Twenty Years of Links and Leads
The 20th edition of the North America–Europe Golf Challenge is set for October 4. Organized by the ACCJ, EBC, and CCCJ, the shotgun-style tournament tees up fun, food, drinks, prizes, and one of the year's best networking opportunities.
The Mercedes-Benz–Francis Ford Coppola Winery Cup strengthens business connections.
It started in 2001, on a sunny day in Honolulu. Robert Grondine and Erik Ullner had just completed a round on the Hawaii Kai Golf Course when Grondine, then president of the American Chamber of Commerce in Japan (ACCJ), had an idea. Could a tournament modeled after the Ryder Cup bring Tokyo’s foreign business community together? Ullner, then vice-chair of the European Business Council (EBC), loved the concept and brought it to EBC Chairman Richard Collasse.
“Our chairman was not a golfer, but he liked the idea because that sort of networking opportunity didn’t exist in those days,” recalled Ullner. “He said, ‘Erik, you’re the golfer, why don’t you arrange it together with the ACCJ?’”
The North America–Europe Golf Challenge was born.
The first outing was on September 26, 2003, at Atsugi Kokusai Country Club. Opened in 1959, the course in Kanagawa Prefecture continues to host the event to this day.
The 20th edition of the international battle will take place in Atsugi on October 4.
Organized by the ACCJ, the EBC, and, since 2013, the Canadian Chamber of Commerce in Japan (CCCJ), the shotgun-style tournament pits Team North America against the European national chambers of commerce and business associations in Japan that make up the EBC. Up to 72 golfers can play for each side. In some years, that has been stretched to 80.
Originally called the DaimlerChrysler Cup, the tournament was renamed the Daimler and Chrysler Cup in 2008, and then the Mercedes-Benz Japan Cup in 2010, as the title sponsor’s corporate structure evolved. In 2015, global lifestyle brand Cole Haan joined as cosponsor and the event became the Mercedes-Benz–Cole Haan Cup. Its sponsorship continued until the pandemic. In 2022, Thomson-Reuters co-sponsored.
This year, a new North American title sponsor comes aboard. California’s Francis Ford Coppola Winery will bring their Alexander Valley varietals to the course and after party.
“The 20th edition of the international battle will take place in Atsugi on October 4.”
The event is always competitive, with team scores based on the average of the top 80 percent of players. The winner is rarely ahead by more than 1.5 strokes. The smallest margin has been 0.06 strokes, demonstrating the very even matching of players.
This has led to a back-and-forth affair over the years. The European team won the first cup in 2003 before the North American team pulled off a three-peat in 2004, 2005, and 2006. The Europeans fought back, winning two of the next three (2007 and 2009) before the North Americans went on another roll, prevailing in 2010, 2011, 2012, 2013, and 2015. Not to be outdone, Europe has nabbed five of the past six titles: 2016, 2017, 2018, 2022, and 2023. The tournament was not played in 2020 and 2021 due to the coronavirus pandemic.
While this rivalry is fun, the real value, participants consistently say, is the networking and chance to build new relationships.
“I have played in the tournament 15 or so times over the years, including its first 11 years in a row,” said longtime participant Ryan Dwyer, a partner at the Tokyo office of K&L Gates. “The course is always in top shape, and I always enjoy the round and the networking party afterwards.”
Beyond networking, the tournament also supports the community. A fundraising component was added in 2006, and proceeds helped the YMCA Challenged Children Project—a program assists children with disabilities and special needs, offering them opportunities for inclusion, development, and participation in physical, social, and recreational activities—through 2022. This year, support will go to Unleash Potential, a non-profit organization dedicated to helping children with disabilities and challenges in Japan.
Prizes are also a popular part of the gathering, and the awards and raffle are a centerpiece of the post-competition party at the clubhouse. While top players have a chance to win performance prizes like high-end golf gear, all players have a shot at incredible prizes, such as wine and air tickets for international flights. With millions of yen worth of prizes being provided by this year’s sponsors, it is expected that no player will leave empty-handed.
More than 20 years after the seeds were planted in Hawaii, the North America–Europe Golf Challenge has blossomed into one of the most popular dates on the calendar for golfers of all levels in the business community. And as more Japanese players join, the opportunities for networking continue to grow. Grondine, who passed away in 2011, would no doubt be proud of what the ACCJ, CCCJ, and EBC task forces have nurtured.
If you’re a golfer, join the fun, enjoy the great on-course food and drinks, and find your next business connection. This is one event you shouldn’t miss!
Youthful Energy
Fresh ideas and youthful energy are the lifeblood of business and international relations, and the ACCJ is dedicated to nurturing rising talent through the Young Professionals Forum.
The ACCJ Young Professionals Forum opens doors for ages 35 and under.
Fresh ideas and youthful energy are the lifeblood of business and international relations, and the American Chamber of Commerce in Japan (ACCJ) is dedicated to nurturing rising talent through the Young Professionals Forum (YPF). An interactive platform for young, working professionals aged 35 and under, the YPF provides members with opportunities to actively engage in all aspects of the chamber’s activities, including networking, information sharing, and advocacy.
“The YPF is all about creating connections that bridge generations, industries, and more,” explained Melynie Yoneda, a vice-chair of the forum. “Members have the opportunity to interact with high-ranking leaders within the ACCJ, as well as network with peers that they might not necessarily be able to meet in their day-to-day jobs. And ACCJ corporate members are able to get fresh perspectives from YPF members.”
Co-Chair Kelly Langley said that the YPF “has worked closely with the Board of Governors to enhance engagement with young professionals and continue innovating to build the future pipeline of leaders and members.” He added that professional development and human resource challenges continue to be areas where the YPF aims to contribute.
“The YPF is all about creating connections that bridge generations, industries, and more.”
Events such as the Learning from Executives series, held in collaboration with the ACCJ CEO Forum, expand mentorship and training, helping members develop both professionally and personally.
Yoneda said she is grateful for the forum and the opportunities it opens up. “As a young professional in Japan, it is easy to get swept away in your day-to-day tasks or fall prey to tunnel vision,” she noted. Her favorite memory so far was a cross-chamber networking event last October that brought together members of eight foreign chambers of commerce. “There was a palpable energy in the room that radiated from the 80 young professionals eager to meet and network with their peers.” A similar event is planned for September 17.
“If anything, the YPF is a chance to interact with peers from all industries and walks of life,” Yoneda concluded. “Today, we may just be networking and eating pizza, but it is exciting to think that the connections we make will become the future leaders shaping the US–Japan relationship.”
Sightseer Surge
Japan has steadily reclaimed its status as a top destination. It is no longer a question of if Japan will recover from the pandemic, but rather how it will rise to the challenge of serving up its famous omotenashi to so many visitors.
Japan has seen a steady rise in visitors. Now set to break a record, can the tourism industry keep pace?
After more than two years of isolation and a slow reopening, Japan has steadily reclaimed its status as a top destination. The impressive bounce back began in 2023, when 25.06 million visitors lifted inbound tourism to 79 percent of the pre-pandemic record. The country is now on course to shatter its record of 31.88 million travelers, set in 2019.
In fact, the rebound has been so great that the pendulum has swung from tourism drought to flood. But with the economic benefits come strains on the hospitality industry. It is no longer a question of if Japan will recover, but rather how it will rise to the challenge of serving up its famous omotenashi to so many visitors.
Moving Past the Pandemic
In 2023, The ACCJ Journal reported on Japan’s reopening. Since the easing of border restrictions, the influx of tourists has had a positive impact on the hospitality industry.
Part of what continues to make Japan an attractive destination is its evergreen allure as a place of rich culture and history. “Japan has significantly boosted global awareness of its many attractions through marketing efforts such as the Cool Japan campaign and the strategic use of social media,” said Karl Hudson, area vice president of Japan and Guam for Marriott International, Inc.
More recently though, one of the most-mentioned drivers has been currency trading. Hudson continued: “The weak yen is having a significant impact on tourism operations in Japan, influencing both inbound and domestic tourism. On the positive side, it has made Japan a more affordable destination for foreign tourists, leading to a surge in inbound tourism.”
These travelers spent nearly ¥5.3 trillion in 2023. Despite the total number of visitors not reaching 2019 numbers, spending exceeded that year’s ¥4.81 trillion. Midyear projections put the 2024 outlay at ¥8 trillion, and the Japanese government is eying ¥15 trillion by 2030.
According to The Asahi Shimbun, a significant portion of 2023’s ¥5 trillion-plus was spent on accommodations. At ¥1.83 trillion, this category accounted for 34.6 percent of the total spending. Other noteworthy expenditures were ¥1.4 trillion on shopping, ¥1.2 trillion on food and drinks, and ¥602.4 billion on transportation.
The New Challenge: Overtourism
With spending now surpassing pre-pandemic levels, the challenge lies in how to handle the ever-growing number of Japan explorers. In June, the country welcomed the most ever in a single month: 17.8 million.
“The downside [to the tourism influx] includes higher costs for imported goods, which can affect various aspects of tourism operations, from food and beverage supplies to hotel amenities,” explained Hudson. “To navigate these challenges, businesses are adopting dynamic pricing strategies, adjusting rates based on demand, seasonality, and booking trends to optimize revenue and manage costs effectively.”
Not only can these challenges cause issues for operations, but they can also impact the overall travel experience.
“You may often see long lines of foreign travelers waiting in front of train ticket counters and ticket vending machines,” noted Yasuhiro Sudo, senior vice president and Japan country manager at American Express International, Inc.
“With spending now surpassing pre-pandemic levels, the challenge lies in how to handle the ever-growing number of Japan explorers.”
These long lines, he said, are caused by travelers trying to purchase tickets, using unfamiliar machines that lack multilingual support, or interacting with agents. “This causes many foreign travelers to become tired before boarding the train, resulting in a less-than-satisfying travel experience.”
In the most-visited areas, there is a lot of strain on infrastructure, which is felt by residents and visitors alike.
A notable case study is Kyoto, which has received a significant portion of the tourism pie since borders reopened. Residents are growing uncomfortable with the number of daily visitors. As reported by NHK, of about 2,500 Kyoto residents surveyed between October and November 2023, some 86 percent said that they were annoyed by crowding in and around tourist spots. According to the survey, the impact was felt particularly on public transportation, which has become overcrowded. Tourists’ littering and overall behavior are further irritants.
Sudo said the issue is more pronounced along Japan’s Golden Route, which runs from Tokyo to Kyoto and includes stops at popular destinations such as the hot springs of Hakone, in Kanagawa Prefecture.
According to data from the Japan Tourism Agency’s 2023 Accommodation Travel Statistics Survey, Tokyo, Osaka, and Kyoto accounted for about 70 percent of inbound lodging destinations, and there is an increasingly large bias toward staying in these cities.
Digital Transformation
In the face of these challenges, experts in the field are looking to various solutions, including in the area of digital transformation (DX).
American Express, Sudo said, is promoting the adoption of contactless payments with credit cards on public transportation so that foreign travelers can use their usual credit cards.
“This is not only for transportation,” he added, “As contactless credit card payment progresses at sightseeing spots, stores in town, shrines, temples, and other places, it can contribute to reducing congestion. Cashless, contactless payment is one of the first issues to be addressed in the tourism DX space.”
Marriott’s Hudson agrees, and shared some of their own efforts. “Our app and web merchandising have become key localization channels, enabling us to deliver targeted and relevant offers, destination content, and dining recommendations tailored to the location, tier level, and digital behaviors of each of the 210 million Marriott Bonvoy members. By adopting a federated regional approach to managing merchandising content, we achieved faster market responsiveness amid the shifting conditions following the Covid-19 pandemic.”
“In the face of these challenges, experts in the field are looking to various solutions, including in the area of digital transformation.”
Hudson also noted the efficacy of Marriott’s other DX efforts, such as their Destination Storefronts,
Dining Portal, and multilingual websites.
The digital space has been a key element in improving visitor experience, with other major players also bringing in new services, such as Universal Studios Japan’s smartphone app.
With the upcoming Expo 2025 Osaka, Kansai expected to attract 28.2 million visitors—3.5 million from overseas—an important consideration is how to ensure smooth travel and minimize disruptions. “We remain hopeful that tools like the Travel Contents App, among others, will facilitate seamless access for visitors from across the globe to enjoy Osaka,” a Universal Studios Japan representative told The ACCJ Journal.
Fees and Education
Another option industry experts are eying is the introduction of taxes and other visitor fees. One such proposal was discussed at the Osaka Prefectural Assembly in March, with Governor Hirofumi Yoshimura emphasizing “the need to secure financial resources for landscape beautification and other things,” as reported by The Mainichi Shimbun.
Similar taxes and fees already have been introduced, such as July’s introduction of a ¥2,000 fee to climb Mount Fuji and the International Tourist Tax, which came into effect in 2019 and requires residents and visitors alike to pay ¥1,000 when leaving the country. ACCJ Tourism and Hospitality Committee Chair Stephen Zurcher said he is unsure of the efficacy of these measures. “When our committee members met with various Diet members last year, we found that the tourist tax usage was opaque,” he explained. “Even the Diet members did not know how the tax was being spent.”
A shortage of personnel is also making it difficult to serve visitors. “With the rapid return of strong inbound tourism, the industry is seeing higher demand for rooms, but staff levels are lower than before the pandemic,” noted Zurcher, who is also a management professor and dean of the Asian Studies program at Kansai Gaidai University. The sentiment was echoed by Hudson, who said that Marriott is also facing “staffing challenges.”
This is not a small issue. According to business research provider Teikoku Databank Ltd., more than 80 percent of inns and hotels are facing a labor shortage. And with rising visitor numbers, the discrepancy between supply and demand will only grow more prominent.
“Both imported and local talent need to be developed to support the projected growth of tourism in Japan over the next five to 10 years.”
Both Marriott and Universal Studios Japan mentioned overseas recruitment and bilingual staff as being a part of the solution, but this comes alongside a push for more domestic workers and a need to educate both.
“Bringing in foreign workers to assist the labor shortage in the hospitality industry is currently being supported to some extent,” said Zurcher. “But, beyond these workers in operational roles, the industry needs management talent, and that takes a longer-term investment in talent development on the part of the government and the industry itself. Both imported and local talent need to be developed to support the projected growth of tourism in Japan over the next five to 10 years.”
The ACCJ published a viewpoint last October entitled “Preparing Japan for the Post-Pandemic Tourism Industry,” in which it recommends that the Japanese government make education in hospitality a priority. The viewpoint notes that, while a lot has gone into the building of accommodations to match tourism growth, not enough has been done to expand training at educational institutions to keep pace.
There is a call for Japan to step up its game to be on par with other international players. “Hospitality education in Japan has historically fallen to junior colleges,” noted Zurcher. “This contrasts sharply with the rest of the world, where hospitality education is conducted primarily at four-year [colleges] and at the graduate level, often at highly regarded schools such as Hong Kong Polytechnic University, the University of Nevada, Las Vegas, and Cornell University, as well as many excellent schools in Europe. Japan currently has no equivalent.” Education and encouraging young talent could be a much-needed part of the solution to both staffing shortages and visitor satisfaction.
Looking Forward
While the tourism surge has brought challenges, it presents an opportunity to improve services and create a better experience for tourists and residents alike. Whether through DX, education, or other approaches, finding solutions is paramount as Japan’s visitor numbers soar.
“Tourism is one of the fastest growing industry segments in Japan,” Zurcher said in closing. “Over time, tourism could become the most important industry for the country as a whole. It is in Japan’s best interest to be able to support this anticipated growth by investing in the labor supply.”
Supply Change
One thing the pandemic laid bare was the fragility of supply chains. Companies are taking the lessons learned, but for Japanese companies, shifting gears can be difficult. How can they connect with the right leaders?
Recruiter Robert Half on the evolving landscape of supply chain management.
From left: Kazuko Oya and Taku Yamashita (Photo: Yuuki Ide)
One thing the pandemic laid bare was the fragility of supply chains. When borders closed and restrictions to contain the spread of the coronavirus put a crimp on the movement of people and parts, manufacturers had to quickly adjust their logistics. As a changed world moves forward, companies are taking the lessons learned and looking to improve their supply chain management.
For Japanese companies, shifting gears can be difficult. Entrenched and outdated enterprise resource planning (ERP) systems, and even manual processes centered on Microsoft Excel, scream for digital transformation. But to make the change requires knowledge, experience, and leadership.
Specialized recruitment agency Robert Half is helping connect companies with consultants who can lead the way. Its team of supply chain management recruitment consultants has unique insight into the Japanese market, with extensive knowledge and established networks nurtured over 18 years. Taku Yamashita and Kazuko Oya shared with The ACCJ Journal the situation and trends in the Japanese market and how they are able to adapt to client needs to deliver exceptional value and results.
“Our unique differentiation is that we have ironclad relationships with supply chain management gaishikei [foreign-capital companies] seeking bilingual candidates,” explained Yamashita, director of supply chain management and human resources. “We completely understand skill sets, experience, and value for our clients.”
Oya, the senior division director for supply chain and procurement, noted that their extensive experience allows them “to consult with clients and collaborate to find candidates who offer the highest value and return on investment.”
Elusive Talent
Finding candidates is one of the biggest challenges that Japan faces as its domestic industries attempt to transform how they plan and manage supply chains that Oya and Yamashita said are “late to the party” and behind global standards. One big reason is education. Japanese university degrees are concentrated in areas such as finance, economics, sales, and marketing. An MBA is mandatory for supply chain management, but there are no MBA programs in Japan that focus on it. Consequently, there are few knowledgeable, educated candidates to lead the supply chain transformation.
“For a company starting or going through the transformation, it’s not just about the experience or skill set, but more about the leadership and mind-set.”
One situation that can create challenges for companies that are trying to take a step forward can come during a merger or acquisition. Domestic branches of a company may use outdated ERP systems, while the international branches run on more modern platforms and adhere to best practices. Getting the two systems to talk to one another is not possible. Changing the ERP system is the largest hurdle to overcome, and a consultant is usually brought in to get a new system in place, a process that can take a year or two.
What kind of candidate is needed to carry out such a transition?
“For a company starting or going through the transformation, it’s not just about the experience or skill set, but more about the leadership and mind-set,” said Oya. “There will be a lot of changes—not just to the system, but to the people, culture, and operational processes. So, somebody who is resilient is needed, somebody who is not afraid of making changes and can have an immediate impact from a planning perspective.”
Because of their knowledge of the industry, spanning almost two decades, Oya and Yamashita are able to consult with Robert Half’s clients, both domestic and international, on the challenges, needs, and hurdles they must overcome. They can go beyond recruitment and offer advice on who is the right candidate to fill this role, whether that be a domestic person or somebody from abroad with good Japanese language skills. They may even find the elusive, but highly sought-after, unicorn: someone half in Japan and half out.
“There are young Japanese workers who start in a Japanese company and then want to move to an international company,” explained Yamashita. “These workers may then come back to Japanese companies in their mid-forties or fifties.”
One path to this which Robert Half has noticed is for university graduates to join a consulting company, learn the supply chain methods for five years, and then return.
“They want to contribute to the development of their own country, so they come back to traditional Japanese companies,” Yamashita added.
Why It Matters
One reason that Oya and Yamashita feel that supply chain logistics in Japan lags far behind that found in the United States or other countries is that it isn’t viewed as equally important within traditional companies.
“There are various functions in a company—sales, marketing, finance, human resources—and supply chain is one of these. But in general, in Japan, I feel that it doesn’t get the same respect or visibility as the others, because supply chain is often seen as blue collar,” explained Oya.
But supply chain management is critical to the success of any business, whether a company is manufacturing a car or delivering fast-moving consumer goods to a customer’s doorstep.
““We’ve started seeing more Japanese companies trying to hire people coming from a global background and mind-set.””
One of the most important areas of supply chain management is sales and operations (S&OP), which is in charge of production and demand planning one month, one year, or two years out. Making S&OP more adept and resilient is growing in importance not only in Japan but the whole Asia–Pacific region as many international companies focus on APAC business.
A client that has been growing its overseas business and has its headquarters in Japan realized that, to win the global market, it needed to change its approach to supply chain management and bring S&OP up to speed. A specialty of Robert Half is helping Japanese companies bring international culture and methods from the United States and other countries into Japan, so the partnership is a perfect fit.
“We’ve started seeing more Japanese companies trying to hire people coming from a global background and mind-set,” noted Oya. “Mid-career hiring is something that traditionally hasn’t happened in Japan, but is becoming increasingly common. We’re seeing more people with 30 years of experience at American or multinational companies moving to big Japanese manufacturers with a very long history of hiring new grads and training them in their way, not hiring from outside.”
One of those seasoned veterans could be the missing talent to lead a transformation of your supply chain, and the Robert Half team are ready to partner with you to build resilience for today and the future.
Register now to learn, connect, and get inspired by Robert Half Japan networking events: roberthalf.jp
A Night of Stars and Stripes
Tokyo American Club’s New York Ballroom pulsed with energy—and music—on July 2 as the American Chamber of Commerce in Japan (ACCJ) marked the 248th birthday of the United States and its own 75th.
ACCJ members and partners celebrate Independence Day and 75 years as the voice of global business in Japan.
Photos by Miki Kawaguchi/LIFE.14
Tokyo American Club’s New York Ballroom pulsed with energy—and music—on July 2 as the American Chamber of Commerce in Japan (ACCJ) marked the 248th birthday of the United States and its own 75th.
Dubbed “A Night of Stars and Stripes,” the evening was an expansive celebration of American heritage and the enduring bilateral relations that connect the United States and Japan.
More than a Fourth of July bash, the event marked the diamond anniversary for the ACCJ. Organized by the Board of Governors, the party was the chamber’s largest gathering since the onset of the Covid-19 pandemic and highlighted the vibrant reengagement that has been underway throughout the year.
As more than 400 members, guests, and VIPs made their way into the ballroom, emcee Emily noted that, since its founding in 1948 with the support of General Douglas MacArthur, the ACCJ has been the most active and influential foreign business organization in Japan, fervently pursuing its mission to:
- further develop commerce between the United States of America and Japan,
- promote the interests of US companies and members,
- and improve the international business environment in Japan.
ACCJ President Victor Osumi surprised the crowd by singing the national anthems of Japan and the United States before delivering opening remarks. “There’s no budget problem,” he jokingly noted, explaining that he chose to perform these important songs himself because of his heritage, which fuels his passion for US–Japan relations.
“Having grown up in the US and Japan, both countries have greatly shaped my identity and values, and have given me a bicultural perspective that made me who I am today. I’m honored to serve as a bridge connecting our two great nations,” Osumi said.
“To our members and our incredible committee leaders, thank you for your involvement with the chamber, which drives everything we’ve accomplished over the past 75 years,” he continued. “And to our valued partners, thank you for working with us to strengthen the US–Japan economic partnership, which is one of the most important alliances in the world.”
Japanese Vice-Minister for International Affairs Takehiko Matsuo spoke next on behalf of the Ministry of Economy, Trade and Industry.
“The Japanese government continuously provides its strong support to all of you,” he said. “I believe, and I do hope, that the ACCJ could play a very important, very key role to further strengthen our two countries’ economic ties.”
US Ambassador to Japan Rahm Emanuel then shared congratulations via video, as he was traveling in the United States at the time and unable to attend.
“Since the birth of the chamber, Japan has emerged as a respected global leader in a multitude of areas—in business, technology, manufacturing, and most importantly, research and development,” he said. “Through the dedicated efforts of the chamber, and all the companies that make up the chamber, our two nations have worked side by side to make groundbreaking strides across the spectrum, from next-generation technologies to clean energy.
What we accomplish together in the years ahead will set a benchmark and will shape the lives of millions for decades to come. I wish all of you a very happy Independence Day and another 75 years of success as we build a future for the United States and Japan.”
Newly arrived Deputy Chief of Mission Katherine E. Monahan followed up these remarks with her own reminiscence of coming to Japan in 1987 on the Japan Exchange and Teaching (JET) Programme, as well as her past work with the ACCJ Financial Services Forum. “It was a really interesting and fun time,” she said. “I have a deep love of Japan, and a part of me has always been here. Japan is a really special place, and the things we do together are amazing.”
Monahan raised a glass to toast the birthdays of both the United States and the ACCJ, and the evening gave way to a rousing performance by legendary American guitarist Marty Friedman. Well known as the lead guitarist of American thrash metal band Megadeth, Friedman moved to Japan in 2004 to pursue his love of the country, language, and a desire to perform with Japanese musicians. He was named an ambassador of Japanese heritage by the Agency for Cultural Affairs in 2016.
“It takes a lot of motivation and kind of an insane story to want to come here to Japan and make a life here,” he said. “But I know all of you will agree with me that it’s probably the most cool thing that we’ve all done in our lives. Japan is like a country of dreams … and my dream came true in so many different ways because of Japan.”
Friedman performed as part of the generous support of iconic guitar maker Fender, which presented two Stratocasters—one manufactured in the United States and one in Japan—to the chamber. ACCJ President Victor Osumi joined Fender Senior Vice President APAC Giorgio Guerrini and Product Management Director APAC Masato Fujikawa onstage to receive the gifts.
Following another spectacular performance by Friedman, members and guests began networking as they were treated to a flavorful Fourth of July-inspired spread curated by Michael Anthony, executive chef of New York’s Gramercy Tavern. Anthony, who was brought to the event by Delta Air Lines in collaboration with Tokyo American Club and the ACCJ, got his start in Tokyo in the early 1990s. Anthony’s goal in crafting the Independence Day menu, he told The ACCJ Journal, was to “serve foods that connect with childhood memories of the holiday.”
To go along with the bites, Brown-Forman bartenders served up more-adult libations made with the company’s Jack Daniel’s Tennessee whiskey and Woodford Reserve bourbon, including the signature Woodford 75 cocktail, named in honor of the ACCJ’s diamond milestone.
The night’s theme of music continued across the way in the Brooklyn Suite, where ELAC, innovators of speakers and audio equipment for 98 years, presented an immersive sound experience featuring more than seven decades of classic American and Japanese vinyl.
The evening was made possible thanks to the generous support of Aflac, Boeing Japan, Delta Air Lines Japan, Google Japan, and GR Japan, who contributed at the highest level as Stars and Stripes sponsors, as well as Red, White, and Blue sponsors FedEx Japan, RGA Reinsurance Company, and Toyota.
Along with ACCJ President’s Circle member companies Cisco Systems, connectFree, and Eli Lilly Japan, and other partners, the community came together to deliver a night to remember as the ACCJ continues the mission it set out on in 1948: to be the voice of global business in Japan.
Partnership and Progress
At the start of 2024, The ACCJ Journal sat down with Victor Osumi as he took the helm as ACCJ president. As the heat of summer set in, we again joined him to gauge how the year he has dubbed one of reengagement is evolving, and where he sees the chamber amid its 75th anniversary.
ACCJ President Victor Osumi shares thoughts on the chamber’s active year of reengagement and 75th anniversary.
Photos by Shelley Mae Photography
Growing up in a diverse, dual-culture environment, Victor Osumi spent most of his early years in Los Angeles. He would also regularly visit Japan. When he moved to Florida for high school, he set out on a path that would lead him to the US Air Force and, ultimately, to his current role as managing director and president of Japan operations for Delta Air Lines, Inc., as well as president of the American Chamber of Commerce in Japan (ACCJ).
At the start of 2024, The ACCJ Journal sat down with Osumi to learn more about his very active role with the chamber and the path he saw ahead as he took the helm. As the heat of summer set in, we again joined him at Delta’s office near Shiba Park to gauge how the year he has dubbed one of reengagement is evolving, and where he sees the chamber amid its 75th anniversary.
You set out to focus on fostering partnership, embracing progress, and bridging to the future with excellence when you began your presidency. How are those goals progressing?
It has been going very well. For three years, Covid-19 put limitations on in-person interactions, but this year we are fully open and the ACCJ is taking advantage. The changes resulting from the pandemic bring opportunities not only for business but for us to refine ourselves as a chamber to best meet the needs of today.
We’ve had tremendous success in reaching these goals and reinforcing why the ACCJ is known as the voice of global business in Japan. I have to thank everyone on the Board of Governors for their hard work. In our meetings, I have asked each leader how they feel we could improve the chamber.
We identified three areas:
- Quality over quantity
- Committee focus
- Strengthening relationships
We promote 500–600 events each year organized by 60-plus committees. That is a lot. We have working groups assessing how best to leverage and focus the expertise of our membership to benefit the global business community.
Relationships are the lifeblood of the chamber, and an important task coming out of the pandemic has been to reengage in person with our member companies. In the first half of 2024, we visited many leaders—including the CEOs of more than 30 of our Corporate Sustaining Members—to discuss the state of business and the market, and to be sure that we are delivering what they need. I have enjoyed doing this together with many fellow board members and Executive Director Laura Younger.
When it comes to advocacy, we want to be sure that we are approaching the right people and are enhancing those relationships. There was a bit of a disconnect during the Covid-19 pandemic, so we have prioritized reengaging those efforts where needed, such as with the Keizai Doyukai [the Japan Association of Corporate Executives] and embassies.
We are making great progress, and our goal is to ensure quality, strengthen advocacy, and boost the voice of the ACCJ and the benefits of being a member.
How was this year’s visit to Washington?
The DC Doorknock—along with the Diet Doorknock—is one of the most important events each year for our advocacy, and those meetings were curtailed by the pandemic. The full resumption this year has reinvigorated the communication and bonds that are critical to strengthening bilateral relations and business.
In June, I joined fellow ACCJ leaders for this year’s visit to Washington. Everyone we met was more engaged with Japan. They wanted to know what the Japanese government and US businesspeople in Japan are thinking as they consider how the United States should approach the region. I feel we are reengaging in a constructive way and advancing important dialogues on a range of critical issues, including artificial intelligence (AI), quantum computing, semiconductors, cybersecurity, and space.
Digital initiatives are of particular urgency, and expanding cooperation with like-minded partners to align on the application and governance of AI, strengthen cybersecurity, and promote free and fair digital trade agreements is essential to the peace and stability required for ensuring a prosperous future for our nations.
One path to that is the Indo-Pacific Economic Framework for Prosperity (IPEF). How has that initiative progressed this year?
Yes, IPEF is one way in which Japan, together with the United States, can play a leading role in the region and build stable and resilient relationships with its neighbors. It has been good to see the progress made thus far—a very steady approach that isn’t rushed.
There is huge opportunity in the Indo–Pacific region—it’s one of the fastest-growing markets—and I believe that IPEF offers many areas for the ACCJ to explore. The bilateral trade relationship between the United States and Japan has improved, and Prime Minister Fumio Kishida’s visit to Washington in April highlighted this.
Infrastructure, technology, cybersecurity, and supply chains are all areas with great potential for development as a result of IPEF. There is room to improve, and there are challenges in the regulatory environment given each country’s own regulations and policies, but I see great potential. As the countries involved work on the next steps to realize the promise of IPEF, the ACCJ must continue to be part of the discussions.
Tourism is another area hit hard by the pandemic. How has the ACCJ been able to support its recovery?
Inbound tourism is vital to the economy and has seen an incredible resurgence this year. Japan is on track to break the record of 31.88 million visitors, set in 2019. When Ambassador Rahm Emanuel arrived in January 2022, the number of foreign nationals entering the country that month was 17,800. There was pressure from many areas and organizations to get the borders reopened. Ambassador Emanuel and his staff were key to making that happen, and the ACCJ was able to serve as a conduit between our members and the Japanese and US governments. Japan is thriving again, and with events such as next year’s Expo 2025 Osaka, Kansai on the horizon, this economically important trend looks certain to continue.
Also important to our member companies is diversity, equity, and inclusion. Has there been progress on Japan’s support for DEI?
DEI is so very important to attracting and retaining top talent for our members. I feel everyone is conscious these days about social responsibility, and DEI helps each company bring its core values to the forefront.
Japan remains an outlier among G7 countries in recognizing same-sex marriages. While not all the court rulings have been resoundingly positive, I do feel we have made some progress in the Diet, and we renewed our viewpoint in support of marriage equality. Ambassador Emanuel has been extremely supportive of diversity and has helped a great deal. I think that we are doing the right thing socially by supporting marriage equality and DEI initiatives, of course, but the issue is also of great importance to business. We must continue to aggressively support this movement.
From left: ACCJ Executive Director Laura Younger, President Victor Osumi, US Deputy Chief of Mission Katherine E. Monahan, and Japanese Vice-Minister for International Affairs Takehiko Matsuo at A Night of Stars and Stripes on July 2. (Photo: Miki Kawaguchi/LIFE.14)
Where do you see the ACCJ as we mark our 75th anniversary?
The ACCJ has adapted to many challenges and changing environments over the past 75 years, and the Covid-19 pandemic was a real test of our resilience as an organization. Our strength showed, and we learned a lot that is helping us rethink how we work, how we communicate, and how we support each other.
The vibrancy of the ACCJ was on full display on July 2, when we gathered at Tokyo American Club for A Night of Stars and Stripes, our big bash to celebrate the Fourth of July as well as our own 75th birthday. The event was organized by the Board of Governors and we had more than 400 attendees. It was a pleasure for me to sing the US and Japanese national anthems. I’m honored to serve as a bridge connecting our two great nations. My background, having grown up in
both countries, is what drives my passion for US–Japan relations and my current role as ACCJ president.
It was also an honor to welcome representatives of the US and Japanese governments to speak. Their close collaboration at our many engagements and briefings throughout the year are vital to the success of our mission. Vice-Minister for International Affairs Takehiko Matsuo joined us from the Ministry of Economy, Trade and Industry, and Deputy Chief of Mission Katherine E. Monahan attended from the US Embassy. Ambassador Emanuel shared remarks in a video, as he was traveling in the United States at the time. It was an incredible evening.
I would also like to say thank you to all our members, and especially to the founding companies that are still with us today—Bank of America, J.P. Morgan, Citi, United Airlines, and AIG, along with Coca-Cola and GE, both of which joined a few months after the founding. Since 1948, the continuity that these members represent is a testament to the staying power of our collective voice.
I’m very proud of what we’ve accomplished. As a member-led organization, the power of the ACCJ comes from our 3,000-plus members. My mission as president, and the mission of the Board of Governors, is to ensure that we are bridging to the future with excellence. Our incredible members and committee leaders—as well as the dedicated office team that works so hard behind the scenes—come together to drive everything we’ve accomplished over the past 75 years, and there are many more years of partnership and progress to come.
Workforce Matters
Japan has long been seen as an attractive destination for companies expanding operations globally. This trend is more obvious today. But what causes foreign capitalists to succeed or fail in Japan?
What causes foreign capitalists to succeed or fail in Japan?
Japan has long been seen as an attractive destination for companies expanding operations globally. This trend is more obvious today. Japan boasts a robust infrastructure—from transportation to energy to telecommunications—and is considered an ideal hedge against the political instability, or “country risk,” that is prevalent in other Asian countries. Expected cost reductions fueled by the weakened yen have led many companies to believe that now is the time to enter the Japanese market.
Common Traits of Failure
Despite the promising situation, some businesses have not achieved the expected results. A survey conducted by the Ministry of Economy, Trade and Industry revealed that struggles with talent acquisition and Japan’s unique nature, such as the preference for homogeneity, caused them to fail. These reasons may seem plausible, but what really happened?
Unsuccessful businesses did not do well because they brought their own cultures and practices to Japan without attempting to adapt. Japanese people have a hard time accepting foreign capitalists who expect them to adapt to their methods, and this often leads to a sense of discomfort among local talent. Integrating into Japanese culture is essential.
Key to Success
Since 2019, there have been numerous changes to Japanese labor law, with more revisions planned for the coming years. Workforce management has become more complex, with legislation impacting work time management, payroll processing, and social security-related filings.
For example, Article 36 of the Revised Labour Standards Act (Overtime Work and Working on Holidays) requires companies to submit a dedicated form to the Labour Standards Bureau for each employee who is expected to work on a holiday or longer than the prescribed hours.
The maximum working hours per day, month, and year must be agreed upon by the employee and employer. The so-called “36 agreement,” which specifies the agreed conditions, is one of the most important documents in workforce management. Yet, it is often treated as a piece of routine paperwork, filed without a thorough review. In fact, we have seen many cases where this paperwork has not even been submitted.
Regulatory authorities place considerable emphasis on proper filing. Failure to comply may result in disclosure of the company’s name. Penalties may also be levied, including up to six months in prison or a maximum fine of ¥300,000.
To succeed, foreign-invested companies must understand how the Japanese labor system functions and how to ensure workforce management compliance. Successful companies comply with the applicable laws and regulations in Japan and have implemented an effective talent strategy that is flexible and rooted in the region.
Given the complexity, it is best to outsource workforce management entirely to a group of specialists. While this may not seem like a distinguishable advantage over competitors, compliance is crucial for running a successful business. Securing reliable resources to handle these needs with confidence is the first step toward successful entry into the Japanese market.
Dayforce provides payroll and labor outsourcing services through Workcloud, which offers:
- One platform: supports payroll, attendance, social insurance, year-end adjustment, and onboarding management.
- Excellent user interface and system scalability: intuitive user interface (UI) does not require manuals and allows for additional development.
- Bilingual support: all pages have the same UI in English and Japanese.
- Timely response to legislation: enhancing features and ensuring compliance with newly enacted laws.
Article supported by Actus HR Solutions, KK
For more information and to learn how Dayforce Workcloud can help your business, visit https://dayforce.co.jp/contact.
Tax Surge Ahead
An increase in taxes on high-net-worth individuals is on the horizon. Here's how it will impact business and real estate owners beginning January 1, 2025.
How an upcoming income tax increase will impact high-net-worth individuals and business owners.
A new measure to be introduced in 2025 will increase taxes on high-income individuals. With the effective income tax rate set to rise to 22.5 percent or higher, business and real estate owners who plan to realize gains from the sale of real estate or stocks should be aware of the impact on their taxable income after January 1, 2025.
Income tax in Japan consists of aggregate taxation on certain types of income. These include employment income, business income, and real estate income. The total from each type is summed and taxed at progressive rates. The national income tax rate ranges from five to 45 percent (plus 10 percent for local taxes).
Income from the transfer of real estate, and some financial income, is subject to separate taxation. Income from the transfer of real estate (long-term holdings) and stocks is taxed at a flat rate of about 15 percent (plus five percent local tax).
This can give rise to a phenomenon where the portion of total income derived from the transfer of real estate and stocks increases while the actual overall tax rate decreases, thus lowering the effective income tax burden for high-income earners. From the viewpoint of a fair taxation system, the tax burden rate will be raised to 22.5 percent (for the national tax portion), and possibly higher for incomes above a certain level.
How It Works
First, the standard income amount is calculated by totaling the amount of income (both aggregate assessment income and separate income) for which a tax return is filed each March and adding financial income that is not included on the tax return. This includes income where the withholding tax suffered is treated as the final liability, such as dividends from listed stocks, small dividends from unlisted stocks, and income from special accounts.
Special accounts are those which the taxpayer has selected to hold listed stocks. The dividend income, as well as income from the transfer of listed stocks, suffers withholding tax at the source. This is treated as the final liability for these types of income, so they are not included on an income tax return.
Next, the standard income amount is multiplied by 22.5 percent (national tax) after deducting the special deduction (¥330 million). If the total exceeds the regular tax amount, the difference will be levied as additional tax due.
In addition to those who plan to sell real estate or stocks, individuals with high financial income from special accounts will be affected by this amendment.
Even for non-residents of Japan, the tax increase will apply to transfers of real estate located in Japan and transfers of Japan-sourced stocks.
Corporate owners and major investors who plan to sell their companies, individuals who plan to sell their real estate, and high net worth individuals who have large amounts of financial income are advised to understand the impact of this tax increase and consider how to respond.
For more information, please contact Grant Thornton Japan at info@jp.gt.com or visit www.grantthornton.jp/en
Disclaimer: Opinions or advice expressed in the The ACCJ Journal are not necessarily those of the ACCJ.
Happy Independence Day 2024!
As Americans around the world celebrate the nation’s 248th birthday, the Fourth of July provides a chance for those of us in Japan to reflect on what has already been a historic year for US–Japan ties.
A special message for ACCJ members from US Ambassador to Japan Rahm Emanuel
As Americans around the world celebrate July Fourth, the day provides a chance for those of us in Japan to reflect on what has already been a historic year for US–Japan ties. Prime Minister Fumio Kishida’s state visit to Washington in April, the first by a Japanese prime minister in nearly a decade, marked a high point in our two nations’ long relationship, with numerous announcements of cross-border investments and collaboration.
With economic security directly linked to national security, it is paramount that the United States and Japan leverage their respective strengths to cooperate in the development of critical and emerging technologies and the diversification of supply chains.
As next-generation technologies such as artificial intelligence (AI) power the future of the global economy, initiatives like the $110 million AI partnership between four top universities in the United States and Japan, announced during the state visit, will allow us to be at the forefront of a field that is fast becoming embedded in every area of business and life.
Japan’s ambition to become a global high-tech and digital hub of research and innovation was given a boost by the announcement of investments in the country’s digital sector from Microsoft ($2.9 billion), Google ($1 billion), and Amazon Web Services ($15 billion).
“With so much of the world digitally interconnected, it is imperative that our secrets are kept safe, our privacy and data protected, and our supply chains secured.”
Amid the country’s digital transformation, cybersecurity has become a priority. With so much of the world digitally interconnected, it is imperative that our secrets are kept safe, our privacy and data protected, and our supply chains secured. During my recent trip to Fukuoka, we launched the US–Kyushu Cybersecurity Partnership Initiative. Bringing together leading US and Japanese technology companies with partners in civil society, law enforcement, and academia, the initiative is designed to strengthen the cybersecurity ecosystem in an area of Japan that is becoming critically important to the global economy.
While longstanding partners in space exploration and research, the United States and Japan are collaborating in every area of this flourishing sector. Decades after the Apollo program, the United States is preparing to return to the moon. The Artemis program will see the United States and Japan join forces on this momentous project, with an American astronaut once again stepping onto the lunar surface, this time accompanied by a Japanese astronaut. The coming years promise to be ones full of “giant leaps” in space science and human exploration.
Meanwhile, Japan continues to be the No. 1 investor in the United States, with $775 billion in direct investments. This confidence was reflected in decisions by major Japanese companies to expand operations or build new facilities across the United States. The likes of Toyota, Honda Aircraft, Daiichi Sankyo, and UBE all deepened their presence in North Carolina, Ohio, and Louisiana, respectively, with millions of dollars of commitments to those local communities and economies. The investments are also a vote of confidence in both US manufacturing capability and the skills of US workers.
“None of our efforts would be possible without the underlying people-to-people ties … We are fortunate to have committed partners in the American Chamber of Commerce in Japan.”
As climate change wreaks havoc across the world, the United States and Japan remain steadfastly committed to accelerating energy transition while promoting clean energy. We have entered a new era where renewable energy is a major driver of investment decisions. The next challenge for Japan is deploying renewable energy at scale, but regions such as Hokkaido, where natural resources are plentiful, provide boundless opportunities for US energy companies already established in the field.
Unlike fossil fuels, which are subject to the unpredictability of world events and authoritarian regimes, renewable energy is clean, secure, and the employer of tomorrow.
None of our efforts would be possible without the underlying people-to-people ties. To lay the foundation for the next generation of US–Japan relations, we announced new educational endowment initiatives to support scholarships for high school and university exchange students. Together with our established Fulbright and Mansfield programs, these will inspire and inspirit the future custodians of our special relationship.
We are fortunate to have committed partners in the American Chamber of Commerce in Japan (ACCJ). What we accomplish together with the US–Japan alliance over the next year will shape the future of the Indo-Pacific region—and the world—for decades to come.
I wish all our ACCJ friends and partners a very happy Fourth of July.
Disclaimer: Opinions or advice expressed in the The ACCJ Journal are not necessarily those of the ACCJ.
May 2024 Event Highlights
View a collection of photos from the ACCJ’s May 2024 events.
From left: Alternative Foreign and Direct Investment (AFDI) Committee Chair Paul Lee, ACCJ President Victor Osumi, Director-General of the Office of Foreign Direction Investment Promotion at the Cabinet Office Mitsuru Myochin, and Special Adviser Jennifer Rogers are seen together after the AFDI event on May 27 at Tokyo American Club.
The American Chamber of Commerce in Japan hosted a wide variety of events in May. Among these were:
- How Intensified US-China Strategic Competition Is Reshaping Indo-Pacific Economic Interdependence
- Preparing for the AI Revolution: Executive Business Briefing with Joe Hart, Dale Carnegie President and CEO
- Breakfast in the Boardroom: Breaking Barriers in Japan’s Corporate Leadership
- International Spring Meet and Greet in Kobe
- The 33rd ACCJ/NIS Chubu Walkathon
- PMDA’s International Vision in New Midterm Targets
- Promoting FDI in Japan: A Discussion with Mitsuru Myochin, Director-General, Office of FDI Promotion, Cabinet Office
- IBM’s Compliance Landscape: Building a Culture of Trust and Integrity in a Global Organization
Here are some of our favorite highlights.
2024 DC Doorknock
During the 2024 DC Doorknock, ACCJ delegates met with leaders in Washington, DC, to discuss security, economic, and strategic partnerships.
The 2024 ACCJ DC Doorknock delegates gather in front of the US Capitol.
From June 3 to 6, American Chamber of Commerce in Japan (ACCJ) leaders made their visit to Washington, DC, as part of the chamber’s annual DC Doorknock visits. These trips are an important part of the ACCJ’s advocacy efforts and strengthen US–Japan relations.
ACCJ President Victor Osumi was joined by Special Advisor Steve Briggs, Governor Hans Klemm, Chairman Christopher LaFleur, Executive Director Laura Younger, and Bank of America's Tamao Sasada.
A Bishop Scholar’s Journey
As his time as the first Bishop Memorial Scholar draws to a close, we sit down with Matthew Trani to learn about the experience and how he hopes to maintain his ACCJ connections.
As his internship ends, Matthew Trani shares impressions of the ACCJ and a message for future recipients.
Following the tragic deaths of Bill Bishop, his wife Izumi, and their daughter Sophianna on Christmas morning 2022, the American Chamber of Commerce in Japan (ACCJ) and the United States–Japan Bridging Foundation came together to honor their legacy. Launched in July 2023, the Bishop Family Memorial Scholarship Fund brings US students to Temple University, Japan Campus, where Bishop was a lecturer and board member. It also provides an internship at the chamber.
The ACCJ Journal interviewed the first recipient, Matthew Trani, last December, two months into his internship. As his time as a Bishop Memorial Scholar draws to a close, we again sat down with Trani to learn about the experience and how he hopes to maintain his ACCJ connections.
How do you feel about your internship ending?
Odd, because it almost feels like I’m leaving the community that I’ve been attached to—almost to a point of dependency—for the past eight months. There aren’t many places where you can have a working relationship and be able to just casually talk to people in Japan as a foreigner. That feeling hasn’t changed since our first interview.
How will you maintain your ACCJ relationships after you leave?
A lot depends on if I can convince my new company to become a member. If that were to happen, then I would potentially be back within a relatively short time.
But I think I can still connect regardless, as I’ve met as many members outside the chamber as I have through the chamber; they’re all in the same circles. When I get invited to somebody’s house, there will be a professor from Temple there, or someone from Tokyo American Club or the embassy. The network is so tight that they’re never more than one connection away.
Did making connections remain your number one goal?
A little bit. The priority did change from the beginning of the year. Making connections was great, but I needed a job to continue living here. A lot of the companies to which I was thinking of applying are ACCJ members, but I needed to figure things out on my own, which I did. The biggest difficulty is switching from a student visa to a work visa. I was very lucky to find a company that had the patience to do that.
Now, it should be a lot easier to use those connections in the future. So, I would say my goal didn’t change, but now that I’ve achieved my secondary goal, I can go back to my primary goal, which is to continue making and maintaining connections.
Beyond connections, what did you gain most from this experience?
I probably wouldn’t have had the chance to work in a corporate environment where I interacted with so many executives all at once. It’s kind of [remarkable] seeing somebody where it’s like, “Oh, you’re the CEO of Bloomberg Japan, which is the same company my dad works for in New York.” But this is someone that my dad would not usually be able to talk to. And it’s very different having Victor Osumi, as the president of Delta in Japan, saying hi to you and being on a first name basis.
Matthew Trani with ACCJ Executive Director Laura Younger
Where were you most involved at the ACCJ?
That changed over the course of the year. When I started, I was going to a lot of events and getting most of my networking connections early on. Then it shifted to more back-office work, and I worked a lot in Membership and we did some assignments on the competitive advantage of the ACCJ. That project took time to flesh out and get it to how we wanted it for the board.
On the whole, I definitely preferred the administrative work, with the exception of spreadsheets. I think with networking and helping at events it becomes much of the same routine, but when you deal with administrative materials, you can think a lot more critically. I really like jobs in which you can think deeply and try to solve problems.
What was your favorite event?
I learned so much from attending committee meetings. Often, I would think, “I didn’t know that, but that’s very interesting.” Or they would discuss things I’ve noticed in Japan but didn’t have the opportunity to say out loud.
We were at a meeting of the Tourism and Hospitality Committee and they were talking about how Japanese people aren’t going abroad, so domestic airlines are empty. Typically, it’s Japanese people who take those airlines, while foreigners take airlines from their home country.
It’s really crazy that a lot of the time you don’t have the opportunity to voice things like that, but the committees do so and work toward resolving those issues through advocacy papers and other things.
What would you tell future Bishop Scholars?
This is the best opportunity in Japan for a college student, one you never imagined you’d get. That’s what it was for me; I never expected that I would have the opportunity to do this during my time in Japan, and I never planned around it when I originally booked my study abroad. You can’t plan on where you’re going. I would say to all the Bishop Scholars who come after me, I’m sure you probably feel the same, so just roll with it and see where this opportunity takes you.
Trani completed his internship with the ACCJ in late April and is expected to begin working in Japan in mid-June, after having graduated from Hofstra University in late May.
April 2024 Event Highlights
View a collection of photos from the ACCJ’s April 2024 events.
ACCJ President Victor Osumi, CEO Forum members, Young Professionals Forum leaders, and speakers from the Learning from Executives event after the CEO Forum x YPF Collaboration event at the Otemachi One Tower on April 24.
The American Chamber of Commerce in Japan hosted a wide variety of events in April. Among these were:
- Navigating Cybersecurity Staffing Challenges in Japan
- It’s a Small World: A Multinational Networking Event
- Marketing Teams that Drive Transformation: Lessons from Panasonic Connect
- Ten Points on Business Dinner with Jim Weisser
- Earth Day 2024
- ACCJ/NAJAS Business Leaders Series with Steve Briggs, Kraft Heinz president for Northeast Asia
- Law Enforcement and Foreign Residents: A Look at the Tokyo Bar Association Study
- Learning from Executives Series (CEO Forum x YPF Collaboration Event)
Here are some of our favorite highlights.
ISA 600 Explained
The International Federation of Accountants has updated the International Standard on Auditing 600 (ISA 600), and the revised standard went into effect on December 15, 2023. What are the advantages and disadvantages of the revisions when it comes to group audits?
What are the pros and cons of the latest update to the International Standard on Auditing?
The International Federation of Accountants has updated the International Standard on Auditing 600 (ISA 600), and the revised standard went into effect on December 15, 2023. What are the advantages and disadvantages of the revisions when it comes to group audits?
Firstly, a group audit refers to an audit of consolidated financial statements where the parent company and its subsidiaries are viewed as a single economic entity or “group.” It is often conducted by the parent company’s auditor, known as the group auditor, and encompasses the financial information of the parent company and its subsidiaries. As the group auditor will provide an opinion on the consolidated financial statements, it is essential that they are satisfied with the work completed by component auditors or local audit teams.
The group audit is necessary because businesses often operate through different legal entities and across different geographical locations. For an accurate view of the group’s financial situation, auditors must assess financial statements at both the parent and subsidiary levels and follow the standards established by the relevant auditing bodies.
International Standard on Auditing 600 (ISA 600) (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) deals with special considerations that apply to a group audit, including when component auditors are involved. The standard is effective for audits of group financial statements for periods beginning on or after December 15, 2023, and aligns with recently revised standards which emphasize the assessment of risk, including ISQM1 and ISA 220 (Revised) and ISA 315 (Revised 2019). There is increased emphasis on the responsibilities of auditors relating to professional skepticism, planning and performing a group audit, two-way communications between the group auditor and component auditors, and documentation.
The changes are intended to:
- Encourage proactive management of quality at the group engagement and the component levels
- Keep the standard fit for purpose in a wide range of circumstances and in a developing environment
- Reinforce the need for robust communication and interactions during the group audit
- Foster an appropriately independent, challenging, and skeptical mindset on the part of the auditor
ISA 600 (Revised) sets out the responsibilities of the group auditor for providing the audit opinion on the group financial statements, including components such as subsidiaries, associates, joint ventures, and non-controller entities.
Advantages
Viewed from the component auditor’s side, relying on a variety of useful information regarding management’s rationale from the group auditor can reduce the risk of material misstatement and detection risk when conducting audit components.
One significant change is the introduction of the risk-based approach as a framework for planning and performing a group audit engagement. This means more focus on identifying and assessing the risks of material misstatement and performing further audit procedures in response to the assessed risks. The group auditor develops initial expectations and, based on these, may involve component auditors in risk assessment procedures, as these individuals may have direct knowledge and experience with the entities or business units that could be helpful in understanding the activities and related risks.
According to the standard, the group engagement partner may take responsibility for directing and supervising component auditors in different ways, such as:
- Discussing identified and assessed risks, issues, findings, and conclusions
- Participating in the closing or other key meetings between the component auditors and component management
The discussion between the group auditors and component auditors provides the opportunity to understand how and where the entity’s financial statements may be susceptible to material misstatement due to fraud. This is done by considering external and internal factors affecting the group that may create an incentive or pressure for group management, component management, or others to commit fraud. The discussion between group engagement partners and other key management team members also provides a chance to identify risks of material misstatement relevant to components where there may be impediments to the exercise of professional skepticism. In other words, the involvement of the group auditor enhances the effectiveness of component auditors.
ISA 600 (Revised) strengthens and clarifies the importance of two-way communications between the group auditor and component auditors as well as various aspects of the group auditor’s interaction with component auditors. However, there are many types of restrictions that may exist, such as on access to people and information (e.g., component management, those charged with governance of component, component auditors) as well as audit documentation.
Viewed from the group auditor’s side, the revised standard provides guidance on ways to overcome restrictions. The group auditor may be able to visit the location of the component auditor or meet with the component auditor to review their audit documentation. They may also be able to review the relevant audit documentation remotely when not prohibited by law or regulation and request that the component auditor prepare and provide a memorandum that addresses the relevant information.
Disadvantages
The application of ISA 600 (Revised) may also bring some downsides.
According to the requirements, the role of group auditor increases, as does the workload of component auditors. The group auditor may involve component auditors to provide information or perform audit work to fulfill the requirements of the standard.
Component auditors can be—and often are—involved in all phases of the group audit. The group auditor shall take responsibility for the nature, timing, and extent of further audit procedures to be performed, including determining the components at which to perform further audit procedures. This responsibility is demonstrated through meeting the requirements of the consolidation process and considerations when component auditors are involved.
Communication
ISA 600 (Revised) includes enhanced documentation requirements and application material to emphasize the link to the requirements of ISA 230 and other relevant ISAs. The required documentation includes:
Basis for the group auditor’s determination of components
Basis for the group auditor’s determination of the competence and capabilities of component auditors
Documentation of the direction and supervision of component auditors and the review of the work
Additional considerations when access to audit documentation is restricted
The strength and clarity of the importance of two-way communications between the group auditor and component auditors in the standard are likely to result in more work for the group engagement team. This is particularly true regarding the enhanced responsibilities in evaluating the component auditor’s communication and the adequacy of their work, the sufficiency and appropriateness of audit evidence obtained, and communicating with group management and those charged with governance of the group. References in the standard to the definition of “engagement team” includes the group auditor and component auditors.
As mentioned, the group auditor will involve component auditors and clarify the instructions for the risk-assessment procedures. However, in practice, there are some instructions from the group auditor that may not be suitable for component auditors, and this can lead to some aspects of the instructions not being effective.
These changes to the standard will take time to implement, comply with, and complete for both the group auditor component auditor sides.
Generally, both sides should make sure that they understand the new requirements and that audit methodologies are updated accordingly and in a timely manner. They should also reassess the models being used for considering component materiality and aggregation risk to determine whether they are still appropriate.
For more information, please contact Grant Thornton Japan at info@jp.gt.com or visit www.grantthornton.jp/en
Assisting Business
With an emphasis on teamwork the ACCJ Sales Support Alliance supercharges the chamber experience by bringing together members across industries to share connections, knowledge, and help one another build business success.
The Sales Support Alliance supercharges ACCJ members’ networking opportunities with monthly meetings and unselfish teamwork.
In many sports, one player basks in all the glory of a score while another enjoys lesser accolades for their assist. Ice hockey spreads the wealth a bit more with a secondary assist—the pass before the pass that leads to the goal—and all three players earn a point in their stats.
This emphasis on teamwork is the same idea that forms the foundation of the American Chamber of Commerce in Japan (ACCJ) Sales Support Alliance (SSA). Founded in 2019 by Sales Development Committee Co-Chairs Eric Wedemeyer and Kjell Yadon, the SSA is designed to add value for committee members and guests by setting up the assists that lead to a business win.
Wedemeyer and Yadon describe their committee as horizontal rather than vertical as it serves ACCJ members across industries and company types. This broad reach amplifies the network effects and helps the SSA “supercharge everybody’s ACCJ experience.”
As an organization built on community and networking, the lifeblood of the ACCJ is serving up opportunities to its members. The SSA infuses this with the unselfish teamwork that leads to long-term success. Members introduce each other to new contacts in the hope that those fellow members will find business, even if there is no direct benefit to themselves—the pass before the pass that leads to the goal.
“In a networking situation, when you meet a new person at an ACCJ event, someone you know could very well be of use to the person you’re talking to, it becomes a richer experience if seen as an opportunity to introduce not just yourself, but also your contacts,” explained Wedemeyer. “If that results in a valuable business connection between two other people, that’s great. It’s a nice thing to do, it feels good, and the introduction will get paid back over time.”
J.R. Best, an SSA regular, found himself on the receiving end of an assist a couple of years ago. “David Clement connected me with the athletic director at [the American School in Japan],” said the co-founder of Hawaii-based Sports Camp of America (SCOA). “His daughter ended up being a junior counselor at SCOA’s summer camp, and she was fantastic.”
“In a networking situation, when you meet a new person at an ACCJ event, someone you know could very well be of use to the person you’re talking to, it becomes a richer experience if seen as an opportunity to introduce not just yourself, but also your contacts.”
SSA meetings regularly feature alternating small-group sessions and large-group discussions where attendees refine their self-introductions, sharpen their listening skills, and practice introducing other members to the group. This creates a feedback loop that allows attendees to reflect on their message and understand if their main point is coming across. For Japanese salespeople, it’s a chance to build confidence presenting in English in a comfortable, supportive, informal setting.
“By explaining my business to the people around me, I am able to look at myself objectively—what I am doing now, what I want to do, whether I am overreaching,” said Naoki Hioka, president of translation and localization company MedicaLingual, Inc. Hioka feels he has been able to identify issues and find the best path forward for his business thanks to SSA meetings.
Another feature of SSA meetings is the “Expert Corner,” where participants share knowledge and tips on a sales topic of interest. Recent topics have included using generative AI as a sales tool and post-Covid changes in lead generation strategies. Because SSA members represent so many different industries and job descriptions, these discussions generate an illuminating range of perspectives.
The name Sales Support Alliance might lead some to assume that only salespeople stand to benefit from the meetings, but Wedemeyer and Yadon stress that this is far from the truth. More than half of attendees are not in formal sales roles.
“Everyone is selling something,” said Yadon. “Many of our attendees are running their own companies or are responsible for promoting a company function internally. Sales skills always come in handy.”
Kreston ProWorks Business Development Manager Luc Swamika shared how he has benefitted from an introduction made at an SSA meeting. “Through the program, we forged a strong, lasting partnership and developed a mutually beneficial referral system that’s driving value for both our companies. Most importantly, we’ve built a relationship of trust and deep understanding with a valued partner.”
“SSA meetings regularly feature alternating small-group sessions and large-group discussions where attendees refine their self-introductions, sharpen their listening skills, and practice introducing other members to the group. ”
SSA meetings are open to non-committee-members, and usually half of attendees are first-timers. But once in the door, many get hooked and thrive on repeat attendance, building relationships over time.
Wedemeyer and Yadon describe the SSA as a momentum machine. Month to month, the results may look piecemeal, with people coming in with different sales targets and networking expectations. But over time, the SSA’s connections multiply as members get to know one another and build the trust necessary to make new introductions with confidence.
That momentum changed a bit during the coronavirus pandemic. Like most groups, productivity waned as meetings were forced to go virtual. Now, the Sales Development Committee is rebuilding the SSA as the in-person gathering it was before Covid-19. With more and more members joining, setting up the assist and scoring the winning goal is within everyone’s reach.
The next SSA meeting will take place on May 22 in the American Room at Cambridge Innovation Center. If you enjoy the personal relationship building of business, or just want to get together to chat, the SSA is waiting for you.
March 2024 Event Highlights
View a collection of photos from the ACCJ’s March 2024 events.
ACCJ leaders and inspirational mentors Sarah Bader, Ginger Griggs, Elizabeth Handover, Deborah Hayden, Azusa Koike, Mari Matthews, and Catherine Ohura shared lessons on career-building and more at an event honoring International Women’s Day on March 13 event at Tokyo American Club.
The American Chamber of Commerce in Japan hosted a wide variety of events in March. Among these were:
- The Evolving Healthcare Landscape: Trends in the Use of Medicines and Customer Engagement in Japan
- Executive Perspectives on the Post-Covid Workplace
- Japan Fintech Festival x ACCJ FinTech Panel
- Miracles through Partnership: Improving Japanese Healthcare through Collaboration and Entrepreneurship
- Speed Mentoring to Celebrate International Women’s Day
- How Can Successful M&A Unlock the Potential of Companies in Japan?
- The Likability Advantage
- The Future of Television: Streaming and Disruption in the Media Industry
- Cybersecurity Lessons from Ukraine
- Business Strategy Series: From Nada to the World: Learning from Hakutsuru Shuzo's Overseas Strategy
Here are some of our favorite highlights.
February 2024 Event Highlights
View a collection of photos from the ACCJ’s February 2024 events.
The Women in Business and Kansai Diversity & Inclusion Committees held the WIB Learn from Examples Series: Unveiling the Power of DEI in Corporate Success at Nippon Boehringer Ingelheim (NBI) Co., Ltd.’s Kobe Pharma Research Institute on February 15.
The American Chamber of Commerce in Japan a hosted wide variety of events in February 2024. Among these were:
- From Import Niche to Mainstream Hit: How Haribo Goldbears Cracked Japan’s Convenience Stores and Reached No. 1
- Entrepreneurs vs. Corporate Giants: A Look Ahead at Japan’s Economic Future
- WIB Learn from Examples Series: Unveiling the Power of DEI in Corporate Success at Nippon Boehringer Ingelheim Co., Ltd.
- Unlocking Sustainable Futures: A Deep Dive into Carbon Accounting
- Fireside Chat with Hiroyuki Otsuka, founder and chief executive officer of Newton Investment Partners (former deputy head of Carlyle Japan)
- Chubu Children’s Fund Charity Lunch
- Regulatory Innovation in the Cloud: Accelerating Critical Therapies to Citizens of the World
- Kansai CEO Series: Canvas to Corporation: Unleashing the Power of Art in Business
Here are some of our favorite highlights.
Losing the Lag
Rob Claar, CEO and founder of healthcare investment, development, and commercialization platform HekaBio joins us to discuss how overseas healthcare companies can gain regulatory approval in Japan and put their innovations in the hands of Japanese doctors and patients.
Rob Claar’s quest to bring lifesaving innovations to Japan
Rob Claar became interested in healthcare at an early age. Watching his father work on the government-program side of insurance and talking to him about the industry, Claar came to understand some of the issues surrounding public and private systems. But as he entered Yale University to study art history, he did not envision a career helping healthcare innovators from the United States and elsewhere bring their lifesaving drugs and devices to Japan. A twist of fate, however, led Claar to become a champion of Japanese doctors, working to connect them with international peers and innovation.
Ahead of his presentation at a March 13 luncheon hosted by the American Chamber of Commerce in Japan Independent Business and Healthcare Committees, the HekaBio K.K. founder shares his journey from childhood in Detroit to Tokyo, where he helps companies gain regulatory approval for healthcare innovations.
An extended version of this interview is available on The ACCJ Journal Podcast or by streaming from the audio player above.
How did you get involved in healthcare innovation in Japan?
Claar: I came to Japan basically out of cultural interest. This was in 1987. I was 23, had just graduated from college, and decided that I wanted to see Asia. I was interested in the culture, art, and language, particularly of Japan.
I forced myself not to come to Tokyo to begin with. I thought Tokyo would be an easier place to survive with English, and I wanted to push myself to learn Japanese as quickly as possible. So, I landed in Nagoya and immersed myself in studying the language. I thought I was going to be good enough at Japanese after one year to move on to my next destination and call my Japan experience a success. That didn’t happen.
I was studying Japanese at the YWCA in Nagoya, and it was going very well. But, as you know, it takes a lot of time. After one year, I was still not where I wanted to be. I gave myself another half a year, and I started really enjoying being in Japan and speaking Japanese.
Then I got a job as a Japanese-to-English translator for Brother Industries and moved into their dormitory in Nagoya. They were setting up manufacturing operations in Malaysia and elsewhere, and I was translating manufacturing and line instructions. That was interesting and a good experience but, once I got good enough at Japanese, I decided it was time to either go home to America and start the rest of my academic career or go up to Tokyo and see what I could do. I decided to move to Tokyo and was lucky enough to get hired by a think tank called Sanwa Soken.
They were essentially a research arm for the government. The day after I joined, a huge project came in from the Ministry of Health. I was put on that project and got to learn all about the healthcare system. I traveled around Japan, met doctors, and began to understand how serious they are about patient care. I really started to fall in love with the idea of the Japanese healthcare system [and] how a national single-payer system can work wonderfully.
What did you discover that led you to want to help innovators?
Claar: As I met doctors, I began to understand their struggles. They wanted to be considered among their international peers as studying, researching, and being able to speak in an international forum on the greatest innovations worldwide. But their frustration was that their research was one generation too late in many areas. I became aware of the innovation lag and wanted to see what I could do to make an impact.
I realized that Japanese doctors struggle to get their hands on up-to-date innovations from around the world. There’s a lot of talk about drug lag and loss, and the same thing is happening on the device side, where innovations that are getting approved in the United States and Europe are not making it to Japan.
There are a few reasons for this, but I thought that if I could focus on how to help these very sincere, wonderful doctors in Japan, then that was going to be a way for me to potentially make a career here and have an impact on society.
So, I left Sanwa Soken to start my own company, Junicon. We would go around and interview doctors, and we found a way to sell those results to large pharmaceutical and medical device companies in Japan, Europe, and the United States.
I also started spending my spare time helping doctors translate their papers from Japanese into English so that they were better able to speak at international conferences. It was a minor thing, but being helpful to Japanese doctors is a way that I got into things and maintained those relationships.
What’s stopping overseas companies from entering the Japanese market?
Claar: Small companies are doing more and more of the true innovation around the world, and they have no bandwidth to start thinking about Japan. So, how do we get more innovative companies to think about Japan? That’s what we’re really focused on at HekaBio, and that’s my personal interest.
Japan is far away, and these companies don’t really know what goes on here. They have this outdated image that Japan is very hard to get into and the regulatory process is super opaque. They’re never going to get regulatory approval on their own, or they’re never going to form the right commercial relationship. I think this is a really outdated image of Japan that many companies have. We’re trying to help solve that. Our doctors and their patients are waiting for these innovations. We want to see if we can bring them in and arrange the capital.
The Japanese government is doing a great job right now with new programs that they’re introducing. They’re making clinical trials easier to get started and operate in Japan, both on the drug and the device sides. They’re welcoming first-in-human studies to be done in Japan, which has not been the case until recently. They’ve eliminated the requirement to have a Japanese principal investigator on international studies. And they’re also offering pricing incentives for programs that get submitted in Japan within a certain number of days or months of the submission in the United States. In some cases, we’ve had an approval in Japan before the United States, even though we started at the same time.
How many companies have you helped get regulatory approvals in Japan?
Claar: More than 50, including at our former subsidiary unit, which was a clinical research organization called Vorpal Technologies. We’re very proud to have been involved in getting those launched and into the market.
What is that process like?
Claar: At the beginning, we do market research. We want to confirm that the doctors who we want to be behind the program are really behind it. We’ll find out who has done the presentations and who has published how many papers in that area. Who’s in the medical society? Who’s on the board? All these different things. The worst thing we could do is partner with an overseas company that doesn’t have the health economics and an appreciation for the Japan system in mind.
Once we do that, and we understand the strength of the clinical data that the company has produced overseas—and whether the Pharmaceuticals and Medical Devices Agency (PMDA) will accept it as valid in Japan—then we start talking with the PMDA to understand the regulatory process [for the specific innovation]. Once we get buy-in from the regulators, then we go forward with the clinical trial. If no in-Japan clinical trial is required, which is often the case for devices, then we can just go forward to the submission and review period, which typically takes 12 months.
Sounds straightforward. Is there something else holding back innovation from overseas?
Claar: What remains is the question of reimbursement price. If companies have no idea until the very end what the reimbursement price is going to be, then it becomes difficult for them to want to invest the time and money. So, that’s part of the upfront market research that we do. What does a comparative product look like in terms of reimbursement? What can you expect, based on your experience in overseas markets, in terms of the ability for the Japanese health insurance system to pay?
If there’s no comparative product, if it’s a new category, then you submit your cost accounting information. The PMDA really wants to see everything in a very transparent way.
What we would like to see in Japan is more clarity. New categories, where nobody knows what the pricing is going to be, is a situation in the market that most people have to deal with. I think that if the government were able to give better guidelines up front, in a consultative process, and you could go to the Ministry of Health, Labour and Welfare and tell them what you are thinking about, more of the issues around the drug and device lag and loss could be solved. But they won’t give you anything in terms of a response with any responsibility associated with it. They’ll listen and tell you yes or no, but their answer is not a promise.
Japan’s healthcare system is the best in the world. I fully believe that. And we all have the responsibility to make sure that Japan’s great healthcare system can survive. We know that the government is fearful of healthcare costs growing. They’re looking for ways to cut the costs of [things such as] long-selling drugs, devices, and in vitro diagnostic tests. But we would like to encourage them to think more long term about some of the things that can be done in terms of digital health solutions for early diagnosis of particular conditions.
What opportunities do you see for ACCJ member companies? Can they replicate the success you’ve had?
Claar: Absolutely. And I hope so. I think we’ve come up with a great business model, and we’re happy for anyone to copy it, because we think it really works for bringing innovations into Japan.
HekaBio is focused, for the most part, on pharmaceutical and device interventions for acute illnesses, hospital treatments, and serious diseases. What we’re not working on are things such as chronic diseases, which are a huge burden on the healthcare system. [Monitoring] chronic diseases with at-home digital health [tech] would also work in our business model.
If somebody wanted to exactly copy our model and go right into exactly what HekaBio is doing in serious acute disease identification and treatment drugs and devices, then be my guest. We’ll be happy to have them [replicate] our business model with no worry.
But there are so many opportunities. For example, if they want to do something different, there are many new molecular entities, particularly for rare diseases. The PMDA has a list showing the status of those that are [only] available elsewhere. So, there’s no development risk, really, because you know that it works. It’s been approved in either the European Union or the United States, but it’s not available in Japan yet. Take one of those for a rare disease, buy the rights for Japan, and get it developed. You wouldn’t even have to build a big organization with your own infrastructure here. You could be a one-person company, get the rights, and then have a contract research organization do the clinical trial and be the in-country clinical caretaker on your behalf. Get it all through and then sell it to a pharmaceutical company once it’s done. That’s another business that could be not only very lucrative, but interesting and of societal benefit for Japan.
Internal Controls, Sustainability, and IFRS
With two new sustainability standards in effect for annual reporting as of January 1, 2024, companies may need to reassess their internal controls to ensure they are compliant with disclosure requirements.
How two new sustainability standards impact reporting and disclosure, and what companies should consider to ensure they are compliant.
On June 26, 2023, the International Sustainability Standards Board (ISSB) unveiled its first-ever standards for sustainability disclosure. Designated International Financial Reporting Standards (IFRS) S1 and S2, they focus on general sustainability- and climate-related disclosures.
As demand grows from investors, regulators, customers, and other stakeholders for companies to disclose their sustainability practices and impact on the environment and society, these standards could help with the assessment of a company’s long-term sustainability, its ability to manage risks and opportunities, and to compare companies across industries.
IFRS S1, General Requirements for Disclosures of Sustainability-related Financial Information, requires companies to disclose financial information about their sustainability-related risks and opportunities that is useful to primary users of general-purpose financial reports in making decisions related to providing resources to the company. IFRS S2, Climate-related Disclosures, requires companies to disclose the same related to climate.
As this information could affect the company’s cash flow, access to financing, or cost of capital, the requirement for reporting and transparency might influence strategy, objectives, and decision-making processes.
With these new sustainability standards taking effect for annual reporting periods beginning on or after January 1, 2024, companies should reassess their systems of internal controls to comply with the disclosure requirements.
The table below shows internal controls that companies may need to consider.
| Internal Control Areas | Points to Consider |
|---|---|
| Data collection, verification, and management | · Accuracy and reliability of sustainability data for reporting · Manage the increased volume of sustainability data |
| Risk assessment and management | · Controls and processes to identify, assess, and manage risks and opportunities · Consistency with its strategic decisions and operations |
| Technology infrastructure | · Invest in new technology and IT controls |
| Training and awareness | · Invest in employee training and awareness programs · Policies and procedures to evaluate competencies |
| Governance | · Establish authority and responsibility |
| Integration with financial reporting | · Communication and monitoring from management and those charged with governance · Facilitate external audit |
| Stakeholder engagement | · Inclusion of processes for engaging with stakeholders |
Data Collection, Verification, and Management
The IFRS standards and reporting promote transparency and accountability regarding sustainability- and climate-related risks and opportunities. By requiring the collection and validation of data, a company can ensure accuracy and reliability for reporting.
Doing so will require robust internal controls similar to those used in financial reporting, and internal controls may need to be updated to manage the storage, access, and protection of a larger volume of data. As sustainability reporting is often required by regulatory bodies or industry standards, integrating sustainability metrics into internal controls helps ensure compliance and reduces the risk of penalties and legal issues.
Risk Assessment and Management
As sustainability reporting involves identifying, assessing, prioritizing, and monitoring risks and opportunities related to sustainability and climate, internal controls must include processes to effectively assess, manage, and mitigate risks. It is also key to ensure that those charged with governance have considered trade-offs associated with the risks and opportunities.
Sustainability reporting also highlights long-term sustainability goals and opportunities. Therefore, aligning internal controls with these goals can ensure that strategic decisions and operations are consistent with sustainability objectives.
Technology Infrastructure
Companies may need to invest in new technology and IT controls to manage sustainability data, especially if they are transitioning to digital reporting platforms. Information systems should be able to capture internal and external sources of data related to sustainability and climate risks and opportunities.
Training and Awareness
Companies may need to invest in employee training and awareness programs to ensure that all personnel understand the sustainability goals and the importance of reporting, and can carry out their internal control responsibilities. Companies may need to monitor the contributions of employees to these objectives. Processes may include policies to determine whether appropriate skills and competencies are available or will be developed to oversee strategies designed to respond to risks and opportunities related to sustainability and climate.
Governance
Sustainability reporting may necessitate changes in corporate governance to ensure that sustainability considerations are integrated into strategy and decision-making processes. Internal controls should reflect shifts in governance by having a governance body (which may include a board, committee, or equivalent) or individuals responsible for oversight of risks and opportunities related to sustainability and climate. Companies should also consider updating policies and procedures to reflect the responsibilities of those charged with governance and management.
Integration with Financial Reporting
Aligning the processes for sustainability and financial reporting requires careful coordination and internal controls to ensure that both are accurate and consistent. Policies and processes should consider how, and how often, those charged with governance and management are informed about sustainability- and climate-related risks and opportunities and decisions on significant transactions. Companies may also need to establish controls and policies to facilitate external audits of their sustainability disclosures to ensure that the data, processes, metrics, and targets adhere to reporting standards.
Stakeholder Engagement
Internal controls may need adjusting to address the broader set of stakeholders associated with sustainability reporting compared with traditional financial reporting. Sustainability reporting can lead to increased stakeholder scrutiny and engagement, and effective internal controls can help manage these interactions and ensure that stakeholder concerns are addressed, and the company’s reputation maintained. Communication methods should take into considering the timing, audience, and nature of the engagement.
As the ISSB is currently developing these sustainability standards, we expect that additional standards might be promulgated to address the needs of the stakeholders. Regular reviews and updates of internal controls, policies, and procedures are necessary to adapt to changing sustainability reporting standards and evolving practices.
Companies focusing on sustainability could drive innovations and efficiencies in their processes that lead to cost reductions. Internal controls can monitor and optimize these changes to ensure that they are implemented effectively and align with the company’s strategies, objectives, and decision-making processes.
For more information, please contact Grant Thornton Japan at info@jp.gt.com or visit www.grantthornton.jp/en
2024 ACCJ Shinnenkai
ACCJ members and guests ushered in the Year of the Dragon in the Imperial Hotel’s Hikari Room.
Members and guests ushered in the Year of the Dragon in the Imperial Hotel’s Hikari Room.
Photos by Miki Kawaguchi/LIFE.14
From left: ACCJ President Victor Osumi, Deputy Chief Mission Raymond Greene, Chairman of Japan–US Business Council and Vice-Chair of Keidanren Jun Sawada, and ACCJ Executive Director Laura Younger.
The American Chamber of Commerce in Japan (ACCJ) held its second in-person shinnenkai since the start of the Covid-19 pandemic, ushering in the Year of the Dragon at the Imperial Hotel on January 26. Some 270 guests joined the ACCJ to kick off the new year with the kagami-biraki—the ceremonial cracking open of a sake barrel—followed by networking with fellow members, friends, and officials from the Japanese and US governments.
ACCJ President Victor Osumi gave opening remarks and shared his vision of fostering partnership, embracing progress, and bridging the future with excellence. He then led the kagami-biraki alongside ACCJ Executive Director Laura Younger, US Embassy Deputy Chief of Mission Raymond Greene, and Jun Sawada, chairman of the Japan–US Business Council and vice-chair of Keidanren (the Japanese Business Federation).
As we continue our celebrations to mark the ACCJ’s 75th anniversary, we look forward to working with our members and partners to advance US-Japan relations and make a positive impact on the international business environment in Japan.
