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The Asahi Shimbun
By HIROAKI KIMURA/ Senior Staff Writer
June 7, 2022 at 15:00 JST
Tadateru Mitani, CEO of Mitani Sangyo Co., unveils the Company Well-Being Index (CWI) in Kanazawa on April 28 to coincide with the announcement about financial results. (Provided by Mitani Sangyo Co.)
KANAZAWA–Entrepreneur Tadateru Mitani is committed to rendering his enterprise here “friendly” to all relevant parties including employees and sustainable as a “good company.”
“The current increased interest in the SDGs (U.N. Sustainable Development Goals) should not be quickly lost just as a temporary trend,” said Mitani, 37, CEO of Mitani Sangyo Co.
Mitani Sangyo, a long-established firm handling chemicals and plastics for use in automobiles for more than 90 years, effectively abolished its mandatory retirement system for employees.
While employees at the company in the Hokuriku region listed on the Tokyo Stock Exchange’s top Prime Market can retire at age 60, they are allowed to continue working there for additional years on an unlimited basis.
Staffers are eligible for severance allowances on two occasions: when they reach the standard retirement age of 60 and when they decide to dissolve their contracts with Mitani Sangyo on their own.
FRAMEWORK FOR LIFETIME EMPLOYMENT
The unique continued employment system, reported on in the Japanese edition of The Asahi Shimbun in February last year, was introduced at Mitani’s initiative to cater to a variety of elderly workers ranging from those looking after their grandchildren or older family members needing care to people engaging in lifelong learning.
Some of them would like to work just in the same way as they did before their retirement, but others hope to do different tasks.
Mitani said at a news conference at the time that he will build a “new framework for lifetime employment,” so that all employees can design “proper levels of working” by taking account of their personal situations.
Other company owners may take a negative view of the new system, asking, “What will you do if employees abuse the abolishment of mandatory retirement for staying at offices forever.”
Mitani, however, said that is not the point, contending employers should value elderly staff members amid the aging of Japanese society, since they have contributed greatly to the formation of corporate climates.
Mitani acknowledged that he “might be too naive” but proudly summed up the decision’s objective at the news conference.
“I feel as if I have small holes in my mind each time an employee leaves,” said Mitani. “A company’s climate is made up of personalities of all employees. Without even a single employee, what the company is like could be different. I find the fact sorrowful every time I hear a quitting employee bid farewell.”
Mitani insisted this is the “natural feeling” people hold over the problem.
“I believe various businesses not only in Kanazawa but also throughout Hokuriku or Japan will share that sentiment,” he said.
The impressive words of Mitani, who was born to Mitani Sangyo’s founding family, resembled those of Panasonic founder Konosuke Matsushita.
While Matsushita deemed his “employees as families,” it is rare for younger entrepreneurs these days to adhere to the notion.
RELEASE OF NONFINANCIAL BAROMETERS
More recently, in an information disclosure attempt, Mitani released specialized nonfinancial management indexes in the hope of allowing his enterprise to remain a “good company.”
Such elements, not shown in financial statements unlike business performances or fiscal matters, are to be presented by corporations to investors.
More investors are increasingly interested in factors that are not displayed on financial statements, as the SDGs are widely accepted and investments are made more often in Environmental, Social and Governance (ESG) enterprises.
On top of that, the TSE asks companies listed on its Prime Market–one of the three new segments put in place following the recent market restructuring–to make available their business risks linked to climate changes.
The administration of Prime Minister Fumio Kishida has announced that it will pitch rules for corporations to release nonfinancial data in connection with “investments in human resources” under its “new capitalism” policy.
That way, company operators are increasingly pressed to proceed with reform in their information disclosures.
The indicators devised by Mitani Sangyo are called Company Well-Being Index (CWI). Although “well-being” generally refers to people’s state of contentment mentally and physically, the standards were named so in Mitani’s belief that the idea applies to corporations in the same fashion.
The barometers were likewise worked out at the behest of Mitani. Starting in late 2018, it took more than two years to complete them.
Concrete targets and actual results are supposed to be unveiled for each business year, and data for fiscal 2021 was released in April.
Asked why he decided to disclose nonfinancial information, Mitani replied in his peculiar way at the firm’s headquarters in Kanazawa.
“I feel very odd and doubt that people should simply jump on the bandwagon in line with the SDGs’ concept,” Mitani said.
TAKING ACTION EVEN BEFORE THE SDGS
So many individuals are currently wearing the pin representing the 17 SDGs with a colorful ring on their suits’ collars that it can be easily found on streets.
Mitani said he began feeling three or so years earlier that it is “meaningless for everyone to just don the pin or label projects as contributing to certain targets” in the SDGs.
This thought coursed through his mind, because Mitani Sangyo had taken a range of actions for the sake of society based on the values the firm saw as particularly important before the notion of the SDGs was adopted.
In Vietnam, one of its core business bases, for example, Mitani Sangyo offered an education program for students at a college opened in accordance with a Japanese-Vietnamese government agreement. It also delivered tableware produced by its affiliated firm to residents affected by a natural disaster.
Mitani said the CWI was created as part of efforts to evaluate these activities’ outcomes and progress under self-imposed criteria.
“Pushing the SDGs like chanting spells will achieve nothing,” Mitani noted. “I wanted to keep taking socially good steps even when no attention was being paid to the concept of the SDGs.”
The standards were inspired by not earlier examples of different companies but repeated in-house discussions, so the content of the CWI differ from that of any other similar barometers.
Noteworthy first of all is the three categories constituting the CWI of “business foundation,” “business reform” and “nonprofit business.”
The segmentation is founded on the thought that the three perspectives of making the business base stable, realizing balanced growth for short, medium and long-term gains and achieving private and public interest at the same time are essential for firms to be continuously regarded as good.
The business foundation division features topics about working environment improvements and compliance with an eye on enabling employees to work securely, such as men’s child-rearing leave use ratio, statistics on work-related accidents and the percentage of fulfilled quality goals.
Particularly astonishing is that payments of the “schooling allowance” are included in the section.
As Mitani Sangyo relies on an achievement-oriented salary system, workers rated low receive reduced wages.
The allowance aims to cover college costs for children of staffers with slashed salaries without an obligation to repay, stopping them from being deprived of opportunities to study.
The compensation can be called as a significant form of “investments in human resources,” given that youngsters’ life difficulties stemming from student loan payments have become increasingly problematic in society.
The business foundation category likewise comprises elements helping generate a corporate climate where misconduct will not arise.
This gives other business operators strict guidelines.
FREEDOM IN NONFINANCIAL DISCLOSURE DATA
Citing the recent scandals involving Mitsubishi Electric Corp. and Hino Motors Ltd., it is obvious that irregularities over product quality could put enterprises’ footing in danger.
Fixing the business foundation is not enough for corporations to prove helpful for society constantly. The business reform segment is thus intended to nurture a revenue source to support medium- to long-term growth.
How many activities designed to create new projects have gone as far as to be unveiled via press release distributions is now publicly accessible.
The nonprofit business department shows how much money is injected into programs that are unprofitable but have social significance such as those in Vietnam and disaster-hit regions. Those activities’ results are featured in the section as well.
The endeavor by Mitani to spontaneously release nonfinancial information through a great effort offers a vital lesson.
The phrases “greenwash” and “SDGs wash” are lately frequently used to refer to corporations pretending to preserve the environment or meet the SDGs with no concrete efforts made for those purposes.
The spread of nonfinancial data disclosure should be welcomed. But that type of information is not easy to evaluate in quantitative format, rendering it difficult to put standard disclosure rules in operation.
For that reason, it would not be surprising if imposing uniform rules on all businesses for disclosure leads to more corporations devoting themselves to taking countermeasures only superficially.
The lesson is that room should be left in developing nonfinancial data disclosure criteria so that enterprises can resort to their own creativity such as Mitani Sangyo.
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