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

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. Failing to disclose a company’s environmental and social risks puts shareholders at risk from unforeseen scandals which can in turn lower company brand value, cause cancellations of supplier contracts, or result in legal action.

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.

Concerted actions by all companies with business relationships linked to tropical forest-risk commodities will be essential to protect and conserve forest ecosystems, while also respecting and upholding the rights of key stakeholder groups, particularly local communities. Too often overlooked and marginalized, these stakeholder groups are in fact critical partners whose cooperation, contributions and empowerment are fundamental if this endeavor is to succeed.

Read or download the full report:

Shareholders beware: How major Japanese companies are misreporting sustainability under the Corporate Governance Code (English)

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



More information on Japan’s Corporate Governance Code:

In 2015, Rainforest Action Network produced guidance for Japan’s financial institutions in translating the Code into practice.

Read or download the full report:

The Financial Sector and Japan's Corporate Governance Code (English)

The Financial Sector and Japan's Corporate Governance Code (Japanese)

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