The Origin and Progress of CSV Management

The Kirin Group first adopted the term "CSV" in 2013, but the origins of CSV management date back to before then. We would like to explore the truth by unraveling the history of the Kirin Group.

What social contribution should look like through reconstruction assistance

The direct impetus for the Kirin Group to place its management pivot on CSV was the Great East Japan Earthquake that struck Japan on March 11, 2011. Sendai plant of Kirin Brewery was affected by the earthquake, with four of its beer tanks collapsing, and the plant's facilities were severely damaged by the tsunami. The situation was so dire that there was no prospect of recovery, and at one point there were calls for the brewery to withdraw from Sendai. However, the plant resumed operations in November of the same year, thanks to the hard work of our people, who were determined to lead, but not be hindrance to, the recovery of the stricken local economy.

  • Sendai plant damaged by the tsunami

  • Sendai plant damaged by the tsunami

In July of the same year, Kirin Kizuna(Bond) Project was formed and eventually donated approximately 6.5 billion yen in reconstruction funds. Although the Kizuna Project was able to demonstrate some success, the road to the reconstruction was still far from complete, and there were limits to how much we could continue to donate. We realized that the only way to sustain our contribution to the region was through business, as we demonstrated with the reconstruction of the Sendai plant.

The Kirin Group's focus was on Creating Shared Value (CSV), which was proposed by U.S. business professor Michael Porter in 2011. CSV is to make a business by solving social issues through innovations. This allows us to expand and sustain the contribution to the society by reinvesting the cash generated by the business. CSV is not subject to the same budgetary restrictions as donations, and can provide sustainable value to society. The Kirin Group declared its shift from CSR to CSV in the Long-Term Management Vision KV2021 announced in October 2012, and the following year, in 2013, it became the first company in Japan to establish a division using the CSV name (the CSV Department), making CSV a full-fledged cornerstone of its management.

  • At the Shared Value Leadership Summit presentation (March 2014; New York, NY)

Long-Term Management Vision" (1981) and entry into the pharmaceutical business

The Kirin Group first announced the term CSV in 2013. In fact, however, the Kirin Group has been practicing the concept that would later lead to CSV for several decades. A symbolic case of the practice was the establishment of a life science business (now the pharmaceuticals business) as a new field of business entry in the "Long-Term Management Vision" formulated in 1981.

Business diversification itself has been active since the 1970s, with the creation of a whisky business (Kirin Seagram) and a dairy business (Koiwai Dairy). However, the diversification of this era was aimed at utilizing the distribution channels of the existing beer and soft drink businesses and not at solving social issues. We were also engaged in social contribution activities prior to the "Long-Term Management Vision," but these were activities that were separate from our business, such as donations to welfare programs and sponsorship of sports and cultural activities for the purpose of corporate PR, and not with a view to generating economic returns.

On the other hand, the entry into the pharmaceuticals business under the "Long-Term Management Vision" was a management strategy to leverage the fermentation and cultivation technologies accumulated in the beer business, the origin of our business, to develop pharmaceuticals through biotechnology, with the aim of contributing to solving the social issue of the aging population. In other words, the "Long-Term Management Vision" was the first time the Kirin Group clearly stated its management strategy to achieve both social and economic value. The successful development of biopharmaceuticals, which had never existed before, and their delivery to patients in the pharmaceutical business was the very solution to social issues through innovation that we aim for today in our CSV management.

The starting point of CSV in the Kirin Group is "Reverence for Life"

The Kirin Group has developed fermentation and biotechnology that can be applied to the development of pharmaceuticals, and the existence of Brewing Philosophy of the beer business underlies the development of the technologies. "Reverence for Life (Ehrfurcht vor dem Leben)" advocated by Dr. Albert Schweitzer, who was awarded the Nobel Peace Prize in 1952. Dr. Schweitzer said, "I am life that wills to live, in the midst of life that wills to live" and "He accepts as good preserving life, promoting life, developing all life that is capable of development to its highest possible value."

This concept, Reverence for Life, deeply resonates with the Kirin Group, whose business is relying on the blessings of the nature, such as agricultural products (barley, hops), water, and on workings of lives such as yeast, a microorganism which brews beer. In order to maximize the potential of agricultural products and yeast and make the best quality beer, we must humbly learn about the power of life. With this attitude, we continued studying about microorganism from the aspect of biochemistry, and the study led us to obtain advanced biotechnology. Respect for life is also a philosophy that can be applied to the life science of pharmaceuticals, and together with our technical competence, it was one of the factors that enabled the Kirin Group, as the only company among the beer companies in the world, to enter the pharmaceutical business.

  • The Standard for Brewing Technology, created in 1977. The beginning of this document describes "Reverence for Life".

Kirin's management philosophy nurtured by "Reverence for Life"

Dr. Schweitzer's words suggest that we humans are a part of life in the natural world, and that all plants, animals, and microorganisms coexist in an interconnected world. Since everything is interconnected, we cannot hope for a sustainable future if we pursue only our own interests. In the Kirin Group, "Reverence for Life" is also the philosophy behind CSV management, which aims to balance the growth of the company with the prosperity of society.

The Kirin Group has been a world leader in environmental management that aims to balance economic growth and the preservation of nature, which is also an expression of our "Reverence for Life" philosophy. In 1991, the year before the Earth Summit in Rio de Janeiro in 1992, the Kirin Group announced its "Basic Policy for Addressing Global Environmental Problems" and shifted its focus from conventional anti-pollution initiatives to activities with the entire planet in mind. The Kirin Group’s Environmental Vision 2050, which we are currently implementing, orients our environmental activities toward making positive impacts on the nature and society beyond our own businesses’ boundaries.

"Reverence for Life" has a significant impact not only on CSV, but also on Kirin's overall management philosophy. Our emphasis on “Diversity” and “Respect for Humanity” are also the aspects of "Reverence for Life." This calls for respect for the people around us as well as for ourselves, and for making the most of the life we have been given, where “Diversity” is one of our “One Kirin Values” and “Respect for Humanity” is a basic human capital philosophy of the Kirin Group that respects efforts and a characteristic of each employee who strives to continue to develop, and actively creates a place where all employees can do their best.

Thus, although the Kirin Group began using the term CSV more than 10 years ago, our management that led to today's CSV began 40 years ago, and the background philosophy "Reverence for Life" has been handed down from generation to generation even before that. The Kirin Group will continue to inherit and further develop this DNA, aiming to become a global leader in CSV