Results-first and anti-ESG: Now is the time to show imagination and ethics

Global Sustainability Standards Board (GSSB) Board Member
GHG Protocol Technical Working Group (TWG) Members

Zeroboard Research Institute Director Tomoo Machiba

In an interview with Hyogo Governor Saito Motohiko recently in the Asahi Shimbun newspaper, former Osaka Governor Hashimoto Toru said, "Power harassment of employees and 'begging' during inspection tours are basically unrelated to the lives of the prefecture's residents," which left me feeling uneasy. * 1 Now, a third-party committee of Hyogo Prefecture has pointed out that it is highly likely that the leak of the whistleblower's private information was done at the instruction of Governor Saito and others. * 2 However, when the gubernatorial election in November 2024 came to be, the people of Hyogo Prefecture had no way of knowing what was actually going on inside the prefecture, and they were hit with a mixed information battle on social media. If there was a re-election now, would the result be the same, no matter how successful Saito had been?

Hearing this comment, I was reminded of the "3 rules for winning" depicted in the movie, "The Apprentice: The Making of Donald Trump." In this book, notorious lawyer Roy Cohn teaches the young Trump, "Attack, attack, attack," "Never admit fault, deny it all," and "Keep claiming victory." Through these lessons, Trump goes from the brink of bankruptcy to a succession of major businesses, transforming into a "monster" that even shocked his mentor, Cohn. * 3

Even if the Contents of the movie are not all true, I think it succinctly shows the source of President Trump's simple way of looking at things and his overwhelming self-confidence. For him, the result of "America First" is everything, and to achieve that, he will use any means possible, including ultra-high tariffs, deportation of immigrants, and restrictions on the acceptance of international students. According to this logic, it would be completely unacceptable to attach conditions such as ESG and renewable energy in order to maximize corporate profits and secure Energy.

However, the logic of the strong (despite the fact that many of Trump's supporters are weaker people who have been left behind, such as workers in the Rust Belt) seems to be a total denial of the path of modern Industry(although I don't like that term) that Western society has taken, which includes the emancipation of slaves, securing workers' rights, environmental conservation, consideration for North-South issues, and gender equality, based on reflection on the negative legacy of colonialism, the Industrial Revolution, and subsequent economic development.

In the six months since Trump was re-inaugurated as U.S. president, governments and companies in Europe and Japan have been scrambling to respond, but perhaps now is the time for each and every one of us to once again clarify which position we belong to: does profit and performance matter everything, regardless of the means, or does it mean that results are important, but the legitimacy of the process that gets us there is also important?

Many Japanese companies seem to be waiting to see how ESG enthusiasm slows, but now is the time for them to recognize that their business activity are heavily dependent on the natural environment, natural resources, local communities and human resources, respect the tradition of "triple win," proudly reaffirm their commitment to long-term development through coexistence with the environment and society, and demonstrate a proactive attitude to seek understanding both inside and outside the company (unless they are black companies).I also think it is time for us, as citizens and consumers, to use our imagination and ethics toward producers and the global environment, and to express our opinions through voting and our daily product choices, to say no to results-first mentality and to recognize once again that we have the power to change the attitude of government and companies.

For this reason, implementing due diligence to ensure sustainability in the production process is a key policy for the further evolution of modern civilization and for effective purchasing and consumer choices. In February 2025, the European Union (EU) announced a draft "Omnibus Package," which postponed the 1 phase of application of the Corporate Sustainability Due Diligence Directive (CSDDD) by 1 year from 2028, limited the scope to direct suppliers (Tier 1), and relaxed the implementation of audits from annually to every 5 years. However, worryingly, the leaders of Germany and France have now called for the abolition of the CSDDD itself. * 4

In addition, it has been proposed to postpone the application of the due diligence obligation, one of the main measures, in the EU Battery Regulation (EUBR) by 2 years, to August 2027 * 5. The application of the EU Deforestation Regulation (EUDR), which requires large companies to prove that seven primary products are not contributing to deforestation, has already been postponed by 1 year to the end of 12 2025 * 6 , but 11 countries, including Austria and Luxembourg, are calling for further relaxation * 7. Regarding the CSDDD, Denmark showed a stance of rejecting the proposal from Germany and France * 8 , and the German government subsequently announced a softening tone, calling for the regulation to be made less bureaucratic and more rational * 9 , so it is unlikely that it will be abolished.

Due diligence is originally intended to improve supply chain activity in a sustainable direction, so it is necessary to coordinate its implementation so that it does not unilaterally pressure small and medium-sized suppliers and producers in developing countries, but at the same time provides support. In addition, if the overlaps and complexity of the CSDDD, EUBR, and EUDR3 regulations are reviewed, it may become a more effective and realistic measure.

President Trump's anti-ESG momentum has not waned, but unlike his days as a businessman who won "deals" through behind-the-scenes maneuvering, I think we are now in a situation where we are playing poker or mahjong with our cards in full view to the world. I would like to watch future developments without being too afraid.

* 1 Following on from his previous statement, Mr. Hashimoto stated, "If it goes as far as bribery, it will be a problem." (Asahi Shimbun, "The media should not look down on the internet - Mr. Toru Hashimoto, Hyogo gubernatorial election is 'good teaching material'", May 3, 2025) https://digital.asahi.com/articles/AST523G6LT52PQIP01FM.html　

* 2 Yomiuri Shimbun, "Hyogo Governor Saito 'did not give instructions' to leak private information - denies involvement despite third-party committee's pointing out 'high possibility',"May 27, 2025, www.yomiuri.co.jp/national/20250527-OYT1T50156　

* 3 Movie Walker Press, "What are the ' 3 rules' that created Donald Trump? Learn the method to success from a notorious lawyer,"January 19, 2025 https://news.yahoo.co.jp/articles/d718a4f6fee873f107b1bc64ecb4771b367d87a5

* 4 Reuters, French, German leaders call on EU to scrap supply chain audit law, 21 May 2025 www.reuters.com/sustainability/society-equity/french-german-leaders-call-eu-scrap-supply-chain-audit-law-2025-05- 20　

* 5 Intertek, What does the proposed extension of the battery due diligence deadline for the EU Battery Regulation mean for battery manufacturers and users?, 22 May 2025 www.intertek.com/blog/2025/05- 22-eu-battery-regulation　

* 6 European Commission, Regulation on Deforestation-free Products https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en　

* 7 Reuters, Eleven countries EU demand weakens deforestation law further, document shows, 26 May 2025 www.reuters.com/sustainability/climate-energy/eleven-countries-demand-eu-weakens-deforestation-law-further-document-shows-2025-05- 26　

* 8 Responsible Investor, EU Round-up: Denmark rejects France and Germany's call to scrap CSDDD, 27 May 2025 www.responsible-investor.com/eu-round-up-denmark-rejects-france-and-germanys-calls-to-scrap-csddd　

* 9 ESG Today, Germany walks back call to scrap the EU's supply chain sustainability law, 26 May 2025 www.esgtoday.com/germany-walks-back-call-to-scrap-the-eus-supply-chain-sustainability-law