Japan’s Executives Swelter in Solidarity to Save Power

The 32-degree Celsius (90-degree Fahrenheit) heat outside Honda Motor Co. (7267)’s office prompts health warnings from the national weather agency. Inside in an executive meeting room, it’s only four degrees cooler as President Takanobu Ito swelters.

“We are already used to being in this warm office,” Ito said, gesturing with his short-sleeved arms as a spokesman stirs the air with a paper fan. “We hope visitors understand the heat is part of our effort to save energy.”

The 28 degree Celsius atmosphere in Honda’s 17-story Tokyo tower is now standard in offices participating in the government-led “Cool Biz” campaign to cut air-conditioning power use. Executive suites including Ito’s are no exception in a practice that has also become an expression of solidarity after last year’s nuclear power-plant disaster cost the country nearly its entire supply of atomic energy.

Cool Biz and conservation steps including a switch to light-emitting diode lamps have helped Japan cut energy use more than three times faster than the Organization for Economic Co- operation and Development country average. In the six years since the campaign began, primary energy use has dropped 9.4 percent in Japan, compared with the 2.5 percent average decline for OECD countries, according to Bloomberg calculations using data from the BP Statistical Review of World Energy.

Photographer: Haruyoshi Yamaguchi/Bloomberg

Takanobu Ito, president and chief executive officer of Honda Motor Co., speaks during a news conference announcing the company's environmental annual report 2012 in Tokyo. Close

Takanobu Ito, president and chief executive officer of Honda Motor Co., speaks during a... Read More

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Photographer: Haruyoshi Yamaguchi/Bloomberg

Takanobu Ito, president and chief executive officer of Honda Motor Co., speaks during a news conference announcing the company's environmental annual report 2012 in Tokyo.

Power-saving measures taken immediately after the nuclear disaster that followed last year’s earthquake, such as the idling of escalators and dimming of train-station lights, also contributed to 2011’s decline in consumption.

Hotter This Summer

At Eaccess Ltd. (9427), a Tokyo-based wireless communications provider owned partly by a Goldman Sachs Group Inc. affiliate, the executive suite is even hotter this summer than last, said Chairman Sachio Semmoto.

“Our procurement department has been flooded with orders for mini-desk fans,” said Semmoto, who is taking longer morning runs so he feels more refreshed in his stuffy office.

At Japan Airlines Co.’s Tokyo offices, President Yoshiharu Ueki shares an open office with nine other executives where the thermostat is set at 28 degrees.

Ueki said he’s not really bothered by the heat, but does carry a handkerchief that comes in handy to mop his brow.

Finance Minister Jun Azumi also works in a building kept at 28 degrees in Tokyo’s government office district. The ministry has installed automatically dimming lights that save power, making it harder to see the minister coming at a distance, wearing short sleeves and no tie.

Tieless Geithner?

Azumi’s counterpart, Treasury Secretary Tim Geithner, would probably insist on business attire, said Yasushi Hamao, a finance and economics professor at the University of Southern California’s Marshall School of Business.

“I cannot imagine Geithner showing up with no tie,” said Hamao. He said a similar campaign would gain little traction in the U.S., where executives would balk at working in an 82-degree Fahrenheit (28 degrees Celsius) office. “They’ll say, ’This decreases productivity.’”

They would have a point, according to research by the E.O. Lawrence Berkeley National Laboratory at the University of California and 23 other studies used by Cornell University to generate a productivity calculator on its ergonomics website. The calculator estimates that productivity at Cool Biz’s 82 degrees Fahrenheit would be almost 6 percent below levels at the ideal office temperature of 71 degrees Fahrenheit.

Still, Japanese companies may be saving on their power bills.

Permission to Air-Condition

Rakuten Inc. (4755), the nation’s biggest Internet retailer, trimmed 40 percent off its electric power consumption last year from 2010 levels, said Akio Sugihara, senior executive officer at the Tokyo-based company.

Managers at the company’s headquarters in the capital set the thermostat at about 28 degrees and turn off air-conditioning altogether after 6 p.m., unless employees apply for permission to work late, he said.

To ease the transition, the Internet retailer promoted a “Rakuten Hawaiian Summer” theme in its offices, posting announcements clarifying that sandals and shorts are acceptable office attire, Sugihara said. “We are allowing employees to dress down drastically.”

North Compton, who meets hundreds of executives a year as Japan director for Management Recruiters International Inc., said he’s started getting e-mails warning him that the “Cool Biz” dress code allowing casual wear will be observed.

“You’re talking country managers, directors of major companies,” Compton said by phone. “They’re wearing polo shirts and chino pants. That was unspeakable even two years ago.”

Alpine Escape

Polo-wearing Japanese business leaders have another way to escape their steamy offices: leave town for a business conference.

Keidanren, the country’s main corporate lobbying organization, holds its annual summer meeting at a mountain resort 70 minutes northwest of Tokyo by bullet train in Karuizawa, Nagano prefecture. Chief executives, political leaders and news reporters mingle at the resort in an area where the average August temperature was 26 degrees Celsius last year, compared with 29 degrees for Tokyo.

Nuclear Crisis

For Japanese companies participating in Cool Biz, the prospect of power shortages after last year’s disaster at Tokyo Electric Power Co. (9501)’s Fukushima Dai-Ichi atomic station is trumping concerns about comfort, productivity and fashion, Kazuharu Aizawa, an environment ministry spokesman, said in an e-mail.

Safety checks at atomic power stations nationwide following last year’s earthquake left Japan with no nuclear power for nearly two months this spring. Only two of the country’s 50 functioning reactors are operating. Prior to the accident, nuclear power provided Japan with almost 30 percent of its electricity.

Softer Line

Power-supply concerns probably boosted Cool Biz participation beyond the 53 percent of businesses tallied in 2010, when the ministry conducted its most recent survey, Aizawa said. That was up from about 43 percent in 2006, a year after the ministry began the first version of the campaign.

That leaves room for more companies to get on board.

Tadashi Yanai, founder of Fast Retailing Inc. and Japan’s richest man, is projecting record profit for the casual clothing maker, propelled partly by demand for chinos and polos.

Still, the Tokyo Midtown office tower where he works is taking a softer line on keeping workers cool.

Tokyo Midtown Management Co. sets thermostats in public areas of the building at 27 degrees Celsius and recommends tenants set theirs at 26.5 degrees Celsius, Tomomi Kaneko, a spokeswoman for the Mitsui Fudosan Co. (8801) unit, said by phone.

“Last summer, we recommended our tenants set their their temperature at 27 degrees Celsius,” Kaneko said. “But some of our tenants have more office workers than others, and it was too hot for them, so this year, we are recommending 26.5 degrees Celsius.”

To contact the reporters on this story: Jacob Adelman in Tokyo at jadelman1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editors responsible for this story: Frank Longid at flongid@bloomberg.net; Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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