A growing number of Japanese companies are stepping up their intelligence gathering as they realize Japan is increasingly exposed to rising tensions between the United States and China.
Companies in sectors historically less exposed to geopolitical turmoil, such as Suntory and Mitsubishi Chemical, have hired risk managers and new Created job functions and specialized teams.
The move to strengthen risk management capabilities comes as investors are asking Japanese companies to increase disclosure on their response and preparedness for contingencies such as: war in ukrainesupply chain disruptions caused by the pandemic and rising tensions between the US and China over Taiwan.
Kyohei Yabu, research manager at the Japan External Trade Organization, said Japanese companies often face the dilemma of how they can respond to the changing regulations of the world’s two largest economies.
“There is a growing risk that Japanese companies will be caught between the two,” he said.
A report released in September by consulting firm PwC Advisory found that about a third of Japanese listed companies with sales exceeding ¥500 billion ($3.9 billion) included “geopolitics” in their annual reports. I am listing.
Isshu Ueno, an attorney at law firm TMI Associates, said, “Japanese companies are lagging behind their counterparts in the United States and Europe in addressing economic security and geopolitical risks.
“For investors, a company’s commitment to security has become a benchmark like ESG. [environmental, social and governance] It’s for judging the value of a company,” Ueno said.According to his research, the number of Japanese companies mentioning “Economic Security” The annual report more than doubled from 11 last year to 27 this year.
Suntory poached Tsuyoshi Eguchi, a US-based executive from trading house Mitsubishi, last month and named him the beverage group’s first chief information officer.
The group that owns Jim Beam’s U.S. maker of bourbon whiskey is gathering information after being warned of U.S. regulatory challenges if it establishes joint venture headquarters in the country under consideration, according to people close to the company. He said he recognized the need to strengthen the too close to China.
Mitsubishi ChemicalJapan’s largest chemical company last year created the role of Chief Supply Chain Officer to oversee risks in its factories, logistics, procurement and climate control management. The company said the role would also include handling future geopolitical risks, such as China’s invasion of Taiwan.
Mitsubishi Chemical was in talks to buy coal from Russia last year when Moscow launched a full-scale invasion of Ukraine. Within days, we started negotiations with our Australian supplier. Pivot emphasized the need for senior positions to navigate such risks, analysts said.
The Group has also established a team dedicated to risk management. “Such a structure was always needed as a global company, but we didn’t have it,” the company said.
Last year, Hitachi appointed its financial officer as chief risk officer and launched a working group to discuss crisis management and regional geopolitical risks.
Although no executives have been named, beverage maker Kirin has also begun internal discussions on how its Taiwanese subsidiary will respond in the event of an unforeseen event, such as an invasion by China.
The company’s focus on geopolitical challenges and economic security Efforts of the Japanese government — Passed the Economic Security Bill in May — to ensure a stable supply of critical materials such as chips and batteries amid supply chain risks.
