"Human rights to gain place in Japan's corporate governance code", 5 May 2021

Japan will add a provision on human rights to its corporate governance code for publicly traded companies when it is revised next month [...]

"Respect of human rights" will be included in the section of the guidelines dealing with sustainability. The planned language will call on boards to view human rights as an important management issue and think more about how to tackle the matter "proactively." The code from the Financial Services Agency and the Tokyo Stock Exchange covers companies on the TSE's markets, telling them to explain noncompliance with its provisions.

The authorities aim to push companies to act voluntarily to root out potential abuses in their supply chains so as to limit the risk of boycotts from increasingly sensitive consumers and investors.

The government drew up a "national action plan" on business and human rights last year, but it is not legally binding. The hope is that incorporating the topic into the governance code will encourage a stronger response.

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