From the Promotion Phase to the Implementation Phase
On March 1, 2023, NYK announced the establishment of the ESG Strategy Headquarters, the Company’s eighth headquarters. On April 1, this headquarters will form the ESG Management Group, known as the ESG Management Promotion Group until now. The new group’s predecessor promoted environmental, social, and governance (ESG) management after the NYK Group ESG Story was released in February 2021. Also, the ESG Management Promotion Team will become the ESG Management Planning Team. Team Manager Yuiga Hasegawa explains why “promotion” will be removed from titles.
“Based on the strong commitment and leadership of President Hitoshi Nagasawa, we called for the Groupwide adoption of ESG management. Over the past two years, we made progress regarding the initial goal of encouraging employees to internalize ESG. As the foundations have been cemented, we will take on even greater challenges. Our new president, Takaya Soga, emphasizes that we are entering the implementation phase of ESG management. We felt that the launch of the new medium-term management plan, which begins from fiscal 2023, would be a good time to remove ‘promotion’ from titles.” Strongly focused on the task ahead, Hasegawa explains further:
“With each passing year, the pace of change in sustainability-related, global trends is increasing. We must change ourselves to reflect these trends. The ESG Management Group has an important task: the implementation of ESG management strategies. We will change the name of the ESG Management Committee to the ESG Strategy Committee. Moreover, the new committee meets monthly rather than quarterly.”
Although many people have heard the term “ESG,” the level of understanding varies from person to person. The group worked hard to ensure that everyone acquired an understanding of ESG. Now, it is often raised as an issue at NYK’s head office and at major Group companies in Japan. ESG Management Promotion Group Member Rira Ohata has been impressed, as she describes:
“After returning to work from parental leave, I had the impression of being in a completely different company. In each business division, I now often see employees ‘internalizing’ ESG principles by paying close attention to all kinds of in-house information and then incorporating into their own departments the initiatives of other departments.”
However, progress in relation to ESG management has been predominantly in Japan. As a global corporate group, the NYK Group will begin the full-scale introduction of ESG management on a Groupwide and global basis.
Globalization of ESG Yardsticks
In January 2023, the ESG Management Promotion Team held the first briefings on ESG management for non-Japanese personnel. However, holding these briefings was a challenge for the team due to the wide range of countries and regions involved. Another member of the group, Masaki Yamada, explains,
“Due to religious and cultural differences, understanding of and sensitivity to ESG naturally differ from those in Japan. Given this diversity, we spent a long time thinking about how to proceed.”
Fortunately, since April 2022 the NYK Group has been introducing a system of region heads and country heads, mainly in South Asia and the Middle East, so that businesses can be developed with greater flexibility. The ESG Management Promotion Team began by conducting a series of interviews with the heads of each country and region regarding levels of ESG awareness among their non-Japanese personnel. Then, with the support of each head, the team decided to hold briefings aimed at providing non-Japanese personnel with a comprehensive overview of past activities and future policies concerning ESG management. A total of five briefings were held, three in the China / Southeast Asia region, one in the Americas region, and one in the Europe / Africa / Middle East region. More than 800 non-Japanese personnel participated. The questions at the briefings and responses to the post-briefing questionnaire proved to be meaningful, as Yamada highlights,
“We learned that ESG is not just a concern for Japan, but a global issue that is important to non-Japanese personnel. More personnel than we expected are convinced that we cannot survive as a global corporate group unless we sincerely address GHG emissions reductions and other ESG issues.” Given that approximately 10% of all non-Japanese personnel participated in and listened attentively to briefings on ESG-related topics, Hasegawa has high expectations.
“In promoting awareness and organizational reform, if between 10% and 20% of people take the matter seriously, reform begins to snowball. The pace of ESG management is sure to become ever faster across the Group and on a global basis.”
More Interactive Communication with Non-Japanese Personnel
The briefings explained the ESG and economic yardsticks that are important to the NYK Group’s ESG management. They also provided opportunities to read the Group’s integrated report, showed how to exchange information via in-house social networking services, and highlighted information issued by the ESG Management Promotion Group. Participants in these briefings were particularly interested in two initiatives: the ESG Navigator system*1 and the Group’s approach to materiality targets. Also, questions from participants in the Q&A session were not only about environmental issues. Personnel in Europe were particularly interested in the percentage of female managers. Yamada feels that the briefings were well received.
“The goals set for the further empowerment of female employees met with a positive response. Further, many personnel are interested in initiatives related to new fuels, such as the introduction of LNG-fueled ships in preparation for their eventual conversion to ammonia-fueled ships. Other areas non-Japanese personnel showed strong interest in included social contribution activities, such as the provision of transportation support to developing countries.” While agreeing that the response has been encouraging, Ohata is also looking ahead to new challenges.
“In each region, individual non-Japanese personnel told us that, although various initiatives and activities were underway in frontline operations, they did not know where to send information on these efforts. We would like to create a system of two-way communication so that information reaches the head office in Japan. In such a system, the head office would provide information on Groupwide strategies and international trends while receiving feedback from frontline operations on individual initiatives and local conditions and sensibilities regarding ESG. An increase in these kinds of exchanges will help further improve materiality-linked KPIs.”
The head office has much to learn from non-Japanese personnel. In Europe and North America, outside of work many personnel are active in volunteer and social contribution activities. One issue is that such activities have yet to be linked to business development and the competitiveness of core businesses, as Yamada explains:
“For example, team building is more advanced at overseas subsidiaries. In the United States, where I once worked, non-Japanese personnel come from many different countries. Consequently, measures to build trust in teams are considered natural. I think we should learn from such measures. Rather than only communicating from management to frontline operations, we must think about ways of integrating autonomous initiatives that originate from frontline operations into management. As the NYK Group is a truly global corporate group and an industry leader, the promotion of ESG management on a global basis will become increasingly important for the Group.” Ohata also has high hopes with respect to initiatives that personnel are developing in regions around the world.
“Personnel are thinking about what they personally should do and consciously taking action, which are important first steps toward the realization of ESG management.”
Over the past two years, the NYK Group’s ability to promote ESG management has increased. With the aim of shifting ESG management into the implementation phase, the ESG Management Promotion Group will globally expand the NYK Group Sustainability Initiatives,*2 which support proactive activities that address social issues. At the same time, the Group will enhance the disclosure of non-financial information. When ideal value creation becomes achievable at every workplace, the NYK Group will evolve even further. What is more, that day is not far away.
(Interview held on March 1, 2023)
- *1 ESG Navigator system
ESG Navigators are responsible for advancing ESG management by supporting both top-down and bottom-up ESG initiatives in each department. As of fiscal 2022, 67 ESG Navigators—appointed by the general managers of departments, offices, and branches—are active in all 48 head offices and branches. More than 100 employees have served as ESG Navigators. - *2 NYK Group Sustainability Initiatives
Themed on “giving back to the oceans, earth, and people,” these initiatives are advanced under a framework of the NYK Group. The initiatives are aimed at proactively addressing social and environmental issues and thereby enhancing corporate value for all of the Group’s stakeholders.