Green Reporting Award 1998
Results of 1998
TOYO KEIZAI INC. all rights reserved.
Awards
- The First Prize:
IBM Japan, Ltd.
- The Second Prizes:
KIRIN BREWERY CO., LTD.
SONY CORP.
- The Third Prizes:
Chubu Electric Power Co., Inc.
East Japan Railway Co.
FUJITSU LTD.
ITO-YOKADO CO., LTD.
JDC CORP.
Kansai Electric Power Co., Inc.
MIYAGI COOPERATIVE SOCIETY
SHIMIZU CORP.
SHISEIDO CO., LTD.
TOKYO GAS CO., LTD.
- Special Prize:
JDC CORP.
KIRIN BREWERY CO., LTD.
SONY CORP.
Fact Sheet
Environmental reports for judgment
1. The report written in Japanese was published by the companies that active in Japan, not available electronic items.
2. It is the latest report announced through January 1996 to January 1998. Environmental reports was written as below,
--- written by Japanese.
--- made by companies that active in Japan.
--- announced by the paper material not any electronic items.
--- Issued in January 1996 to January 1998.
Fundamental Criteria for judgment
1. The environmental principles of the company must be clearly defined.
2. The results of efforts to reduce the environmental impacts must be evident.
3. The report should be a good communication tool.
The Examining Committee
- Junji Asano:
President of TOYO KEIZAI INC.
- Hajime Ota:
Executive Counselor of Keidanren
(Japan Federation of Economic Organization)
- Toshihiko Goto:
Co-Chair of Environmental Auditing Research Group
- Makoto Hoshino:
Chief Executive Director of World Wide Fund Japan
- Takeshi Mizuguchi:
Steering Committee Member of The Valdez ociety
- Mariko Kawaguchi:
Chartered Member of the Security Analysts Association of Japan
- Katsuhiko Kokubu:
Assistant Professor of Kobe University
- Koiji Tachika:
Chairman and Chief Executive Officer of Tohmatsu & Co.
- Masaatsu Takada:
Professor of Kyoto Gakuen University, Chairperson of The Japan Accounting Association
- Kimie Tsunoda:
Freelance Editor
Overall Comments
1. Summary
Some 47 companies (including cooperatives) submitted entries for the First Green Reporting Award (sponsored by Toyo Keizai and Green Reporting Forum and supported by Tohmatsu&Co.), a surprisingly large number since this is a new award as yet little known among the public. The number of Japanese companies issuing and disclosing environmental reports is estimated at around 100, hence nearly half of them were represented in the entries. Green Reporting Forum members, who have been studying various environmental reports since the early 1990s, feel that the level of reports has improved significantly. By industry, the entries broke down as follows:
- Electrical machinery/machinery 10
- Construction 7
- Retailing 6
- Cooperatives 4
- Electric utilities 4
- Chemicals 4
- Gas utilities 3
- Food and beverages 3
- Automobiles 2
- Transportation 2
- Trading houses 2
In the screening process, the Working Group (comprising all Forum members and two Toyo Keizai reporters) conducted preliminary examinations and selected 13 candidates for the first and second prizes, and five for special awards. From these, the Examining Committee (ten members) selected one first prize and two second prize winners; there was a consensus that all 13 candidates had issued such excellent reports that a third prize category should be established for the ten losing entries. Three were awarded special prizes.
Three Fundamental Criteria (and which were known to prospective entrants) for selecting prize winners:
* The environmental principles of the company must be clearly defined
* The results of efforts to reduce the environmental impacts must be evident
* The report should be a good communication tool
Selection was decided through active discussions among Working Group and Examining Committee members representing various viewpoints (investors, consumers, academics, accountants, journalists and citizens).
2. Awards
It was difficult to decide between IBM Japan's IBM Japan Environmental Progress Report 1997 and Sony's 1997 Sony Environmental Report for first prize but IBM Japan won because of superior information both in terms of quality and quantity. This report, we believe, is a good benchmark in terms of having a clear environmental policy and targets, a thorough explanation of the environmental management system in place, and detailed information (including data) on the environmental impacts. The report also contained information on financial data (environmental accounting) and negative information such as legal penalties, which were little mentioned in other reports. Although more efforts are required to separate information between that which concerns IBM and that which concerns only IBM Japan, we believe that this represents a good example of an environmental report of a multinational company.
Second prizes were awarded to Sony and Kirin (Sony for the report in the previous paragraph and Kirin for its 1997 Kirin Brewery Environmental Report). Sony's report not only provides superior information in terms of both quality and quantity, but is a good communication tool in that it has a significant impact on readers. It should be noted that some highly evaluated Sony's report because, while IBM Japan's report was based on the report of the parent in the US, Sony's was a report by a Japanese company aiming at attaining global standards. On the other hand, Kirin's report stands out for its many charts and tables that are visually pleasing and reader friendly.
With respect to Kirin's report, two flow charts were especially highly rated: one showing the environmental impacts generated at each stage of beer production, distribution, and consumption, and the other illustrating CO2, Nox, and SOx emissions at the same stages. Kirin was also awarded a special prize for these charts. Despite wide data coverage (including data on distribution and consumption as well as data on raw material production) and the flow charts, Kirin was not awarded the first prize because it did not provide sufficient detail of its response to this data or show how it used the data to improve environmental strategy.
Third prizes were awarded to ten reports. All were highly evaluated and not far behind reports winning the higher prizes. In particular, the Shimizu and Fujitsu reports were runners up for the higher prizes and stand out.
We would also like to mention that there were a number of reports which, though not awarded a prize this time, were very close to doing so. In many cases, the gap was very slim, indicating good chances the next time around.
3. Special Prizes
Kirin, Sony, and JDC were awarded special prizes, the aim of which is to recognize reports which are superior in certain respects, in order to improve the quality of overall environmental reports. From the 47 candidates for the awards, it was only a coincidence that the three recipients for special prizes were also second and third prize winners.
Kirin won the award for its pioneering flow chart; Sony for its unique separate (loose-leaf) data sheet (meaning up-to-date environmental information is available to readers although Sony does not revise the entire report every year); and JDC for the information on its green purchasing efforts (the only firm to disclose the purchased amount of green products, the names of individual items, and makers).
Besides these three, there were two others of significant interest, one in retailing which showed how recycling reduces social cost, and another which presented a simple format (an A4-sized folder than opens out into four pages); but no consensus could be obtained for awarding either firm.
After examining all reports, it was felt that environmental reports widely differ depending on company size, industry, and operating environment. In this respect, the winning reports are thus not necessarily models for all companies to emulate. Rather, they should be regarded as benchmarks offering examples for the improvement of environmental reports. (Katsuhiko Kokubu, Kimie Tsunoda)
Judging
1. Overall Process
There were two stages, examination by the Working Group and then by the Examining Committee. The aim of the former was to select candidates and it comprised 19 (Forum members and some Toyo Keizai reporters). The Examining Committee comprised ten, five from the Forum and five representing various viewpoints, and was apprised of Working Group deliberations by Ms Tomoko Kurasaka (Forum member and certified public accountant).
2. Judging
10 Nov 1997: Green Reporting Awards established and entries invited in the Toyo Keizai weekly magazine.
31 Jan 1998: Deadline for entries; 47 corporations submit entries.
14 Feb 1998: Working Group holds final meeting: 13 candidates for first and second prizes, and five for special prizes.
16 Mar 1998: Examining Committee selects winners.
3. Selection of Prize Winners
(1) Thorough reading and selection by the Working
Group What criteria to apply in the selection process was first discussed in the Working Group. Based on the three fundamental criteria mentioned earlier, 15 sub-criteria were listed, and, in evaluating them, three qualitative guidelines were employed:
Relevancy: Whether the information in the report meets the needs of readers.
Reliability: Whether the information is trustworthy or not.
Comparability: Whether data and information can be compared historically or among companies.
As a result we compiled a matrix with fifteen columns and three rows which each Working Group member kept in mind when reading reports submitted. However, companies were not rated based on these criteria, rather those aspects of reports which were found to be particularly superior (or inferior) were considered with all other information available and members made selections individually. It should be noted that there was no grading of reports based on the examining criteria. (However, to test the feasibility of grading in the future, two members attempted it but found that it might lead to unfair judgments since it was extremely difficult to adopt uniform grading for each criterion.)
Not all members read all 47 reports which were divided into four industry groups (retailers/cooperatives; electrical machinery/machinery/precision instruments; construction/transport/automobiles/trading houses; and utilities/foods/chemicals). The Working Group was divided into five sub-groups (three or four members each): one was given the task of reading all 47 reports in order to adjust for differences among industries, and the other four were in charge of one industry group each.
(2) Selection of candidates at the final Working Group meeting
On 14 February, each member put forward about three candidates he/she liked. Reports no one and/or only one member recommended were deleted from the candidate list. The remaining reports were discussed, as a result of which a short list of 13 candidates was arrived at by consensus. Since all these 13 reports were of such a high standard, it was decided to establish a third prize category for those reports not awarded the first or second prize (which categories had been formally decided when the scheme was initiated).
(3) Selection by the Examining Committee
All Examining Committee members were required to read all 13 reports beforehand and to come up with their best three. Since the Examining Committee was to evaluate from a different viewpoint from that of the Working Group, the 15 sub-criteria were not given to the five Examining Committee members since they were supposed to represent the views of their particular industry and social position, and thus required to be subjective in making a selection. Only three aspects of information (relevancy, reliability, and comparability) from a qualitative viewpoint were given for reference, and which were not meant to bind members' judgment in any way, members being asked to rather judge based on the three major criteria. The reports recommended by the members mostly overlapped. After eliminating the reports no one or few recommended, only a few reports remained for final discussion. By discussing each of these thoroughly the opinion of the members gradually converged. Deciding the winner of the first prize was difficult and agreement was not reached until the last minute. Some members had to be won over to IBM although they personally harbored some reservations.
4. Special Prizes
(1) Reading by Working Group members
The selection of candidates for special prizes was simultaneous with the selection of candidates for first and second prizes.
(2) Selection of candidates by the Working Group
Each member selected candidates for special prizes and gave reasons. Following discussion, five were selected.
(3) Selection by the Examining Committee
Each candidate put forward was first approved/disapproved by each member; this was followed by discussion.
5. Note on Evaluation Method
As is obvious, our method was basically qualitative. Despite clear criteria, the evaluation of reports depended on the individual judgments of Working Group and Examining Committee members, and integrating all such judgments was not through grading but discussion (which is why we do not respond to individual inquiries and comments from entrants regarding their being/not being selected). The possibility of adopting grading was discussed but not adopted because the concept of environmental reports (how they should be written and evaluated and by whom) is not yet developed socially and the reports themselves are still in the experimental phase. Under such circumstances, rating reports is practically very difficult and involves the risk of making report formats rigid. We stress that we do not believe our collective judgment is subjective and irrational because we have not adopted grading, but rather believe that judgments based on each member's specialty are effective in evaluating qualitative elements which cannot be expressed in figures.
We believe the method we used to be the best available so far but anticipate that judging standards and methods will advance in line with the progress of environmental reports. Thus, monitoring environmental reports, we will try to come up with the most appropriate method. (Takeshi Mizuguchi)
The Evaluation Metrics
1) The environmental principle should be clarified
- 1. Environmental Policy, Objectives and Targets
- 2. Environmental Management System
- 3. Others
2) Efforts to reduce environmental impacts of its operation must be made clear
- 4. Measuring Environmental Impacts from its Main Activity
- 5. Making Efforts to Reduce Environmental Impacts of its Main Activity
- 6. Making Efforts to Reduce Environmental Impacts within its site
- 7. Making efforts to Reduce Environmental Impacts of its Products and Services
- 8. Requirements or Supports to Suppliers Concerning Environmental Protection
- 9. Others
3) Must be a good communication tool
- 10. Fundamental Information of the Company
- 11. Environmental Financial Information.
- 12. Negative Information
- 13. Two way communication being possible
- 14. Understandability
- 15. Others
Sponsored by: TOYO KEIZAI INC.
Green Reporting Forum
