Hitachi: A Global Strategy for Social Innovation

TUESDAY JUN 1, 2010

The Challenge

In 2006, Japan-based Hitachi Ltd. committed to a new corporate strategy to stabilize business performance and create a foundation for long-term growth based on its vision of contributing to the solution of fundamental global challenges. The company had grown into 900-plus business units, serving diverse sectors, including power systems, appliances, transportation systems, advanced materials, construction equipment, data centers, and much more. Ultimately, Hitachi wanted to ensure that the new strategy aligned its businesses around the common theme of “social innovation,” and provided a platform for innovation and sustained growth. Hitachi asked BSR to help create a strategy for social innovation that would strengthen commercial performance and contribute to solutions to significant global challenges linked to sustainability.

Our Strategy

We focused our efforts on the need to support Hitachi’s global strategy of increasing revenues outside of Japan, creating a truly global organization, and aligning innovation with society’s current and future needs. To do this, we designed a program that provided Hitachi with a wide range of perspectives on global environmental challenges from both inside and outside the company to sharpen the company’s focus on a key set of priorities in corporate responsibility and social innovation. It comprised three steps:

1. Finding gaps and doubling down on strengths: Given the breadth of Hitachi’s businesses (and corresponding impacts), we used the principle of materiality to highlight and prioritize issues that presented the most significant risks for the business, both at the corporate level and at the business- unit level, across all geographies. This allowed Hitachi to be strategic about addressing significant stakeholder concerns, while staying focused on important business opportunities.
2. Aligning management under one mission: Our business- unit-level assessment generated considerable dialogue among senior executives on issues most relevant to their business units. These conversations helped better define CSR for Hitachi and highlighted opportunities to focus innovation more directly on critical social and environmental needs.
3. Listening to society: BSR worked with Hitachi to design and facilitate two stakeholder engagement events in New York and Brussels, so that Hitachi executives could hear directly from opinion leaders about their expectations of Hitachi to address significant social and environmental challenges.

Our Impact

Hitachi’s global CSR strategy now guides key investment decisions in the company’s business portfolio and helps focus Hitachi’s investments toward social innovation, which aims to fuse social infrastructure with information and communications systems. As a result, Hitachi strengthened its position in social innovation businesses, such as:

• Information and communications systems, including data centers and cloud computing
• Social infrastructure systems, including water, power, and transportation systems
• Smart-grid technology » Lithium-ion battery development

Lower weight and higher efficiency lithium-ion batteries, and the advanced materials innovation required to create them, are needed to make advancements in green mobility and new energy production. Hitachi’s innovations in this area already led to the world’s first commercial hybrid train and batteries for use in hybrid and electric vehicles. The new global CSR strategy enables Hitachi to double down on efforts to deliver similar products and services that will address society’s biggest needs.