren Japan Business Federation ties SDGs with the "Society 5.0" vision as it looks to the new horizons, and the Japanese government is now talking about Tokyo 2020 as the "SDGs Olympics" and the 2025 Osaka Expo as the "SDGs Expo." SDGs are becoming mainstream, and this trend is unlikely to be reversed. Japanese companies also need to put SDGs at the forefront of their mindset.

The 17 goals and 169 targets that form the SDGs are important CSV tools for exploring opportunities and avoiding risks. KDDI has many wonderful intangible assets, including the company culture, networks, trust, patents, technical skills and united workforce, but when it comes to making the most of these assets in its messaging to touch people's hearts, SDGs can be very effective. For KDDI, I believe the biggest leverage points are Goal 9 (Industrial innovation and infrastructure) and Goal 17 (Partnerships for the goals). With the increasing awareness of SDGs in the wider society, this is the time for KDDI to re-design its corporate brand to incorporate SDGs and strengthen its ability to send a message that resonates.

SDGs are transitioning from compulsories to showcases

KDDI: That sounds like a socially worthy activity, but it is not always compatible with business viability, for example due to the huge investments it may need.

Sasaya: Yes, that is a particularly difficult point. The SDGs are there to address social challenges that are complex and cannot be fixed quickly. Companies must be patient and see their business from a medium- to long-term perspective. It is necessary to have a clear pathway towards 2030, the end date for the SDGs, or even further towards 2050 through medium- to long-term planning, and work out a concrete plan for resource allocation in terms of people, materials and money. Engage with all stakeholders so they can understand the importance of sustainability in business management. These are the challenges companies must face to overcome the difficulties associated with the long timescale.

KDDI: What are the benefits of working on SDGs in a highly competitive environment?

Sasaya: The keyword is the "mainstreaming" of the SDGs. As the government puts the SDGs at the center of its policies and investors and business partners shift their attitudes, KDDI can gain a good reputation by leading the way due to its unique position as a platform provider; your company is part of the social infrastructure and can influence other businesses. To take the example of ITO EN, we were inundated with requests to "teach SDGs" after receiving the Japan SDGs Award. The more attention you attract, the more new business opportunities open up. This creates a positive impact on multiple stakeholders, helps with recruitment, creates a positive feedback loop to business management, and also raises the employees' awareness.

Research suggests that nearly 60% of the leaders of listed companies are aware of the SDGs. Today the SDGs are already "compulsory exercises" that all companies must do at the minimum, and we are entering the stage beyond that, where each company competes with a unique set of exercises that showcase their strengths. Successful companies link up their unique strengths with the SDGs and communicate effectively about their work. At the same time, companies are increasingly networking with other companies that are also committed to SDGs. Businesses that are inactive in this area can even face the risk of being left behind.

KDDI: When looking at the relation between ESG and the SDGs, we tend to think of SDGs as an approach towards an ideal world proposed by the United Nations, while ESG is regarded more as a risk assessment tool to safeguard return on investment.

Sasaya: Investors and research companies tend to use ESG for risk avoidance, making ESG considerations the minimum requirement. The SDGs, on the other hand, can be used as a means of attack as well as defense. Both ESG and the SDGs can be seen from the perspectives of both risks and opportunities. However, in order to avoid being accused of superficial "SDG-washing", a convincing case needs to be made. This can be done by presenting concrete data and disclosing corporate targets towards 2030. It would be good if you can strike a good balance by looking at both ESG and the SDGs.

The world expects platform providers to lead the way

KDDI: We can't reach our end users without engaging our partner companies when we talk about SDGs and our work on them, but it's not easy to get the hundreds of partner companies spread across the country to align with our position. We believe it's important to adopt an approach of using SDGs as the starting point to gain their understanding and bring them around.

Sasaya: To explain the SDGs in a simpler term, decipher the SDGs by putting them in the context of the traditional Japanese "good three ways" concept, where the SDGs fit into the "good for the society" part. That way, for example, sales activities can be framed not just in terms of "look, we have a new product!" but in relation with SDG issues, and you can equip your sales people with the skills needed to have social conversations about SDG issues that touch on the real, everyday world. By making the SDGs a common language for messaging, you can attract like-minded people like a magnet and gather a fellowship of allies around you.

The five selection criteria of the Japan SDGs Award―universality (can it be applied on a broad scale?), inclusiveness (does it respect diversity and include the minorities and the vulnerable?), participation (does it involve collaborative work?), integration (does it have financial as well as environmental and social benefits?), and transparency and accountability (does it incorporate a process of evaluation, publication and revision?)―are good guidelines to follow when working on the SDGs.

KDDI: Sustainability comes naturally to people from other countries and the younger generation, but perhaps the hardest people to convince are middle-aged and older people, who experienced a period of very rapid economic growth in Japan. The challenge is how Japanese companies can open up to the global trend and adapt to new values.

Sasaya: Japanese telecommunications carriers have always been providing public benefit services that have SDG-like aspects, so the goals and targets of the SDGs may sound rather obvious. However, the work you have been doing can gain renewed recognition when it is done with the awareness that it offers a solution to a global challenge. Furthermore, KDDI can play an important role as a platform provider working with others. When a car manufacturer makes a move, its suppliers follow. Similarly, KDDI can influence other companies simply by linking its achievements with the SDGs in its messaging. When communicated this way, your message can eventually filter through beyond the young, trend-sensitive generation and corporate leadership to the wider audience, driving the entire organization forward.

KDDI already has a clear and firm grasp of how its business activities tie in with the SDGs, and the world is watching how your SDG-focused management approach develops. I hope to see your company tell its story of value creation and make the most of its unique strengths as a platform provider by showcasing its SDG-focused management approach.

KDDI: As a public benefit services company, our group has been working on the provision of a robust telecommunications network for the Japanese market as well as providing telecommunications services in Myanmar. Last year, we reviewed our material sustainability issues in response to significant global changes such as the adoption of the SDGs and the Paris Agreement. The new medium-term management plan that starts from fiscal 2019 will strengthen our work on the SDGs through our core business activities. Based on Mr. Sasaya's comments, we will strengthen our commitment to the global effort to make a sustainable society a reality.