In April 2020, we established a framework for ESG management promotion led by the president to extract our ESG issues, set specific goals, and encourage further action. From April 2023, we have established the ESG Strategy Headquarters and set up the ESG Management Group and Decarbonization Group within the headquarters. We have also renamed the conventional ESG Management Promotion Committee as the ESG Strategy Committee to promote more frequent and specific discussions. The committee is composed of executive officers representing each division and an external expert. A wide range of ESG-related themes are discussed strategically, including setting overall company policies and goals and progress checks on action plans determined by each division. The ESG Strategy Headquarters will report to the Management Meeting and Board of Directors.

Framework for Promoting ESG Management (As of April 1, 2023)

1. *1A platform for enhancing the transparency of disclosure on ship recycling
2. *2When evaluating the performance of an organization, key performance indicators enable quantitative measurement of its degree of attainment of strategic goals. The ESG Management Committee sets Groupwide numerical targets for ESG management and measures progress.

ESG management has begun to steadily spread not only in the company but also throughout the entire NYK Group. Multiple Group companies in Japan and overseas have begun to consider initiatives to advance ESG management.
In fact, NYK is strengthening coordination with Group companies. In addition to in-person discussions through regular meetings of domestic Group company presidents, the Company maintains good communication channels between the head office and overseas Group companies as well as among overseas Group companies, mainly through utilization of the Regional Management Offices established at business sites in the Americas, Europe, East Asia, and South Asia. Moreover, as a result of the widely changing global business environment, NYK has established region heads and country heads as new positions to deepen the NYK Group's regional strategies and to more flexibly craft business activities within the regions in April 2022.
Conducting business globally, the NYK Group comprises Group companies with a variety of different business lines and scales in Japan and overseas. Going forward, regardless of business lines and scales, departments in charge at the head office and Group companies will continue collaborating closely to spread ESG management throughout the entire Group.

The NYK Group will create a virtuous cycle in which employees adopt a long-term perspective and-with help of ESG yardsticks-address social issues through the differentiation of existing businesses, the expansion of new business fields, and investments. To provide foundations for initiatives, we have assigned ESG Navigators to each head office department. ESG Navigators act as catalysts and communicate the policies of the senior management team to these departments.
From fiscal 2023, we are restructuring our ESG Navigator system to transition up to the implementation stage of ESG management and actively exchange ESG information internally and externally.

ESG Navigator System

ESG Navigators are responsible for advancing ESG management by supporting both top-down and bottom-up ESG initiatives in each department. Currently, 103 ESG Navigators, appointed by the general managers of departments, offices, and branches, are active in all 50 head office departments. We have borrowed the term “navigator” from the world of shipping, and we use the term in the sense of a second officer who is the chief navigator. An important task of the chief navigator (second officer) is to formulate voyage plans. In consultation with the captain, the chief navigator determines the route that the ship should take. Further, the chief navigator plays a central role in gathering and summarizing feedback from all crew members. We have chosen the title “ESG Navigator” because we want these personnel to advance ESG management at our offices by playing a role comparable with that of a chief navigator on board a ship. Specifically, ESG Navigators perform three key roles: discussing with the general managers of departments and offices how to establish routes that will take the departments to their target profiles; sharing the management team's ideas with all department members; and leading uninhibited exchanges of opinions among junior employees and vertically and laterally providing feedback from department members to other departments.

With the aim of disseminating ESG management, we are implementing numerous initiatives targeting Group employees in Japan and overseas.