The simplest way for a company to gain public recognition for the value it add s to society is through marketing efforts directed at consumers , but this is a platform that is often un available to B2B firms . The Denso Group, a maker of automotive parts and components, has come up with unique approaches to overcom ing the CSR challenges in the B2B sector to ensur e the sustainable growth of the business while contributing to the sustainable development of society .
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Case studies in corporate social responsibility tend to focus on companies that have succeeded in boosting sales, profits, or other clear indicators of corporate value in the process of implementing socially responsible policies—“strategic CSR,” as it is sometimes called. But linking CSR to corporate value is a special challenge for “business-to-business” (B2B) firms that provide goods or services almost exclusively for other companies.
The starting point for any company’s CSR policy is its affirmation, internally and outwardly, of its social raison d’être. A company’s raison d’être can be understood in terms of its net social value added—meaning its sum total of positive and negative contributions to society at every stage of the value chain—as judged by the stakeholders that make up society (not by the company itself).
The most obvious way in which a company can gain public recognition for the value it adds to society is through its marketing and provision of products or services to consumers. This is a platform unavailable to B2B firms. For such businesses, the focus is on minimizing the negatives in the value chain, as by reducing the environmental load or addressing human rights issues at the development, production, or distribution phase. Of course, the quality of a B2B manufacturer’s intermediate goods affects the quality of the finished product and is therefore a key to its competitiveness. But once the parts are integrated into the final product, judging the value of the supplier’s contribution is often difficult.
When one considers how many Japanese manufacturers are suppliers of intermediate goods, one realizes the extent to which this issue affects Japanese industry.  In the following, I describe the efforts of the Denso Group, a major manufacturer of automotive parts and components, to grapple with and overcome the CSR challenges facing manufacturers in the B2B sector.
Denso’s CSR Approach
Let us begin with a brief survey of Denso’s CSR program. Despite the challenges explained above, Denso has placed great emphasis on contributing social value through its products, particularly in respect to the environment. At the same time, it has worked continuously to minimize negative value across the supply chain.
Denso embraces economically, environmentally, and socially responsible business conduct, viewing CSR as a means of ensuring the sustainable growth of the business while contributing to the sustainable development of society. In business terms, Denso divides its CSR activities broadly between stakeholder satisfaction and risk management.
The first category encompasses policies for creating value vis-à-vis each of five stakeholder groups: customers, employees, shareholders and investors, business partners, and the international and local communities. Risk management pertains to such nonemergency areas of risk as compliance and information security. The characterization of routine risk management as an aspect of CSR is one of the distinctive features of Denso’s CSR policy (Figure 1). 
The organizational structure Denso has developed for its CSR efforts is worthy of attention. At one point the company had six separate committees for the environment, safety, corporate ethics, social philanthropy, risk management (routine), and risk management (emergency). Over time it streamlined the organization. Currently, there remain only committees on the environment, safety, and emergency risk management—groupwide priorities that involve regulatory compliance. CSR policy as a whole is under the jurisdiction of the Corporate Strategy Planning Center within the Corporate Planning Division. This reflects Denso’s view of CSR as an integral aspect of business management and strategy.
Figure 1. Elements of Stakeholder Satisfaction and Risk Management
On the surface, it might seem more efficient to establish separate units to address different themes. But when people are grouped and segregated according to theme, they have a tendency to focus narrowly on the clearly visible, easily anticipated, and quantifiable problems in their designated field and become less aware of society’s changing needs.
Denso has refined its CSR system with a view to streamlining the organization while clarifying its functional division of labor. The result is an organizational structure that directly addresses various management issues integral to CSR, including the creation and maintenance of corporate value, the integration of social initiatives into business activities, and risk management.
Key Performance Indicators and Concrete Action
Denso has received especially high marks for its environmental policies. It is the area in which the company has made the most progress integrating action on social issues into its products and business processes. Characteristic of Denso’s approach is the adoption of key performance indicators and action measures for each area of environmental concern (climate change, resource recycling, toxic substances, biodiversity, etc.), broken down by stakeholder group.
In terms of research and development, Denso’s commitment to the environment has yielded concrete results in the form of lighter and smaller parts as well as advanced hybrid and idle-stop (stop-start) technology. Denso believes it has a responsibility to actively suggest improvements in this area. In terms of production, Denso has developed and adopted low-impact manufacturing processes, including energy-efficient production lines, and is actively collaborating with other companies on such matters as green procurement.
Underpinning these efforts is the company’s basic environmental plan, Denso EcoVision. The long-term plan sets 10-year goals and lays the basis for five-year action plans. Denso EcoVision 2015, adopted in November 2005, was revised in November 2010 and again in March 2013 (see Figure 2).