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Bridgestone: Big wheel keep on turning

By William D Alessandro on November 19, 2012 at 12:23pm.

Content:

In 1988, Bridgestone purchased the Firestone Tire and Rubber Co.  The move was the central plank of  Bridgestone’s strategy to become one of the world’s top tyre manufacturers, which is where the Japanese company finds itself today ahead of Michelin and Goodyear.  Not coincidentally the acquisition rescued the legendary US company from a debacle of its own making.  (More about that later.)  

A brief look back in history goes a long way towards understanding Bridgestone’s approach to corporate sustainability reporting. 

Bridgestone grew out of a family owned business that made famous rubber-soled socks for rice farmers .  The tyre company was only six years old when Japan invaded China in 1937.  Bridgestone was an important military supplier (so was Firestone).   The company’s factories in the home town Kurume on the southwest end of the island and in Yokohama survived WWII intact.

Still, Bridgestone, like all industry in Japan, had enormous challenges to overcome.  One way they succeeded was by obsessive adherence to the product quality methods taught to industrialists in Japan after the war by the American professor William Edwards Deming.  By 1968 Bridgestone had won the prestigious Deming Prize, established by Japanese scientists and first awarded in 1951.  The corporate social responsibility report sticks closely to the quality management approach: plan-do-check-act (PDCA).

Five years ago the Bridgestone Group chose 22 focus points with instructions to guide CSR activities along the PDCA path.  Each focus point is grouped under one of four categories: fundamental activities (such as securing stable profits); business activities (such as fair procurement with suppliers); environmental activities; and social principles (such as job satisfaction and respect for diversity).  Each focus point is discussed individually.  The write-ups differ in length and scope.  But they all state the objective (i.e., the plan), review what was accomplished in 2011, and explain what more will be done. 

Taking a random look at one, focus point #3 is “ensuring business continuity”.   The goal is “to prevent risks and develop standards that help the business return to its normal operations after an emergency”.  Bridgestone’s risk management system is described along with achievements in 2011 and plans for 2012 and beyond.   A few specific risk management plans are mentioned, including for dealing with major earthquakes and the new type of influenza.  

The presentations of focus points take up more than 40% of the 66-page report.  Three long features fill nearly half of the remaining space in the report.  One tells how Bridgestone’s technology supports safety and security (for example, elastomeric seismic isolation bearings for building foundations, and a new material that makes winter driving safer).  

Another article looks at some of the company’s contributions to a sustainable society.  The group is working to achieve objectives in 2020 for the reduction in CO2 relative to sales and products’ after-uses.  The company also has a goal to reduce overall CO2 emissions by at least 50% by 2050.

A third feature describes how Bridgestone helps communities (for example, by raising health awareness in India and aiding earthquake-stricken areas in Japan). 

Experts in CSR in Japan were invited to a meeting on 4 April 2012.  They shared their views on what Bridgestone can do to work toward a sustainable society.   Four pages are devoted to some of the give-and-take during that dialogue.

Bridgestone got feedback on the sustainability report from independent observers, not named, from questionnaires, and through the corporate website.   One page contains some representative opinions and suggestions side-by-side with the company’s response.

Communication:

In 2011 the Bridgestone Group launched an initiative to promote CSR activities by business partners outside Japan.  One hundred and forty-five of them in Europe received a self-assessment checklist.  That brought the total number of companies targeted by the checklist worldwide to 594.  We are not told how many remain.

Bridgestone reports that 94% of the checklist items elicited a response such as “the company has begun some CSR activities”.   Bridgestone calls this Level 3, concluding: “It is evident that our business partners’ activities meet or exceed a required level.”  But we are not told what the other levels of activity are or how they are determined.

This characteristic — a concentration on the CSR processes and procedures at the expense of specific performance — prevails throughout the report.  For instance, the report says the guidelines in the international standard ISO 26000 were examined to see how well they stacked up against Bridgestone’s activities.  “Most guidelines were being followed, but we discovered some areas where initiatives need to be strengthened.”  Nothing else is said except that “[w]e will prioritize and address these areas going forward”.

Also in 2011 the entire Bridgestone Group conducted a self-assessment to ascertain whether the instructions based on the 22 CSR focus points were being implemented.   The outcome is not discussed, only to say “we are now pursuing improvement initiatives based on its findings”.

The point is not to criticise Bridgestone’s communications philosophy but to make a note of it.  The report elaborates on leading indicators and downplays the lagging ones.  The PDF is brimming with information on the systems that management has put in place to deal with material CSR risks and opportunities. 

Bridgestone explains the editorial policy on page one.  The PDF is intended for a broad range of stakeholders.  The company even has a shorter PDF, just 17 pages, to satisfy a more general audience.   The corporate website adds more content, including more performance data and valuable details absent from the PDF.

Credibility:

Bridgestone says the 2011 report “referenced” the environmental disclosure guidelines published by the Japanese Ministry of the Environment and the guidelines from the Global Reporting Initiative (GRI).  No further supporting claims are made.  There is no index of GRI indicators or any sort of independent verification.  None is warranted.  The report charts its own unique course for CSR disclosures.

Bridgestone does include a one-page evaluation by an independent party.   He is Toshihiko Fujii, visiting professor at the Saitama University Graduate
School of Economic Science.  He commends the company for some of the measures and makes suggestions in areas where he thinks more can be done.

Most multinational corporations have a skeleton or two in the closet.  Firestone had a graveyard of them. 

Problems with Firestone’s steel-belted radial 500 tyre were the subject of controversy throughout the 1970s.  The Harvard Business School published a case study of the affair and the cover-up.  Students were lectured on it in ethics classes at the Wharton School for MBAs at the University of Pennsylvania for many years. 

Another travesty occurred the 1990s.  It involved the lethal combination of Ford Motor Co.’s Explorer SUV, which rolled off the assembly lines for the first time in 1991, and then rolled over on the highways on Firestone’s radial tyres.

This is not the place to delve into the dark and, literally, deadly tales.  Firestone suffered crippling financial losses stemming from the recall of millions of tyres — not to mention the mortal blow to its reputation —which led to its sale.  Undoubtedly Bridgestone has put the matter far behind.   But Firestone’s misdeeds and errors in judgment extended into every imaginable aspect of CSR.  A shadow of doubt about integrity and honesty will linger as long as there are survivors and stakeholders alive to remember.

Recommendations:

1.  Explain why plans hit potholes or audits turn up deficiencies. 

2. Put at least some performance results in an easy-to-read table in the PDF.

3. Make more appearances at the major sustainability reporting conferences.  You have a good story to tell about the use of leading indicators from which many companies can benefit.

William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters.  He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.