Sustainability in Supply Chains

Committee:
Sustainability & Social Responsibility
status:
Some progress
Published:
Japan has taken steps to address human rights risks in supply chains, but environmental sustainability remains under-regulated. Key issues such as greenhouse gas emissions, biodiversity loss, deforestation, and pollution linked to upstream and downstream activities are not yet systematically covered by legal obligations or disclosure requirements. With the EU moving ahead with mandatory due diligence rules and sustainability reporting through the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), there is a growing gap between international expectations and Japan’s regulatory approach.

Recommendations

The Japanese government should accelerate the development of environmental due diligence and disclosure requirements for companies, including:
  • Clear expectations on identifying, assessing, and mitigating environmental risks in global supply chains
  • Alignment with international best practices and evolving EU frameworks to ensure compatibility with trade and investment flows
  • Support for companies, especially SMEs, in building capacity to implement sustainable supply chain practices
Improved supply chain regulations would enhance transparency, reduce environmental harm, and help Japanese and international companies operating in Japan meet global sustainability standards.