There are several approaches to corporate social responsibility (CSR), the main ones being direct funding programs, targeting the needs of staff, non-financial support to the community, and investment in the environment.
Companies also choose to implement CSR for various reasons, be it pressure from within or outside the company, as a tool for risk management, improved accountability in the company or enhanced stakeholder management (Crane and Matten, 211). This paper therefore evaluates similarities and differences in Honda’s and Nissan’s CSR strategies based on their scorecards and CSR reports, and assesses their social accounts.
Nissan Motors, according to its CSR report (Nissan-global.com), aims to “Enrich People’s Lives”. Guided by its vision, the company makes efforts to grow with society by prioritizing on two objectives: sustainable profits for the company and development for society.
Nissan Motors first formulated a CSR policy in the fiscal year 2005, whereby it identified vital areas to focus on. To measure its performance in CSR related activities, Nissan developed a scorecard which has been published annually since 2007, so as to increase transparency and encourage feedback from all stakeholders.
In comparison, Honda (UK) first published a CSR report in 2007 since it recognized a need to communicate that it was a good corporate citizen (world.honda.com). The report highlighted Honda’s core philosophy, and the work it had done to promote them.
Honda has attached itself to a ‘2010 vision’, as per their CSR report, that is, “Committed to being a company that society wants to exist”. Although the company encourages feedback from all key stakeholders, Honda does not have a sustainability scorecard like Nissan; therefore the company doesn’t communicate the success or failure of its CSR initiatives.
Honda’s CSR report focuses on the company’s achievements in the environment, safety concerns, educational initiatives and the company’s relationship with the society. Nissan’s sustainability report is much wider in scope, whereby it illustrates the company’s approach to CSR by mentioning eight key areas of focus.
The eight key areas in the report are: corporate governance and internal control, the environment, safety, quality, employees, value chain, philanthropy, and economic contribution.
Honda, in its CSR report, claims to be the first manufacturer to volunteer a global target for carbon dioxide (CO2) emissions for all its products and manufacturing facilities.
In its Environment Statement (1992), the company says that it aims at developing products and facilities that have the lowest impact on the environment, by following four principles: first, Honda will ensure that it recycles materials and make efforts to save energy and resources at each stage of a product’s life cycle.
Second, the company will minimize waste and find appropriate solutions of doing away with waste at each stage of the product life cycle. Thirdly, each member of the company will strive to protect human health, and take up the assigned role so as to make sure that Honda as a whole is responsible. Fourth, Honda will evaluate its impact on the environment and society, and engage in ways that will boost its image in society.
To follow up on its Environment Statement, Honda aims to make improvements in exhaust emissions, noise reduction, recyclability of parts, and fuel efficiency in the production stage of each product. There is evidence to show that green factories and green buildings are used in production and administrative functions of the company, which aim at reducing CO2 emissions, air pollution, and efficient utilization of energy.
The policy also commits the company to recover and recycle parts of products that have reached the last stage of their life cycle. Honda’s CSR report quotes that the company has so far achieved in lowering CO2 emissions in 2007, as compared to levels reached in fiscal year 2001. The company has also set CO2 targets that it hopes to attain in the year 2010.
Nissan Motors, similarly, established an environmental philosophy in 1992. The company has also engaged itself in activities that aim to reduce CO2 emissions, and reduce air, soil, and water pollution. Like Honda, Nissan employs the use of green factories and offices, further proven by the fact that its global headquarters in Japan uses the best possible ways to ensure utilization of renewable energy.
The building takes advantage of sunlight so as to save on energy. 60 percent of complete vehicles in Japan are transported by sea, leading to further reduction in CO2 emissions. This model is currently in use in other Nissan manufacturing plants around the world.
While both car makers manufacture hybrid and electric cars so as to decrease CO2 emissions, Nissan has gone a step further by entering into contracts with different countries. The partnerships aim to endorse the introduction of zero-emission automobiles in those areas, whereby the states should target on creating the required infrastructure to support the mobility of such vehicles.
In its sustainability report, Nissan has set a 100 percent recyclability target rate for its vehicles by 2010. Furthermore, the company has a global environment planning office that checks on the company’s responsiveness towards the environment while communicating with its stakeholders.
Both Nissan and Honda, in their CSR reports, have developed technologies that provide a measure of safety for drivers, as well as pedestrians. The two car companies have a similar approach when it comes to preventing avoidable accidents (use of installed sensory cameras in the vehicles), pre-crash safety (allows drivers recover from dangerous situations), and post accident features (help in injury minimization).
The two car makers have reported to have participated in safety through education, where Honda has the safety challenge and Nissan held various safety activities in several locations around the world. Honda’s safety challenge, an in-house activity, cannot be ascertained while there is valid evidence in the sustainability report that Nissan engages in safety related activities.
Honda reports on having undertook a school of dreams initiative in 2007 and 2008. The two day educational program was meant to inspire children and improve teachers’ capabilities to match curriculum requirements in several subject areas.
The CSR report states that an independent post-research study was carried out thereafter. The group interviewed teachers who had participated in the program, and found out that all teachers concurred that the school of dreams had a positive effect on all the students. The claim has not been supported in the report; however, there is more detail about Honda’s apprenticeship program in the UK.
Nissan also engages in educative programs, such as school visits, while the names of the schools have been mentioned, unlike Honda. In the sustainability report, Nissan states that it has developed a partnership with WCN (Weather Caster Network) that aims on increasing awareness in environmental issues among children.
Comprehensive figures have been provided in the document to support the notion that Nissan donates or is in sponsorship arrangements with other entities that provide books and other reading material to young children.
Nissan’s involvement with the stakeholders is rather explicit, whereby the company elaborates on its relationship with its customers, shareholders and investors, business partners and with society in the CSR report. Strategies to provide for each stakeholder have clearly been distinguished and illustrated.
The company has established targets and feedback mechanisms that aim on enhancing customer satisfaction, as well the development needs of its employees. Honda’s CSR strategies have been summarized in the society section; hence an analyst would have a difficult time evaluating Honda’s performance.
To its shareholders and investors, Nissan commits itself to provide correct and detailed on its implementation strategies so as to enable them to make informed decisions.
The company came in first in a list of “Awards for Excellence in Corporate Disclosure of the Securities Analysts Association of Japan”, for the third time in a row, in the automotive and tires industry. This proves that the company is practicing the best accounting disclosure policies Japan’s motor industry.
While Honda’s CSR makes little mention of strategies that empower employees, Nissan’s sustainability report states that the company continually supports career designs for its employees.
The report states the company strives to develop a culture of learning and improves internal communication within the company. Nissan affirms that it has mechanisms that ensure diversity is respected within the organization, and policies against discrimination.
Nissan has a corporate citizenship steering committee that oversees environmental planning, as well as societal issues. The company focuses on three major approaches: encouraging the spirit of volunteering among its workforce, taking advantage of the company’s strengths and qualities, and collaborating with specialized NGOs so as to make sure its social contributions are efficiently used.
Nissan also reports use of third party audits that monitor its CSR activities, which implies that its records are more reliable than Honda’s. An ethical audit is an important evaluation of a company’s CSR programs, in a move to determine if the strategies are effective, and efficient.
Nissan complies with GRI (Global Reporting Initiative) guidelines in the preparation of its statements, while Honda does not. The sustainability report illustrates the company’s CSR strategy and profile, the management’s approach and performance indicators, evidenced in the scorecard. A sustainability report relates to the triple bottom line, that is people, profits, and the planet.
Honda, on the other hand, simply reiterates the car maker’s CSR initiatives, targets and achievements. There is no mention of failure to meet a target in Honda’s report, which means that the report has only highlighted on its positive aspects. On the contrary, Nissan has reported on several failures, such as failure to pay dividends to shareholders in 2009.
On this account therefore, Nissan can be said to have provided complete information regarding its CSR initiatives. Honda lacks a scorecard that illustrates its failures and achievements, important issues that can improve the reliability of the CSR report.
Whereas the two companies are multinationals, Honda’s report focuses primarily on the CSR activities of the company in the UK, while Nissan has documented initiatives carried out in different geographical regions, which provides a clearer picture of the company as a whole. Nissan’s sustainability report is therefore more detailed, and reliable, than Honda’s CSR report.
Works Cited
Crane, Andrew, and Dirk Matten. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. London: Oxford University Press, 2007. Print.
Honda (UK). Corporate Social Responsibility Report. 2008. Web.
Nissan Motor Co. Ltd. Sustainability Report. 2010. Web.