Setting Sustainability Targets: Evidence from Japanese Companies

Abstract

The purpose of this research is to explore the extent to which companies set long-term targets in their sustainability reports. Based on a sample of Nikkei 225 listed firms from Japan, the use of targets related to environmental and social issues is assessed. In addition, commitments to sustainable development goals (SDGs) are examined. The results of this study show that (a) many companies set sustainability targets for a specific year (2020, 2030), (b) targets are less frequently revised than medium-term business plans, (c) non-manufacturing industries, especially construction and fisheries industries, tend to set longer-term targets and (d) of the 17 SDGs, companies prefer to commit themselves to targets on sustainable production and consumption (SDG 12) and climate action (SDG 8), which are seen as more relevant to their business activities than the other goals.