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Integrated
Reporting
in Japan 2019
Integrated Reporting Center of Excellence
KPMG in Japan
March 2020
home.kpmg/jp
Message from global thought leaders
The corporate community in Japan is to be congratulated for its Also important to determining materiality, and important in their
embrace of integrated reporting. I have written about this on my own right, are the risks and opportunities the company sees to
column on Forbes.com in the article “What The World Can Learn value creation over the short-, medium, and long-term, and the
From The Japanese Experience In Integrated Reporting.” In 2010 outlook the company has about the challenges and uncertainties it
there were only 24 Japanese companies issuing an integrated faces to its strategy, business model, and long-term performance.
report By 2018 this number had grown to 414, a compound annual Again, Japan ranked third to last. Clearly Japanese companies need
growth rate of 43 percent. Of the 2,218 companies in the First to improve here.
Section of the Tokyo Stock Exchange, 382 issued integrated
In terms of performance, the extent to which the company has
reports and they counted for 58 percent of total market
achieved its strategic objectives and how well-placed it is to continue
to do so in the future, Japan ranked last. It’s score was 1.10
capitalization of this group. While data on the number of
companies practicing integrated reporting by country are
compared to second-to-last Brazil and U.S. tied at 1.45. This is a
incomplete, it is likely the no country has shown the same level of
serious problem. How can a company that is performing well for its
shareholders and other stakeholders get their support if it isn’t
enthusiasm for integrated reporting as Japan. This is especially
noteworthy since this is being done on a completely voluntary
telling them how they are? Failure to do so will result in all
basis, although the Japan Stewardship Code and the Japan
stakeholders assuming that its performance is poorer than it really
Corporate Governance Code have clearly played an important role.
is. If performance is poor, the company needs to be candid about it
Unfortunately, the quality of integrated reporting in Japan does not so it can get input from its shareholders and other stakeholders
match is quality. In collaboration with Michael P. Krzus and Carlos about how to improve it.
Solano I did an analysis of the quality of integrated reporting in 10
The one component on which Japan had a fairly good ranking, sixth
and just below average, was strategy and resource allocation—the
countries. On a scale of 0.0 to 3.0, Japan ranked third to last with a
company’s strategic objectives and how it is allocating its resources
score of 1.38 (average was 1.82) with Brazil at 1.22 and the U.S. last
at 0.78. Our analysis focused on what we consider to be the critical
to achieve them. This is a strength that companies can build on.
components for producing a high-quality integrated report.
The way to do so, and the foundation of integrated reporting, is for
the board of directors to publish a “Statement of Purpose (The
This starts with materiality, the environmental, social, and
Statement).” As I wrote in “The Statement Of Purpose And What
governance (ESG) issues that are important to long-term value
You Need To Do,” “The board of a company should publish an
creation from both a risk and opportunity perspective. Japan ranked
annual one-to-two page ‘Statement of Purpose’ that clearly
third on this component. Good guidance here is provided by the
articulates the company’s purpose to profitably achieve a solution
Sustainability Accounting Standards Board (SASB), for which I was
the Founding Chairman. The importance of SASB’s work is evident
from the 2019 letter, “A Fundamental Reshaping of Finance,” that
for society. It specifies within that purpose the few stakeholders
most critical to long-term value creation and sustainability. While
Larry Fink, Chairman & CEO of BlackRock, wrote to CEOs. He
stated, “BlackRock believes that the Sustainability Accounting
many, if not most, companies have mission and vision statements,
almost none of them are signed by the board of directors.” Hermes
Equity Ownership Services has published a useful “Guidance
Standards Board (SASB) provides a clear set of standards for
reporting sustainability information across a wide range of issues.”
Document” for boards of directors on what the content of “The
Japanese companies also need to recognize that the ESG issues Statement” should be.
The Statement then becomes the basis for a company’s strategy
that are material will change over time. Some that have been will no
longer be and some that aren’t will become so. In “Dynamic Materiality
and Core Materiality: A Primer For Companies and Investors,”
and allocation process and the time frames it uses to evaluate its
impact on all stakeholders. The company then needs to publish an
I summarize the results of an important paper by Thomas Kuh,
integrated report in which it explains its progress on accomplishing
Andre Shepley, Greg Bala, and Michael Flowers of Truvalue Labs.
its purpose.
They show how material topics change over time. Yet they also
show that there are three that have been important for the past 10 Just as Japanese companies have shown leadership on integrated
years—GHG emissions, labor practices, and business ethics. reporting, they can now do so on the even newer idea of “The
Japanese companies should be reporting on all three of these, in Statement.” This will improve their integrated reporting. It will also
addition to those that are material for their particular industry. encourage companies all over the world to publish “The Statement”
as well. Japan and the world will be a better place for this.
Determining the material issues of today and which might become
so tomorrow is informed by strong stakeholder engagement in Robert G. Eccles
which the company seeks to understand the expectations of all of
its stakeholders and how best to respond to them. The company Visiting Professor of Management Practice
then needs to engage in an open dialogue with its key Saïd Business School
stakeholders. Japan ranked third to last on this component. University of Oxford
Japanese businesses, like those in other capital markets, are facing disclosures to provide meaningful signals to the financial markets.
a new decade with increasingly uncertainty created by climate It all starts with good data and controls which are the building
change, geopolitical tensions and harsh business conditions. The blocks of good information which is needed to navigate the
value of a company today is largely made up of unaccounted challenges ahead.
intangibles. Just as the value of those intangibles can increase
This is an important moment for Japanese businesses to lead the
rapidly, it can be destroyed in seconds.
way by setting the standard for good reporting. The quality of
Investors want confidence that the companies are managing not integrating reporting needs to improve rapidly and provide
only what’s on the balance sheet but all the resources and meaningful insights to investors and other stakeholders. We look
relationships that its business model depends on to create value. forward to the progress in Japan.
Mario Abela
At the WBCSD, we are working on projects to integrate
non-financial information in business decision-making by improving Director, Redefining Value
governance and risk management and driving purpose-driven World Business Council for Sustainable Development (WBCSD)
Introduction 02
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
About the survey
Starting this year, we have included both securities reports and integrated reports in the scope of the survey.
1 Communicate a story
What are the pieces management needs to convey a value creation story?
With each year of this survey, we found a growing the overall report. Without access to the information that
number of corporate leaders issuing messages that forms the pieces needed to tell the story, the reader
convey their thinking in a vibrant way. Management is cannot gain a good understanding. Conversely, readers
beginning to speak out, in accordance with their may feel that any information that is not clearly related to
responsibilities, about their organization’s goals, the story is just noise.
the initiatives they are pursuing to achieve those goals, It is vital to show the links between the information
and the value creation story behind them. that shapes the value creation story, and also to explain
Yet very few reports adequately convey the validity and it in the right order so that the reader arrives at
feasibility of the management’s story throughout an accurate understanding.
Recommendations 04
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Key Findings
business model and the results it proactively involved in the materiality the sustainability of their
delivers. The Board of Directors should assessment process. business models
assess the importance of each material The FSA’s Principles for the
issue to ensure that materiality plays a Disclosure of Narrative Information
35%
role in management decision-making. state that securities reports should
Although 77% of the companies use materiality as a means of
reviewed refer to materiality in their evaluating whether the information is
integrated reports, only 35% discuss it important for investors in making Materiality
in terms of the sustainability of their investment decisions. P.07 ▶
When it comes to material issues, how specify the likelihood, the timeline
should risks be managed once they are and the impact if the risk and Companies that explain
identified and how is value created opportunities materialize. risks and opportunities
from opportunities? The consideration At first glance, securities reports in connection with its
to these questions will lead to the appear to have more information than
materiality assessment
development of the company’s most integrated reports on risk information.
optimal strategies. However, going forward, information
22%
While 78% of companies discuss risks on risk and opportunities should be
and opportunities in integrated reports, considered from the perspective of
only 22% of companies explain the whether it is useful to the reader.
Risks and
connection to its materiality opportunities
assessment. Only a few companies P.09 ▶
26%
financial quantitative targets, only 26%
of companies reporting non-financial Strategies
and resource
quantitative targets. allocation
Disclosing indicators in securities P.11 ▶
reports is important in helping readers
05 Key Findings
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The financial footing essential for implementing strategies
Capital costs and financial strategy
29%
efficiency, etc.) and targets, beyond quantitative information and
accompanied by an explanation of the include an explanation that would aid
Capital costs and
reasons behind them, show that a understanding of the context. financial strategy
company has an ability to implement P.13 ▶
discuss the outlook for those targets. but only 48% explain their current
Discussions of progress based on the performance as part of the process of performance on their short-,
correlation between current results and achieving medium- and long-term medium- and long-term
medium- and long-term targets enable strategic targets. strategic targets
the reader to assess the feasibility of Specifying non-financial indicators that
the company’s aspiration to create
48%
affect financial performance and
value. Even when performance is analyzing the results based on these
worsening, the report can explain that trends in securities reports makes
this is a temporary stall and conditions them more persuasive. Performance
P.15 ▶
strategies, as well as to describe the environment, which are the premises outlook is related to their
potential effects on the value creation for materiality assessment and
story. The percentage of companies strategies, will give readers a better
materiality assessment
20%
explaining the outlook was 74%. understanding of where those
However, only 20% explain how their companies are heading.
outlook which should be the premise
for their materiality assessments, are Outlook
related to material issues. In addition, P.17 ▶
term are built, and then run effectively. While progress has been made in
Integrated reporting should explain this. governance reform, we still see for in a CEO
The qualities of a CEO are one boilerplate descriptions. In securities
important element, but only 10% of report, companies should lay out the
10%
companies specify this. The goals that connection between the governance
companies want to achieve should system and strategic targets and
include not just issues to grapple with provide explanations based on their
in the short term, but medium- and own business’s characteristics. Governance
long-term targets as well. Given this, P.19 ▶
companies should explain their thinking
Key Findings 06
© 2020 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Materiality
The percentage of companies referring to materiality Of the companies which identified material issues
rose to 77%. However, the breakdown reveals that in terms of their business model’s sustainability,
42% of these companies, analyzed material issues to 42% mentioned the involvement of its Board of
identify key areas in which they could resolve social Directors in assessing materiality. However, for
issues. Only 35% of companies identified material half of those companies, their involvement is limited
issues in terms of the sustainability of their business to “approving or confirming” the results of
models (Figure 1). the materiality assessment (Figure 2).
Materiality in integrated reporting should describe the Materiality assessment is made from the perspective of
issues the companies identified as potentially affecting the impact on the sustainability of a company’s
the sustainability of their business model, considering business model, based on the outlook on the potential
the potential changes in the future business changes in the business environment. For this reason,
environment. Readers want to knowthe medium- and materiality assessment should form the basis for a
long-term strategies that take into account the material company’s strategic decision-making and resource
issues the company has identified. allocation. Hence the Board of Directors should be
involved in this process.
Analyzing and explaining the issues expected to have a
high impact on the company’s medium- and long-term The Board of Directors’ view on material issues is
value creation, rather than only identifying areas which fundamental to the company’s value creation story.
contribute to society, will lead to a more constructive Including this in the report fosters a deeper
dialogue with investors. understanding of how the company identify issues and
creates sustainable value.
Figure 2
Board of Directors’ involvement
Figure 1
Materiality in the materiality assessment process
77% 42%
an area which can confirms
help resolve assessment
social issues results
(135) (26) 21% (13)
42% (73)
Good practice Describing the involvement of the Board of Directors in materiality assessment
One integrated report indicates that, in the materiality The report also mentions the company’s plans to regularly
assessment process, the relevance of the company’s review material issues based on the progress of
material issues was considered at a management meeting business plans on related issues and the change in the social
and the board meeting. and environmental changes.
07 Materiality
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Augmenting narrative information in securities reports
As more and more companies attempt to explain reported will also differ. However, all communication
materiality in their integrated reports, it seems that a channels should share the same value creation story,
number of them view integrated reporting as an as well as a common understanding of materiality
opportunity to assess materiality. However, only 11% that forms the foundation of the company’s value
of the companies provide information on materiality in creation story. The FSA’s Principles for the Disclosure
their securities reports, of which 8% describe of Narrative Information expects that descriptions
material issues as factors that could affect the must reflect the company’s understanding of what is
sustainability of their business model (Figure 1-1). material, always keeping in mind the interest of
investors’ investment decision making. The results of
Depending on the media used for reporting,
materiality assessments should also be included in
the content or focus information which should be
the securities reports.
Figure 1-1 Materiality
Not described Description on issues Not described No integrated report Description on issues
11% 60%
Description as an area which can
area which can help resolve
help resolve social issues
(25) social issues (135)
32% (73)
3% (8)
94% 58%
materiality materiality
(16) 0% (0) (36) 21% (13)
6% 42%
confirms confirms
assessment assessment
results results
(1) (26)
6% (1) 21% (13)
Materiality 08
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Risks and opportunities
Of the companies surveyed, 78% explain risks and Of those companies that discuss risks and opportunities
opportunities in their integrated report, but only in their integrated report, 37% explain how they
22% of those discuss risks and opportunities manage risk, but most only describe their systems and
in terms of how they relate to the results of the mechanisms. Less than 20% of companies mentioned
materiality assessment (Figure 1). the likelihood that these risks could materialize, the
timeframe, and the impact that would have if they did
This is likely due to the low percentage of companies
materialize (Figure 2).
who assess materiality in terms of the sustainability of
their business model. Since materiality, on the one If readers are able to understand not only the risk
hand, and risks and opportunities, on the other, are management system and method, but risk responses,
assessed in two separate processes, they cannot be they will be able to determine whether that company is
discussed in an interlinked manner. effectively managing risk.
Companies must analyze the material issues they face Take, for example, a company that has categorized key
as they pursue their purpose, and then address the risks risks into strategic risks and operational risks, assessed
and opportunities resulting from the uncertainties that the likelihood that these risks will occur, the time frame
this analysis identifies. It is important to tell readers a and their potential level of impact, and then presented
story in which purpose, decisions about materiality, and countermeasures tailored to these specific risks. The
risks and opportunities are linked together. reader will conclude that it is highly likely that the
management of this company is proactively and
properly managing risk.
Figure 1 Figure 2
Risks and opportunities (including only risks) Details of risks and opportunities
22% (39)
to materiality
22% (39)
method/opportunity
creation method
37%
(50)
78%
and opportunities,
but reasoning is not
clear
Likelihood 7% (10)
(136) 56% (97)
Time frame 5% (7)
n=175 companies n=136 companies
Companies in the Nikkei 225 that issue integrated reports Companies that describe risks and opportunities
Good practice Management discusses risks and opportunities in value creation story
Eighteen percent of the companies surveyed However, information on the fundamental risks that
described the “impact” in their integrated report, while could cause changes to accounting estimates and
25% did so in securities reports (Figure 2-1). Securities information that is helpful in predicting future cash
reports provided more information on risks than flow would be useful for readers.
integrated reports, but there are several points related
In this respect, the information provided on risks in
to quality that need improvement.
integrated reports may be minimal, but it includes
For example, simply stating that a risk “can affect information that is helpful to readers that is not being
financial conditions and operation results” does not provided in securities reports. Both securities reports
give the reader enough information to measure the and integrated reports are mediums that provide
likelihood of occurrence and the impact it would have. information indispensable to investor decisions on
Moreover, accounting estimates that can have a major corporate value. If the goal is the same, the two kinds
effect on financial conditions and business results of reports should be consistent.
may be important risks to managers with a
responsibility for reaching earnings targets.
(39)
Described Described
100% (225)
60%
(136)
( ) : Number of companies
1 Consistently describe
the company’s vision and
the path it will take to achieve it
2 Describe measures to achieve
strategies, and specific targets
A holistic view in corporate management is needed to Eighty-six percent of companies provide financial targets
increase profitability over the long term and continue to in integrated reports, but only 26% reveal quantitative
provide social value. non-financial targets (Figures 2 and 3).
In this survey 95% of the companies describe their Providing specific targets is a sign of a strong
medium-term business plans in their integrated report, commitment to achieving those targets, and it is the
but only 37% argue this with a description of their starting point for a better understanding of a company’s
long-term strategy (Figure 1). strategies. Listing targets not only for financial
information, but also for non-financial aspects that have
When companies explain their long-term strategies, but
a significant effect on sustainable growth, and explaining
without clarifying their role and relationship with the
their correlation with financial performance, is to deepen
understanding of a company’s sustainability.
medium-term business plan, readers cannot get a clear
sense of the company’s precise vision in the long term.
A company has to consider matters that are less In addition, companies should explain the specific steps
likely to yield tangible results in the short and medium they are taking to achieve their targets in a succinct way.
term and must instead be addressed over a longer
Nevertheless, 48% of companies lack a description of
time-span, such as HR development and R&D,
their strategies broken down by each line of business
in order to achieve its vision. Moreover, the longer the
perspective, the greater impact the company’s business
(Figure 4). In addition, only 18% of companies lay out the
relationship between the value driver and strategies and
activities will have.
clarify their approach to resource allocation (Figure 5).
Management should identify the stakeholders that have
Ideally, companies should base the information they
a major impact on sustainable value creation and speak
provide not only on strategies, but on specific measures,
convincingly from a more panoramic viewpoint about
their approach to resource allocation, and indicators that
their vision and the path to achieving it.
can convey their progress toward achieving their vision.
Figure 2 Figure 3
Figure 1 Quantitative financial Quantitative financial
Medium-term business plan (three years or less) targets targets
With long-term
(25) 86% (129) 26%
(150) (46)
strategy
37%
Described (65) Figure 5
Good practice Describing vision for the future and strategies based on integrated thinking
One report provides future visions not only for profit, but for Corporate social responsibility is, in essence, effectively
the impact the company will have on stakeholders in society. employing the resources provided by society and proving
This report specifies the resources needed to achieve these useful and valuable to society on an ongoing basis.
visions and the methods for procuring these resources as
This is a good example of how CSR initiatives, which have
long-term strategies and a medium-term business plan,
tended to be considered separately from the main business,
should now be seen in an integrated manner—using integrated
which is a milestone in that effort.
thinking—and incorporated in a company’s vision.
This survey found that 94% of companies described as a medium-term plan laying out the steps, should
their medium-term business plans (spanning up to describe these long-term strategies and medium-term
three years) in their securities reports, but only 18% of business plans in their securities reports.
those included an explanation of long-term strategies
Moreover, an explanation of specific measures by
(Figure 1-1). Moreover, only 26% of all companies
business and region, along with the scale of
described their strategies by business in their
investment and targets, will foster better
understanding of a company’s medium- and
securities reports (Figure 4-1).
Companies that have clear long-term targets as well long-term strategies.
as long-term strategies to achieve these goals, as well
Indicators that monitor the appropriate cycle of the An examination of the reports for descriptions of
funds needed for strategy implementation (such as funding policy and methods found that 37% of
ROE), and targets, as well as explanations of progress companies mention some sort of policy on securing
on these, are useful information that helps readers financial resources (Figure 2). Many of these
assess the feasibility of management strategies. companies describe their target D/E ratio and their
methods for financing (Figure 3).
In integrated reports, 69% of companies provide some
kind of indicators and targets for these indicators. When it comes to policy for allocation of funds
However, only 29% of companies overall explain the generated in business, 57% of companies explain how
reasons that led them to set these targets, with they use their funds (Figure 4). Most companies
references to capital costs. This is still low (Figure 1). describe policy on shareholder returns, with the next
most common being growth investments (Figure 5).
Management strategies are more persuasive if they
However, in many cases, the companies explain
include indicators whose feasibility is backed up from
shareholder returns or investment plans separately
a financial perspective, together with targets and the
without giving the reader an overall picture (a balanced
rationales behind them. Moreover, explanations of the
perception of the company’s capital costs, based on
view) of their fund allocation policy.
business risks, are essential. Companies should clearly specify their overall policies
for capital distribution, such as growth investments,
Companies that develop multiple businesses may find
cash on hand and shareholder returns, based on the
it effective to describe the thinking behind their capital
lifecycle of their businesses and their optimal capital
costs, broken down by business.
structure, and show how the policies reinforce the
Adequate communication can lead to more effective feasibility of their management strategies.
management of capital costs, thus leading to
reductions in these costs. Figure 3
Figure 2 Content of explanation
Funding methods of funding methods
Future D/E
Figure 1 Not
explained ratio level 71% (46)
Targets for earning power and capital efficiency 63% Explained Funding
method 69% (45)
(110) 37% Rating indicating
funding capacity 46% (30)
Not included Explanation of rationale (65)
31%
behind target-setting
(55) based on capital costs Other 22% (14)
29% (51) n=175 companies n=65 companies
Companies that explain funding methods
Figure 5
Figure 4 Content of explanation of
Policy on fund allocation how funds are allocated
Included
69%
Shareholder
No explanation of Not returns 92% (92)
rationale behind explained
Growth
target-setting
43% Explained
investments 73% (73)
(120) 40% (69) (75) 57% Business
42% (42)
(100) funds
Repayment of
interest-bearing
liabilities
23% (23)
n=175 companies n=175 companies Other 6% (6)
Companies in the Nikkei 225 that issue integrated reports n=100 companies
Companies that explain
( ) : Number of companies ( ) : Number of companies their policies on fund allocation
No explanation of No explanation of
Included rationale behind Included rationale behind
57% target-setting
54% target-setting
31% (69)
(129) 46% (104) (120)
n=225 companies
companies included in the Nikkei 225 Index
40% (135)
49% (65)
Other 10% (14) Other 22% (14)
(90) (110)
n=135 companies ※ n=65 companies※
n=225 companies ※Companies that explain funding methods
companies included in the Nikkei 225 Index
48%
Both non-financial indicators
financial
and
76% (133) n=175 companies 19% (34)
non-financial (84)
Figure 4
Impact of current results on achievement of
Only
financial 41% (72) Explained
strategic targets
24 %
Not
explained
Explained
(42) 52%
Only
non-financial
2% (4)
(91) 48%
(84)
n=175 companies
Companies in the Nikkei 225 that issue integrated reports n=175 companies
( ) : Number of companies ( ) : Number of companies
Good practice Explaining the financial value created by achieving non-financial target
One company selects material issues that affect value creation, Listing indicators in this way and explaining the progress
identifies non-financial information useful in addressing made so far makes it easier for the reader to understand
related risks and opportunities, and then provides targets for the logic behind the initiatives taken to achieve
each indicator. The company also identifies the financial value the medium- and long-term targets, and it also makes
created by achieving these non-financial targets, and whether for a more persuasive story about the value creation the
they contribute to the milestones used to assess current company aspires to achieve.
progress on its long-term vision.
15 Performance
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Augmenting narrative information in securities reports
Integrated reports must explain the analysis of business performance while taking trends in
financial performance in that fiscal year, and indeed non-financial indicators into account.
88% of companies explain the reasons behind both
Financial results are naturally weighed heavily as
ups and downs in results (Figure 3-1). Moreover, of
indicators for assessing management results, but an
those companies that explain the reasons for these
assessment of performance based on non-financial
ups and downs, 83% use only financial indicators to
indicators is useful information in assessing current
explain these changes, but only 5% use both financial
corporate value. An explanation based on trends in
and non-financial indicators.
non-financial indicators that affect sales and costs will
Companies that explain ups and downs using both help to improve the persuasiveness of the analyses of
financial and non-financial indicators designate business performance in securities reports.
non-financial factors that affect results, and analyze
Both
financial 15% Both
financial 37% Explained Explained
10% 19%
and and
non-financial (33) non-financial (84)
(22) (42)
Not Not
1% 2%
Only Only explained explained
non-financial
(3)
non-financial
(4)
90% 59%
(203) (133)
Not
58 %
(131)
Both financial and
non-financial indicators
81%
(182)
41%
(91)
explained
20% 15% (34)
(44)
n=225 companies
Companies in the Nikkei 225 that issue integrated reports
( ) : Number of companies
Performance 16
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Outlook
This survey showed that 74% of companies explain Of the companies explaining their outlook of the
their outlook in their integrated report, but only 14% of business environment, 20% of companies explain how
companies refer to their timeframe (Figure 1). those outlooks are related to materiality assessments,
and 57% of companies explain how they are related to
If the outlook for the business environment on which
their strategy (Figure 2).
the value creation story is premised are not explained, it
is difficult for the reader to understand where the story The reports show that many companies consider their
came from, and this impairs its reliability. Even if outlook strategies based on outlook of the business
for the business environment are explained, without a environment, when crafting their medium-term
narrative based on a timeframe, the trajectory for business plan. However, few companies explain why
achieving this value creation story remains vague. their materiality assessment arrived at a particular result.
Outlook of the business environment become Companies in the same industry and in similar business
increasingly uncertain the longer the timeframe is. environments will probably not show major differences
When explaining outlook, it becomes easier to convey in the results of their materiality assessments. However,
management’s intentions if the timeframe for these although they may arrive at the same assessment
outlooks is laid out. This helps to give the reader an results, individual companies’ outlooka still differ
accurate understanding. depending on their corporate philosophies, strengths
and past trajectories.
Companies can tell a more compelling value creation
story if they discuss why they arrived at their materiality
assessment results and why they devised such
strategies by linking it to their outlook.
Figure 1 Figure 2
Outlook Outlook linked to materiality and strategies
26% timeframe
14% (25) 39%
(46) (50)
Linked to
strategies
Good practice Awareness of environmental change in short, medium and long term
and explanation of corresponding outlook
One company’s report describes its thinking about medium-term business plans, and the short-term perspective
environmental changes and explains their resulting outlook in in explanations of business strategies for each fiscal year.
terms of short-, medium- and long-term timeframes.
This sort of treatment makes it easy to understand the
The president’s message explains changes in the business outlook that are the basis for companies’ implementation of
environment anticipated in the different timeframes and business plans in the short-, medium- and long-term,
specific initiatives from a long-term perspective, resulting in a highly persuasive value creation story.
the medium-term perspective in the explanation of
17 Outlook
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Augmenting narrative information in securities reports
Only 44% of companies describe their outlook but management’s perceptions of those
for the business environment in their description of environments and the impact they have on how the
management policies and strategies in their manage the company.
The FSA’s Principles for the Disclosure of Narrative
securities reports (Figure 1-1).
Companies should lay out their outlook for factors in Information calls for companies to explain
the business environment that could affect them, management’s perceptions of the environment in
such as disruptive innovation, aging population, which they operate together with a connection to the
and consumption tax increases, and then substance of the company’s business in their
explain how these factors will affect their value descriptions of management policies and strategies.
creation and strategies. This clearly indicates that management is expected to
explain the business environment more fully even in
Moreover, readers want to see not only what
securities reports.
kind of business environments affect companies,
Figure 1-1 Forecasts
44% (99)
timeframe
42% (94) 57% (129)
timeframe
46% (104)
Linked to
strategies
Linked to
Explained strategies Explained 41% (53) 57%
44% (44)
43% (43)
Linked to
44%
(44) 61% (79)
Linked to
strategies and
materiality
(74)
strategies and
materiality 16% (21) 20%
1% (1) Linked to
materiality
(26)
Linked to
materiality 4% (5)
n=99 companies
0% (0) n=129 companies
Companies that explain forecasts Companies that explain forecasts
( ) : Number of companies
Outlook 18
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Governance
The CEO is a company’s top executive, with responsibility Describing the appropriate function and effectiveness
for its sustainable growth. As such, one of the most of the board of directors, which support medium- and
important roles of the board of directors is to use objective, long-term growth in corporate value, helps to present
timely and transparent procedures to appropriately select a the mechanisms needed to achieve the purpose.
person who can make bold management decisions suited
to changes in the environment as the CEO.
In integrated reports, 68% of companies state that they
carry out evaluations using questionnaires and interviews
The survey showed that 10% of companies explain the and 63% note the frequency of these evaluations.
qualities they require in their CEOs and 11% of companies In contrast, only 37% of companies note the evaluation
explain their process for removing a CEO, which are both low items, and even fewer companies describe the
(Figures 1 and 2). response to identified issues and the results of the
Fifty percent of companies explain their evaluation and response to issues identified in the past (Figure 4).
calculation methods for the elements making up Conveying effectiveness of the boards means more
compensation for directors, which should function as than simply describing the Board composition and
sound incentives for achieving sustainable growth. regular reviews being conducted. Companies should
Forty-two percent of companies explain the percentage of explain the correlation between strategic goals and
each element in compensation overall (Figure 3). board evaluation and then lay out the ongoing
Describing the specific requirements and qualities required processes followed to improve issues that have been
of CEOs and the highly transparent procedures for identified and reinforce strengths.
selecting and removing CEOs leads to a solid explanation In addition, describing the status of evaluations
of the strategy implementation system. Describing a performed by external organizations can enhance
rational compensation scheme also helps to present the the transparency and objectivity of the
incentive-linked system for improving medium- and effectiveness evaluations.
long-term corporate value and reflects integrated thinking
about the compensation system’s design.
Figure 4
Figure 1 Figure 2 Content of explanation of board evaluation
Qualities required of Procedure for
CEO dismissing CEO
Evaluation
method 68% (119)
Not Not
explained explained Frequency of
Explained Explained 63% (110)
90% 10% 89% 11%
evaluations
(158) (156) Evaluator
(17) (19)
(internal) 62% (109)
n=175 companies Evaluator
Companies in the Nikkei 225 that issue integrated reports (external) 25% (44)
Figure 3 Evaluation
Content of explanation of director compensation items 37% (65)
Issues
identified 50% (87)
Elements of
compensation 89% (155)
Policies on addressing
Evaluation and calculation
issues identified 33% (58)
methods for elements
of compensation
50% (88)
Results of response to
Elements as percentage of
42% issues identified in the past 33% (57)
compensation overall (73)
Good practice Laying out current conditions and future course, even when certain initiatives are
still merely under consideration
One integrated report explains the status and progress on all Even if it is difficult to address all points that could improve
matters requiring disclosure in the corporate governance code. corporate governance in the short term, an explanation of the
It is notable that the report provides information not only on direction of such efforts would show that a company is
the initiatives the company has already carried out, but also actively committed to improving corporate governance and
explains the status and direction of initiatives which are still being in dialogue with investors.
under consideration.
19 Governance
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Augmenting narrative information in securities reports
2% 8%
(17)
3% 9%
(4) (7) (19)
Not Not Not Not
explained explained explained explained
98% 70% 97% 69%
(221) (158) (218) (156)
Governance 20
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Basic Information
About the Issuing Companies
513 companies
The number of companies
+
11
15
1
6
■ HKEX:
(1)
■ JJASDAQ/Mothers:
issuing integrated reports
(424) (89) 1 6 (5)
in 2019 6 ■ Second Section of the TSE:
First Section (6)
(333) 6
of the TSE (As of September 30, 2019)
(277)
(386)
477
companies
(212)
(317)
(135)
(91)
(58)
(23) (31)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2017 2018 2019
Source: “List of Japanese Companies Issuing Self-Declared Integrated Reports 2019,” n=341 n=414 n=513
Corporate Value Reporting Lab companies companies companies
7% 27%
(129)
(34) Over JPY 100 billion
66%
JPY 427 trillion
22% 88%
(477) (477) (419)
JPY 100 billion to JPY 500 billion to
under JPY 500 billion under JPY 1 trillion
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Industries of issuing companies
The highest number of issuing companies came from the By industry, the insurance sector had the highest percentage of
electric equipment sector for the fifth year in a row, up by 11 issuance, at 89%, followed by the air transport industry (67%),
over the previous year to 51 companies. The banking sector pharmaceuticals (64%) and the marine transport industry (63%).
had the highest number of first-time issuers this year, at 12,
The warehousing/transport industry had no companies issuing
with many of those being regional banks. The number of
reports through last year, but saw its first issuing companies this
first-time issuers in the machinery industry was 10, and B2B
year. As a result, all industrial sectors now have companies
companies are also increasing their report issuance.
issuing integrated reports.
Chemicals
Machinery
Construction
Pharmaceuticals
Wholesale
Banking
Foods
Retail
Services
communication
Information and
equipment
Transportation
and gas
Electric power
Real estate
Other products
clay products
Glass and stone/
services
Other financial
Nonferrous metals
Land transport
Insurance
equipment
Precision mechanical
commodity futures
Securities and
Textile products
Steel
Metal products
Marine transport
Rubber products
coal products
Petroleum and
Mining
Air transport
agriculture and forestry
Fisheries/
Transport
Index attributes of issuing companies Warehousing/
The percentage of issuing companies making up the Nikkei 225 rose 12 percentage points over the previous year to 78% and
and the JPX Nikkei 400 has steadily increased year by year. The rose 5 percentage points to 60% for the JPX Nikkei 400.
percentage of companies in the Nikkei 225 that issued reports
Nikkei 225 component percentage n=225 companies JPX Nikkei 400 component percentage n=400 companies
57% (129)
66% (148)
78% (175)
44% (177)
55% (219)
60% (241)
English only
Issuance of English version Japanese only 1%
As in 2018, over 80% of companies published their reports
in both Japanese and English.
14%
(74)
Japanese
and English
(4)
85% (435)
n=513 companies
*Data on the issuance of
English versions is current
as of the end of January 2020.
125
terms of timeliness.
companies n=509 companies
Excluding four
158
companies
n=435 companies
Companies issuing
(119) companies out
of 513 that only
(137) both Japanese and
English reports
(87) (81)
issue an English (106)
version
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SPOTLIGHT
SPOTLIGHT 24
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SPOTLIGHT
25 SPOTLIGHT
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Expectations for consistency between standards
for non-financial information
Corporate Reporting Dialogue (CRD), convened by the The numerous standards and frameworks for
International Integrated Reporting Council (IIRC) with the non-financial information has led to confusion among
aim of supporting more comparable integrated corporate not only to the report preparers, but also to the users.
reporting, launched a 2 year project called the Better This has led to calls for greater consistency and
Alignment Project (the Project) in November 2018. unification among the standards and frameworks.
As a result, apart from the Better Alignment Project,
The Project will release a report every year, and has
many other projects comparing various standards have
issued the first report in September 2019. The first-year
also been launched.
report focused on the comparison between the
standards issued by the organizations participating in The Better Alignment Project is currently considering
the CRD that set standards on non-financial information the agenda for the second year, based on observations
(CDP, CDSB, GRI, IIRC, SASB) with the disclosure made in the first year’s report. We hope that the IIRC
principles, recommended disclosures and illustrative will exercise even greater leadership and make rapid
example metrics issued by the Task Force on progress in considering ways to ensure consistency
Climate-related Financial Disclosures (TCFD). The first and further understanding of the characteristics of the
year report also reflected the comments received in the various standards.
consultation held in 2019 as well as the results of the
Norie Takahashi
roundtable discussions held in 12 cities around the
world, including Tokyo. CRD website
These results pointed to an overall consistency and For those browsing
compatibility among the standards and frameworks. online, please click
the QR code
SPOTLIGHT 26
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SPOTLIGHT
Figure 1 Figure 2
Companies in the Nikkei 225 Disclosure in line with TCFD recommendations
that are supporters of TCFD in integrated reports (by content)
(as of December 31, 2019)
n=102 companies
67% Companies in the Nikkei 225
(68) that pledged support for TCFD
Does not support (As of December 31, 2019)
55% (123)
43%
(44) 38%
30% 29% (39)
(102)
risk management
integrated into overall
climate-related risks
climate-related risks.
that have been identified
n=225 companies
companies included in the Nikkei 225 Index
TCFD website
( ) : Number of companies
27 SPOTLIGHT
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independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
List of Nikkei 225 companies as of October 2019
ADVANEX INC. Development Bank of Japan Inc. INPEX CORPORATION KYORIN Holdings,Inc.
ADVANTEST CORPORATION Dexerials Corporation ISEKI&CO.,LTD. Kyosan Electric Manufacturing
AEON CO.,LTD. DIC Corporation Isetan Mitsukoshi Holdings Ltd. Co.,Ltd.
AEON Financial Service Co.,Ltd. DKS Co. Ltd. ITO EN,LTD. Kyoto University
AEON Mall Co.,Ltd. DUSKIN CO.,LTD. ITOCHU Corporation KYOWA EXEO CORPORATION
AGC Inc. DyDo GROUP HOLDINGS,INC. ITOCHU ENEX CO.,LTD. Kyowa Kirin Co.,Ltd.
AHRESTY CORPORATION DYNAM JAPAN HOLDINGS Co.,Ltd. ITOCHU Techno-Solutions Corporation KYUDENKO CORPORATION
AIR WATER INC. E・J Holdings Inc. IWATANI CORPORATION Kyushu Electric Power Company,Inc.
AIRDO Co.,Ltd. East Nippon Expressway Company J.FRONT RETAILING Co.,Ltd. Kyushu Railway Company
Limited Lawson,Inc.
AISIN SEIKI CO.,LTD. JACCS CO.,LTD.
EBARA CORPORATION LEOPALACE21 CORPORATION
Ajinomoto Co.,Inc. Japan Airlines Co.,Ltd.
EBARA Foods Industry,Inc. LINTEC Corporation
Alfresa Holdings Corporation Japan Asia Group Limited
Echo Electronics Industry Co,.Ltd. Lion Corporation
ALPS ALPINE CO., LTD. Japan Exchange Group, Inc.
Eisai Co.,Ltd. LIXIL Group Corporation
AMITA HOLDINGS CO.,LTD. Japan Petroleum Exploration Co.,Ltd.
Electric Power Development Co.,Ltd. MANDOM CORPORATION
AMUSE INC. JAPAN POST BANK Co.,Ltd.
FamilyMart Co., Ltd. Marubeni Corporation
ANA HOLDINGS INC. JAPAN POST HOLDINGS Co.,Ltd.
FANCL CORPORATION Maruha Nichiro Corporation
ANEST IWATA Corporation JAPAN POST INSURANCE Co.,Ltd.
FISCO Ltd. MARUI GROUP CO.,LTD.
ANRITSU CORPORATION JCR Pharmaceuticals Co.,Ltd.
FP CORPORATION MATSUDA SANGYO Co.,Ltd.
AOKI Holdings Inc. JEOL Ltd.
Freund Corporation Maxell Holdings, Ltd.
Aozora Bank,Ltd. JFE Holdings, Inc.
FUJI CORPORATION Mebuki Financial Group,Inc.
ARATA CORPORATION JGC HOLDINGS CORPORATION
FUJI ELECTRIC CO.,LTD. MEDIPAL HOLDINGS
Asahi Group Holdings, Ltd. J-OIL MILLS, INC.
FUJI OIL HOLDINGS INC. CORPORATION
Asahi Holdings,Inc. Joshin Denki Co.,Ltd.
Fuji Pharma Co.,Ltd. MEGMILK SNOW BRAND Co.,Ltd.
ASAHI KASEI CORPORATION JSP Corporation
FUJICCO CO.,LTD. MEIDENSHA CORPORATION
ASKA Pharmaceutical Co.,Ltd. JSR CORPORATION
FUJIFILM Holdings Corporation Meiji Holdings Co., Ltd.
Astellas Pharma Inc. JTEKT Corporation
Fujikura Ltd. Meiji Yasuda Life Insurance
AUTOBACS SEVEN CO.,LTD. JUKI CORPORATION Company
FUJITA KANKO INC.
Azbil Corporation JVCKENWOOD Corporation Menicon Co.,Ltd.
FUJITEC CO.,LTD.
BANDAI NAMCO Holdings Inc. JXTG Holdings, Inc. METAWATER Co.,Ltd.
FUJITSU GENERAL LIMITED
Benesse Holdings, Inc. KAGA ELECTRONICS CO.,LTD. MIE UNIVERSITY
FUJITSU LIMITED
BIC CAMERA INC. KAGOME CO.,LTD. MINEBEA MITSUMI Inc.
Fukuoka Financial Group,Inc.
BRIDGESTONE CORPORATION KAJIMA CORPORATION Miraca Holdings Inc.
FUKUSHIMA GALILEI CO.LTD.
BROTHER INDUSTRIES, LTD. KAKEN PHARMACEUTICAL CO.,LTD. MISAWA HOMES CO., LTD.
Funai Soken Holdings Incorporated
C.I. TAKIRON Corporation KANAMOTO CO.,LTD. Mitsubishi Chemical Holdings
FURUKAWA CO.,LTD. Corporation
Calbee,Inc. KANDENKO CO.,LTD.
Furukawa Electric Co., Ltd. Mitsubishi Corporation
CANON INC. KANEMATSU CORPORATION
Fuyo General Lease Co.,Ltd. Mitsubishi Estate Company,Limited
CAPCOM CO.,LTD. KANEMATSU ELECTRONICS LTD.
GiG Works Inc. MITSUBISHI GAS CHEMICAL
Carlit Holdings Co., Ltd. Kanro Inc.
GS Yuasa Corporation COMPANY,INC.
CASIO COMPUTER CO.,LTD. KANSAI PAINT CO.,LTD.
GUNZE LIMITED Mitsubishi Heavy Industries, Ltd.
Chiba University Kao Corporation
H.I.S. Co.,Ltd. MITSUBISHI MATERIALS
Chubu Electric Power Company,Inc. Kawasaki Heavy Industries, Ltd. CORPORATION
H2O RETAILING CORPORATION
CHUGAI PHARMACEUTICAL CO.,LTD. Kawasaki Kisen Kaisha, Ltd. Mitsubishi Paper Mills Limited
HAKUHODO DY HOLDINGS
CKD Corporation KDDI CORPORATION Mitsubishi Research Institute,Inc.
INCORPORATED
CMK CORPORATION Keihanshin Building Co.,Ltd. Mitsubishi Tanabe Pharma
Hankyu Hanshin Holdings,Inc.
COMANY INC. Kewpie Corporation Corporation
HANWA CO.,LTD.
Concordia Financial Group,Ltd. KH Neochem Co.,Ltd. Mitsubishi UFJ Financial Group,Inc.
HEIWA PAPER CO.,LTD.
COSMO ENERGY HOLDINGS Kirin Holdings Company,Limited Mitsubishi UFJ Lease & Finance
Hitachi Capital Corporation Co.,Ltd.
COMPANY,LIMITED KITO CORPORATION
Hitachi Chemical Company,Ltd. MITSUI & CO.,LTD.
CyberAgent, Inc. KITZ CORPORATION
Hitachi Construction Machinery Co.,Ltd. Mitsui Chemicals,Inc.
Dai Nippon Printing Co.,Ltd. KOBAYASHI PHARMACEUTICAL
Hitachi High-Technologies Corporation Mitsui E&S Holdings Co., Ltd.
Dai Nippon Toryo Company,Limited CO.,LTD.
Hitachi Metals, Ltd. Mitsui Fudosan Co.,Ltd.
DAIBIRU CORPORATION Kobe Steel, Ltd.
Hitachi Transport System, Ltd. Mitsui Mining & Smelting
Daicel Corporation Kobe University
Hitachi Zosen Corporation Company,Limited
DAI-DAN CO.,LTD. KOKUSAI PULP & PAPER CO.,LTD.
Hitachi, Ltd. Mitsui O.S.K. Lines,Ltd.
DAIFUKU CO.,LTD. KOMATSU LTD.
Hitotsubashi University MITSUI-SOKO HOLDINGS Co.,Ltd.
Dai-ichi Life Holdings,Inc. KOMERI CO.,LTD.
Hodogaya Chemical Co.,Ltd. Mitsuuroko Group Holdings Co.,Ltd.
DAIICHI SANKYO COMPANY,LIMITED KONDOTEC INC.
Hokkaido Electric Power Company,Inc. Mizuho Financial Group, Inc.
DAIKEN CORPORATION KONICA MINOLTA, INC.
Hokuetsu Corporation Mizuho Leasing Company,Limited
DAIKIN INDUSTRIES, LTD. Konoike Transport Co.,Ltd.
Hokuriku Electric Power Company Mochida Pharmaceutical Co.,Ltd.
Daio Paper Corporation KOSE Corporation
HONDA MOTOR CO.,LTD. Monex Group, Inc.
DAITO TRUST CONSTRUCTION KUBOTA CORPORATION
CO.,LTD. HORIBA, Ltd. Morinaga Milk Industry Co.,Ltd.
Kumagai Gumi Co., Ltd.
DAIWA HOUSE INDUSTRY CO.,LTD. House Foods Group Inc. MS&AD Insurance Group Holdings, Inc.
KURARAY CO.,LTD.
Daiwa Securities Group Inc. Hulic Co., Ltd. Murata Manufacturing Co., Ltd.
Kurimoto, Ltd.
Denka Company Limited IBIDEN CO.,LTD. Nabtesco Corporation
Kurita Water Industries Ltd.
DENSO CORPORATION IHI Corporation NAGASE&CO., LTD.
KYB Corporation
Dentsu Group Inc. IINO KAIUN KAISHA, LTD. Nankai Electric Railway Co.,Ltd.
KYOCERA CORPORATION
NEC Capital Solutions Limited OSAKA GAS CO.,LTD. Sumitomo Bakelite Company,Limited TOHO TITANIUM CO., LTD.
NEC Corporation OSG Corporation SUMITOMO CHEMICAL Tohoku Electric Power Company,Inc.
NEC Networks & System Integration Otsuka Holdings Co.,Ltd. COMPANY,LIMITED TOKAI CARBON CO.,LTD.
Corporation Pan Pacific International Holdings Corp. SUMITOMO CORPORATION TOKAI RIKA CO.,LTD.
Net One Systems Co.,Ltd. Panasonic Corporation Sumitomo Dainippon Pharma Co., Ltd. Tokai Tokyo Financial Holdings, Inc.
NGK INSULATORS, LTD. PARCO CO.,LTD. Sumitomo Forestry Co.,Ltd. Tokio Marine Holdings, Inc.
NGK SPARK PLUG CO.,LTD. PENTA-OCEAN CONSTRUCTION SUMITOMO HEAVY INDUSTRIES, LTD. Tokyo Century Corporation
NH Foods Ltd. CO.,LTD. SUMITOMO LIFE INSURANCE TOKYO DOME CORPORATION
NHK SPRING CO.,LTD. PIGEON CORPORATION COMPANY
Tokyo Electric Power Co.
NICHICON CORPORATION POLA ORBIS HOLDINGS INC. Sumitomo Metal Mining Co.,Ltd. Holdings,Inc.
Nichi-Iko Pharmaceutical Co.,Ltd. Prima Meat Packers, Ltd. Sumitomo Mitsui Construction Co.,Ltd. TOKYO GAS CO.,LTD.
NICHIREI CORPORATION PwC Japan Group Sumitomo Mitsui Financial Group, Inc. Tokyo Kiraboshi Financial Group,Inc.
NIHON CHOUZAI Co.,Ltd. RAITO KOGYO CO.,LTD. Sumitomo Mitsui Trust Holdings,Inc. TOKYO OHKA KOGYO CO.,LTD.
NIHON KOHDEN CORPORATION Rakuten,Inc. Sumitomo Osaka Cement Co.,Ltd. Tokyo Tatemono Co.,Ltd.
Nihon Unisys, Ltd. Recruit Holdings Co.,Ltd. Sumitomo Riko Company Limited TOKYU CONSTRUCTION CO.,LTD.
NIIGATA UNIVERSITY Resona Holdings, Inc. Sumitomo Rubber Industries, Ltd. TOKYU CORPORATION
NIKKISO CO.,LTD. RICOH COMPANY,LTD. Sun Messe Co.,Ltd. Tokyu Fudosan Holdings Corporation
NIKKO CO.,LTD. ROHM Co., Ltd. SUZUKEN CO.,LTD. TOMY COMPANY,LTD.
NIKON CORPORATION ROYAL HOLDINGS Co., Ltd. SUZUKI MOTOR CORPORATION TOPCON CORPORATION
NIPPON CHEMI-CON CORPORATION S.T.CORPORATION SYSMEX CORPORATION TOPPAN FORMS CO.,LTD.
NIPPON CHEMIPHAR CO.,LTD. SAKATA INX CORPORATION T&D Holdings,Inc. TOPPAN PRINTING CO.,LTD.
Nippon Electric Glass Co.,Ltd. Sangetsu Corporation TADANO LTD. TOPY INDUSTRIES,LIMITED
NIPPON GAS CO.,LTD. SANGO CO.,LTD. TAIHO KOGYO CO.,LTD. TORAY INDUSTRIES, INC.
NIPPON KAYAKU CO.,LTD. Sanken Electric Co.,Ltd. Taikisha Ltd. Torishima Pump Mfg.Co.,Ltd.
Nippon Life Insurance Company Sanki Engineering Co.,Ltd. TAISEI CORPORATION TOSHIBA CORPORATION
NIPPON PAINT HOLDINGS CO.,LTD. SANTEN PHARMACEUTICAL CO.,LTD. TAISHO PHARMACEUTICAL TOSHIBA TEC CORPORATION
HOLDINGS CO., LTD.
Nippon Paper Industries Co.,Ltd. Sanwa Holdings Corporation TOSOH CORPORATION
TAIYO NIPPON SANSO CORPORATION
NIPPON PILLAR PACKING CO.,LTD. SANYO DENKI CO.,LTD. TOTO LTD.
TAIYO YUDEN CO., LTD.
Nippon Sheet Glass Company,Limited SAPPORO HOLDINGS LIMITED TOYO CONSTRUCTION CO.,LTD.
TAKARA & COMPANY LTD.
Nippon Shinyaku Co.,Ltd. SATO HOLDINGS CORPORATION TOYO DENKI SEIZO K.K.
TAKARA HOLDINGS INC.
NIPPON SHOKUBAI CO.,LTD. SAWAI PHARMACEUTICAL CO.,LTD. TOYO KANETSU K.K.
Takara Leben CO.,LTD.
Nippon Signal Company,Limited SBI Holdings, Inc. TOYOBO CO.,LTD.
Takasago Thermal Engineering Co.,Ltd.
NIPPON STEEL CORPORATION SBS Holdings,Inc. TOYODA GOSEI CO.,LTD.
Takeda Pharmaceutical Company
NIPPON TELEGRAPH & TELEPHONE SCREEN Holdings Co.,Ltd. Limited TOYOTA BOSHOKU
CORPORATION SCSK Corporation CORPORATION
TAKENAKA CORPORATION
Nippon Yusen Kabushiki Kaisha SEGA SAMMY HOLDINGS INC. TOYOTA INDUSTRIES
TDK CORPORATION CORPORATION
Nishimatsu Construction Co.,Ltd. SEIBU HOLDINGS INC. TechnoPro Holdings,Inc. TOYOTA MOTOR CORPORATION
Nissan Chemical Corporation SEIKAGAKU CORPORATION TEIJIN LIMITED TOYOTA TSUSHO CORPORATION
Nissha Co., Ltd. SEIKO EPSON CORPORATION TERUMO CORPORATION TS TECH CO.,LTD.
NISSHIN SEIFUN GROUP INC. SEIKO HOLDINGS CORPORATION T-Gaia Corporation TSUBAKIMOTO CHAIN CO.
Nisshinbo Holdings Inc. Sekisui Chemical Co.,Ltd. The 77 Bank, Ltd. TSUMURA & CO.
NISSIN FOODS HOLDINGS CO.,LTD. Sekisui House, Ltd. The Chiba Bank, Ltd. UACJ Corporation
Nitori Holdings Co., Ltd. SENSHUKAI CO.,LTD. The Dai-ichi Life Insurance Company, Ube Industries,Ltd.
NITTO BOSEKI CO.,LTD. SEPTENI HOLDINGS CO.,LTD. Limited
NITTO DENKO CORPORATION ULVAC, Inc.
Seven & i Holdings Co.,Ltd. The Fukui Bank, Ltd.
NOMURA Co.,Ltd. UNI.CHARM CORPORATION
Seven Bank,Ltd. The Furukawa Battery Co.,Ltd.
Nomura Holdings, Inc. UNITED ARROWS LTD.
SG HOLDINGS CO.,LTD. The Gunma Bank, Ltd.
Nomura Real Estate Holdings,Inc. University of Tsukuba
Sharp Corporation The Hachijuni Bank, Ltd.
Nomura Research Institute, Ltd. UNIVERSUTY OF FUKUI
Shikoku Electric Power Company,Inc. The Hiroshima Bank, Ltd.
NORITAKE CO., LIMITED USHIO INC.
Shimadzu Corporation The Hyakugo Bank, Ltd.
NORITZ CORPORATION UTSUNOMIYA UNIVERSITY
SHIMIZU CORPORATION THE JAPAN WOOL TEXTILE CO., LTD.
NS United Kaiun Kaisha, Ltd. WACOAL HOLDINGS CORP.
Shin Nippon Air Technologies Co.,Ltd. The Juroku Bank, Ltd.
NSK Ltd. West Japan Railway Company
Shin-Etsu Chemical Co.,Ltd. The Kansai Electric Power Company,Inc.
NTN CORPORATION YAMADA DENKI CO.,LTD.
Shinsei Bank, Limited THE NIPPON ROAD CO.,LTD.
NTT DATA CORPORATION YAMAHA CORPORATION
Shionogi & Co.,Ltd. THE NISSHIN OILLIO GROUP,LTD.
NTT DOCOMO,INC. Yamaha Motor Co.,Ltd.
Shiseido Company,Limited The San-in Godo Bank, Ltd.
OBAYASHI CORPORATION YAOKO CO.,LTD.
Showa Denko K.K. THE SHIGA BANK, LTD.
OHARA INC. YASKAWA Electric Corporation
SKYLARK HOLDINGS CO., LTD. THE SHIMANE BANK,LTD.
Oji Holdings Corporation YASUHARA CHEMICAL CO.,LTD.
Sodick Co.,Ltd. THE SHIZUOKA BANK, LTD.
OKASAN SECURITIES GROUP INC. YKK AP Inc.
SoftBank Corp. The University of Tokyo
OKAYAMA UNIVERSITY YKK Corporation
SOHGO SECURITY SERVICES CO.,LTD. TIS Inc.
Oki Electric Industry Co., Ltd. Yokogawa Electric Corporation
Sojitz Corporation TOA CORPORATION
OKUMURA CORPORATION YOROZU CORPORATION
Solaseed Air Inc. TOAGOSEI CO.,LTD.
OLYMPUS CORPORATION YOSHINOYA HOLDINGS CO.,LTD.
Sompo Holdings, Inc. TOBISHIMA CORPORATION
OMRON Corporation Z Holdings Corporation
SONY CORPORATION TODA CORPORATION
ONO PHARMACEUTICAL CO.,LTD. ZEON CORPORATION
Sony Financial Holdings Inc. TOHO Co.,Ltd.
ORIX CORPORATION SUBARU CORPORATION TOHO GAS CO.,LTD.
March 2020
KPMG Japan
Integrated Reporting Center of Excellence
31 Afterword
© 2020 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Survey Team
Hiroto Yamane Yoshiko Shibasaka Tomokazu Sekiguchi Sakurako Ohtsuki Kiyoo Kamiyama
Koichiro Saio Teruya Saruta Kyoichi Seishi Norie Takahashi Hiromasa Niinaya
Sumika Hashimoto Katsunao Hikiba Shinichiro Akasaka Keiko Kodama Mai Yamashita
Tomonori Yoshida Yuka Otsubo Shotaro Kanatani Satoshi Gohara Hiroki Chihara
Yuki Ito Kaoru Mamiya Research Team, Knowledge Center
Support members
Daisuke Ikadai Shunji Kato Kaori Kobayashi Akane Komatsubara Chika Hozumi
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