- About Yokogawa:
- 2012 CSR Report:
- Top Interview:
- Creating Value:
- Lifecycle Assessment:
- Yokogawa Policies:
- Independent Opinion:
- External Ratings:
- CSR Reports (PDF)>
- Safety and Health:
- Supplier Relations:
- Governance and Compliance:
- UN Global Compact Index:
- Contact Us:
- LCA Label:
- __2012 CSR Report :
- Interview of Top Leaders
Interview of Top Leaders
Ms. Unno has been conducting a review of Yokogawa's CSR activities since 2010 and has discussed with President Kaihori CSR activities which distinguish Yokogawa. Ms. Unno has a particular interest in the relationship between CSR and Yokogawa Group strategies and business that are closely linked with energy and safety issues, namely measurement and control. She also is interested in the long-term viability of communities in emerging markets.
Unno： Yokogawa Electric reportedly came through the Great East Japan Earthquake without any major damage to its facilities. Has this disaster had an indirect impact on your business?
Kaihori： I would first like to express my heartfelt condolences to the victims of the earthquake that struck Japan's Tohoku region. We fervently hope for an early recovery of the disaster-stricken area, and towards this end will do our utmost to lend the region support.
Regarding the impact of this disaster on the Yokogawa Group, our key factories in Singapore, China, Tokyo, and Yamanashi (Japan) fortunately didn't suffer any direct damage. However, some of our customers in the materials industry and in the power, gas, water supply/treatment, and other infrastructure related sectors were significantly affected. In the aftermath of the earthquake, our most important role is to help these customers rebuild their factories.
Managing Director, So-Tech Consulting Inc., providing Japanese firms advice and support in the areas of sustainability and CSR
Unno： Yokogawa makes plant control equipment and systems. What specifically are you doing to help your customers who have been affected by the earthquake?
Kaihori： Plant control systems are like the brain and nerves of the human body. So, the first step at the affected plants is to repair the machinery and other components that carry out the equivalent of the body's motor functions, after which we can attend to the control systems and other equipment that function as a facility's brain and nerves. We are doing everything we can to support our customers so that their plants can resume normal operations as soon as possible.
Unno： Yokogawa also has deep ties to the energy industry, but the recent earthquake is changing the way people think about energy. How has this tragedy affected your business?
Kaihori： Previously, people were interested in energy within the context of global warming and resource depletion. Since the earthquake, however, safety has become a new keyword when it comes to energy. Natural energy sources are also drawing attention. Of course, it is difficult to immediately switch all power generation to natural sources, and we believe we are in a transition, or bridging period, in our march toward this goal. The Yokogawa Group must develop secondary battery-related products and other innovations that allow us to harness natural energy sources, and must stay abreast of global developments in this field to play an important role during this bridging period. We believe that the Yokogawa Group's mission is to be a force for global progress that shows respect for our fellow human beings and protects nature.
Unno： I believe you're saying that you must strive for sustainability as you go about your business activities. The Yokogawa Group's measurement and control technologies are of direct relevance to the energy industry, which means your business can come up with energy solutions and contribute in making a more sustainable society. By taking a strategic approach in this, you will be able to enhance your corporate value.
Kaihori： We are working to become a company that basically provides value in three different ways to its customers: improving efficiency, enhancing safety, and protecting the environment. We have many target markets, but let's consider the energy market as an example. In this market, fossil fuels are still being used during the bridging period, alongside natural energy sources. In emerging markets, where energy demand is skyrocketing, fossil fuels are mainly used as these countries aim to quickly acquire wealth. So, the use of fossil fuels is actually increasing. However, their facilities are not optimal in terms of combustion efficiency and power generation efficiency, and are older and face a number of technical issues. If they adopt our control systems, they can improve combustion efficiency and their power generation efficiency will increase. Consequently, less fuel will be required and, of course, costs will drop. For example, an old thermal power plant in Mongolia introduced our control systems. Throughout the project, our engineers worked with the customer to make improvements and energy efficiency improved significantly.
Kaihori： Also, in China and Southeast Asia steel mills and petrochemical plants that consume a lot of energy are using our systems. We diagnosed problems at several of our customers' factories and proposed solutions that could allow them to operate and use energy more efficiently. Our customers, particularly those that are leading global companies, are constantly searching for ways to improve efficiency, enhance safety, and protect the environment, and they are very interested in the advanced technologies of Japan and best practices from around the world. The use of our products results in significant reductions of NOx, SOx, and other harmful chemical substances that are generated when fossil fuels are burned, making plants cleaner and safer for the environment. By introducing to our customers around the world Yokogawa technologies that have long been in wide use here in Japan, we believe that we can contribute to society.
Unno： Yokogawa expects to provide with not only sales of very high quality products to customers, but also broader solutions for business and society at large.
Kaihori： One of our strengths is the ability to provide reliable products and services that our customers can count on 365 days a year. In addition, we must continually go a step further and think ahead from now on. In other words, we must pursue a comprehensive solutions approach that helps our customers improve efficiency and employee safety and protect the environment.
Unno： By the way, Yokogawa, like other companies, is focusing on emerging markets which are expected to grow further. You must dig deeper to understand what customers can actually gain by using Yokogawa products. To expand the customer base in a specific area, it is important to win the trust of the stakeholders who live there. You must work together with local companies to find solutions to issues faced by their community. To do this, it is necessary to understand the needs of stakeholders such as local government bodies, companies, and citizens. Rather than focusing just on philanthropy, it's important to think about how you can contribute through your business activities.
Kaihori： Emerging economies and developing nations have the basic need to become prosperous, and for that purpose they use energy and resources. We provide the products needed to do that. Also, these markets are now thinking they cannot go on forever with the current formula of relying on foreign capital and engineers to manufacture products. Let me explain. Our Group is handling many projects in Saudi Arabia, Abu Dhabi, and other oil- and gas-producing countries in the Middle East, and we've realized that there is a strong need to utilize local talent. As software production, including engineering, can be done anywhere, they want us to hire people from their countries to create this software locally, not at our sites in Japan and Singapore. Even though we'd like to do this, we cannot always find enough people who have the required skills. That's why we are starting from the very beginning, such as by partnering with universities in Saudi Arabia, sending lecturers, and receiving interns. We are passing on measurement and control related engineering skills to university students and giving them opportunities to work with our employees and actually use this knowledge.
Unno： Is it like operating a school within the company?
An engineering educational facility in the Dhahran Techno Valley established by Yokogawa
Kaihori： It's not a school per se; it's an internship program that lets students work in our Saudi Arabia office. We also have unique training programs that give trainees the opportunity to visit our sites in Singapore and Japan. Additionally, we're running an internship program in collaboration with a local educational institution in Abu Dhabi, in the United Arab Emirates. The UAE is one of the few countries in the Middle East where women are encouraged to work, but actually there aren't enough job openings yet for women. So, our Abu Dhabi office began hiring female interns in 2011, starting with a group of five.
Unno： After graduation, will these students join the Yokogawa Group?
Kaihori： Some will go to work for us in Saudi Arabia, and others will take positions at our customers. Either way, it's a good thing for us. By investing our resources and technologies in a country and providing education to locals, we can ensure the long-term viability of our business in that country. We want to apply this strategy elsewhere.
Unno： Technical development and human resource development are areas that are of great interest to emerging countries, so it would be effective to clearly and systematically demonstrate in these markets, with their different cultures, that Yokogawa is dedicated to these programs. That is a given in Japan and it doesn't need to be explained to Japanese, but in other cultures an active effort must be made to promote this aspect of your business. ISO26000 (Guidance on Social Responsibility) includes a section called "Community Involvement and Development" that stresses the importance of benefiting the local community and enabling the people there to stand on their own two feet by, for example, helping them acquire new skills and creating jobs. This, in turn, is a basic and important element for ensuring the long-term viability of local communities.
Kaihori： There are many things we should do in the areas of CSR and philanthropy, but we want to focus on those things that we do best. Providing training in measurement and control is not something that every company can do. By continuing to contribute in this way to countries and regions without thinking too much about short-term gains, we can help to put them on a more solid economic footing and eventually will reap benefits such as increased business inquiries. This way of thinking is very different from how we conduct our business in advanced nations, where efficiency and cost are given top priority. In factories, our products often have to keep operating for more than 10 years, so we can't just sell our products, pocket the money, and say goodbye. We must consider how to ensure the long-term viability of our business through such activities as fostering local talent.
A Special polymer plant of Nitriflex in Brazil controlled by Yokogawa's system
Unno： You're talking about ensuring the long-term viability of your business and local communities as well.
Kaihori： As a matter of fact, in addition to providing training in engineering, we're also starting to collaborate in R&D with one of the Saudi Arabian universities that I mentioned earlier. We've suggested research themes and proposed joint research with the university, local companies, our customers, and other parties. There are many interesting themes that can best be studied in Saudi Arabia, such as marine pollution and efficient exploration for natural resources.
Unno： In the CSR field, such involvement with the local community is regarded as "stakeholder engagement." It is based on the concept that local stakeholders are potential business partners. Personally, I believe that a business can attain sustainability more easily by adopting this premise from the beginning. Particularly in energy and infrastructure projects in emerging countries, stakeholder engagement is a must from the standpoint of managing business risks.
Kaihori： That's right. Commonsense varies from one country to another, just like with social customs, religion, and many other things. We conduct business around the globe in advanced, emerging, and developing nations — so we make sure to follow local customs and rules. Take human rights, for example. What it means varies from country to country. People's perceptions of the importance of preventing corruption also differ in advanced and emerging nations. Of course, as a company we need unified, global action guidelines. That's why we joined the United Nations Global Compact in 2009 and adopted its principles on human rights, labor standards, the environment, and anti–corruption as the standards for our Group companies around the world.
Unno： Human rights and labor issues were highlighted in the ISO26000 standard and the United Nations Global Compact, and global awareness of these issues has increased.
Kaihori： As I mentioned earlier, I think of the three key themes — improving efficiency, enhancing safety, and protecting the environment — all the time. Of these, labor safety is an area where our customers, especially leading companies in advanced nations that do business in the oil and materials industries, are fairly ahead. For example, these customers are requiring us to gather and submit on a regular basis various types of hard data on labor safety for work done on our premises and at customer sites. The reality is that today we won't receive orders unless we can prove the safety of our work practices. Furthermore, these leading companies in advanced nations are investing in emerging and developing nations, and are conducting business there based on a similar safety policy. Naturally, efforts to enhance safety will become more widespread around the world, especially in the energy and materials industries.
Unno： As citizen's perceptions of what is important evolve around the world, companies are asked to rethink the way they conduct business and manage their organizations. Gone is the time in which businesses only had to think about costs in order to sell products.
Kaihori： From now on, it will become more important to provide solutions, including consultation, rather than products by thinking from the customer's viewpoint. We are doing business with customers in various industries, so we can, for example, utilize our experience in the medical field to provide solutions based on best practices to our customers in the food industry. High product quality has been our strength throughout our long history, but now we're combining this with consulting and engineering services that add value, in order to provide total solutions to our customers.
Unno： I'm sure that the concept of sustainability is firmly ingrained in this.
Kaihori： Since the collapse of Lehman Brothers, emerging and developing nations have gained significant momentum. Citizen's perceptions of what is important have clearly changed, too. Prosperity is no longer just about financial gain. I believe it is important for us to address the question of how we will achieve sustainability at the global and community level. Yokogawa will not waver from its mission of being a force for global progress that shows respect for our fellow human beings and protects nature.
Unno： We look forward to hearing more about sustainability-oriented activities at Yokogawa.