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June Meeting Recap: Prioritizing People, Planet and Profit Equally

By Marie Mortreux, Public Relations and Communications Intern

Our June 2016 meeting focused on contrasting social businesses and traditional businesses. Two successful women were invited to talk about their experiences in both the corporate and social enterprise sectors: Megumi Hagiuda, founder and CEO of AFRIKA ROSE, and Angela Ortiz, CSR Manager at H&M Japan. The panel was moderated by Sabine Becker-Thierry an independent consultant and the program coordinator for FEW.

What does “ethically produced” mean? Social businesses are inherently different from traditional businesses although they’re not non-profit organizations. Some big corporations have also been incorporating the notion of CSR (corporate social responsibility) into their management practices.

After seven years working for a pharmaceutical company, Hagiuda flew to Kenya to take part in NPO-led community action. During her time there, she became inspired to create a business importing Kenyan roses to be sold to Japanese consumers. She’d always dreamt of working in social development and during the time she worked as a volunteer in Kenya (from 2011 to 2012) she realized building schools wasn’t really tackling the root of the problem. She realized parents needed jobs first in order to gain financial independence and be able to finance their childrens’ education. As a result, she took the initiative to create a sustainable alternative by importing roses to Japan and creating a source of income for the Kenyan workers of a rose farm, also enabling them to benefit from healthcare, free lunches, scholarships and clean water systems.

Hagiuda strongly believes Kenyan roses reflect the power of nature and life, the strong connection with family and the expression of love attached to Kenyan culture which has been lacking nowadays in the fast-paced Japanese lifestyle, partly due to modernization and globalization. As a result, she wanted to surprise Japanese people by “circulating a love ecosystem.” She emphasized the importance of thinking about the people who produce the products we buy and that she wishes all companies were social enterprises. One of the challenges she encountered when developing her business was the lack of understanding of people of the difference between a social business and charity, such as donations.

Ortiz is the co-founder of O.G.A for Aid, a disaster relief NPO. At H&M Japan, she currently focuses on developing awareness and managing energy reduction as well as staff training. Ortiz first entered the non-profit world because she wanted to become more aware of social investment and environmental responsibility. She then built her own consultancy project before joining H&M. Her choice comes from a desire to learn more about the corporate world but also be more sustainable in her life as a mother. She trains the staff of H&M about environmental issues such as pollution and stressed the difficulty of handling several hundred employees while trying to overrule already set procedures.

The triple bottom line adds a new environmental dimension to the two already existing financial and social components of company management. Three goals targeted by Angela as the CSR manager of H&M are a fair and equal workplace for everyone, leading the field and having only sustainable materials in the supply chain. When looking at the different stages of production, one comes to realize there are steps which can be taken to reduce environmental damages. Raising awareness of the designers, educating farmers to grow organic cotton and reducing emissions during transport are some examples. However, consumers have the biggest impact on the environment by choosing to recycle or throw out their clothes.

In Japan, 90 percent of textiles are thrown away as moeru gomi. H&M works together with I:CO, a sorting facility to recycle textiles and redistribute benefits to NPOs such as Save the Children and Resilience. One of the challenges faced by H&M is its lack of control over working conditions in factories as its suppliers are independent contractors. Angela emphasized the importance of vigorous auditing and also encourages other big companies to publicly list their suppliers. Lack of transparency and sustainability from companies will result in loss of profit in the long run. The social role of companies falls down to educating consumers by raising their awareness and providing them with alternative steps to be taken such as recycling.

Despite the fact living in a capitalist society gives the right to anyone to invest and create value, the responsibility remains on the consumers to make changes by choosing not to purchase goods and services from a company whose practices are unethical. Japan was the first country to recycle paper and was originally very sustainable and conscious in terms of environment. Having more corporations become social organizations and consumers who are more aware opens the possibility of creating a better workplace in chains of production and preserving the environment.

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