Business and Human Rights 2025

JAPAN Trends and Developments Contributed by: Hideaki Roy Umetsu, Aki Tanaka, Aritsune Miyoda and Chihiro Tsukada, Mori Hamada

these issues highly relevant to a broad range of businesses. As a result, companies are increas - ingly compelled to address these matters as issues that directly affect them rather than as distant or abstract concerns. This heightened sense of urgency has led to greater awareness and engagement among corporate leadership. Consequently, it is anticipated that human rights issues will become one of the most critical man - agement priorities for Japanese companies in the years ahead. Current Landscape Overview of the Guidelines As noted above, the Japanese government established the Guidelines in 2022, drawing on the UNGPs and other international standards. The Guidelines apply to all business enterprises operating in Japan, regardless of size, sector, operational context, ownership, or structure, and call for respect for human rights within companies, their group entities, and their sup - ply chains. The Guidelines define “supply chain” broadly, encompassing both upstream (procure - ment of raw materials, resources, facilities, and software) and downstream (sale, consumption, and disposal of products and services) activities. The Guidelines set out three primary expecta - tions for business enterprises: • the establishment of a human rights policy; • the implementation of human rights due dili - gence (HRDD); and • the provision of effective remedies. These requirements are consistent with the UNGPs. Current status of corporate human rights efforts While a handful of large Japanese corporations began addressing human rights issues even before the UN Human Rights Council endorsed

the UNGPs, the concept of business and human rights remains relatively new to most major Jap - anese companies. However, since the introduc - tion of the Guidelines, there has been a marked increase in the number of companies initiating HRDD processes. According to a 2023 survey by Keidanren, over 70% of responding companies reported promoting efforts to respect human rights in line with the UNGPs, compared to just 36% in a similar survey conducted in 2020. The growing recognition of HRDD’s importance is further reflected in the initiatives of various gov - ernment ministries. Key issues for future progress Despite the absence of legislation comparable to the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), many large Japanese cor - porations have implemented HRDD processes, particularly following the release of the Guide - lines. However, small and medium-sized enter - prises (SMEs) have generally lagged behind, even though their customers are increasingly asking them to respond to human rights ques - tionnaires and address specific issues. Given their limited resources, public support will be essential to encourage and enable SMEs to undertake meaningful human rights initiatives. Another area requiring attention is the develop - ment and effectiveness of grievance mecha - nisms. Even among large corporations, many have yet to establish their own grievance sys - tems or participate in external mechanisms. Where such systems do exist, they often fail to function effectively. The UNGPs and the Guide - lines emphasize the importance of early detec - tion and remediation of adverse human rights impacts, but in practice, suppliers – especially those in overseas supply chains – are often una - ware of these mechanisms.

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