Japan: Japanese companies' reporting on sustainability inadequate, says Rainforest Action Network

sarawak-illegal-logging credit_btu weekly

Rainforest Action Network has been tracking the implementation of Japan’s Corporate Governance Code which, introduced in June 2015, was heralded as a major step forward in helping to open up Japanese corporations to greater transparency and oversight. On the first anniversary of the Code, this new report by RAN exposes a lack of progress in how companies are addressing and reporting on critical sustainability issues. ... Rainforest Action Network evaluated the Code reports of ten major Japanese companies known to be directly linked to tropical deforestation and associated social risks through their supply chains or financial relationships. The report finds that while companies reported an awareness of generic sustainability issues, few identified the specific environmental and social risk factors they faced from their direct links to tropical deforestation, and none demonstrated how they are practically addressing these issues. In all cases, the companies were found to be linked to significant ongoing environmental and social conflicts. 

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Company response
26 October 2016

Askul responded to RAN "Shareholders Beware"

Author: アスクル

Askul provided a response to the Business & Human Rights Resource Centre, stating that it viewed the opinions of RAN as one of many important stakeholder opinions. 

「いただきましたご意見つきましては、ステークホルダーからの貴重なご意見のひとつとして考えています。」

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Company response
26 October 2016

Fuji Oil responded to RAN "Shareholders Beware"

Author: 不二製油

Fuji Oil provided a response to the Businss & Human Rights Resource Centre. stating that it adopted in March 2016 a policy on the sustainable procurement of palm oil, which it implemented in cooperation with local stakeholders. The company stated that it will report on this implementation later in the year. 

「環境や社会への負の影響を特定し責任あるサプライチェーンを構築することを目指し、不二製油グループでは「責任あるパーム油調達方針」を2016年3月に策定しこの方針に則った活動を推進しています。具体的には、現地のステークホルダーにも配慮しながら活動を進めるためTFT(NGO)と協働し、方針の実現に向けた行動計画を策定の上、活動を実施しています。本年度の進捗レポートは下半期に公開の予定です。透明性と説明責任を一層確保すべく、コーポレート・ガバナンス報告書をはじめサステナビリティレポートなどを通じた情報開示の充実にこれからも取り組んで参ります。今後もグループを挙げて持続可能なパーム油サプライチェーン構築に取り組みます。」

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Company response
26 October 2016

Itochu responded to RAN "Shareholders Beware"

Author: 伊藤忠

Itochu provided a response to the Business & Human Rights Resource Centre, in both English and Japanese, outlining its policies and activities for the sustainable proceurement of timber and palm oil. 

 

 

 

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Report
26 October 2016

Japan: Shareholders beware: How major Japanese companies are misreporting sustainability under the Corporate Governance Code

Author: Rainforest Action Network

The findings in this report suggest that many companies are systematically misreporting compliance with their sustainability and stakeholder obligations under the code, or, have a fundamental lack of understanding as to what constitutes meaningful sustainability reporting and stakeholder engagement. While this is not the fault of the corporate governance code itself, the ambiguity in the code and guidelines facilitates this misreporting. in particular, there is a lack of clarity on the range of stakeholders that should be considered, what measures are “appropriate” in addressing sustainability issues and what non- financial information should be disclosed (see recommendations section). Consequently, Japan’s corporate governance code does not presently enable shareholders or other stakeholder groups to have sufficient confidence in the corporate sustainability performance of Japanese companies. In order to remedy the deficiencies identified in this study, the code’s sustainability and stakeholder reporting obligations and guidance must be strengthened and clarified, and companies must urgently improve efforts to understand and address the serious range of sustainability and stakeholder issues connected to their business operations. 

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Company non-response
26 October 2016

Marubeni did not respond to RAN "Shareholders Beware"

Author: 丸紅

Company non-response
26 October 2016

Mitsubishi UFJ Financial Group did not respond to RAN "Shareholders Beware"

Author: 三菱UFJファイナンシャルグループ

Company response
26 October 2016

Mizuho Financial Group responded to RAN "Shareholders Beware"

Author: みずほファイナンシャルグループ

Mizuho Financial Group responded to the Business & Human Rights Resource Centre, stating that it continued a dialogue with RAN and outlining its policies regarding sustainable business, noting it abided by the Equator Principles.

「評価をいただいたRAN 様とは、2013 年から継続的に対話を行っており、今回の評価もステークホルダーからの貴重なご意見として承りました。みずほフィナンシャルグループは、CSR への取り組みを、「グローバルな金融グループとして、社会的責任と公共的使命の重みを常に認識し、様々なステークホルダーの期待を踏まえて、活動基盤である社会との関わりにおいて責任を充分に果たす企業活動を実践すること」と定義し、CSR への取り組みが、「社会の持続可能な発展に寄与するものであり、さらには<みずほ>の新たな企業価値の創造と発展を実現する基盤になる」との考えのもと、CSR への取り組みを企業行動の主軸と位置付けています。… EP 採択金融機関として、EP の対象となる全てのプロジェクトについて、適切なデューデリジェンスと評価プロセスを実施する旨コミットしており、EP の規定に基づき、人権も含めてお客さまに適切な配慮を求めるとともに、定期的にモニタリングを実施しています。」 

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Company non-response
26 October 2016

Oji Holdings did not respond to RAN "Shareholder Beware"

Author: 王子ホールディングス

Company response
26 October 2016

Sumitomo Forestry responded to RAN "Shareholders Beware"

Author: 住友林業

... When performing due diligence, the Company ensures suppliers supply the timber that meet logging compliance requirements and use only the timber products made with raw materials that satisfy the requirements by consulting the provided information. Normally, the information include names and locations of the producers, held certifications or permits, procured product names, quantities of the products, used wood species, their logging sites, and their main buyers. Additionally, the aforementioned information sorted by country, region, wood species, and timber type is then compared with the procurement standards stipulated by Timber Procurement Committee for a risk assessment against illegal logging. For timber products found at medium to high risk, the Company requests additional information from their suppliers, sends its investigators for on-site inspections, and implement measures to mitigate the risk. Following items are checked, through supplier surveys and local interviews for the procured products: -Whether the rights of workers and local inhabitants are abused in the area where we procure (the raw material for) the products from. If it is the case, whether suppliers check their logging practices take place with consideration. -Whether the high conservation values forests are included in the area where we procure (the raw material for) the product from. If it is the case, whether suppliers check their logging practices take place with consideration. -Whether the high conservation values forests are included in the area where we procure (the raw material for) the product from. If it is the case, whether suppliers check their logging practices take place with consideration. ...

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Company response
26 October 2016

Sumitomo Mitsui Financial Group responded to RAN "Shareholders Beware"

Author: 三井住友銀行

Sumitomo Mitsui Bank provided a response to the Business & Human Rights Resource Centre, noting that that the company had met with RAN several times regarding the report. The company declines to comment on specific cases, but states that it will take the views of RAN into account. 

「レィンフォレスト・アクション・ネットワーク様とは、本件で数回面談・打合せいたしました。個別の事案について回答することは出来ませんが、いただきましたご指摘等は参考とさせていただきます。また、当社グループのサスティナビリティ-に関するホームページが10/上旬に更新されておりますので、新たにそちらもご参照いただけましたら幸いです。」

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