The basic corporate stance of Nissui, whose business relies on the bounty of nature, is to respect natural resources and interact with the earth and sea with gratitude. Conservation of the global environment is indispensable for business continuity, among others. In November 2021, Nissui declared its support for recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) and joined the TCFD Consortium with the understanding that tackling climate change is an important management issue. We will identify the risks and opportunities related to climate change, assess the impact on businesses as well as financial effects through scenario analysis and take countermeasures to enhance business sustainability.
We will also disclose information in line with the TCFD recommendations on four disclosure elements, i.e., “governance,” “strategy,” “risk management,” and “metrics and targets.”

Participation in External Initiatives​

Governance

The Nissui Group is promoting sustainability management aimed at realizing sustainable growth and higher corporate value. As an organization serving as its driving force, Nissui established the Sustainability Committee, which consists of all Executive Officers and Outside Directors and is chaired by the President & CEO.
In each of the eight subcommittees set up on a theme-by-theme basis under the Sustainability Committee, the subcommittee’s chairperson (i.e., Executive Officer) designated by the Committee’s chairperson and members appointed by the subcommittee’s chairperson address each sustainability-related issue in a cross-departmental manner. At the meeting of the Sustainability Committee, which is convened six times a year, specific targets, policies and measures for sustainability-related issues are examined based on reports and proposals made by each subcommittee, and the Board of Directors'’ opinions and advice are reflected in its initiatives through periodic reports made to the Board of Directors.
In regards to the climate change problem, risks and opportunities are analyzed and countermeasures are studied in the “TCFD Compliance Project,” which was launched in fiscal 2021 as a cross-departmental project in which the Senior Managing Executive Officer (CFO) serves as the project owner. Findings of its studies are reported to the Board of Directors following deliberation at the Sustainability Committee, and the Board of Directors’ opinions and advice are reflected. A meeting of the TCFD Compliance Project was convened five times in fiscal 2022.
As for measures to mitigate climate change, such as reducing CO₂ emissions, the Environmental Subcommittee under the Sustainability Committee promotes initiatives of the Nissui Group as a whole.
Also, Nissui revised its officers’ compensation system in fiscal 2022 to fulfill its vision targeted in 2030 and its business plan, adding the level of achievement of non-financial (sustainability) targets—such as the sustainability of marine resources and the reduction of CO₂ emissions at the Nissui Group’s business locations—to the list of performance indicators for Directors’ variable compensation component.

Sustainability Committee

• Chair: President & CEO
• Members: All of the Executive Officers and the Outside Directors
• Secretariat: Sustainability Department
• Report to: Board of Directors
• Meeting frequency: Six times a year

Formulates policies/plans and determines important matters related to sustainability, including tackling climate change

TCFD Compliance Project

• Project Owner: Senior Managing Executive Officer (CFO)
• Project Leader: Executive Officer (in charge of Quality Assurance Group, Sustainability Department)
• Members: Representative of related departments (Food Products Business Group, Fisheries Business Group, Corporate Strategic Planning & IR Department, Legal Department, and Finance and Accounting Department)
• Secretariat: Sustainability Department
• Meeting frequency: Five times a year (FY2022)

Identifies risks and opportunities and assesses the impact on businesses and financial effects through scenario analysis

Environmental Subcommittee

• Chair: Executive Officer (In charge of Quality Assurance Group, Sustainability Department)
• Members: Senior Managing Executive Officer (CFO), Executive Officer (In charge of Convenience Store Sales), Fine Chemicals General Plant, Food Products Production Promotion Department, Hachioji General Plant, Convenience Store Sales Department, Marine Products Business Department 2, Marine Products Business Department 4, Aquaculture Business Promotion Department, Supply Chain Management Department, General Affairs Department, Technology Development Department
• Secretariat: Sustainability Department
• Meeting frequency: Four times a year

Strategy

In fiscal 2021, Nissui conducted an analysis of two climate change scenarios based on the TCFD recommendations with respect to the Fisheries Business Group and the Food Products Business Group, identified climate change risks and opportunities, assessed the financial impact and looked into countermeasures against them. We will take countermeasures against significant risks and opportunities that have been clarified to help reduce risks and steadily seize opportunities in pursuit of a climate change resilient state.

Overview of Scenario Analysis in Strategy

Risk Management

Nissui has established the risk management rules to prevent risks that may hinder business activities from arising, minimize the occurrence of losses and make best efforts to preserve its management resources and continue its businesses. The Risk Management Committee, which is chaired by the President & CEO, builds and operates a risk management system and periodically makes reports to the Board of Directors. Significant business risks, including the impact of climate change (global temperature rise), are deliberated and updated by the Board of Directors each year.

Risk Management
Business Risks

Metrics and Targets

In its long-term vision “Good Foods 2030,” the Nissui Group has presented its aim to reduce total CO₂ emissions by 30% in 2030 compared to the fiscal 2018 level and realize carbon neutrality by 2050. To fulfill the target on a Group-wide, global scale, we will engage in initiatives proactively by formulating a CO₂ emissions reduction plan, such as implementing energy-saving measures at each business location, replacing equipment with highly efficient units with low energy usage, and using renewable energy sources. We calculated Scope 3 emissions by dividing emissions into 15 categories in accordance with the guidelines by the Ministry of the Environment, which are consistent with the Greenhouse Gas Protocol. Going forward, we will pursue greater accuracy of data, look into ways to reduce Category 1 emissions -which are large in volume- and make other such efforts to further promote the reduction of CO₂ emissions in the Nissui Group. Furthermore, we will promote initiatives also with respect to wild-caught marine resources to be procured, plastics, food loss and waste, water, etc. by announcing their respective targets and measures to realize sustainable use.

CO₂ Emissions (Scope 1 and Scope 2)

CO₂ Emissions (Scope 1 and Scope 2) Reduction Target: Compared to Fiscal 2018/Total Emissions
Nissui Group will aim to reduce CO₂ emissions by 10% by 2024 and 30% by 2030 and achieve carbon neutrality by 2050.

Targets and Measures to Realize Sustainable Use

Long-Term Vision
Targets and Results
Reduction of CO₂ Emissions​​
Reducing Environmental Impact
ESG Data Book (Scope 3)

In 2021, the Nissui Group conducted a climate change scenario analysis in accordance with the TCFD recommendations. We analyzed the entire expanse of our value chain, examining the Marine Products Business, the Food Products Business and the Fine Chemicals Business. The latter was added to the scope in fiscal 2022. Using a 1.5℃/2℃ temperature-rise scenario and a 4℃ temperature-rise scenario for the world, we identified the risks and opportunities, assessed the financial impact in 2030 and looked into countermeasures against them.
As a result, we found that in the 1.5℃/2℃ scenario, operating costs attributable to the introduction of carbon tax serve as an obstacle to business growth, but efforts to proactively reduce greenhouse gas emissions and improve the efficiency of production activities and the acquisition of new customer demand can translate into business growth. In the 4℃ scenario, we found that the physical risks associated with the increasing severity of natural disasters serve as an obstacle to business growth, giving rise to the need to minimize the impact on earnings by dealing with such risks through initiatives to make the aquaculture business more sophisticated. Moving forward, we plan to proceed with analysis by expanding its scope to include other businesses.

Definition of Scenarios’ Outlook of the World

In the scenario analysis, the outlook of the world in the two scenarios was defined by referring to RCP2.6 (a scenario in which temperature rise is below 2℃) and RCP8.5 (a scenario in which temperature rise is 4℃) by the United Nations’ Intergovernmental Panel on Climate Change (IPCC)  and the scenario by the International Energy Agency (IEA).

1.5℃/2℃ Scenario

Timing of impact was divided into short-term (within 3 years), medium-term (3 to 10 years) and long-term (10 to about 20 years).
(Note 1) ICP: Internal Carbon Pricing
(Note 2) LCA: Life Cycle Assessment

4℃ Scenario

Timing of impact was divided into short-term (within 3 years), medium-term (3 to 10 years) and long-term (10 to about 20 years).

Impact of Carbon Pricing

For carbon pricing, whose impact was particularly large in terms of financial impact, estimates were made on the premise of the following basis of calculation. 
Future CO₂ emissions (Scope 1 and Scope 2) were calculated based on the sales forecast for 2030, and the amount of impact in terms of operation cost was calculated by multiplying it with the carbon price according to IEA’s forecast with respect to each scenario, i.e., 2℃ scenario and 4℃ scenario (Note 1). This revealed that a reduction in total CO₂ emissions by 30%, which is our target for 2030, will translate into a Group-wide reduction amounting to 4.41 billion yen in the 2℃ scenario and 1.76 billion yen in the 4℃ scenario.

Carbon tax: Assumed to be USD135/t-CO₂ in the 2℃ scenario and USD54/t-CO₂ in the 4℃ scenario, assuming an exchange rate of USD1.00=JPY118 in both scenarios
(Note 1): IEA World Energy Outlook 2022
(Note 2) Without Countermeasures: With respect to Scope 1 and Scope 2 emissions, per-unit CO₂ emissions released are assumed to be at a similar level as in the base year, i.e., fiscal 2018.
(Note 3) With Countermeasures: With respect to Scope 1 and Scope 2 emissions, CO₂ emissions are assumed to be reduced by 30% from the fiscal 2018 level through the achievement of the 2030 target.

Evaluation of Impact on Natural Marine Resources (Japanese anchovy and Alaska pollock)

In fiscal 2022, the Nissui Group used a model from the United Nations Food and Agriculture Organization (FAO) to evaluate expected changes in allowable catch of two important fish species that the Group sources in large quantities. Two scenarios were developed and applied to Japanese anchovy and Alaska pollock, to assess allowable catch of each in 2030 and 2050. In the 1.5°C scenario, allowable catch for both species was forecast to decrease slightly in 2030 and 2050. In the 4°C scenario, allowable catch for Japanese anchovy was forecast to decrease both in 2030 and 2050, while allowable catch for Alaska pollock was forecast to increase slightly in 2030 but to increase more significantly in 2050. Because the change in allowable catch in 2030 was modest, it was confirmed that impact on the Group’s finances would be modest. However, because the degree of change in allowable catch in 2050 was relatively high, a concerted response was deemed to be necessary. This need was particularly pronounced for Japanese anchovy, which was forecast to decline.

Degree of change in allowable catch (Note)

Decrease of less than 5% ➘, Decrease of 5–25% ↓, Decrease of over 25%↓↓
Increase of less than 5% ➚, Increase of 5–25% ↑, Increase of over 25% ↑↑

(Note): Nissui estimates based on “Impacts of climate change on fisheries and aquaculture (2018),” United Nations Food and Agriculture Organization (FAO)

Evaluation of Water Risk

A number of global standards are available for evaluating water risk. In fiscal 2021 the Nissui Group used Water Risk Filter, a standard developed by the World Wildlife Fund (WWF), to evaluate manufacturing and logistics sites in Japan overall. In fiscal 2022, the Group applied Aqueduct, a standard of the World Resources Institute (WRI), to evaluate individual manufacturing and logistics sites in Japan and overseas. Regarding opportunity loss from production shutdowns due to water damage, the flood depths specified in Aqueduct for the locations of each site were used to identify the number of days of production shutdown and the degree (percentage) of inventory damage at each site; this information was then used to calculate the financial impact of water damage. The results confirmed that the level of financial impact was intermediate. Regarding water stress (drought), while none of the Group’s sites corresponded to the highest risk level, it was determined that some production sites in Japan, Thailand and the Americas were located in regions subject to water stress. Going forward, the Group will continue to implement measures to reduce water use and explore ways of refining methods of evaluating water risk.

Results of flood risk evaluation using Aqueduct (number of sites)

Results of evaluation of drought risk using Aqueduct (number of sites/water use)

Reflection in Strategy

In response to the scenario analysis results, Nissui has been reflecting the countermeasures—starting with high-priority ones—in its mid-term business plan “Good Foods Recipe1,” which commences in 2022, to ensure consistency with its strategy.