The Sustainability Data Standardization Consortium (Representative Director: Renji Hirase, hereinafter referred to as "SDSC"), which promotes standardization of the definition of sustainability data disclosure for small and medium-sized companies and non-listed companies, released " Handbook ver1.0 for Utilization of Sustainability Information" on February 27, 2024 (Tuesday).
The Handbook serves as a comprehensive guide for the compilation and disclosure of non-financial information tailored for small and medium-sized enterprises (SMEs) striving for sustainable growth and longevity.
Interested parties can access the Handbook through the SDSC's inquiry form by stating"Handbook DL."
SDSC website：https://www.j-sdsc.org/en
◾️Key Highlights of the Handbook:
- Target Audience: The Handbook caters primarily to unlisted companies, particularly small and medium-sized enterprises not mandatorily obligated to disclose sustainability information in annual securities reports.
- Intended Users:
- Executives, managers, and staff of unlisted companies and SMEs engaged in compiling and disclosing sustainability information.
- Financial institutions, including banks, and operational staff interacting with non-listed companies, urging them to compile and disclose sustainability information.
- Management, managers, and staff of small and medium-sized non-listed companies actively involved in sustainability information compilation and disclosure.
◾️Structure of the Handbook:
- Drawing from international disclosure frameworks like GRI and ISSB, the Handbook synthesizes sustainability-related interview items from 15 subcommittee members' companies.
- It delineates trends and utilization methods for "Environment," "Social," and "Governance" aspects, elucidating the merits of initiatives.
- To facilitate incremental progress, the Handbook provides reference information categorized into introductory, basic, and applied levels of sustainability information disclosure.
- The inclusion of model case studies aims to inspire companies in promoting their sustainability management endeavors.
◾️Purpose and Background:
Japanese SMEs have historically propelled the nation's industrial prowess through innovation and healthy competition. However, contemporary challenges such as escalating procurement costs, labor shortages, and market saturation have cast shadows on the outlook for small and midsize enterprises. In response, the SDSC endeavors to unite the direction and values of SMEs determined to thrive in these challenging times. The Handbook's principal objective is to furnish such enterprises with a roadmap towards a sustainable future.
SDSC envisions this Handbook serving as a conduit for visualizing and communicating the conscientious practices of SMEs, fostering long-term support, selection, survival, and growth by consumers, job seekers, customers, financial institutions, and other stakeholders.
◾️Future Endeavors:
The Handbook will undergo continuous updates to reflect the evolving landscape of sustainability practices, both domestically and internationally. The anticipated timeline for future revisions includes:
- February to end of September 2024: Release and utilization of Handbook ver. 1 (trial and operational phases), analysis of usage metrics by the secretariat, minor revisions leading to Handbook ver. 1.1, and research towards subsequent fiscal year revisions.
- End of March 2025: Release of Handbook ver. 2.0.
- April 2025 onwards: Release of subsequent versions, building upon ongoing feedback and emerging best practices.
◾️The Sustainability Data Standardization Consortium (SDSC)
Established in August 2023, SDSC collaborates with diverse stakeholders, including financial institutions, relevant ministries and agencies, SME-related organizations, and other entities in Japan. SDSC's mission revolves around "disclosing sustainability information conducive to informed decision-making across all sectors, with a particular emphasis on small and medium-sized enterprises (SMEs)." Its membership comprises domestic banks, including megabanks and government-affiliated financial institutions (accounting for 92% of total deposits in Japan), alongside various major industry associations.
【Comments from the Secretariat】
Deloitte Touche Tohmatsu LLC
As an auditing firm, we have been supporting the activities of this organization from the side in a fair and neutral manner by dispatching experts in sustainability-related operations and project management, including climate change risk, ESG compliance, non-financial information disclosure, and sustainable finance. We hope that this handbook ver1.0 will contribute to the "standardization of sustainability data" as a compass for a sustainable future.
Yohei Sudo (Associate Partner), Rise Consulting Group, Inc.
We would like to congratulate you on the publication of the "Handbook ver1.0 for Utilization of Sustainability Information for Unlisted, Small and Medium-Sized Enterprises". This handbook was produced to provide a compass for a sustainable future. As a company whose mission is to "Produce Next: Creating a Happier Future Together," we are also very pleased to see the publication of this handbook. We will continue to contribute to the development of the Sustainability Data Standardization Consortium and the dissemination of this handbook.
Renji Hirase (Representative Director), Sustainable Lab Inc.
Standardization of sustainability information is a non-competitive area that transcends the interests of individual companies, and is a step toward building an information infrastructure that serves the public interest. Hence, I believe that it is necessary for all Japan, not individual companies, to work together as one to tackle and boost the project. It is faster to go it alone, but it means that we all need to go together to go far. The Handbook ver 1.0 that we are releasing this time has been optimized by incorporating the opinions of more than 30 banks and through reviews from several academic experts and related organizations. As a result, the Handbook ver1.0 is not only valuable for all types of engagements by banks and procurement departments of large corporations, but also can be easily implemented by many unlisted, small and medium-sized companies.
The handbook also makes it easier to identify "good companies" from the perspective of stakeholders (employees, business partners, financial institutions, consumers, etc.) surrounding non-listed, small and medium-sized companies. As a result, our mission is to illuminate Japan's "good companies" and to reveal and manifest the potential of the Japanese economy. To this end, our organization will continue to promote the sophistication of the handbook and the development of its application scenarios.