In July 2021, Ethical Consumer viewed Rakuten Kobo’s website for the company's environmental policy or report. It stated on its website that “Rakuten recognizes and respects our dependence on the environment. From the broad range of products sold on Rakuten Ichiba to the travel destinations promoted on Rakuten Travel, all our businesses depend on the richness of our natural environment. This is why Rakuten is committed to reducing its environmental impacts, conserving the environment and protecting nature in all our operations.”

In July 2021, Ethical Consumer viewed the Environmental Report for Rakuten Kobo which had no date but referred to its environmental impacts relating to greenhouse gas emissions, resource management, biodiversity and the environmental impacts in its supply chains. This report did not contain any future targets.
Rakuten Kobo’s website stated that the company would have “100% renewable electricity for Rakuten Group, Inc. controlled offices, data centers and fulfillment centers by 2025.” Alongside this, Rakuten Kobo provided a pie chart which showed the current energy consumption in MWh of renewable and non-renewable energy use.
Accompanying this information, the company stated that “The environmental data indicated on this page for 2019 have been third-party verified.” Ethical Consumer viewed the “LR Independent Assurance Statement” which stated that “Lloyd’s Register Quality Assurance Limited (LR) was commissioned by Rakuten Corporation to provide independent assurance on its environmental and social data within its Corporate Report 2019”.

Ethical Consumer deemed a strong policy to include two future, quantified environmental targets, demonstration by the company that it had a reasonable understanding of its main environmental impacts, be dated within two years and have its environmental data independently verified.

Whilst Rakuten Kobo Inc. did demonstrate that it had a reasonable understanding of its main environmental impacts, had a report dated within 2 years and was independently verified by Lloyd’s Register Quality Assurance Limited, it only had one reduction target. Therefore it received Ethical Consumer's worst rating for Environmental Reporting and lost a whole mark in this category.

Reference:

Rakuten Kobo sustainability webpage (19 July 2021)

In July 2021, Ethical Consumer viewed the website of Rakuten Kobo looking for information on what the company was doing to tackle climate change. Ethical Consumer was looking for the following:

1. For the company to discuss its areas of climate impact, and to discuss plausible ways it has cut them in the past, and ways that it will cut them in the future. For the company to not be involved in any particularly damaging projects like tar sands, oil or aviation, to not be subject to damning secondary criticism regarding its climate actions, and to have relevant sector-specific climate policies in place.
2. For the company to report annually on its scope 1&2 greenhouse gas emissions (direct emissions by the company), and,
3. to go some way towards reporting on its scope 3 emissions (emissions from the supply chain, investments and sold products).
4. For the company to have a target to reduce its greenhouse gas emissions in line with international agreements (counted as the equivalent of at least 2.5% cut per year in scope 1&2 emissions), and to not count offsetting towards this target.
If a company met all of these criteria it would receive a best rating. If it met parts 1&2 (impacts and annual reporting CO2e) it would receive a middle rating. Otherwise it would receive a worst rating.

1.Ethical Consumer viewed the Environment section of the Rakuten Kobo website which noted its key climate impacts which largely related to its 70 services that it offered online and its daily operations which rely on electricity consumption. Its impacts also extended to its offline services, such as logistics services that produced CO2 emissions from trucks for product deliveries. For past efforts to cut its carbon emissions, the company stated that Rakuten's Americas Regional Head Office in San Mateo, California, has installed rooftop solar panels that would supply 15% of the total electricity consumed at the 500+ employee office from mid-2020, and become the first model of Rakuten-owned renewable electricity generation on site. The company also stated that, regarding future emissions cuts, it was “aiming to reduce them throughout our value chains by improving energy efficiency, adopting clean energy solutions, and helping our customers reduce their own emissions through the use of our products and services.”

2.Rakuten Kobo went some way to provide reporting of its Scope 1 and 2 emissions by stating its annual carbon emissions between 2018 and 2019 in t-co2 per employee, but not in tonnes CO2e.

3.Ethical Consumer viewed the company’s ‘ESG Data Book’ dated 2019 which contained scope 3 emissions but these were not measured in co2 equivalent and thus were not considered sufficient.

4.In terms of targets for reducing future greenhouse gas emissions in line with international agreements, Rakuten Kobo did mention that it will “Reduce greenhouse gas emissions of Rakuten Group, Inc. originated from electricity consumption (Scope 2) to zero by 2025.” However, this only applied to its Scope 2 emissions so was not accepted.

Overall, Rakuten Kobo failed to sufficiently report on its scope 1, 2 or 3 emissions nor could it provide a rigorous future target for reducing its emissions. Therefore, Rakuten Kobo received Ethical Consumer’s worst rating for carbon management and reporting and lost a full mark under Climate Change.

Reference:

Rakuten Kobo sustainability webpage (19 July 2021)

In September 2021 Ethical Consumer searched the Rakuten website but could find no evidence of a policy on toxic chemicals such as PVC, phthalates and brominated flame retardants (BFRs). The company produced e-readers.
As a producer of electronics Ethical Consumer believed this policy was a necessary part of the company's Corporate Social Responsibility reporting. Rakuten therefore lost a whole mark under Pollution and Toxics.

Reference:

Rakuten corporate site (6 September 2021)

In September 2021 Ethical Consumer viewed Rakuten's website global.rakuten.com for the company's conflict minerals policy. The company manufactured e-readers. It had no published conflict minerals policy, other than one paragraph in an undated document titled Rakuten Group Sustainable Procurement Instruction that was found through an internet search. This stated only: "Prohibition of Conflict Minerals - We avoid the use of conflict minerals, which are connected to environmental degradation and human rights violations. In order to procure minerals in a responsible manner, we collaborate, and in the case where concerns are raised, we take action to cease the procurement and use of conflicts minerals."

Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, notably in the eastern provinces of the Democratic Republic of Congo (DRC). The minerals in question are Tantalum, Tin, Tungsten and Gold (3TG for short) and are key components of electronic devices, from mobile phones to televisions.
Ethical Consumer expected any company manufacturing electronics to have a policy on the sourcing of conflict minerals. Such a policy would articulate the company's commitment to conflict free sourcing of 3TG minerals and its commitment to continue ensuring due diligence on the issue. The policy should also state that it intended to continue sourcing from the DRC region in order to avoid an embargo and show evidence of membership or financial support to organisations developing the conflict free industry in the region.

Rakuten’s policy did not meet any of these criteria. As a result the company received Ethical Consumer's worst rating and lost a whole mark under the following categories - Habitats and Resources and Human Rights.

Reference:

Rakuten Group Sustainable Procurement Instruction (6 September 2021)