Ethical Performance
inside intelligence for responsible business


Japanese firms still behind Europe on CSR

November 2007

Japanese companies perform strongly on environmental issues but need to improve in other areas to match European achievements, says a report from Ethical Investment Research Services.

The report gives a snapshot of responsible business worldwide, covering key issues including corporate governance, environment, equal opportunities, human rights and supply chain management.

Bob Gordon, author of the report and head of US and Japan research at Eiris, said: ‘Twenty-five years ago very few companies were aware of environmental, social and governance issues, let alone developing policies and systems to address them. Corporate responsibility continues to evolve from what was a mainly philanthropic activity to a more mainstream approach where it is integrated into core business activities.’

Peter Webster, executive director of Eiris, said: 'Investors are concerned by the potential costs of investing in irresponsible and unsustainable companies. Increasingly, they are favouring those companies that are responding well to the environmental, social and governance challenges they face – each of which has the potential to affect shareholder value if not properly addressed.’

Altogether, the study, The state of responsible business: global corporate response to environmental, social and governance challenges, looked at 1996 companies in the FTSE All-World Developed Index from Asia, Australia, New Zealand, Europe and North America.

It found North American companies lag behind their European counterparts and that European companies have well developed responsible business practices, thanks to a sophisticated responsible investment market, pressure from non-governmental organizations and a strong regulatory environment.

Large companies were found to be more likely to adopt good business practices than small ones and responsible investment was considered likely to grow because companies believe ethical conduct benefits financial performance.

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