Hitachi Channel Solutions, Corp. boasts the top share of the ATMs in Japan. The company provides solutions using sensing, handling and security technologies not only in the financial sector, but also in manufacturing, distribution, public service, transportation and healthcare.
Based on the company’s vision, “Shaping a sustainable future by connecting the real and the digital, people and society with technology and trust,” Hitachi Channel Solutions is exploring and pursuing images of the future that it envisions and promoting the realization of these images. In this context, a two-hour workshop was held by SHIP on November 8, 2022 to encourage employees of the company to “shape the future” based on the SDGs, and to inspire them to take actions.
In the workshop, after a lecture on the relationship between the SDGs and business, as well as the innovation process, participants were asked to find his/her own relationship to a few selected SDG targets. Then, by utilizing the methodology of Purpose Engineering*, participants discussed what kind of driving goals should be set and what kind of specific projects should be launched and acted upon to achieve their personal goals and the social goals of the SDGs.
*Purpose engineering: A method to create a clear and strong pivotal purpose by organizing purpose in three levels: Intra purposes (personal purposes), Pivotal purpose (driving goals of a project or business), and Meta purpose (social purpose), and to launch a project and make it successful.
After the workshop, participants commented, “It was an opportunity to think deeply about the SDGs,” “I was able to feel closer to the SDGs,” “I was surprised that we have to make the SDGs our business,” “I was able to understand the method to incorporate the SDGs into my work,” “My awareness of the SDGs has increased. And I will be more conscious of them in my daily work,” and “It was an opportunity to consider how my work can contribute to the SDGs. I understood that I need to take the initiative in line with the goals.”
SHIP continues to support the creation of SDG-driven business models in line with the vision and philosophy of companies.
The Creative Response-Social Innovation School (CR-SIS) fosters human resources capable of solving social issues through the power of innovation. This school, started in 2020 and headed by Seiichiro Yonekura, Professor Emeritus of Hitotsubashi University as well as Professor of Hosei University Graduate School, has been offering 6-month classes for businessperson in charge of corporate CSR/SDGs, business strategy and brand strategy, and those who are planning to start their own social business.
Ai Ohara, the Director of SHIP, was invited to speak at the 6th class of CR-SIS on November 11, 2022. Under the title of “The Essence of the SDGs and Innovation,” she explained that the SDGs are not just icons but are unique in that they are measurable goals with a three-tier structure of goals, targets, and indicators (KPIs), and that when you look into targets and indicators, you can find opportunities for innovation. She also emphasized that it is essential to know how to initiate innovation in order to achieve the SDGs, by showing the cases of projects between UNDP and Japanese companies, in line with the concept of innovation activities defined by ISO 56002: Innovation Management System.
The lecture was attended not only at the Tokyo venue but also online from Sendai, Nagoya, Hiroshima and Fukuoka. A wide range of people, from high school and university students aiming for social business to teachers, entrepreneurs and businesspersons listened to the lecture and asked many questions after the lectures.
SHIP is thus connected with many external stakeholders to promote activities to achieve the SDGs through innovation.
From April to July 2022, SHIP gave six lectures to business persons, titled “SDGs and Innovation – Ways for Japanese companies to achievement of the SDGs through innovation” at Sophia University Professional Studies.
This lecture course was attended by 20 businesspersons from a diverse range of companies, including food manufacturers, transportation, financial institutions, trading companies, mass media, and consulting firms. In the course, Japan Innovation Network (JIN) gave lectures on how to initiate innovations addressing to the achievement of the SDGs and case studies of collaboration between the United Nations Development Programme (UNDP) and Japanese companies. UNDP Representation Office in Japan gave a lecture on the “SDG Impact Standards” for integrating the SDG into corporate decision-making. In addition, representatives from Kokubu Group was invited as a guest speaker to talk about how Kokubu strategically integrated the SDGs into their business strategies.
In the last two sessions of the course, each group of 6-7 participants picked up a specific issue related to the SDG 12 target 3: “By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses,” and came up with ideas how to innovate in the value chain to solve the issue.
Participants who completed the course commented, “The concept of the SDGs changed the way I thought about them. I learned that to be an innovative company, it is necessary to have a clear vision and objectives based on that vision,” “It was a revelation that not only is it possible, but is the essence of the SDGs, to be compensated for the value created by innovation, which overturned my previous understanding of the SDGs,” and “The biggest lesson I learned was that activities by private sector to achieve the SDGs should not charity or donations, but can (rather must) generate profit as a business.”
Founded in 1712 in Nihonbashi, Edo (old name of Tokyo), Kokubu Group is one of Japan’s leading food wholesalers. Kokubu Group plays a key role in Japan’s food distribution industry by providing its service to 35,000 customers including supermarkets, convenience stores, department stores, drugstores, liquor stores and the food service and restaurant industry, as well as by sourcing from 10,000 food manufacturers.
For more than 300 years since its establishment, Kokubu Group has continued and expanded its business to this day while constantly confronting society and making changes, overcoming crises such as the Great Kanto Earthquake in1923 and World War II. SHIP supported the company’s “SDGs Strategy Development Project” for 6 months from 2019 to 2020.
In this project, a core team of eight members was formed, including members from the corporate planning, sales and logistics divisions in addition to the Sustainability Promotion Section, to reflect the SDGs in the management plan and to directly incorporate the SDGs strategy to business in the field.
The project was also part of Kokubu’s innovation activities and used the framework of ISO 56002: Innovation Management System, which JIN was involved in developing.
Framework of ISO 56002
To this end, the project team first clarified the “Context of the organization” including the environment surrounding the Kokubu Group and confirmed the role of Kokubu as required by stakeholders and society. Then, the team analyzed the 169 targets of the SDGs in detail, listed the “Relationship between the SDGs and the Kokubu Group’s business,” and identified which SDGs targets the Kokubu Group should contribute to achieving.
And the SDG strategy was developed after clarifying the Kokubu Group’s strength, what kind of “value” it currently provides to stakeholders, what kind of value it would like to provide in the future, as well as “Intent” and what kind of corporate group it would like to become over the next 100 years.
In addition, with the aim of realizing the Kokubu Group’s ideal state, the project team proceeded to determine what business opportunities exist (“Identify opportunities” in ISO 56002), and to develop a business model (“Create concepts”) to realize them.
Orie Hiraga, Group Manager of the Sustainability Promotion Section, who participated in the project as a core team member, said, “Through the process of this project, we were able to discuss and think about what significant role the Kokubu Group can play in the society, and what kind of value we can offer. In the process of this discussion, we did not deny opinions that might be taken as so-called “grievances,” but instead took them as opportunities to create value by solving issues, and thoroughly and earnestly discussed them. I feel that the fact that the discussion was able to proceed without deviation was largely due to the understanding of the SDGs that we were able to deepen through the thorough analysis of the 169 targets in the beginning. These free discussions helped us envision the future for the next generation and led to the setting of major goals for the Kokubu Group.”
The project team developed a statement of the Kokubu Group’s SDGs strategy, ” We will pass on the business we have built up over 300 years to the next generation. We will create happiness and smiles for everyone across the globe through food.” And in September 2020, the Chairman and the President announced the strategy. This SDGs strategy was also reflected in the 11th Long-term Business Plan.
Subsequently, Sustainability Promotion Section has communicated the SDGs strategy and the methods for identifying business opportunities in the SDGs and creating business models to Group employees. And each group company is currently working toward the realization of Kokubu’s ideal state identified in the strategy.
Hideyuki Koga, General Manager of the Sustainability Promotion Section, who was a member of the core team, commented on their activities after the project, “Based on the materiality, targets, and basic action policy developed, and the 30 SDG targets selected in the project, a 12-member project team, including new members from the human resources and healthcare divisions, established 18 KPIs for realization of the SDGs strategy. Then, the project team evaluated the business model based on the ISO 56002 framework and shared it with the committee members of the 11th Long-term Business Plan, which started in 2021. And finally, the SDGs were integrated into our business strategy.
One year has passed since then, and various exiting projects and working groups have been launched within the Group, and efforts are being made to solve environmental and social issues through innovations. As JIN has taught us in the SDGs Strategy Development project, it was very important to integrate the SDGs into business strategy. The approach to the SDGs has become much easier for Kokubu Group, as the implementation of our business plan is now directly leads to the achievement of the SDGs.”
Creating SDG-driven business models in accordance with the innovation management process implemented in the Kokubu Group’s project is one of the SHIP’s expertise. SHIP will continue to provide support to Japanese companies in such activities to make further use of their technology and know-how to achieve the SDGs.
The United Nations Development Programme (UNDP) has established 91 UNDP Accelerator Labs around the world, working with local governments, various organizations, and private companies to create and implement new solutions to development challenges with the aim of achieving the SDGs.
To accelerate this, Accelerator Labs are actively pursuing partnerships with the private sector including those in developed countries. In 2020, funded by the Cabinet Office of Japan, Japan SDGs Innovation Challenge was initiated, and Accelerator Labs and Japanese companies have been jointly creating and verifying solutions by utilizing technology and know-how of the Japanese private sector, while also developing business models for the partner Japanese companies. SHIP has been supporting the implementation of this Challenge.
Projects in this Challenge follow the process of innovation activities as defined in ISO 56002 (Innovation Management System) which was published in 2019 and focusing on the “creation of concepts/solutions” and “verification of concepts/solutions” of the innovation process (see the diagram above).
Since December 2020, projects in India, the Philippines, Vietnam, and Turkey have been implemented, and for FY2021, project implementations in Malaysia, Burkina Faso and South Africa have been decided at the end of 2021.
The first cohort projects were conducted fully online because of the COVID19 pandemic over about six-month period. The hot spots of plastic waste accumulation were identified in the rivers of Pasig City in Metro Manila, the Philippines and in the rivers of Danang City, Vietnam by the partner company, Japan Manned Space Systems Corporation (JAMSS). The satellite image-based plastic waste detection models were developed in this project, and used to detect hot spots by comparing satellite images and photos taken on the ground by cameras and drones.
In India, the partner company, NEC India’s blockchain technology was incorporated into eSpiceBazaar, a spice trading platform that was being built by the Spices Board of India, and an app was developed for farmers to input farm and harvest information. User test was successfully conducted with 1,000 chili pepper farmers in Guntur City in the state of Andhra Pradesh.
Structure of blockchain empowered eSpiceBazaar
And in Turkey, on the island of Gökçeada, workshops to collect opinion of community residents, were held several times with the participation of adults and school children. The partner company, Sotonoba came up with the vision and designed the facilities for the outdoor public space, by reflecting the results of the workshops. As the output of this project, a method for constructing and operating public space with the participation of residents was developed.
Online workshop with community residents Ideas developed by a student
Based on the significant outcome achieved, it was decided to implement the second phase of the above projects by expanding the target regions and by increasing the number of target beneficiaries and agricultural products.
For the FY2021, projects were initiated in Malaysia, Burkina Faso, and South Africa at the by the beginning of 2022. In these three projects, field visits by Japanese partners was conducted for the first time in South Africa, and collaboration across the three countries has begun in Malaysia project with the participation of third-country partners in addition to Japan.
SHIP supported the implementation of “Support program for SDGs business development utilizing SATREPS project outcomes” sponsored by the Japan Science and Technology Agency (JST) for two years in FY2018 and FY2019.
SATREPS (Science and Technology Research Partnership for Sustainable Development) is a program aiming to strengthen international science and technology cooperation between Japan and developing countries that has been implemented since 2008 by JST in collaboration with Japan Agency for Medical Research and Development (AMED) and the Japan International Cooperation Agency (JICA).
The program provides funding of about 100 million yen per year for three to five years for science and technology projects to solve global issues, to be carried out jointly by Japanese and developing country researchers. To date, more than 150 projects have been implemented in about 50 countries in the fields of environment and energy, bioresources, disaster prevention and mitigation, and infectious diseases control.
SATREPS emphasizes deploying its research outcomes in the society, and the “Support program for SDGs business development utilizing SATREPS project outcomes” was implemented to strengthen this emphasis. Specifically, researchers who have raised their hand to commercialize their research outcomes were matched with Japanese private companies, and then spent about one year building a business model while finding local and Japanese business partners, customers, and investors (see the diagram above).
SHIP provided support for implementation of projects in Vietnam, Malaysia and Tunisia in FY 2018, and in Vietnam, Indonesia, and South Africa in FY 2019 (see the list of projects below). As a result, several patterns of results were achieved, including cases in which multiple companies participating in a project invested in and launched a new company to start a business, cases in which businesses were launched as new businesses of a company participated in a project, and cases in which verification of the business model was decided to continue toward commercialization.
Maximizing the use of STI to achieve the SDGs is on the global agenda. In supporting the implementation of this program, it became clear that scientific and technological research outcomes based on locally identified issues are very effective as business resources, and that the local networks that Japanese researchers have built over the years with governments, universities, and local companies in the partner developing country are key to develop concrete business models. On the other hand, the project experienced the difficulty of securing initial funds to launch businesses targeting developing countries.
SHIP plans to use its experience in supporting this program to continue to focus on developing “issue-driven” business models in collaboration with many stakeholders and to identify ways to expand investment in incubation-stage businesses.