Environment
Disclosure based on TNFD Recommendations
The MITSUI-SOKO Group (hereinafter referred to as the “Group” or “we”)
firmly believes that a company’s sustainable growth is inseparable from
the sustainability of society. As such, we prioritize the preservation
of the global environment as a vital management issue. The Group has
identified “Promoting climate change actions and resource circulation”
as a central focus within our Materiality issues.
The Group operates on a global scale, providing services to customers and business partners across a diverse array of industries. Consequently, our operations rely on the diverse ecosystem services that nature offers across the entire value chains, and they can affect the environment in multiple ways, extending beyond just climate change. In accordance with the Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations, the Group has decided to expand and refine its information disclosure practices. This effort encompasses the identification of nature-related risks and opportunities, particularly those associated with biodiversity and ecosystem services, throughout the entire value chains, including both upstream and downstream, while further developing our existing initiatives. Specifically, our initiatives and analysis results are organized around four key pillars: Governance, Strategy, Risk & Impact Management, and Metrics & Targets.
The Group operates on a global scale, providing services to customers and business partners across a diverse array of industries. Consequently, our operations rely on the diverse ecosystem services that nature offers across the entire value chains, and they can affect the environment in multiple ways, extending beyond just climate change. In accordance with the Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations, the Group has decided to expand and refine its information disclosure practices. This effort encompasses the identification of nature-related risks and opportunities, particularly those associated with biodiversity and ecosystem services, throughout the entire value chains, including both upstream and downstream, while further developing our existing initiatives. Specifically, our initiatives and analysis results are organized around four key pillars: Governance, Strategy, Risk & Impact Management, and Metrics & Targets.
General requirements
| 1. The application of materiality |
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The Group operates on a global scale, serving a diverse array of
customers and business partners, given the nature of our
business. We acknowledge that our operations depend on the
ecosystem services provided by nature throughout the entire
value chains, and we recognize our potential to impact the
environment in various ways.
The nature-related risks and opportunities for the Group arise from our dependence on and impact on natural resources throughout the entire value chains. As a result, our analysis and assessment covers the key value chains, including upstream and downstream processes. In terms of risks and opportunities, we provide disclosures that may influence the Group’s business operations and financial health. |
| 2. The scope of disclosures |
| We thoroughly analyze, assess, and identify the dependencies, impacts, risks, and opportunities linked to the Group’s logistics and real estate businesses. This includes a comprehensive examination of both upstream and downstream value chains, as well as the identification of priority locations for our direct operations. |
| 3. The location of nature-related issues |
| Given that the condition of ecosystems and the utilization of ecosystem services differ by country and region, we consider it crucial to analyze nature-related issues specific to our operational areas. To accurately identify nature-related dependencies, impacts, risks, and opportunities, we perform a comprehensive analysis of the critical locations of our domestic and international direct operations, particularly those classified as high-risk. |
| 4. Integration with other sustainability-related disclosures |
| We provide disclosures regarding climate change in accordance with the TCFD Recommendations. We also recognize that climate change plays a crucial role in altering environmental conditions, creating both nature-related risks and opportunities. |
| 5. The time horizons considered |
| In our analysis, we conduct qualitative assessments with a medium- to long-term perspective, continuously monitoring key risks and opportunities through effective risk management, metrics, and targets. |
| 6. The engagement of Indigenous Peoples, Local Communities and affected stakeholders in the identification and assessment of the organization’s nature-related issues |
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The Group acknowledges the strong interconnection between
natural capital issues and human rights concerns. We have
established the MITSUI-SOKO Group Human Rights Policy,
positioning the protection of the dignity of all individuals and
the respect for their rights as a key element that forms the
foundation for all of our business activities. We also actively
identify human rights issues and perform due diligence to ensure
that we fulfill our responsibility to respect and uphold human
rights.
Given the nature of the Group’s business, which involves conducting activities in various regions of the world and interacting with people from diverse backgrounds, we recognize that fostering a mutual trust with a broad spectrum of stakeholders is crucial. Consequently, we prioritize proactive information disclosure and maintain continuous dialogue. For further information on our stakeholder engagement efforts, please click here. |
Governance
The Group promotes initiatives related to natural capital issues
through the Sustainability Committee, which operates under the
oversight of the Board of Directors. The Sustainability Committee
performs a comprehensive analysis, assessment, and identification of
nature-related dependencies, impacts, risks, and opportunities within
the Group’s value chains, considering relevant management metrics and
initiatives. It subsequently reports its findings, along with these
metrics and initiatives, to the Board of Directors, which offers
insights and guidance from a supervisory standpoint.
The TNFD Recommendations also highlight the importance of considering the human rights of the stakeholders affected by nature-related issues. The Group acknowledges that natural capital issues are intrinsically connected to human rights concerns, and we are dedicated to upholding the rights of all stakeholders while developing a robust framework for our initiatives. We have established the MITSUI-SOKO Group Human Rights Policy in accordance with the UN Guiding Principles on Business and Human Rights, demonstrating our steadfast commitment to eliminating all forms of discrimination. To ensure the protection of stakeholders and suppliers who are especially vulnerable to impacts, such as indigenous peoples and local communities, we conduct human rights due diligence in accordance with the MITSUI-SOKO Group Human Rights Policy and the MITSUI-SOKO Group Policy on Sustainable and Responsible Procurement. The Sustainability Committee addresses human rights issues by reviewing specific initiatives and management metrics related to human rights, monitoring progress, and providing reports to the Board of Directors.
For further information on our efforts on human rights, please click here.
The TNFD Recommendations also highlight the importance of considering the human rights of the stakeholders affected by nature-related issues. The Group acknowledges that natural capital issues are intrinsically connected to human rights concerns, and we are dedicated to upholding the rights of all stakeholders while developing a robust framework for our initiatives. We have established the MITSUI-SOKO Group Human Rights Policy in accordance with the UN Guiding Principles on Business and Human Rights, demonstrating our steadfast commitment to eliminating all forms of discrimination. To ensure the protection of stakeholders and suppliers who are especially vulnerable to impacts, such as indigenous peoples and local communities, we conduct human rights due diligence in accordance with the MITSUI-SOKO Group Human Rights Policy and the MITSUI-SOKO Group Policy on Sustainable and Responsible Procurement. The Sustainability Committee addresses human rights issues by reviewing specific initiatives and management metrics related to human rights, monitoring progress, and providing reports to the Board of Directors.
For further information on our efforts on human rights, please click here.
Strategies
We utilize the LEAP approach* recommended in the TNFD
Recommendations to analyze, assess, identify, and prioritize
nature-related dependencies, impacts, risks, and opportunities within
our Group’s key value chains.
*LEAP approach: An integrated approach developed by TNFD to identify and assess nature-related issues, including the business’s interface with nature, as well as its dependencies, impacts, risks, and opportunities. It consists of four phases: Locate, Evaluate, Assess, and Prepare.
Analysis and Assessment of Nature-Related Dependencies and Impacts
We identified the primary sectors associated with our direct
operations, as well as upstream and downstream activities in the value
chains, and assessed their nature-related dependencies and impacts
using a five-point scale. This evaluation utilized the ENCORE tool
developed by the United Nations Environment Programme World
Conservation Monitoring Centre (UNEP-WCMC) and other organizations.
MITSUI-SOKO Group Value Chains
- Direct operations: warehousing, port transportation, forwarding, land transportation, real estate leasing
- Upstream business activities: transportation (land, sea, air, etc.), procurement (manufacturing of cargo handling equipment, etc.), and real estate construction
- Downstream business activities: industries of our major customers (healthcare, automotive, consumer electronics, precision equipment & machinery, food & beverages, chemicals, etc.), real estate demolition
Degree of Nature-Related Dependencies and Impacts
Direct Operations
Dependencies
While the nature-related dependencies of our direct operations are generally low, our port transportation activities face significant risks of direct physical damage from flood events, including high tides and tsunamis. It has been confirmed that these operations are heavily reliant on flood and storm mitigation (flood control functions) provided by ecosystem services.
While the nature-related dependencies of our direct operations are generally low, our port transportation activities face significant risks of direct physical damage from flood events, including high tides and tsunamis. It has been confirmed that these operations are heavily reliant on flood and storm mitigation (flood control functions) provided by ecosystem services.
Impacts
Although the nature-related impacts of our direct operations are generally minimal, our international transportation activities, including sea and air freight forwarding, serve as major pathways for the unintentional transport and spread of invasive alien species to non-native habitats, potentially leading to extensive impacts on nature.
Although the nature-related impacts of our direct operations are generally minimal, our international transportation activities, including sea and air freight forwarding, serve as major pathways for the unintentional transport and spread of invasive alien species to non-native habitats, potentially leading to extensive impacts on nature.
Nature-Related Dependencies and Impacts in our Direct
Operations
Upstream
Dependencies
While our logistics-related business activities generally exhibit low dependence on nature, certain operations in transportation and real estate construction are susceptible to risks from floods, storms, and landslides. It has been confirmed that these activities significantly rely on flood and storm mitigation (flood control functions) and soil and sediment retention (soil retention functions).
While our logistics-related business activities generally exhibit low dependence on nature, certain operations in transportation and real estate construction are susceptible to risks from floods, storms, and landslides. It has been confirmed that these activities significantly rely on flood and storm mitigation (flood control functions) and soil and sediment retention (soil retention functions).
Impacts
In our business activities related to procurement (manufacturing of cargo handling equipment, etc.), there is the possibility of a significant impact on nature due to pollution/pollution removal caused by harmful substances generated during manufacturing and pollutants emitted from waste. Our transportation-related business activities have an impact on multiple sectors, particularly through fossil fuel consumption, which contributes to climate change, and the unintentional introduction of invasive alien species during long-distance transportation, both of which can lead to profound ecological consequences. Furthermore, our real estate construction activities can greatly impact the environment due to extensive resource extraction related to the procurement of construction materials and the pollution/pollution removal caused by waste, dust, etc. during real estate construction.
In our business activities related to procurement (manufacturing of cargo handling equipment, etc.), there is the possibility of a significant impact on nature due to pollution/pollution removal caused by harmful substances generated during manufacturing and pollutants emitted from waste. Our transportation-related business activities have an impact on multiple sectors, particularly through fossil fuel consumption, which contributes to climate change, and the unintentional introduction of invasive alien species during long-distance transportation, both of which can lead to profound ecological consequences. Furthermore, our real estate construction activities can greatly impact the environment due to extensive resource extraction related to the procurement of construction materials and the pollution/pollution removal caused by waste, dust, etc. during real estate construction.
Downstream
Dependencies
The healthcare and food & beverage industries, in which some of our customers operate, rely on a wide range of resources for their production activities. It has been confirmed that these sectors are heavily dependent on various ecosystem services, including water resources, other resources, pollution remediation, and water flow regulation. In addition, it has been confirmed that the business activities related to real estate demolition are highly dependent on the ecosystem’s remediation and disaster prevention functions through pollution remediation and flood and storm mitigation.
The healthcare and food & beverage industries, in which some of our customers operate, rely on a wide range of resources for their production activities. It has been confirmed that these sectors are heavily dependent on various ecosystem services, including water resources, other resources, pollution remediation, and water flow regulation. In addition, it has been confirmed that the business activities related to real estate demolition are highly dependent on the ecosystem’s remediation and disaster prevention functions through pollution remediation and flood and storm mitigation.
Impacts
In key customer industries, there is a substantial possibility of significant impacts on nature stemming from pollution/pollution removal, primarily due to the use of various chemical substances and the potential generation of waste and pollutants. Additionally, depending on the industry, overlapping factors such as extensive land and water resource utilization and chemical usage can lead to serious impacts, particularly concerning resource use/replenishment. Furthermore, the business activities related to real estate demolition may have a considerable impact on nature due to climate change caused by greenhouse gas emissions associated with the use of heavy machinery, and pollution/pollution removal caused by waste, dust, etc.
In key customer industries, there is a substantial possibility of significant impacts on nature stemming from pollution/pollution removal, primarily due to the use of various chemical substances and the potential generation of waste and pollutants. Additionally, depending on the industry, overlapping factors such as extensive land and water resource utilization and chemical usage can lead to serious impacts, particularly concerning resource use/replenishment. Furthermore, the business activities related to real estate demolition may have a considerable impact on nature due to climate change caused by greenhouse gas emissions associated with the use of heavy machinery, and pollution/pollution removal caused by waste, dust, etc.
Risks & Opportunities and Countermeasures
Following a thorough dependency and impact evaluation, we have identified potential nature-related risks and opportunities within our logistics and real estate sectors.
In response, we have prepared policies to effectively address each identified issue. In identifying risks and opportunities,
we also take into account external factors such as international policy trends, alongside a comprehensive analysis of dependencies and impacts.
We recognize that implementing the following countermeasures is vital for effectively addressing the identified risks and opportunities. We will actively promote each of these measures in conjunction with our ongoing initiatives.
We recognize that implementing the following countermeasures is vital for effectively addressing the identified risks and opportunities. We will actively promote each of these measures in conjunction with our ongoing initiatives.
- Regular monitoring of nature-related impacts surrounding the Group, including climate change.
- Proactive response to natural disasters.
- Development of sustainable logistics solutions that can adapt to evolving customer needs.
List of Risks & Opportunities and Countermeasures
Identification of Priority Locations
We identified priority locations by integrating metrics data that aligns with the criteria in the TNFD Recommendations, including biodiversity importance, ecosystem integrity,
ecosystem service provision importance, and physical water risks, with the location information of our Group’s major or high-risk business sites. Moving forward,
we will perform additional evaluations of our countermeasures to be implemented in priority locations, guided by the insights gained from this analysis.
Risk and Impact Management
The Group employs the LEAP approach to thoroughly analyze, assess, identify, and prioritize nature-related dependencies, impacts, risks,
and opportunities across key value chains, encompassing the Group, its customers, and business partners.
We stipulate the recognition and management of risks in the Group's business activities in the Risk Management Regulations, develop a system for each type of risk, and implement risk management. With regard to risks and opportunities related to climate change, the Sustainability Committee takes the lead in identifying, analyzing, and evaluating risks and opportunities, sharing information within the Group, instructing relevant departments to take action, and reporting to the Board of Directors, with the aim of addressing and minimizing the risks. For significant risks, the Environment and Human Rights Subcommittee, a cross-functional body under the Sustainability Committee, establishes key performance indicators (KPIs) and oversees progress monitoring. The Sustainability Committee will continue to monitor international laws, regulations, and policy trends related to natural capital themes, including climate change and biodiversity. Furthermore, information regarding the management of nature-related risks and impacts, including those previously mentioned, will be shared with the Risk Management Committee, which oversees Group-wide risks, as needed, through the Sustainability Committee.
We stipulate the recognition and management of risks in the Group's business activities in the Risk Management Regulations, develop a system for each type of risk, and implement risk management. With regard to risks and opportunities related to climate change, the Sustainability Committee takes the lead in identifying, analyzing, and evaluating risks and opportunities, sharing information within the Group, instructing relevant departments to take action, and reporting to the Board of Directors, with the aim of addressing and minimizing the risks. For significant risks, the Environment and Human Rights Subcommittee, a cross-functional body under the Sustainability Committee, establishes key performance indicators (KPIs) and oversees progress monitoring. The Sustainability Committee will continue to monitor international laws, regulations, and policy trends related to natural capital themes, including climate change and biodiversity. Furthermore, information regarding the management of nature-related risks and impacts, including those previously mentioned, will be shared with the Risk Management Committee, which oversees Group-wide risks, as needed, through the Sustainability Committee.
Indicators and Goals
We use measurement indicators to appropriately identify and manage risks and opportunities, thereby achieving our materiality focus on
“Promoting climate change actions and resource circulation”. Our group has established CO2 emission reduction targets and waste recycling rate targets.
For details, please click here.
We will deepen our identification and assessment of nature-related risks within our risk and impact management process while considering incorporating additional metrics and targets as needed.
We will deepen our identification and assessment of nature-related risks within our risk and impact management process while considering incorporating additional metrics and targets as needed.
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- Disclosure based on TNFD Recommendations