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Dialogue with Society

Making Suntory Group Contributions to Society Possible Through Group-wide Initiatives in Water

On June 6, 2017, we invited experts to the Suntory Minami Alps Hakushu Water Plant to introduce the initiatives of the plant and also to discuss the CSR activities of the Suntory Group, which aims to be a global multi-faceted food and beverage company from Japan.

  • Date: June 6 (Tue.), 2017
  • Location: Suntory Minami Alps Hakushu Water Plant

Experts

Naoki Adachi
Chief Executive Officer, Response Ability, Inc.

Taikan Oki
Special Advisor to the President, The University of Tokyo

Sachiko Fumoto
Executive Officer, Nikkei Business Publications, Inc.
Director, Marketing Strategy Institute, Nikkei Bp Intelligence Group

Suntory

Tomomi Fukumoto
Executive Officer,
Corporate Communication Division, Suntory Holdings Ltd.

Kenji Naiki
Senior General Manager, Environmental Sustainability Strategy Department, Corporate Communication Division, Suntory Holdings Ltd.

Masaki Tomioka
Senior General Manager, CSR Department, Corporate Communication Division, Suntory Holdings Ltd.

Yuji Tsukamoto
Executive Officer,
Senior General Manager, Suntory Minami Alps Hakushu Water Plant, Suntory Products Ltd.

Hope for Spark Innovation that Brings Awe to Society through Water

Moderator:
The Suntory Group's Sustainable Water Philosophy was just announced, and I don't think we have seen any other companies who have refined their philosophy to water. I am sure this is a unique inspiration of Suntory as a Bringing Water to Life company, but how are people responding to the Sustainable Water Philosophy?
Taikan
Oki:
I previously thought about the understanding of the natural cycle of water, promotion of environmentally conscious water use, and preservation of watersheds, which are part of the Sustainable Water Philosophy, together with Suntory at The Wisdom of Water (Suntory) Corporate Sponsored Research Program*1. I am very impressed with the prevalence of this philosophy throughout the entire Group, including overseas companies.
If I may comment on the engagement with local communities, I wonder if it would be wise to think about not only engagement in the regions where Suntory is involved with its businesses but also in communities where all of the employees live. If even 1% or 2% of the 38,000 Suntory employees decided to engage in efforts to resolve challenges in their own communities, the form of initiatives toward these local communities would be completely different. I really encourage Suntory to cultivate this mindset in their people.
Naoki
Adachi:
The thought that I had after hearing Suntory announce its Sustainable Water Philosophy is just how important it is to correctly communicate these ideas to the consumer.
Many consumers who heard Suntory announce the Sustainable Water Philosophy may have received it as a message that was putting emphasis on branding of the company as a natural water brand. Suntory uses natural water in all of its products from beer and whiskey to soft drinks. The Suntory Group has to think about and protect water as a company who is expanding businesses that cannot exist without water. I think this ideal needs to be a strong point of appeal with consumers.
Sachiko
Fumoto:
The Sustainable Water Philosophy is really admirable and beyond reproach. However, I feel this may be a bit conservative for Suntory as a company that has continued to provide innovation to society since its founding with the Yatte Minahare spirit.
I have worked toward the issue of revitalizing forestry at The 21st Century Public Policy Institute of Keidanren, but this problem cannot be solved unless the social system itself changes. The issue of water is the same. I hope Suntory can spearhead innovation able to surprise society through water because these problems cannot be solved without building systems to create ideas that go beyond conventional values and ideas.
Taikan
Oki:
Suntory surely has the means to realize the efforts set out in the Sustainable Water Philosophy, considering the initiatives the company has undertaken up until now. More than laying down targets that can be achieved, setting objectives set by forecasting the ideal form of Suntory in 2050 would definitely be more beneficial.
Junior employees today will still be active in their roles in 2050. The attractiveness of Suntory as a corporation would jump another level if the company can show what it is trying to do by presenting this vision in that future.
Tomomi
Fukumoto:
There was the point about not putting in place goals that can be achieved but rather predicting what needs to be done now to reach an ideal form in the future. This is the very approach Suntory has always valued.
When Suntory Founder Shinjiro Torii established western liquors not available in Japan at the time, he was confronted by resistance from everyone at first. However, Founder Shinjiro Torii did not choose to take on the challenge of making whiskey because he believed it could be done but rather whiskey was in the future that he envisioned for Japan. This exemplifies Suntory's Yatte Minahare spirit This discussion once again has reaffirmed the need for inspirational changes in regards to CSR and water activities.
  • *1
    The Wisdom of Water (Suntory) Corporate Sponsored Research Program: Activity conducted between April and May 2008 by Suntory Holdings Limited and the University of Tokyo for the purpose of cultivating the interest of society in water in addition to promoting solutions to water issues and the generation of a rich water environment.

Communicating Sustainable Water Philosophy More Deeply with Society

Moderator:
I first asked for everyone's impressions about the Sustainable Water Philosophy, and now I would ask you to offer some of your ideas. We can start with how the Sustainable Water Philosophy should be communicated and what concepts you feel is right for Suntory.
Kenji
Naiki:
Someone mentioned that the Sustainable Water Philosophy felt a bit conservative, but The Sustainable Water Philosophy is a very direct name for these principles. For me, proposing something so obvious is in of itself innovation.
For example, Suntory has worked in water cultivation activities over many years, but we have still unfortunately been unable to get across the shape of resources such as water as well as the importance of efforts in those activities. I believe endeavoring to bring full awareness about water with words that express the obvious is one of the duties Suntory has.
Tomomi
Fukumoto:
Communication about the Sustainable Water Philosophy requires both internal and external messaging. First, I would like to see thorough internal communication. I think it is important for each and every employee to first understand and incorporate the ideas of the Sustainable Water Philosophy and Bringing Water to Life in order to apply that thinking to their actions. Suntory also needs to share awareness about the necessity of sustainability in water for sustainable growth of the company as a corporation supported by water with its 38,000 employees.
Thereafter, external communication needs to nurture resolve in each of us to cultivate awareness about the importance of water in the next generation. The agreements for Natural Water Sanctuaries span a long period of time. These activities should not range across five and ten years, but rather they need to be thought about in increments of 100 years and they cannot waver in the short-term management policies. Putting these things in writing is pretty standard, and the Sustainable Water Philosophy needs to be clarified and recognized as an organization. Having evidence of the philosophy as documentation has great meaning.
Tomomi
Fukumoto:
CSR communication is strongly based on clear communication through facts. However, I've felt reform is necessary to allow customers and society to make the initiatives of Suntory their own rather than something someone else is doing. Fully communicating our ideas through context or a story is important to get anyone to listen. I hope Suntory can strengthen initiatives such as developing employees who are involved with water in the own communicates away from work as well as facilitating opportunities where Suntory can share Bringing Water to Life experiences with customers.

Gaining Understanding by Spreading the Story of Suntory

Sachiko
Fumoto:
In the discussion about Suntory initiatives spoken about earlier, the most impactful for me was the water resource cultivation activities. I think not simply protecting but cultivating water with activities that clearly aim for 100 or 200 rather than lowering something to zero is excellent. The question still remains whether consumers will fully understand the undertaking. I myself have wondered whether the Minami-Alps was really a place until coming here today. The forest and rivers are just so beautiful in the commercials and it doesn't feel real. Many consumers are isolated from life experiences that bring them in touch with forests and nature. Many consumers can't visualize water being pumped from deep within the earth to be bottled and misunderstand the beautiful flowing rivers seen in the commercial as the natural mineral water. I think this means the way in which communication is done needs to be considered a little more. I would like to see Suntory enhance communication with consumers who will invest in the company as green consumers*2 such as making contributions to protect the global environment in Japan by buying Suntory products or buying Suntory products for the contribution the company makes to building communities.
Kenji
Naiki:
We also recognize that type of communication as a challenge. The Natural Water Sanctuary Project started in 2003 and the Suntory Mizuiku - Natural Water Education Program started in 2004. We are striving to let as many people know about these activities as we can, but there is not enough awareness of these activities right now.
I feel the importance in communicating a story in some way about all of our corporate activities in our products when I hear the feedback from all of you. We still have not put enough effort into this area. The first time we will gain a broad understanding of our initiatives is the moment when we not just communicate what we are doing but can provide information people see as the story of Suntory.
Taikan
Oki:
Telling a story like you have described, Kenji, rather than announcing the Sustainable Water Philosophy as a bullet point would be easier for the general consumer to digest I think.
Whiskey in a cast is left there by someone 20 to 30 years ago. Suntory is a company that is passing this down to the next generation. This is why I think Suntory can benefit from storytelling. I think it would be good to recognize even more that not every company can do this type of storytelling.
  • *2
    Green consumer: Consumers who practice an environmentally-friendly lifestyle.

Importance of Considering Indirect Consumption of Water

Yuji
Tsukamoto:
I have a real impression that the Sustainable Water Philosophy that was established is already underway in daily efforts when I look at the people who are working at our plants. However, I think the proposal to cultivate this type of philosophy in Suntory Group employees is an effective one.
We are also conducting activities such as confirming abnormal water levels while introducing third-party evaluations at the conference to promote measure for conserving and using Hakushu groundwater in Hokuto as well as plant employee participation in environmental improvements to nearby rivers twice a year. We believe in the concepts of Yamanashi prefecture such as Ikusui to protect and cultivate a healthy water cycle, and we are publicizing the amazing richness and purity of Yamanashi water both in Japan and overseas. As the head of a plant, I would like to work with focus on the per unit production*3 of water from the perspective of promoting environmentally conscious water use in addition to the conservation of water. The level is already extremely low today and lowering that level even further now is difficult presently, but I believe aiming for roughly 1 per unit production is important.
Naoki
Adachi:
I was very impressed to hear the per unit production in making Suntory Minami-Alps Tennensui mineral water is very small. It is well below general per unit of production so the work into conserving water really hit me as extraordinary. However, is this also the case for not only mineral water but also whiskey and juice? I am sure they do not have same per unit of production. The consumption is not limited to the water used at the plant, but, considering the highest point in the upstream of the supply chain, this is tens and hundres times of liters when taking into account the farms to procure ingredients from. If this is the case, what would be the indirect use of water that is not directly used by Suntory? Wouldn't taking the idea of per unit of production to this level be very important for Suntory?
Kenji
Naiki:
I fully agree with you. Our business could not start without water and agricultural crops. We are facing a great responsibility when we look at the fact that 70% of the fresh water resources worldwide are used in agriculture. This is a challenge Suntory must confront when thinking about the sustainability of its businesses.
The Japanese food industry, which relies on imports for most of its ingredients, has not been able to directly engage in the business of import suppliers that have been the source of products up until now. However, this may not be accepted as an excuse in the future. Looking 10 to 20 years into the future, we will need to create systems to fulfill our responsibility by getting fully involved with the production of ingredients that we use. If this is the case, the risk of not being able to procure quality ingredients is great when competing on a global scale. Spreading this way of thinking throughout Suntory is the job of our Sustainability Strategy Department.
  • *3
    Per unit production: The amount of water required in the production of a single product. A per unit production of 1 is equal to no use of water other than that within one product.

Requirements for Expanding Global Water Initiatives

Taikan
Oki:
SGDs have been raised as one aspect of wide-ranging goals advocated by the United Nations to solve the problems the world is facing. I believe these SDGs will be used by Japan, America and Europe as a common language to think about society in the future. Suntory, which is a global organization, will effectively use SDGs when talking about water and even activities of the company.
Tomomi
Fukumoto:
Suntory is first addressing SDG 6 of the 17 SDGs; Ensure availability and sustainable management of water and sanitation for all. The goal sets a broad range of efforts from safe water, sanitation, pollution, protection of the ecosystem, recycling and local communities, but I would like to ask for advice from everyone about what kind of activities Suntory should pursue.
Taikan
Oki:
Suntory’s focus on Sustainable Development Goal 6, “Water and Sanitation” is fantastic. However, I feel like the company should offer social contributions in Sustainable Development Goal 8, “Economic Growth and Employment” as a manufacturer. Efficiency reduces the number of people required, but creating jobs by finding new businesses in this type of climate is the greatest contribution a company can make to society.
Initiatives inevitably tend toward the environment because sustainability is a concept that comes from the environment, but I believe it is important to put in work in Suntory’s primary business as a corporate strategy as well. Suntory Group Sustainable Water Philosophy endeavors to support local communities through support to solve water issues. Sustainability cannot be achieved without first thinking about economic growth.
Tomomi
Fukumoto:
The point of view that CSR should be an initiative that is part of management strategy is exactly right. CSR is management. The 'people' in Suntory’s To Create Harmony with People and Nature mission incorporates the meaning of supporting healthy and comfortable lifestyles. We create a richer society and life for people by appealing to a culture in a backdrop of providing high-quality products to customers, developing products and standardizing ways to enjoy drinks as our main business to provide new value. These businesses can also create new markets. Thinking about this throughout the entire value chain is necessary to the sustainability of society as well as our own sustainability.
Taikan
Oki:
Suntory has two large pillars in the Sharing the Profit with Society and Yatte Minahare spirits, but these founding spirits need to be re-examined with SDGs in mind. Why not take a modern look at the Sharing the Profit with Society Spirit to make it shine in these SDGs?
Naoki
Adachi:
Suntory is quite gracious, but Japanese companies generally do not allot much of their budget to CSR. Companies overseas tend to be very gracious in their budget and with people, and this is because management understands that both are the true benefit of CSR.
Sustainability can directly connect to the effectiveness of the brand if there are stories. Recently, many food companies are offering support for agriculture and sustainable procurement. We are also seeing instances where capital is raised for this support by using sustainability bonds*4 and green bonds*5. Support through this method of financing is something companies who have succeeded in increasing the effectiveness of their brand through CSR activities can take advantage. Investors do not trust a company that does not have a track record and, therefore, those companies cannot raise tens of billions of yen. International brands are great at generating appeal for their initiatives. It is important to be very serious about its initiatives, and I really hope Suntory can think about innovation in the way in which it presents these initiatives.
Yuji
Tsukamoto:
Suntory Products is in charge of the manufacturing functions of the soft drink business in Japan, and we recognize the responsibility to act as a broad intermediate with overseas companies to cultivate strength and the ability to improve in the on-site capabilities of teams at a global standard. As the mother plant of others involved in the craftsmanship of the Suntory Group, I want to spread the importance of efforts founded in the Sustainable Water Philosophy in the people we train as promotion members to deploy around the world.
Sachiko
Fumoto:
People are not moved by philosophy but profit. Ideals cannot survive if they do not connect to revenue no matter how good an idea is. Employees and society will give up saying, "That's nice, but it doesn't have to do with me" unless CSR is embedded into the management activities. Tomomi Fukumoto spoke before about her hope that sharing the philosophy with every employee through internal communication would connect to their actions, but a system where these activities are clearly evaluate is required. This is all because people are not driven by only the good.
Masaki
Tomioka:
More than half of all the employees working in the Suntory Group are made up of employees overseas. Instances where conventional means are not relatable to all employees are increasing. The challenges in each country and region are different so it is important that the local company and local employees truly think about the realities surrounding each situation. I once again have seen how activities close to the community must clearly show results that benefit both the business and management.
Taikan
Oki:
I always wondered why people drink bottles of water. I am sure one reason is that there is a need for a drink that is not sweet, but I have discovered another reason after touring the plant and listening to the discussion today. Some people will drive into the mountains to simply bottle water from all of the famous springs. The truly real charm of the natural mineral water is being able to drink the water nearby without going through that time and effort. This alone is important to the brand. Today, I have discovered how the appreciation for the ease of buying this well known mineral water will grow if this strength can be fully brought out in the brand.
Tomomi
Fukumoto:
As a global company, Suntory has also just begun work even in terms of activities founded in our Sustainable Water Philosophy. We still have much to learn in pioneering these initiatives as shown today. Rather, this conversation has offered insight again where Suntory should focus its efforts by considering the fundamental spirits which have been passed down since its founding. We will keep in mind the candid feedback all of you have given us. The Suntory Group actively engages in activities to help us become a good company that has earned trust from people worldwide which will contribute to a sustainable global society in the future. Thank you very much for your time today.
  • *4
    Sustainability bonds: Bonds that use capital financing for products that have social influence.
  • *5
    Green bonds: Bonds to issue to companies and local municipalities for fund raising of capital required for green projects (businesses that aid in solving environmental issues).

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