Japanese large corporations’ use of forest certification in social responsibility reporting
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This document analyzes how large Japanese corporations use forest certification in their social responsibility reports. It finds that while manufacturing industries actively publish these reports, most reports do not use certified paper. Rates of certified paper use are higher in some industries. Few reports mention forest certification. The study provides insight but follow-up is needed as practices may have changed.
Japanese large corporations’ use of forest certification in social responsibility reporting
- 1. Japanese Large Corporations’ Use of Forest Certification in Social Responsibility ReportingOWARI, ToshiakiThe University of Tokyo, Japan
- 2. Forest CertificationForest certification ensures that forests are managed in accordance with a set of standards considered environmentally appropriate, socially beneficial, and economically viable.It has emerged since the early 1990s as a market-based tool for promoting sustainable forest management (Stevens et al., 1998).Products originating from certified forests can be verified through a chain of custody system providing the ability to track them from the forest to the final product (Nussbaum and Simula, 2005).There have been a growing number of chain of custody certificate holders, and a total of 23,717 certificates had been issued worldwide as of May 2010 (Oliver et al., 2010).2011/06/17IUFRO Oregon (Owari, T.)2
- 3. Chain of Custody Certification in JapanEven though chain of custody certificate holders are mainly located in Europe and North America, Japan grants the second largest number of certificates outside these regions (Oliver et al., 2010).The number of chain of custody certificates issued in Japan has increased since the early 2000s, and a total of 1,721 certificates had been granted.FSC: 1,107 (April 2011), PEFC: 205 (June 2011), SGEC: 409 (June 2011)As a major importer of forest products, Japan has a significant influence on the global development of forest certification (Owari & Sawanobori, 2007).2011/06/17IUFRO Oregon (Owari, T.)3
- 4. Markets for CFPs in JapanPaper products companies outnumber wood products companies in chain of custody certificates in Japan (Owari & Sawanobori, 2007).Large corporations, which are often listed on the domestic stock market, have likely driven the demand for certified paper.More corporations now use certified paper for social responsibility reporting (Owari & Sawanobori, 2008).By labeling corporate reports with certification logos, corporations can communicate their sense of responsibility to stakeholders.2011/06/17IUFRO Oregon (Owari, T.)4
- 5. PurposeWithin the forest products marketing arena, an increasing number of studies have examined social responsibility reporting (Li et al., 2011; Mikkilä & Toppinen, 2008; Panwaret al., 2006; Sinclair & Walton, 2003; Toppinenet al., 2011; Vidal & Kozak, 2008a; 2008b).While many researchers have analyzed the social responsibility reports published by large forest industry companies, few studies have been examining those reports published by the end-users of forest products.To better understand the communicational role of forest certification for end-users, this study examined how large corporations use it in social responsibility reporting in Japan.2011/06/17IUFRO Oregon (Owari, T.)5
- 6. 2011/06/17IUFRO Oregon (Owari, T.)Data CollectionThis study defined ‘large corporation’ as a corporation listed on the first section of Tokyo Stock Exchange (n = 1,671, March 2006)Social responsibility (SR) reports (incl., environmental and social reports, sustainability reports, responsible care reports, etc.) published as PDF (Portable Document Format) documents were collected.By September 2006, 524 SR reports were downloaded successfully. Since 1 file was corrupted, a total of 523 reports were used for the analysis.6
- 7. 2011/06/17IUFRO Oregon (Owari, T.)Data AnalysisBy referring to Nippon Foundation (2006), corporations disclosing SR activities on their own website and publishing SR reports were specified.In each SR report collected, the use of recycled paper and certified paper was identified by logos printed on the back cover page. The usage rate was then calculated by type of industry.Content analysis was conducted using the full-text search engine of Adobe® Acrobat® 7.0 Standard (Abobe Systems Inc., CA) to examine the frequency and context of using the words “forest” and “forest certification” in the text of SR reports.7
- 9. Corporations’ SR Communication2011/06/17IUFRO Oregon (Owari, T.)9n = 1,671; The majority of Japanese large corporations seemed not yet to be active in SR reporting as of the year 2006.
- 10. Publishing SR Reports by Industry2011/06/17IUFRO Oregon (Owari, T.)10
- 11. Paper Used for SR Reports2011/06/17IUFRO Oregon (Owari, T.)11n = 523; The majority of Japanese large corporations seemed not yet to be active to use certified paper in SR reporting as of the year 2006.
- 12. Using Certified Paper for SR Reports2011/06/17IUFRO Oregon (Owari, T.)12
- 13. Electric Appliances: Toshiba Corp.2011/06/17IUFRO Oregon (Owari, T.)13
- 14. Foods: Asahi Breweries, Ltd.2011/06/17IUFRO Oregon (Owari, T.)14
- 15. Transportation Equipment: Toyota2011/06/17IUFRO Oregon (Owari, T.)15
- 16. Construction: Taisei Corp.2011/06/17IUFRO Oregon (Owari, T.)16
- 17. Oil Products: Nippon Oil Corp.2011/06/17IUFRO Oregon (Owari, T.)17
- 18. Pulp & Paper: Oji Paper Co. Ltd.2011/06/17IUFRO Oregon (Owari, T.)18
- 19. Retail Trade: Seven & i Holdings2011/06/17IUFRO Oregon (Owari, T.)19
- 20. Bank: Tokyo-Mitsubishi UFJ Bank2011/06/17IUFRO Oregon (Owari, T.)20
- 21. Other Products: Dai Nippon Printing2011/06/17IUFRO Oregon (Owari, T.)21
- 22. Publication-Use Relationships2011/06/17IUFRO Oregon (Owari, T.)22
- 23. Relationship between the Use of Recycle Paper and Certified Paper2011/06/17IUFRO Oregon (Owari, T.)23The usage rates of recycle paper in an industry were negatively correlated to those of certified paper (r = – 0.72).
- 24. “Forest” & “Forest Certification” in SR Reports2011/06/17IUFRO Oregon (Owari, T.)24n = 523; Few corporations used the word “forest certification” in the SR report.
- 25. “Forest” & “Forest Certification” in SR Reports2011/06/17IUFRO Oregon (Owari, T.)25
- 26. Context of Forest Certification in SR ReportsOf the 30 corporations used the word “forest certification”, 19 stated that it was important for environmental protection.3 corporations mentioned forest certification in relation to resource and social sustainability.8 corporations merely explained forest certification and the use of certified paper in the text and did not give any reasons why they took part in the forest certification program.2011/06/17IUFRO Oregon (Owari, T.)26
- 27. Foods: Meiji Co., Ltd.2011/06/17IUFRO Oregon (Owari, T.)27
- 28. Wholesale Trade: Itochu Corp.2011/06/17IUFRO Oregon (Owari, T.)28
- 29. SummaryIn Japan, large corporations in manufacturing industries are relatively active in SR reporting.The majority of corporations had not used certified paper for the SR reports. The use was relatively frequent in some industries.The usage rates of recycle paper in an industry were negatively correlated to those of certified paper.Few corporations used the word “forest certification” in the text of the SR report.2011/06/17IUFRO Oregon (Owari, T.)29
- 30. Discussion (1)In Japan, large corporations in manufacturing industries are relatively active in SR reporting.Industries using more natural resources and energy for their business activities are probably more active in SR reporting.The majority of corporations had not used certified paper for the SR reports. The use was relatively frequent in some industries.To mitigate environmental impacts: air (automobile), water (breweries), resources (printers) (Ito et al., 2004)To improve investor relations: Dow Jones Sustainability Index (largest corporations) (Owari, 2007)2011/06/17IUFRO Oregon (Owari, T.)30
- 31. Discussion (2)The usage rates of recycle paper in an industry were negatively correlated to those of certified paper.Certified paper is used as an alternative to recycled paper. As the use of recycled paper becomes the norm, certified paper is probably considered as an environmentally friendly substitute (Owari & Sawanobori, 2007).The Green Purchasing Network revised its purchasing guidelines in Oct. 2005: “In addition to recycled pulp, virgin pulp produced from certified forest timber can be considered green.”Few corporations used the word “forest certification” in the text of the SR report.To demonstrate their environmental friendlinessComplicate to explain why a corporation needs to promote sustainable forest management? Due to low level of awareness?2011/06/17IUFRO Oregon (Owari, T.)31
- 32. Concluding RemarkThis study was intended to provide insight into the Japanese market for certified forest products and large corporations’ use of forest certification in social responsibility reporting.However, they may have changed the use of forest certification and the way of social responsibility communications.Follow-up studies are therefore needed to anticipate the market development of certified forest products in Japan.2011/06/17IUFRO Oregon (Owari, T.)32
- 33. Thank you!The author thanks Mr. Taro Hosaka for helping data collection. This study was partly supported by the Sasakawa Scientific Research Grant from the Japan Science Society (No.18-229).(Corresponding address: owari@uf.a.u-tokyo.ac.jp)2011/06/17IUFRO Oregon (Owari, T.)33