3-7. EHS Compliance Strategies for Global Expansion

As globalization advances, one of the major challenges Japanese companies face when establishing and operating overseas bases is EHS (Environment, Health, Safety) compliance. It's not easy to achieve a company-wide unified EHS management system while adapting to the laws, regulations, and cultural backgrounds of each country. However, properly building an EHS compliance strategy for overseas expansion can reduce business risks and increase corporate value.

1. Characteristics of EHS Compliance Abroad

Overseas, laws, regulations, and enforcement systems differ from those in Japan, and the penalties for violations can be severe. For example, violations of regulations set by the U.S. Occupational Safety and Health Administration (OSHA) can result in heavy fines, while the EU's REACH and RoHS directives impose strict standards for chemical substance management. Additionally, societal expectations for workplace safety and respect for human rights are increasing. It's essential not only to comply with laws but also to meet international standards and the CSR requirements of customers.

2. Basic Steps for Building a Strategy

An effective EHS compliance strategy for overseas expansion can be built with the following steps:

• Understand local laws: Research and organize environmental regulations, labor safety laws, and waste disposal regulations in the host country.

• Conduct a gap analysis: Compare your company's EHS management system with the requirements of local laws to identify areas that need improvement.

• Balance global policies with local adaptation: While headquarters sets a unified policy, incorporate flexible responses that align with local culture and regulations.

• Audit and monitor: Conduct regular internal or third-party audits to check compliance status.

• Educate and train staff: Improve EHS literacy through training for local employees.

3. Addressing the Supply Chain

In overseas operations, the EHS compliance of suppliers is as important as that of your own factories. If a business partner violates environmental regulations or has a workplace accident, it can directly affect your company's brand. Therefore, it's necessary to include EHS standards in procurement contracts and provide audits and improvement guidance. Managing the supply chain by referencing standards such as the RBA Code of Conduct and the International Labour Organization (ILO) helps build international trust.

4. The Business Value of EHS Compliance

EHS compliance overseas is not just about avoiding risk; it's directly linked to a company's sustainable growth. It prevents penalties and operational shutdowns from legal violations, meets procurement conditions from global customers, and improves evaluations from ESG investors. Furthermore, preventing workplace and environmental accidents contributes to employee motivation and builds trust with the local community.

5. Future Outlook

Moving forward, there will be an acceleration in the construction of a globally consistent EHS management system centered on international standards (such as ISO 45001, ISO 14001, GRI, and ISSB standards). Additionally, digital technologies are being introduced for legal and regulatory monitoring and AI-driven risk prediction.

An EHS compliance strategy for overseas expansion is a core management initiative that balances strengthening competitiveness in the global market with effective risk management.