B Corp™ #02 Transforming the Company / Part 2

Okabe: Corporate ethics will continue to be important in the upcoming years. We’re entering a time when relationships between companies that share specific values will directly translate into economic activity. B Corp™ allows a company to publicly declare its stance within society, and being among the early adopters of this certification in Japan holds significant meaning for the future of Nice Corporation. The increase in people seeking employment here may indicate that we’re entering a new chapter where individuals choose where they work based on shared values. From here, I hope society will shift towards making ethical companies a requirement. For now, we hope that Nice Corporation’s stance reaches people organically. It should not bring rapid results but about connecting with others via shared values and empathy.

I've heard that some people find contradictions in the content of B Corp, as it may seem to conflict with economic interests. However, in the future, we will most probably move towards a world where those contradictions no longer exist. This certification can catalyze new forms of sustainability and a circular economy.

Yamatogi: The thing is, Nice Corporation needs to generate more revenue and profits, in addition to engaging in social and environmental initiatives. To achieve this, we aim to leverage B Corp for business expansion. To sustain the momentum of B Corp, we need to serve as a successful example and a model case in the business world. Although we’ve established internal processes through documentation, the next phase is to use these as a foundation to implement new environmental initiatives, conduct data measurements, engage in community volunteering activities, collect and analyze customer satisfaction, and introduce job descriptions.

We must streamline existing operations so that we can increase productivity. Activities beyond our core business - such as fulfilling responsibilities required by B Corp™ - are crucial. We’re focusing on improving operational efficiency by documenting and systemizing routine tasks. To sustain these activities, we also need to address social and environmental initiatives within the company. We must strengthen our company's earning potential as a "for-profit enterprise" while allocating resources, time, and emotional energy for more socially and environmentally-focused endeavors.

Izutsu: We were initially categorized as an "energy-intensive enterprise"  because of our manufacturing work during the assessment. There were concerns about our electricity and fuel consumption, and we feared we might be wasting resources. However, the overseas reviewers were well-versed in Japanese sewing factories and were satisfied to learn that we converted our factory's operational electricity to renewable energy. Nevertheless, as B Corp™ members, we recognize the importance of continually updating our energy initiatives. Another point that came up during the review was our high employee count. Unfortunately, this isn't something we can reduce. However, it did make me realize that we need to diversify our approach to building a workforce and that I needed to change my mindset. Beyond the environmental considerations, I need to see more companies that value their employees and local communities. People are the most important.

Yamatogi: The garment sewing industry is known for its significant female workforce, and we scored well in promoting women's participation in the workplace. We even created new systems to document maternity and childcare leave. B Corp™ requires that companies update their standards to keep their certification, which can be challenging, especially for small and medium-sized enterprises. We had budget constraints and had to streamline quite a bit to figure things out. Balancing the more capitalistic pursuit of revenue and profit with social and environmental considerations isn’t easy. It’s a delicate balance. Overspending could impact performance and lead to wage cuts, creating a counterproductive situation. Finding ways to strike that balance and make intentional decisions is a rewarding aspect of this journey.

Izutsu: We scored well in the community category. Kojima is home to many companies that support the denim industry. Our area, which includes western Okayama, eastern Hiroshima, and the coastal areas of Kagawa, is a known industrial cluster within the denim supply chain. The fact that our company's economic activity contributes to the revenue of local businesses was a significant factor in our high score. The environmental category focused on waste generation, which is inevitable in manufacturing. While NC PRODUCTS sets reduction goals and uses recycled fibers, we continuously explore other ways to minimize waste. Although we handle the sewing process, we have business partners responsible for different functions like washing and dyeing, which have their environmental impacts. Environmental considerations should ideally be evaluated across the entire supply chain so there’s room for growth. Moving forward, we need to hone in on our communication as a B Corp™ to reduce the environmental footprint of the entire "denim manufacturing" process.

Yamatogi: Companies can be considered “instruments” to transform society for the better. Designing that instrument is not an easy task. BIA offers us a helpful guideline to combat this challenge. While it is an American certification, it embodies a spirit reminiscent of traditional Japanese corporate values, such as treating employees like family, prioritizing customer satisfaction, and supporting local festivals through sponsorship. Although B Corp™ is often associated with SDGs, i.e., environmental considerations, I think there’s a lot more to them than that. The environmental scores matter, but the certification holistically approaches things. It allows for diversity in how companies measure performance and cater to each organization’s unique characteristics and constraints. The philosophy of valuing diversity and equity, repeatedly emphasized in the BIA, seems to be reflected throughout the B Corp™ community. Each company can decide what is essential, what they can do to improve, and which method fits them best. As Mr. Izutsu mentioned, at Nice Corporation, our contribution to the local community was a significant factor that earned us high points, highlighting the community aspect as a distinctive and critical part of our evaluation.

What kind of community member do you want to be in the context of being part of B Corp?

Izutsu: From a community perspective, I envision a future where, for example, the entire region of Kojima becomes a B Corp™ together. My philosophy is to work together at the grassroots level to generate profits for everyone involved. If other regional companies aim for a certification, I want to help them. That said, we still need to do a lot concerning our environmental impact. I want to promote the use of organic fabrics; these advancements have to start with us. For example, by recycling denim scraps we produce, we’re trying to convey our philosophy to our customers directly rather than focusing on B Corp™ alone. I think textile manufacturers will continue to update their technology, and we need to make decisions according to the circumstances of each era. As a company, we commit a lot of care to our products by re-dyeing and repairing them to encourage long-term use by our customers. Calculating the carbon dioxide emissions per product remains challenging, and this will be something we have to find a solution for in the future.

Yamatogi: To add to what Mr. Izutsu has said, we started conducting self-assessment and satisfaction surveys with each employee during the certification process. It’s all handwritten–but it’s an essential asset for us. Certain elements may dissipate on the spot when we speak, but by writing them down, they’re recorded as memories. Writing can bring greater awareness because it is a personal endeavor, allowing us to hear each individual’s unfiltered perspective. We created various mechanisms, such as satisfaction surveys and self-evaluation sheets at the end of the year, an opinion box, and new employee training. All of this is to facilitate better bottom-up communication. From establishing a system for bottom-up communication and promoting transparency within the company to improving employee satisfaction and psychological safety, we contributed to the governance and employee-related areas in our B Corp assessment in many ways. 

Izutsu: Having each employee express their opinions about the company was a big deal because it made us aware of new problem areas. By responding to their feedback, we get closer to making the company more open and transparent.

Okabe: This bottom-up communication shows employees we want them to voice their opinions about the company. I hope that this culture takes root and leads to internal discussions in a positive direction.

Izutsu: Although we’ve always made it a point to pay close attention to our employees' feedback, this was incredibly grounding and valuable because our employees intentionally shared their perspectives with us. Things that employees couldn’t verbalize could be conveyed in writing. Employees and management must trust one another. We aim to establish a better working relationship by building mutual trust through two-way communication. Becoming B Corp™ is not the ultimate goal but rather a means to transform the company. It can be seen as a tool to propel us into the next phase.

In conjunction with the B Corp™ certification process, you also worked on launching your in-house brand "NC PRODUCTS." Tell us what you hope to achieve through this new project. 

Izutsu: NC PRODUCTS is still brand new, and we must thoroughly analyze its effects. However, I think it’s leading to heightened intentionality within our factory workers. Daily tasks in the factory tend to be routine, but now that we’re working on our products, we’re directly working with customer feedback, providing workers with a more profound sense of fulfillment. It is a significant motivation for all of us, making our work more engaging. It instilled a desire in us to create better products. Like the B Corp™ certification, being conscious of our impact on others is fundamental in building a community. We carefully craft and deliver our products. This is passed on to our customers, who use the item for as long as possible, repairing it when necessary and using it again. This establishes a cycle that connects us with our customers and engenders significant value. Through our pop-up store during the launch, we met people who share a deep love for denim, and younger people are excited to engage with denim in a new way. By listening to each of these voices, our communication methods have evolved. It's all about returning to our roots while building new value in the relationship. I think this aligns with the goals of B Corp™ as well.

Yamatogi: We’re planning to release a social and environmental impact report once a year. To ensure that our company’s strategies for environmental care are effectively utilized, it will also be vital that we conduct face-to-face discussions and regular meetings with employees to fine-tune our strategy. As we push these new initiatives, it's crucial to share and instill the philosophy of B Corp™ throughout the company. Furthermore, we’re implementing policies to review our endeavors at the end of each fiscal year so that we are improving our strategies consistently.

Izutsu: The bar is going to get higher each year. Our goal for the following certification is to surpass the 95.3 points we achieved this time. We don’t want just to maintain our current performance. We want to enhance it. This is our responsibility to our employees and the community.

Most importantly, we want to be a model case for Japan by being a company that uses B Corp™ guidelines while achieving sustainable growth. When looking at the domestic B Corp™ community, there are relatively few certified companies, and it seems like many are "certified" but lack follow-through or examples of how to use the certification effectively. There aren’t enough success stories. As a manufacturing company with factories engaged in subcontracting and OEM production, we often face waste, energy, and labor constraints, amongst other B Corp™ criteria. That's why we want to develop practical approaches to environmental impact that are pragmatic and align with our industry’s reality.

Okabe: Joining the B Corp™ community isn’t the “start” of something. It’s an ongoing commitment to solving various social and environmental problems. While the “community structure” is unique to modern certification systems, the question for Nice Corporation is how we want to establish ourselves within that community.

Izutsu: Although we’re in the apparel industry, I believe certification is also possible in other manufacturing spaces. While Japan's manufacturing industry is said to be weakening, I still want to believe in the value of continuing to create things in Japan. By engaging in communication with manufacturing companies across different industries, we hope to explore the continuity of our business. Recruitment is a common concern for many companies. At the very least, we can share that our recent actions have garnered a positive response from young people. At the heart of it all is that we want people to see the value in the local manufacturing industry.

Okabe: I think the manufacturing sector's value will continue to rise. The issues pointed out by Mr. Izutsu are problems that the world is facing collectively. In that sense, Japan has several well-established companies in a good position to survive in the coming years. Manufacturing, especially, holds value in passing on technologies from one generation to the next. Japan, with its long history of manufacturing, still has a role to play in the global economy. When I first visited Nice Corporation, I felt a sense of humanity –and possibility– in the traditional craftsmanship. I think there’s a lot we can learn from the history of craftsmanship. What sets Mr. Izutsu apart from others is that he works for his company's and other stakeholders' benefit. There’s room for Japanese values to be incorporated into B Corp's™ world-class standards.

Yamatogi: I interpreted B Corp's™ mission as an attempt to reignite a sense of humanity in the workplace. Ever since the rapid economic growth period, there have been a lot of negative aspects in the Japanese workplace that have been long overlooked. This has led to loneliness, lack of human connection, and environmental degradation. But the truth is people spend significant amounts of time at their workplace. We can’t ignore that. I began to feel that the things that have been put on the back burner, such as kindness and compassion for another, can be regained by creating new systems. When we were building the company's updated regulations, I included content aimed at nurturing such qualities. Much of this stemmed from my working experience, where organizations often neglect respect for an individual's humanity, leading to high turnover rates. Ideally, a company should be where individual personalities are respected and cherished, and each person’s unique abilities can flourish. However, these standards aren’t being reflected or prioritized in most parts of our country. I felt a dissonance with this reality, so B Corp’s™ emphasis on providing employee care and promoting individual expression resonated with me. 

Okabe: B Corp™ certification is set up as a Western certification system. However, as we enter an era where Asia is poised to lead the global economy, companies may feel their values need to be reflected in these systems. Until now, most Asian companies have been content with obtaining international certifications. However, moving forward, it is essential for those who have received international certifications to influence and update the system they are working in actively. Other companies in Japan- including Nice Corporation-should provide feedback and contribute to the evolution of international certification systems.

Izutsu: Indeed, B Corp™ certification seems to have little reference to aspects of Japanese corporate culture, such as unique social and micro-communal relationships. We must continue to improve where we can while creating a unique corporate culture that doesn’t rely solely on B Corp™. Perhaps we must highlight the unique cultural aspects that B Corp™ may not emphasize enough. We’re working on creating a community between employees and the local community. In the future, we would like to form communities with other companies within and beyond our industry. I believe that there is a lot of potential for these communities in the future.

Left: B Lab Paris
Right: Kojima

The first part of the interview can be found in B Corp™ #02 Transforming the Company / Part 1

Text：Yoshinao Yamada

Photo(1, 2, 3, 4)：Shin Hamada 　(7)：Youhei Sogabe　(9)：Kitamura Minoru (Rudesign / GO motion)

Illustration：LED enterprise CO., Ltd.

Location Support：Sniite