Kazuyoshi Ono, CEO of Ono Packing Company Limited
Ono Packing is a comprehensive logistics services provider with seven warehouses in Tokyo, Saitama and Ibaraki. The company has established itself as a leading supplier meeting customer requirements since its founding in 1969, acquiring certifications including the Non-prescription Production License, JIS Q 9001 quality management systems, and JIS Q27001 information security management systems.
For a 170-employee small to medium-sized enterprise (SME) like Ono Packing, sustainability initiatives were seen as ‘something we’ll need to do in the future.’ This meant that it was a request from a customer that first prompted the company to undergo an EcoVadis assessment in 2022. Through this process, Ono Packing soon realized the importance of sustainability for both their employees and business partners, and the value of prioritizing sustainability as a key part of the company's strategy.
Having obtained a Silver Medal in 2023, Ono Packing is now putting measures in place to improve the company’s score. We asked the company’s Representative Director, Kazuyoshi Ono, how SMEs unable to dedicate personnel to sustainability can prepare themselves for an EcoVadis assessment.
Can you tell us about the first request from one of your business customers to undergo an EcoVadis assessment?
What prompted us was being asked by one of our main customers, a major foreign company in the medical and healthcare sector, to undergo a third-party sustainability assessment. Their email certainly took us by surprise, but a request like that could to some extent be seen as evidence of recognition of our competence as a supplier. Finding solutions to customers’ challenges is an important way of increasing the company’s value as a supplier, which is why we decided to undergo the EcoVadis assessment.
To be honest, while we’d thought it would one day become necessary to take measures to address the issue of sustainability, we hadn’t yet been able to. However, when we took a look at initiatives introduced by a company we do business with, we found they’d set up a website providing information on sustainability for the companies in their supply chain, introducing the measures each of these businesses was actually taking. On the issue of carbon neutrality, they’d set goals outlining what they aimed to achieve by certain dates. I got the impression that this was a serious effort involving the entire company, and not just someone going through the motions.
With the logistics services we provide, the data needed to make deliveries is shared between our company and our customers. And with sustainability, I thought that we’d probably be required to share real-time data on things like our CO2 emissions with our customers in much the same way, and to demonstrate that the trend is for those numbers to be decreasing year by year. This makes it necessary to move quickly on this, and we’re taking positive steps to make it happen.
In 2022, you achieved an EcoVadis Bronze Medal. Does the trust this gives you from customers make you glad that you underwent the assessment?
Of course, that’s a big plus point, but it’s not the only one. Our company had long relationships with many of our customers, some of more than 20 or 30 years, and even some dating back over fifty years to when the company was founded. Receiving repeat business from our customers is certainly one of our strengths.
We’ve had several occasions where we’ve received orders from a relatively new customer who’s heard about us from someone joining them from another company which we do business with. However, especially in the case of global corporations, it’s not possible to win any business just on the recommendation of one individual. In those cases, the fact that we’ve achieved a Bronze Medal is beneficial when trying to persuade someone to choose our company.
The same is true when you’re trying to secure new business. It’s difficult for SMEs with no name recognition like us to just go to a company and say, ‘Please give us your business!’ Having a sustainability rating from a third party organization improves your chances of receiving new business.
Particularly in recent years, we’ve felt that people won’t use our services just because our rates are low, or because we can guarantee a certain level of quality. Instead, you need to have enough evidence to of course demonstrate within the company, but also to customers and business partners, the reasons for choosing Ono Packing. I think that being assessed to global standards by companies such as EcoVadis, is vital for SMEs to be recognized as a partner by global businesses and major corporations.
Do you feel that the sustainability demands of your customers are growing?
Customers’ needs naturally change over time. We’re already addressing issues like the need for greater data security and cost reduction. As we enter an age where it’s not possible to secure enough workers, we’re focusing our energies on creating a good working environment with better working practices and improved diversity and inclusion. This is a particular issue for the distribution industry, which experienced the ‘delivery crisis’ of 2017, when we received notification from our partners in the courier industry telling us that they couldn’t accept any more packages.
We used to be focused solely on our customers, only thinking of our business partners when it came to getting them to comply with customers’ demands. However, we’re now acutely aware of the fact that we won’t be able to continue doing business unless we become a company that our partners would also choose. In this sense, I now feel that sustainability initiatives, in other words, taking measures to achieve sustainability, contributes not just to the level of satisfaction felt by our clients, but also to that felt by our employees and each of our business partners.
In particular, the EcoVadis assessment evaluates conformity not just in environmental matters, but also in areas such as societal and ethical goals, policies and obligations*. This is in line with the needs and expectations of our key stakeholders: customers, employees, and business partners. For me personally, sustainability never quite felt like it had much to do with me, and I saw it more as something expected of large corporations, or businesses with greater social and environmental responsibilities, such as heavy industry or chemical manufacturers. Having understood its significance, I’m now able to also convince those around me of the importance of these efforts.
*EcoVadis assesses four theme areas: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement.
What challenges did you face in completing the EcoVadis assessment for the first time?
First of all, unlike large businesses, was the issue of not being able to spare any staff. At that time, we were also trying to obtain the ISO 14001 environmental management system (EMS) certification, so we decided that the person responsible for that would also be responsible for the EcoVadis assessment.
At the time that we were constructing the ISO management system, we utilized the PDCA cycle (Plan-Do-Check-Adjust) so that we could make continuous improvements. We decided to include sustainability initiatives in this process. Doing so has avoided placing a large burden on our employees, and puts in place a system that lets them get to work using processes they already understand.
In the meantime, a problem arose when we started work on this. Despite holding sustainability training sessions, people weren’t attending, as not understanding sustainability-related terminology made it hard for them to stay interested. Rather than getting them to learn environmental terminology, we took the approach that having background knowledge of the subject – things like social issues and corporate governance – would make it likelier that they would become interested.
In order to increase the knowledge that employees would need for promoting sustainability – things like corporate management and social responsibility, we encouraged them to take the Information Technology Passport Examination. This is the first national exam anyone wishing to become an IT engineer has to take. In addition to IT management and technology it covers things that all members of society should know, like finance, law, and business strategy. I promote the merits of gaining the IT Passport qualification at our weekly meetings, with the added incentive that those who do so receive an award from the president.
In addition to this, we’ve included the General Affairs Department in our working group, and increased the number of staff with knowledge of two of the EcoVadis assessment themes: Ethics and Labor & Human Rights. I feel that, for us, the head of the General Affairs Department taking initiative on this issue was a particularly important factor in improving our score.
How are you utilizing the scores in each EcoVadis assessment theme area to inform your sustainability strategy?
The advantage of this is that the scorecard makes clear which areas we’re struggling in, and which areas we’ll need to improve. We’ve managed to identify that greenhouse gas emissions are an issue for us, and we’re currently strengthening measures to address this.
Another way of looking at it is, if you compare the questions on the questionnaire with those of the previous year, you notice there have been a few changes. We see those changes as reflecting global trends, and as precisely the areas where we should be focusing our efforts.
Ono Packing achieved a Silver Medal in 2023. Please tell us about your future sustainability initiatives.
As I said at the beginning, we think it’s important to quantify the present situation, analyze the numbers, and formulate a plan for improvement. We announce all of this, and then reveal the results of the measures we’ve taken. Going forward, it might become necessary to show reductions in greenhouse gas emissions not just for this company, but also for each of the companies we do business with. We’re currently putting together a system that will do this, but capital investment is needed before that can happen.
As the scope for funding sustainability measures grows, it’s now possible to apply for grants or a Sustainability-Linked Loan. Even for SMEs like this one, we feel it’s possible, financially, to accelerate measures that progress sustainability management and decarbonisation.
What advice would you have for businesses considering taking action on sustainability?
Japan has announced its intention of becoming carbon neutral by 2050. There’s no doubt that sustainability is an issue which businesses will have to face up to in the long term. The measures we all take will have to be taken forward by the next generation of executives and managers. Getting started early will give you the knowledge and time you need to deepen your understanding and make sure you’re on the right track.By having the person responsible for ISO also taking on this role, and making use of the IT Passport Examination, it’s possible even for SMEs to tackle this issue without it being a big burden.
Transporting goods by truck, as we do, can be seen as being particularly negative in terms of greenhouse gas emissions. However, at present there aren’t any alternatives or radical solutions to the problem. We believe that the issues that big businesses are unable to solve through technical innovation will open opportunities for SMEs. If we can, even gradually, achieve reductions in our greenhouse gas emissions, our company should become an attractive choice for customers.
For us at Ono Packing, the success of our sustainability initiatives won’t be down to just one customer, and we’re grateful to all of our customers for giving us this opportunity to promote sustainability.
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