Japan Turns Up Energy Efficiency Heat on Hotels, Department Stores

By Toshio Aritake

Hotels and department stores will be subject to Japan’s “top runner” energy conservation program starting April 1, pushing the industries to cut energy use by more than 15 percent over the next five years, the government said.

Most leading hotel chains and franchises are operating in Japan and will be affected by the move, including Hilton Worldwide Holdings Inc., Marriott International, Hyatt Hotels & Resorts, Starwood Hotels & Resorts’ Sheraton and Westin, and Wyndham Worldwide’s Ramada.

Costco Wholesale Corp., IKEA and Wal-Mart Stores Inc., which owns the Seiyu supermarket chain, are the foreign owners of Japanese retail outlets that could be affected.

Achieving a 15 percent energy conservation goal won’t be easy for retail stores, whose profits are greatly influenced by wider economic conditions, Ako Takahashi, an official of the Japan Department Stores Association and a member of a Ministry of Economy, Trade and Industry subcommittee told Bloomberg BNA. “We’ll make our best effort to reduce energy use,” she said. “That’s all we can say at this time.”

In 2018, shopping malls, supermarkets, business offices and warehouses will also fall under the industry top runner directive, the government said Feb. 13.

Corporate Peer Pressure

Introduced in the late 1990s to help Japan cut greenhouse gas emissions, the top runner concept has spread across much of the economy by pressuring companies to match the energy efficiency levels of the best performers—the top runners—in their industrial sector.

For instance, the top runner program was applied to the Japanese auto industry in 1999, and resulted in companies that could not themselves catch up to the most fuel-efficient producers borrowing technologies from competitors.

Companies that do well under the program are lauded by the government and can use their energy-efficiency status as a marketing tool; those who fare poorly face the prospect of government warnings and ultimately publication of their status in government websites and documents.

While not carrying fines or other penalties, the process has worked in Japan in part because of the economic and marketplace benefits to the producer. In 2009, the program was applied to steel mills and cement manufacturers. It now covers 53 percent of industries in terms of industrial energy consumption, according to the Ministry of Economy, Trade and Industry.

Ultimately, Japan hopes to have more than 70 percent of Japanese industries cooperating in a top runner program, the ministry said.

To contact the reporter on this story: Toshio Aritake in Tokyo at correspondents@bna.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.