Are there any restaurant professionals who are confused about the difference between the SDGs and ESGs as they are trying to address the SDGs as a company? It is important to clarify the difference between the SDGs and ESGs if you want to create long-term business goals.

SDGs and ESG are terms that are used as indicators for companies to be aware of their contributions to society; while SDGs are universal goals, ESG are used in the sense of processes that companies can put into practice.

This article will explain the difference between SDGs and ESGs in an easy-to-understand manner and discuss the benefits and cautions of each.By understanding the difference between the SDGs and ESGs, restaurants can appropriately guide the actions they should take.

A simple explanation of the difference between the SDGs and ESG

The SDGs and ESG are both terms created to address social issues. Let’s understand the difference between the two and what actions we should take as a restaurant.

SDGs: Goals to solve social problems defined worldwide

The SDGs are goals set by the United Nations as the main body to eliminate social problems occurring in the world.The 17 items are.They are divided into 17 categories, including poverty and measures to combat climate change, each of which is a common global goal to be resolved by 2030.

In recent years, the Japanese government has continued to promote the SDGs, and in 2023, the government announced a policy to achieve “Green Transformation (GX),” a shift from the use of fossil fuels to the use of clean energy.

The term “sustainability,” which is often used in the same context as the SDGs, has the same meaning of considering social issues over the long term, but the difference is that it does not have a set deadline.

ESG: The process companies follow to achieve the SDGs

ESG is a term created by companies to solve social problems on their own initiative. Specifically, the term ESG is used to describe the processes that each company undertakes to achieve the SDGs.

ESG is measured by the following three activities

• Environment: Solving environmental problems such as natural disasters and global warming
• Social: Work style reform and gender support
• Governance: corporate anti-fraud and information disclosure

In recent years, “ESG investing,” which adds ESG positivity to investment decisions, has been spreading. This is because companies that are moving toward solutions to social issues can be judged to sustain healthy activities and can be expected to generate long-term returns.

If a company takes ESG into consideration, it will not only be able to create a working environment where employees want to continue working, but it will also become the company of choice for investors.

Advantages of Corporate Commitment to the SDGs/ESGs

If companies engage in SDG/ESG initiatives, they can expect to improve their working environment and increase profits. Restaurants can also expect to continue socially meaningful activities while using food as a theme.

Can increase the value of the company

In recent years, “non-financial information,” in addition to financial information as an indicator for investment decisions, has been enhancing the evaluation of companies. Non-financial information includes the following items. Non-financial information mainly includes the following items.

• Commitment to Sustainability
• Management system for information assets by all employees
• Management Philosophy and Vision
• Intangible assets (brands, patents, etc.)

Disclosure of such non-financial information is an important means of strengthening corporate credibility, transparency, and sustainability. In Japan, the disclosure of non-financial information by listed companies will be mandatory starting in FY2023.

If a company’s value improves, it will be easier to attract funds from investors who pay attention to non-financial information, which will lead to business stability. As a restaurant, we would like to improve the value of our restaurant by communicating our sustainable efforts.

Create an opportunity to generate new products and services

To achieve the goals of the SDGs, innovative activities, such as the development of products and services that do not burden the environment, are necessary. When considering a new business venture as a restaurant, focusing on contribution to the SDGs may lead to the development of unprecedented ideas.

In fact, in recent years, new services have been developed to reduce food loss in restaurants, such as an app notification service that alerts customers when food loss is about to occur from a restaurant and invites them to make purchases.

If we can create products and new services to achieve the SDGs, we will be able to attract more attention from society and expect to expand sales.

Be more likely to be chosen by your business partners

Some companies carefully select their suppliers in order to demonstrate their social contribution to the world. For example, some companies have established a policy of integrating only suppliers that are proactive in their environmental efforts into their supply chain, which is the flow of product supply.

Failure to demonstrate commitment to environmental considerations may result in a company not being selected as a partner in the future. It is one way to show your commitment to ESG in order to continue sustainable operations.

Create a comfortable work environment for employees.

ESG includes not only consideration for the environment, but also reform of work styles and resolution of gender issues, etc. By implementing ESG-conscious initiatives, companies can not only improve employee satisfaction, but also create a company where employees can work for a long time.

In addition, the company will be able to appeal to investors and business partners by appropriately disclosing information and preventing fraud. In addition, the realization of a sound management system will help to retain excellent human resourcesand promote the company’s growth.

Points to keep in mind when companies address the SDGs and ESGs

Even if a company wants to address the SDGs/ESGs, it may not be able to do so immediately due to operational funding and other factors.It is important to understand the points to keep in mind in order to change the organizational structure to one that is aware of the SDGs and ESGs.

Short-term profits are not expected.

Initiatives based on the SDGs/ESGs are not something that will yield immediate benefits. The reason is that many of them are expected to be effective over the long term, such as in environmental considerations.

In particular, it is difficult to see immediate benefits from human resources initiatives, such as reforms in work styles. It is important to think of corporate management in the long run, while gradually earning the trust of the world, including investors and business partners.

Efforts by large companies are likely to attract attention.

Large companies are using their financial resources to implement ESG initiatives to achieve the SDGs, and their websites are mainly used to promote their ESG initiatives to investors, making them more likely to attract attention than small and medium-sized companies.

Nevertheless, even SMEs and start-ups can benefit from promoting their efforts to solve social problems. For example, if they create innovative products or services that do not exist in the world, they may attract attention from investors and improve their ability to raise funds.

In some cases, financial resources are required.

Changing a company’s form in line with ESG may require funds. For example, costs for new benefits or capital expenditures to increase employee satisfaction. Development costs are also incurred in the process of considering new sustainable products and services. Starting with a small-scale initiative would reduce management risk.

Not to be mistaken for greenwashing.

Greenwashing is a marketing technique that “pretends to be environmentally conscious despite initiatives that do not correspond to actual conditions”.

Even if unintentional, if ESG initiatives are communicated without actual results, they may be perceived as greenwashing by consumers. Once misinterpreted, not only will the initiative fail, but the image of the company and its brand may be severely damaged, and in some cases, it may even lead to a lawsuit.

In order to avoid being misunderstood as greenwashing, it is necessary to disclose specific objectives and results, and obtain certification from a third-party organization.

[Related Articles] How to Avoid Being Mistaken for Greenwashing? Five Points to Keep in Mind.

SDG and ESG initiatives that restaurants can undertake

Many of the environmental and social issues that are occurring in the world are related to restaurants, including food loss. In order to find out what each restaurant can do, we will introduce SDG and ESG initiatives that restaurants can take.

Reduce food loss

According to statistics released by the Ministry of Agriculture, Forestry and Fisheries, Japan’s total food loss in 2021 was 5.24 million tons. Of this amount, food loss in the restaurant industry amounted to 800,000 tons.

In order to solve food loss, it is important for each restaurant to continue to implement measures to prevent foodstuffs from being wasted. Efforts should start with what can be done without a relatively large budget, such as measures to prevent leftover food and the introduction of locally produced and consumed foods.

[Related Article] 8 Ideas for Reducing Food Loss in the World that Restaurants Should Practice

Select Ethical Products

Ethical means “ethical” or “moral” in Japanese. In other words, it is a social norm that is not legally binding, a sensible way of thinking and acting that many people consider to be a social model. For example, “fair trade products,” in which fair prices are paid to producers working in developing countries are ethical products. Coffee and chocolate are examples of fair trade ingredients.

[Related Articles]What is the appeal of restaurants that support fair trade?

In addition to foodstuffs, it is also recommended to choose products that are conscious of resource recycling, such as recyclable tablecloths. When purchasing new or renewing store fixtures, it is a good idea to consider choosing ethical products such as these.

[Related article] “Recycling of tablecloths” is realized by recycling tablecloths discarded by the company. New brand “eterble” released.

Create a good working environment for employees

By creating a comfortable working environment for employees, the company will be able to eliminate staff shortages by stimulating recruitment. Furthermore, more stable management and store expansion can be expected as excellent human resources are retained.

Activities that lead to employee satisfaction include transparent personnel evaluations, anti-harassment measures, and skill improvement training. It is important for restaurants to create an environment that allows employees to be actively involved in menu development and other efforts to keep them motivated and working positively.

Examples of SDG/ESG Initiatives by Restaurants

The SDGs and ESG are initiatives that are being adopted by many companies that operate restaurants. Let’s take a look at some examples of SDG/ESG initiatives by restaurants to help you think about what you can do at your own restaurant.

MOS FOOD SERVICES, INC.

MOS FOOD SERVICES, INC. which operates Mos Burger is a company that is developing products to achieve the SDGs. In fact, the company has launched the “Green Burger,” a burger made with vegetables and grains instead of beef, pork, or other animal products.

The company has also adopted an “after-order system,” in which products are made to order, and has a strong awareness of the need to reduce food loss. For takeout, the restaurant offers recyclable salad containers and promotes environmental friendliness.

[Related Articles] Mos Burger, No. 1 in Customer Satisfaction, Introduces Biomass Cutlery Made from Inedible Domestic Rice

ATOM Corporation

ATOM Corporation is a company that operates restaurants such as Steak Miya and Kalubi Taisho. ATOM is working to conserve natural resources by using energy-efficient lighting, water supply, and other equipment in its restaurants.

Another feature of the company is that it promotes a “limited-area regular employee system” as a system for employees to continue working comfortably. The limited-area regular employee system is a system for hiring employees with limited working areas, and has the advantage of meeting the needs of those who wish to continue working in their hometowns.

Understand the difference between SDGs/ESGs and start with what you can do.

The SDGs are a set of shared global goals to solve social problems. ESG, on the other hand, refers to the processes companies undertake to achieve the SDGs.

Understanding the difference between SDGs/ESGs and ESGs will help you make the appropriate appeal to investors and customers as a company.Nevertheless, efforts to solve social problems are unlikely to yield results unless they are managed over the long term.

In addition, as consumer awareness grows, the eyes on such initiatives will also become more demanding. As mentioned in the main text, it is also important to be careful that your efforts are not misunderstood as greenwashing. It is important to remember that take social issues seriously.

[Related article] How to avoid being misunderstood as greenwashing?

For restaurants that want to become more aware of the SDGs and ESG issues, let’s start with what we can do directly, one by one, such as strengthening the system to reduce food loss.
[Related article] https://www.table-source.jp/column/foodloss-8ideas/

[Reference site] Ministry of Foreign Affairs of Japan What are the SDGs?
[Reference site] Cabinet Office ESG Overview
[Reference site] What is food loss?