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2009 Vol.3
The Frontier of Environmentally Sound Business Management


Situations surrounding corporations have been significantly changing due to the emergence of global-scale environmental problems such as climate change and global warming. In response to such market changes, companies have started to take different stances toward their relationship with the environment and relevant strategies. The traditional thinking that responses to environmental issues to meet regulations increase costs has shifted toward a new idea of growing business further by strategically addressing environmental issues.
This shift is largely a result of changes in the perceptions of stakeholders who have influence over companiesfactivities. Consumers have become more environmentally conscious, and the environment has become an evaluation factor for their purchases along with price, functions, and design. As larger inflows of funds come from a greater number of investors expecting growth in green industries, venture businesses are pursuing technological innovation. Environmental policies were traditionally centered on the regulation of pollutants; however, overnments have started providing incentives for activities such as the transfer of green technology from large businesses to medium or small ones and consumer purchase of environmentally friendly products.
Based on advanced technology, some Japanese companies have placed themselves in advantageous positions in areas that are expected grow in the future, such as energy, water, and resource recycling. But, in general, Japanese companies are lagging behind competitors in Europe and the United States. At the same time, however, there are companies in Japan like Toyota that plans strategies for further growth by incorporating environmental issues in its core business and creating a new market for eco-friendly automobiles as an emerging frontier. Environmentally sound business management is about not only balancing economic activities with responsibilities to the environment, but also growing business by integrating environmental concerns into business operations.