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Third-Party Opinion


[Image]Mr. Eiichiro Adachi

Mr. Eiichiro Adachi
Counselor, the Japan
Research Institute, Limited

After graduating from the Faculty of Economics at Hitotsubashi University in 1986, he joined the Japan Research Institute in 1990. He became counselor after serving in posts for economic strategy and technology research at JRI. He supervises industrial research and corporate assessment projects from the perspective of corporate social responsibility. He was a national expert for the ISO 26000 working group from March 2005 to May 2009. He is currently a member of the Studying Group on Environmental Information and Corporate Value held by the Ministry of the Environment. He has co-authored ESG Handbook for Investors and Businesses (Nikkei Business Publications, 2016), among other publications.

The media report on the inappropriate accounting practices at Fuji Xerox's overseas subsidiaries in April 2017 mentioned in the early part of the report came to me as a tremendous shock because I realized my shortcomings in discerning what constitutes an outstanding company, despite the fact that I had worked for so many years on corporate assessment from the standpoint of social responsibility.

Sustainability is not a term that denotes the pursuit of permanent continuity for a company. It denotes longstanding continuity for our planet and society, founded on “satisfying the needs of the current generations without spoiling the power to satisfy the needs of the generations of the future.” When a company commits to sustainability, it is a declaration that it will take responsibility for the impact its business decisions and activities will have on society and the environment through transparent and ethical business conduct. The word “impact” used here includes both the positive and the negative meanings. At the same time, it is an announcement of its determination to control the pursuit of “maximizing current profits” in some situations for “the generations of the future.” Tolerating the excessive pursuit of sales and disregarding rules amounts to the complete opposite of what sustainability aspires to achieve.

The new CSR plan SVP 2030 that had been introduced sets new goals on resolving issues in the global society spotlighted in the SDGs and the Paris Agreement. The Plan is innovative in establishing longterm goals based on backcasting, and the ambition and details expressed in the Plan are highly commendable. On the other hand, I have a little concerns over the Fujifilm Group's conviction that the true responsibility of a company can be mainly fulfilled through the creation of products and services that have value, with the settlement of societal challenges in mind rather than through the responses for the expectations from society, including Design for Environment, legal compliance and contribution to local communities. If a company underestimates the latter attitudes too much as being passive, I can't avoid a sense of uncertainty about its future.

The impression I received on reading through the Report also focuses on this point. In the report of the activities organized under SVP 2016, there lacked an explanation about criteria in the self-assessment and the content of the table was somewhat difficult to understand. I would have liked to know more about the company's stance on the ethical issues involved in regenerative medicines and other cutting-edge technologies, all the more because the Fujifilm Group aspires to be a total healthcare company. I was also concerned that environmental pollutant emissions are not necessarily on the decline and progress in reducing chemical substance emissions has not been reported in detail. Furthermore, reporting on the consolidated group companies as a whole, the reports centered chiefly on the case involving Fujifilm and Fuji Xerox. And although overseas employees form the major part of the consolidated employee ratio, the report focused chiefly on cases in Japan.

With sales profits in FY2016 at ¥172.3 billion, achieving an all-time high in net profits attributable to shareholders, the business performance of FUJIFILM Holdings was truly outstanding, and the impact of the inappropriate accounting case has been limited. Looking back at its history, the Fujifilm Group is a corporate group that survived obstacles by applying its technologies in creating innovations. From this business perspective, the opinions stated herein may appear to be limited and to be restricted to exceptions. However, I feel a general shift taking place in corporate evaluations recognizing “businesses that seek something that creates profits in terms of results” rather than “businesses that seek profitability for its own sake.” I look forward to seeing the Fujifilm Group making dramatic advances to become a truly excellent corporate group.

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