Nichimo’s Sustainability

Initiatives for promotion of sustainable management

In December 2021, we finalized and revealed the “Fiscal 2023 Medium-Term Management Plan (Toward the next stage)” for the three-year period from the fiscal year ended March 31, 2023 to the fiscal year ending March 31, 2025. Our great challenge for the future under this plan is “Promotion of sustainable management.”
As a provider of total services encompassing all value chain processes from the fishing to the processing and sales of marine products, in conducting business activities, we fulfill our responsibility by engaging in sustainable management to conserve abundant marine resources and support environmentally friendly production and logistics, while responding to the global expansion of demand for marine products.

Nichimo’s approach to its goal for sustainability

Nichimo’s goal for sustainable management is focused primarily on striving to increase our corporate value over the medium to long term. Our approach is to fulfill our responsibility of conserving abundant marine resources and supporting environmentally friendly production and logistics of marine products through cooperation within the Group with a view to covering “From Ocean To Dining” in line with our corporate philosophy since our founding. Since our main business areas are in the fishing and marine products industries, in a society that has recently become more aware of conserving the natural environment and natural resources, we believe that striving to increase our corporate value over the medium to long term by fulfilling our responsibility of conserving abundant marine resources and supporting environmentally friendly production and logistics of marine products is what is strongly demanded of the Nichimo Group and it is the Group’s responsibility.

From a perspective of increasing corporate value, the initiatives that we emphasize in promoting sustainable management, such as marine and land-based aquaculture and biomass fishing nets that are biodegradable in the natural environment, have attracted many inquiries due to the high level of attention on sustainable business.

In terms of risk management, insufficient consideration for the marine environment and resources increases procurement risk for marine products. In regard to initiatives to reduce greenhouse gas emissions, the potential to significantly impact the Company’s results cannot be ignored, due to factors such as an increase in costs arising from the introduction of a carbon tax, which is currently under consideration.

In light of the above, we are promoting our current sustainability-conscious business activities, and we have also started initiatives for new businesses in an effort to achieve an increase in our corporate value that outweighs the increase in costs.

Furthermore, we have been using the PDCA cycle stipulated by ISO to manage and optimize planning and target-setting for these initiatives, as well as progress and improvements. In this way, we are working to achieve them by the shortest possible route.

Endorsement of the United Nations Global Compact

The Company endorses the United Nations Global Compact (UNGC), and was registered as a participating company in May 2023. Accordingly, the Company has been promoting sustainable management even further by observing and practicing the ten principles related to the four areas of “Human Rights, Labour, Environment, and Anti-Corruption” stipulated by the UNGC.

Four areas and ten principles of the United Nations Global Compact

Human Rights
Labour
Environment
Anti-Corruption
Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Materiality (material issues)

In the process of identifying its materiality, the Company views the 10 principles set forth in the UNGC as common global issues, then works to narrow the scope down to priority issues, being conscious of consistency with issues in the fishing and marine products industries, where the Company operates its business, and issues in the Company’s own business environment. We aim to determine our materiality during the fiscal year ending March 31, 2024, and will continue working to hone the accuracy of our activities after this determination through target-setting, engagement, and ongoing improvement.

Nichimo’s materiality identification, implementation and accuracy enhancement process

Nichimo Group’s focus issues

1Contribute to the conservation of the marine environment and the sustainable production and supply of marine products

Environment

Having developed its business based on the fishing and marine products industries, the conservation of the marine environment is an important responsibility that the Company must uphold. We believe that fulfilling this responsibility will ensure our business continuity and increase in corporate value going forward. Moreover, factors such as climate change, including global warming, and marine pollution are expected to have an increasing impact on the marine environment and marine products resources going forward. As a preventative approach to these, we are promoting environmentally friendly marine and land-based aquaculture along with participation in Blue Carbon projects for reducing CO2 emissions.

Key social issues that the Company should engage with

Conservation of the marine environment and marine resources, the marine plastic problem, sustainable production and supply, maintaining safe and secure diets, and food loss

UNGC Ten Principles classification: Environment
  1. 07. Businesses should support a precautionary approach to environmental challenges;
  2. 08. undertake initiatives to promote greater environmental responsibility; and
  3. 09. encourage the development and diffusion of environmentally friendly technologies.
Specific initiatives
  • R&D for reducing environmental impact
    (conservation of marine environment and marine product resources)
  • Promote the spread of biomass materials that are biodegradable in the natural environment
    (marine plastic problem)
  • Development of environmentally friendly aquaculture
    (sustainable production and supply)
  • Environmental management using ISO 14001
    (conservation of marine environment and marine product resources)
  • Initiatives to ensure safety and security
    (MEL certification, quality management, food loss reduction)

2Developing diverse human resources to cover “From Ocean To Dining” and engage in social issues, and providing a healthy working environment where they can work with a sense of security

Human Rights
Labour

Nichimo’s purpose is to provide total support in its business domain of the fishing industry and marine products industry, in the upstream processes ranging from fishing and aquaculture to processing and production, and in the downstream processes from logistics to sales. In other words, it is to continue being a platform provider for the industry. We believe this is where our value as a company lies. The source of this value is the Company’s diverse human resources. Having back-casted from our processes for increasing corporate value, we are focusing intently on developing human resources to cultivate the amount of capability that is needed.
Moreover, to facilitate proactive initiatives to address social issues through business activities, we consider it fundamental to create environments where individual employees can work with a sense of security. The Nichimo Group is committed to proactively incorporating diversity among workers, and ensuring that they can work with a sense of security knowing that human rights will be upheld, worker rights will be protected, and a healthy working environment will be provided.

Key social issues that the Company should engage with

Human resource development, health, and diversity & inclusion

UNGC Ten Principles classification: Human Rights
  1. 01. Businesses should support and respect the protection of internationally proclaimed human rights; and
  2. 02. make sure that they are not complicit in human rights abuses.
UNGC Ten Principles classification: Labour
  1. 03. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
  2. 04. the elimination of all forms of forced and compulsory labour;
  3. 05. the effective abolition of child labour; and
  4. 06. the elimination of discrimination in respect of employment and occupation.
Specific initiatives
  • Initiatives to enrich people’s lives
    (workstyle reforms, promotion of active participation of women, certification as a Health & Productivity Management Outstanding Organization)

3Rigorous governance and compliance, conscious of management of diversifying risks and adherence to the Charter of Corporate Behavior

Anti-Corruption

Recently, the Company is facing a number of risks in its business operations, such as the risk of financial impacts from climate change. Under such conditions, increasing corporate value and fulfilling social responsibilities means that the Company must not only observe laws and regulations, but also adhere strictly to the rules of its own Charter of Corporate Behavior. In addition, the Internal Control Committee and the Board of Directors will continue to work on establishing systems and measures to prevent “corruption in all its forms, including extortion and bribery,” as stipulated by the UNGC.

Key social issues that the Company should engage with

Strengthening of corruption prevention and governance system, strengthening of the compliance system

UNGC Ten Principles classification: Anti-Corruption
  1. 10. Businesses should work against corruption in all its forms, including extortion and bribery.
Specific initiatives
  • Rigorous compliance (internal controls, etc.)
  • Meeting all of the requirements of Japan’s Corporate Governance Code
  • Consider establishment of a Sustainability Promotion Committee, also to handle risk management

Promotion of climate change response aiming for carbon neutrality by 2050

Among sustainability issues, countermeasures for climate change in particular require the reduction of greenhouse gas emissions on a global scale.
Nichimo aims to achieve carbon neutrality by 2050, and has been working to comprehend and reduce its CO2 emissions, while making gradual progress on analyzing the impacts related to climate change using the TCFD approach.

Development of marine materials made with biomass and biodegradable materials

Marine materials made with biomass and biodegradable materials

Based on the expertise and knowledge we have accumulated over many years, we have been promoting R&D into marine materials made with biomass and biodegradable materials, and we are promoting their practical application in fishing gear, such as fishing nets and ropes, squid hooks, octopus pots, oyster lines, sandbags and float covers (film).
Making marine materials from biomass that is biodegradable in the natural environment helps to reduce the load on the environment, because even if the materials are damaged or swept away by the sea in rough weather, they will decompose and return to nature, rather than remaining in the sea as microplastics, which have become a problem recently. This initiative also contributes to reducing CO2 emissions during manufacturing and disposing.

Considering the establishment of a Sustainability Promotion Committee

The Group advocates sustainable management to ensure the sustainable increase of corporate value by fulfilling its responsibilities to conserve the abundant resources of the ocean, supporting environmentally friendly production and distribution, and “opening the way to a sustainable world!” and we are considering the establishment of a Sustainability Promotion Committee to oversee our progress.
In our current initiatives, in the course of promoting sustainable management, we obtained ISO Integrated Management System (ISO 9001 + 14001) certification in October 2022, and we are conducting initiatives with an emphasis on quality and environmental consideration. Because these efforts are put into action in individual departments, they foster an awareness of sustainability among employees as well as management, meaning that the entire Company is working to contribute to the realization of a sustainable society.
We will establish a structure to report to the Board of Director, and promote cross-sectional sustainable management throughout the Company.