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It's no longer someone else's business! Compliance and CSR affect corporate value

Compliance
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As the environment surrounding companies changes rapidly, the social responsibilities that companies must assume are also expanding, and the importance of corporate compliance is increasing year by year. Compliance here goes beyond the framework of legal compliance and includes the fulfillment of CSR.

You may think that "compliance and CSR are just for big companies," but society is becoming much more demanding of companies these days, and compliance and CSR-conscious management are essential for long-term business continuity. This is true for both large and small companies.

Once again, let's review compliance and CSR, which affect corporate value.

Contents

What is Compliance?

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Compliance means "legal observance. You may not be familiar with the term "compliance" and it may not ring a bell.

For example, acts of harassment such as "sexual harassment (sexual harassment)," "power harassment (power harassment)," and "moral harassment (moral harassment)," service overtime, working excessively long hours, and leaking personal information are all non-compliance. Isn't this a more familiar problem than you thought?

Compliance in recent years has become diversified and is not merely "observing laws and regulations. Compliance also includes "observing company rules, laws and regulations, and social rules, and conducting appropriate corporate activities.

With the development of social networking services, we have seen scandals committed by a few employees spread all over the Internet, resulting in a major loss of public trust in the company as a whole.

For this reason, the reinforcement of compliance in companies is becoming more and more important every year, and many companies are conducting compliance training and promoting company-wide compliance promotion activities.

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What is CSR?

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CSR stands for "Corporate Social Responsibility. It refers to the social responsibility that a company assumes in the course of its business activities.

This is the concept that a company should not only pursue profits but also assume responsibility for its "stakeholders" at large. Stakeholders include shareholders, management, employees, customers, suppliers, financial institutions, government agencies, various organizations, and other stakeholders of the company.

CSR is an effort to make the world a better place by seeking corporate profits and communicating with people around the company.

Based on this idea, compliance is a fundamental part of a larger initiative called CSR. If compliance is the observance of laws and regulations, CSR is a concept for responding to the demands and requirements of society in a broader sense.

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Background of CSR Requirements

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In recent years, corporate social responsibility (CSR) activities have been attracting increasing attention for the following reasons.

Corporate scandals

This is due to an increase in corporate scandals, such as problems with disguised food production areas and expiration dates, window dressing, and other corporate scandals, which have increased stakeholders' distrust of the companies.

Serious environmental and other problems

This is because various problems such as global warming, climate change, and air pollution have become more serious, and consideration for the environment has become a social responsibility as a company.

Corporate Globalization

As corporate activities have become globalized, stakeholders have also become internationalized, and the impact of corporate activities has increased.

Diversification of consumer value

This is because more and more consumers are choosing products based not on the price of the product, but rather on the corporate philosophy and CSR initiatives of the company.

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What CSR activities do companies actually engage in?

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In fact, each company engages in CSR activities based on its own characteristics. Among them, environmental protection is one of the CSR activities that many companies engage in. Specifically, these include reducing CO2 emissions through the introduction of hybrid and electric vehicles, as well as renewable energy.

Some companies are also involved in cultural support such as concerts and the preservation of cultural assets, and in the development of the next generation of human resources by holding events where children can have hands-on experience.

CSR can also be seen in the fact that sake brewing companies manufactured and supplied a substitute for alcohol sanitizer when the new coronavirus began to spread, and that many companies have greatly relaxed telecommuting policies for their employees, allowing them to work in a variety of ways.

Toyota Motor Corporation is one of the companies actively involved in CSR. The Toyota Basic Principles are our CSR policy, and the entire Toyota Group is engaged in CSR activities.

These activities include contributions to environmental conservation and awareness through tree planting and greening activities in Aichi, Mie, Gifu, Kagoshima, and Indonesia, which are all related to Toyota, transportation services for the disabled and elderly, and plant tours for elementary school students.

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CSR Benefits

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Next, let's review the benefits that companies can gain by engaging in CSR.

Advantage 1: Improved corporate image

Being proactive in CSR will enhance a company's image. When a company's corporate image is enhanced, the image of its products and services themselves will also be improved, and the company will win trust.

Advantage 2: Business Diversification

Through CSR activities, companies can gain experiences and connections with people that they would not normally have the opportunity to gain. This increases the likelihood of new business being generated.

Advantage 3) Increased corporate recognition

When we are proactive in our CSR activities, we can make ourselves known as a company to more than just our existing customers.

Advantage 4: Increased corporate profits

Improved corporate image and recognition through CSR will lead to the purchase of products and services, which in turn will increase profits.

Benefit 5: Increased employee satisfaction

Employees will feel more confident in their work, believing that their work is contributing to society, and their job satisfaction will improve.

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Disadvantages to be aware of when engaging in CSR

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So, are there any disadvantages to engaging in CSR activities? The following are the two main disadvantages to be aware of.

Demerit 1) Increased costs

CSR requires costs. Although CSR is beneficial to the company in the long run, in the short term it may result in lower sales because time and expenses are spent on activities that are not part of the company's core business.

Disadvantage (2) Manpower required

Manpower is needed to engage in CSR. Some companies are facing a chronic shortage of manpower and are unable to provide the manpower to work on CSR.

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CSR and Compliance Initiatives are Essential for Business Continuity in the Future

CSR is not a charitable activity, but a social responsibility that companies must assume. As such, it requires corporate philosophy, ethics, and transparency. As society's scrutiny of corporate activities is becoming increasingly severe, CSR and compliance, which is the foundation of CSR, are essential for corporate development.

If your CSR and compliance efforts are not yet fully implemented, why not start with compliance training? Since there is a significant risk of noncompliance, it is important to continuously educate your employees.

Please use the compliance training contents of "learningBOX ON" to inform your employees about compliance within your company.

learningBOX is a cloud-based elearning platform and you can easily build training courses online.
Created content will be delivered to employees and you can track their learning progress.

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There will be something you can do to improve your work environment.

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Harassment
Impact on the Workplace

Harassment refers to annoying behavior such as harassment or bullying of a person. It does not matter whether the harasser has malicious intent or not, if the harassed person feels mentally uncomfortable, it constitutes harassment.

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