Third-Party Opinion

Mariko Kawaguchi
Senior analyst at the Management
Strategy Research Department of Daiwa
Institute of Research Ltd.
G r a du ate d w i th a m as te r ’s d e g re e f ro m
Hitotsubashi University Graduate School in 1986.
Joined Daiwa Securities in 1986. Transferredto Daiwa Institute of Research in 1994. Had anumber of roles, including analyst, taking her
present assignment. Her research subjec ts
include socially responsible investment and corporate social responsibility. Co-author of Guideto Socially Responsible Investment and CSRManagement. Part-Time Instructor at Aoyama
Gakuin University.

Remarks about the Report
The CSR report is a communications
tool in which a company expresses tostakeholders in the broader community
its posture on CSR philosophy and different issues in contemporary society. The
company states in the report what philosophy it has, what it is specifically thinking
about, how it acts, and what it would liketo do in the future.
However, the reports of many Japanesecompanies, especially traditional manufacturers, are centered on an explanationof internal systems and results vs. internal
targets, and the reports for external audiences are mostly just revised versionsof the internal reports on CSR activities.
I had the same impression about thisreport too.
I n h i s m e s s a g e, Pr e s i d e n t M a s a oYoshida touched on his understanding of
global challenges such as environmental
and poverty issues, the concept of triple
bottom lines, and the importance of communicating with stakeholders. The bodyof the report covers items such as compli-41

ance, customers, shareholders and investors, suppliers, and employees. The reportcovers all of the CSR activities by officesof the Company. The Company deserveshigh marks for conveying its attitude
towards CSR.
But relationships with stakeholders
are centered on an explanation of systems and mechanisms. With respect tothe environment, the report clearly sets
out the performance, objectives, andother aspects in accordance with thePDCA cycle, and this is remarkable foran environmental management report.
The Company deserves particular praisefor setting a bold target of reducing CO2emissions from production bases by 25%
in 2009, compared with the 2000 level,
and is reducing CO2 emissions steadily,
although the cuts are short of the target.
However, the report does not appear
to set out the strategy Furukawa Electric
will use to show how it will ac tively
a d d r e s s t h e g l o b a l e nv i r o n m e n t a lissues, including global warming, that
confront humanity and how it will contribute through its core businesses. And
although Furukawa Electric deals withcopper, the report also fails to make clear
the Company’s position on the selectionof mines and its mineral resources strategy, which are indispensable elements inaddressing CSR challenges.
Consequently, I unfortunately had theimpression that the CSR report was inadequate as a report on specific CSR activities, although senior management clearlyrecognizes global warming and poverty
as the greatest challenges facing mankind.

After the Interview
However, this impression changed
dramatically once I spoke with Chief
Social Responsibility Officer Tetsuya Sato.
After the interview, I understood that
the Company is proactively addressing
issues that I felt were not being dealt withadequately when I read the report.
In the field of CSR sourcing, the humanrights of people living near mining sites
and the ecological destruction of areas

surrounding mining sites are global
challenges that need to be addressed.
Companies that use mineral resources atsome point in their supply chains fromthe upstream position to the downstream
are required to avoid what is called dirty
mining, or mining in a way that does notconsider human rights or the environment. In fact, Furukawa Electric faces
expectations from its customers, namely
auto manufacturers and home-appliancemanufacturers about the use of resourcesfrom dirty mining, and it has in turn asked
its own suppliers, the ore refineries, about
it. Actually the answer seems to be thatore refineries cannot separate ore fromdirty mining. Unfortunately, the report
does not write about this. “We decided
not to mention this because we had notreached a final conclusion,” said Mr. Sato.
However, readers will think that theCompany is unaware of the issue if thereport does not discuss it. The CSR report
should report not only conclusions but
also ongoing information on what kindof position the Company is taking in
addressing social issues. Since dirty mining is a significant social and environmental issue, I hope that Furukawa Electric willcontinue quiet dialogues with refineries
so that manufacturers will encourage
mines to address the issue in addition tosimply pass on the answer from refineries
to customers.
Discussing environmentally friendly
products reinforced again for me the factthat copper wire is essential for every
product using electricity. Although thismay be obvious to people in the industry,
it is a discovery to people like me outside
the industry. It is widely recognized that