How Major Japanese Companies Are Misreporting Sustainability Under The Corporate Governance Code

The introduction of Japan’s Corporate Governance Code in June 2015 was heralded as a major step forward in improving the transparency and accountability of Japanese listed companies. Whilst the Code appears to be having some positive impact on governance issues such as board independence, the same cannot be said of the Code’s effect on the reporting and integration of sustainability and stakeholder issues. The provision of environmental, social and governance (ESG) information related to business operations (including through a company’s value chain) is a vital consideration for shareholders and other stakeholders in assessing a company’s performance and investment potential.