A Study on the Comparability of the Environmental Reports: Mainly of the Automobile, Beer, and Chemical Industries

Discussion Paper

For several years now, the number of Japanese companies which publish environmental reports has been increasing. In compiling environmental reports, most people refer to the Environmental Reporting Guidelines (Ministry of the Environment, 2001a, 2001b) issued by the Ministry of the Environment. As indicated in the Guidelines, as basic principles of these reports, relevance, reliability, clarity, comparability, verifiability, and timeliness are indispensable. When dealing with numerical data about environmental impact in particular, comparability is very important.

In comparing numerical data, there are three cases: (1) a company's past performance is compared with its present performance; (2) numerical data are compared between companies in an industry; (3) numerical data are compared between different industries. In this study we focus on the automobile, beer brewery and chemical industries and consider comparisons between companies mainly in an industry. The goal of this study is to analyze, from the point of view of the comparability of environmental reports among companies, to what extent numerical data recorded in environmental reports are comparable under present circumstances, what issues should be discussed, and what conditions are required, in order to increase the comparability of numerical data. It is believed that such analysis will provide useful suggestions when the MOE's Environmental Reporting Guidelines are revised in future.

In structure, the present study first states background and goals and reviews previous comparability studies. Next, major companies and various parameters for an analysis of comparability are extracted, and mention is made of the "significant components" as suggested in the Environmental Reporting Guidelines relating to the analysis parameters used in the present study. We then compare and analyze the contents recorded in the environmental reports by companies in three industries: automobile, beer brewery and chemicals. Most of the corporate environmental reports which formed the object of the present study were published in 2000, although reports issued in 2001 were also touched upon in our comparative analysis. Finally, paying attention to similarities and differences among the three industries, we made observations and drew a conclusion, and made recommendations for the Environmental Reporting Guidelines.