We investigate the impact of the home appliance recycling law on closed-loop supply chain activities in the electric home appliance industry of Japan. The recycling rates have experienced a basically constant growth since the home appliance recycling law went into effect in April 2001. This implies that the extended producer responsibility (EPR) scheme compelled the home appliance manufacturers to make efforts toward the efficient recycling of their end-of-life products. The results support Michael Porter's hypothesis that "properly designed environmental standards can trigger innovations that lower the total cost of a product or improve its value." We also conducted semi-structured interviews with five major home appliance/personal computer (PC) manufacturers. All the managers agreed that although the recycling business is not profitable for home appliance/PC manufacturers in Japan, government legislation and corporate social responsibility (CSR) force them to be active in the recycling of their products.