Companies urged to engage in good citizenship

Source: Japan Times, 31 October 2003

In the wake of huge corporate scandals in Japan and the United States, companies are under pressure to be more socially responsible.

The trend has fed demand for universal guidelines for firms to use in filing reports on how they are performing in terms of society, the environment and ethics, according to Ernst Ligteringen, head of the Amsterdam-based nonprofit organization Global Reporting Initiative, known as GRI.
"It is important to have a global standard (for comparability) because the economy is (becoming) increasingly integrated at a global level," Ligteringen said in a recent interview in Tokyo. GRI released its first guidelines in 2000. They were revised last year.

GRI is collaborating with the United Nations Environment Program to promote the guidelines, which are for use by any company or organization, regardless of industry sector, size or location.

More than 328 firms in 26 countries have published reports using the Sustainability Reporting Guidelines. Most of their reports are available on the companies’ Web sites.

In Japan, 62 companies – including Ajinomoto Co., Nissan Motor Co., Hitachi Ltd., Sony Corp. and Shiseido Co. – have referred to GRI guidelines. The number of users in Japan doubled from last year, Ligteringen said.

"It is not surprising that sustainability in Japan is such a pressing issue," because Japan lacks natural resources, he said.

The guidelines cover three categories: economic, social and environmental performance.

Each category has dozens of detailed indicators, including what policy a firm adopts to prevent child labor, what measures have been taken for energy-saving and waste management, and how a firm maintains compliance mechanisms to prevent corruption. The economic category overlaps financial statements.

Companies can use any of the indicators, if not the whole package. Most of the reports published by Japanese firms focus on environmental activities.

Ligteringen noted that this is because environmental issues have traditionally been an emphasis of Japanese firms.

The Japanese government also pays attention. The Environment Ministry’s guidelines for corporate environmental reports, first issued in February 2001, was modeled after the GRI standards, a ministry official said.

Although there are some codes of conduct set out by international organizations, including the U.N., the GRI guidelines are the first for filing reports, according to Ligteringen.