Initiatives for TNFD Recommendations

Environment

Initiatives for TNFD Recommendations

TNFD Report

TNFD Report 2023 (PDF) (3.20MB)

system, 株式会社ニッスイサステナビリティ推進部, 外部協力者, 株式会社ニッスイコーポレートコミュニケーション部, 株式会社ニッスイ人事部人事課

Initiatives for TNFD Recommendations

The Nissui Group recognizes the preservation of biodiversity as a vital management issue. The Group joined the Task Force on Nature-related Financial Disclosures (TNFD) Forum in September 2023, and registered as a TNFD Adopter in December 2023.

Participation in External Initiatives

Governance

Efforts related to natural capital and biodiversity in the Nissui Group are primarily handled by six subcommittees: the Marine Resource Sustainability Subcommittee, the Sustainable Procurement Subcommittee, the Marine Environment Subcommittee, the Plastics Subcommittee, the Environmental Subcommittee, and the Human Rights Subcommittee. Each subcommittee develops and implements policies and strategies, and reports to the Sustainability Committee.
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.

(Note): 3R+R: Reduce, Reuse and Recycle + Renewable

Sustainability Committee

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

Strategy

To clarify the relationship between the Nissui Group’s dependence on nature for its fisheries and aquaculture operations and the impact those operations have on nature, we conducted a diagnosis of “Dependencies and Impacts” and an evaluation of “Risks and Opportunities” in line with the LEAP Approach (Note 1), and organized the results as follows. This evaluation focused on “fisheries” and “aquaculture,” which represent the upstream points of contact with nature in our value chain. An initial evaluation was performed using the external tool “ENCORE" (Note 2), followed by a secondary (qualitative) evaluation aligned with the realities of the Nissui Group’s operations. As a result, it was found that fisheries in the Group are highly dependent on marine ecosystem services, such as specific ocean areas and marine resources, and that fishing activities impact resource quantities and species. In aquaculture, significant dependence was found on ecosystem services that regulate water temperature and quality, in addition to the use of land, water, and sea areas. It was also found that aquaculture impacts nature through water pollution around farming sites, particularly due to water quality deterioration caused by feeding practices.

(Note1) The LEAP (“Locate, Evaluate, Assess, Prepare”) approach: an analytical process developed by TNFD to serve as a guide on evaluating nature-related risks and opportunities.
(Note2)Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE): a tool for evaluating dependence and impact on natural capital for each business sector and production process.

Diagnose dependence and impact

[Figure] Evaluate: Diagnose dependence and impact

Evaluate risks and oppoutunities

[Fisheries]

Main risks and opportunities for Nissui Group

	Risks / opportunities	Classification	Main risks and opportunities expected	Impact on business	Main responses
Fisheries	Physical risks	Chronic risks	Depletion of marine resources	Reduced procurement volumes (Destabilization of supply chain) Increased procurement costs	Further strengthening of access to resources Construction of procurement networks Strengthening of aquaculture business Development of substitutes for marine resources
	Physical risks	Acute / chronic risks	Changes in resource status / fishing grounds / species due to changes in ocean temperature	Reduced procurement volumes (Destabilization of supply chain) Increased procurement costs
	Transition risks	Policy risk	Strengthening of fishing regulations	Reduced procurement volumes (Destabilization of supply chain)	Further strengthening of access to resources Construction of procurement networks Strengthening of aquaculture business Development of substitutes for marine resources
		Policy risk	Enhancement of greenhouse gas emission regulations	Incurred response costs	Efficiency in exploring fishing grounds (e.g. use of drones)
		Market risk	Changing consumer purchasing behavior	Loss of sales opportunities due to delayed responses Incurred response costs (e.g. certification costs)	Obtaining of certifications such as MSC, MEL Continuation of resource status surveys and information dissemination
		Market risk	Increased demands from retailers / foodservice operators (traceability / certification, etc.)	Loss of sales opportunities due to delayed responses Incurred response costs (e.g. certification costs)
		Reputational risk	Deterioration of reputation due to procurement of endangered species	Loss of sales, damage to brand value	Procurement based on endangered species procurement policy Dialogue with stakeholders
		Reputational risk	Deterioration of reputation due to incidental capture of seabirds and mammals	Loss of sales, damage to brand value	Continuation of bycatch prevention measures in each fishing company Dialogue with stakeholders
		Reputational risk	Deterioration of reputation due to negative impact on marine resources and the environment	Loss of sales, damage to brand value	Reduction of marine environmental load and monitoring Coexistence with local communities
		Reputational risk	Deterioration of reputation among investors / financial institutions due to inadequate sustainability response	Withdrawal of investment financial assets	Various sustainable initiatives and active information dissemination and dialogue
		Technology risk	Delay in reducing greenhouse gas emissions from fishing vessels	Decrease in business competitiveness Incurred response costs	Active information gathering for decarbonization of fishing vessels
	Opportunities	Products and services / sustainable use of natural resources	Stabilization of supply chains through sustainable procurement	Stabilization of revenues, expansion of sales channels	Confirmation of status of resources when procuring Acquisition of fisheries certification and increased handling of certified products
		Reputation / ecosystem protection, restoration and regeneration	Avoidance of bad publicity by preventing incidental capture of seabirds and mammals, conservation of ecosystems	Avoidance of reputation risk Ecosystem conservation in fishing grounds → Ensuring continuity of fisheries	Continuation of incidental catch prevention measures in each fishing company
		Capital flow and financing	Reputation improvement among investors/financial institutions, diversification of funding sources	Reduction in capital costs	Sustainable procurement of marine resources and information dissemination
		Reputational capital	Changes in consumer purchasing behavior (increased demand for products that take sustainability into account)	Expansion of sales

[Aquaculture]

Main risks and opportunities for Nissui Group

	Risks / opportunities	Classification	Main risks and opportunities expected	Impact on business	Main responses
Aquaculture	Physical risks	Acute risks	Suspension of business and increasing management costs from increasing severity of wind and flood disasters	Losses from damage of aquaculture facilities	Introduction of submergible fish cages and reinforcement of facilities Predict red tide and minimize damage Strengthening capabilities in land-based aquaculture
		Acute risks	Spread of fish diseases	Loss of assets from mortality of fish stocks	Preventive management using N-AHMS, an original farmed-fish health management system
		Acute / Chronic risks	Water quality deterioration around farming sites	Suspension of operations, fish disease outbreak, fish mortality	Environmental monitoring of fish farms
		Acute / Chronic risks	Business suspension due to drought	Damage to aquaculture sites due to drought	Identification of high-risk sites, relocation, facility enhancement, water source preservation
		Chronic risks	Risks in procurement of marine products due to changes in the marine environment	Impact on procurement volume and increase in procurement costs due to reduced catch of raw material fish for aquaculture feed	Alternative feed development (low-fishmeal formula feed)
		Chronic risks	Ocean temperature rise due to climate change	Occurrence of red tides Changing suitable aquaculture sites	Development of new aquaculture areas (shift to high-latitude regions)
	Transition risks	Policy risk	Strengthening of environmental regulations on aquaculture	Reduction of scale of business and closure of fish farms Financial impact from fines and taxes	Environmental monitoring of fish farms Reduction of environmental impact from feed (EP feed, automatic feeding systems) Shift to off-shore farming
		Policy risk	Stricter regulations on greenhouse gas emissions	Incurred response costs	Shift from boat feeding to remote feeding systems Participation in hydrogen fuel cell feeding boat development / demonstration projects
		Policy risk	Impact on feed due to strengthened natural marine resource management	Reduced procurement volumes Increased aquaculture costs due to feed price increases	Alternative feed development (low-fishmeal formula feed)
		Market risk	Changing consumer purchasing behavior	Loss of sales opportunities due to delayed responses Incurred response costs (e.g. certification costs)	Obtaining of certifications such as MSC, MEL
		Market risk	Increased demands from retailers / foodservice operators (traceability / certification, etc.)	Loss of sales opportunities due to delayed responses Incurred response costs	Feed traceability assurance Obtaining of certifications such as MSC, MEL
		Reputational risk	Deterioration of reputation among stakeholders due to negative environmental impact	Brand value damage, protest actions, boycotts	Reduction of marine environmental load and monitoring Coexistence with local communities
		Reputational risk	Deterioration of reputation among investors/financial institutions due to inadequate sustainability response	Withdrawal of investment financial assets	Various sustainable initiatives and active information dissemination and dialogue
		Technology risk	Delay in low environmental impact aquaculture technology development	Loss of competitive advantage, decline in business competitiveness	Strengthening of response by concentrating management resources
	Opportunities	Products and services / Ecosystem protection, restoration and regeneration	Use of full-life cycle aquaculture technology to reduce dependence on natural resources	Strengthening resilience, establishing competitive superiority	Expansion to other fish species beyond Japanese amberjack (100% artificial seeds)
		Products and services / Ecosystem protection, restoration and regeneration	Health management for farmed fish health promotion, prevention of disease spread to surrounding seas	Improvement in aquaculture performance, revenue stabilization Establishing competitive superiority	Preventive management using N-AHMS, an original farmed-fish health management system
		Products and services / Ecosystem protection, restoration and regeneration	Reduction of marine environmental load through research and development of aquaculture methods not reliant on antimicrobials	Expansion of export opportunities Establishing competitive superiority	Collaboration with stakeholders through SeaBOS
		Products and services / Ecosystem protection, restoration and regeneration	Reduction of impact on the marine environment using land-based aquaculture technology	Establishment of competitive advantage, expansion of sales channels Avoidance of reputation risk	Deepening of current initiatives (shrimp, salmon, chub mackerel)
		Products and services	Ensuring climate change resilience through land-based aquaculture technology development	Business resilience enhancement by avoiding physical risks (e.g. wind / water damage, ocean temperature rise)
		Products and services / Ecosystem protection, restoration and regeneration	Environmental load reduction and animal welfare improvement through smart aquaculture	Reduction of aquaculture cost, improvement of aquaculture performance Improvement of the work environment	Production management using AI and IoT Development of remote feeding systems
		Markets / ecosystem protection, restoration and regeneration	Environmental load reduction through decarbonization of work vessels	Avoidance of future carbon pricing impact Reputation improvement among stakeholders	Participation in hydrogen fuel cell feeding boat development / demonstration projects
		Capital flow and financing	Reputation improvement among investors/financial institutions, diversification of funding sources	Reduction in capital costs	Building sustainable aquaculture business and information dissemination
		Reputational capital	Changes in consumer purchasing behavior (increased demand for products that take sustainability into account)	Expansion of sales

Manage risks and opportunities

The Nissui Group uses material issues as the starting point for risk management to identify significant risks with a focus on medium- to long-term management strategies. In FY2023, a review of material issues was conducted, and accordingly, significant risks were also reassessed. The identified significant risks related to natural capital and biodiversity are as below. The review of material issues incorporated the results from our analysis of “climate-related and nature-related risks and opportunities" as part of our TCFD and TNFD initiatives.
The analysis and countermeasures for risks and opportunities related to climate change are being examined by the “TCFD Compliance Project," a cross-functional initiative led by a Managing Executive Officer (CFO), in collaboration with the Environmental Subcommittee. Additionally, the analysis and countermeasures for risks and opportunities related to natural capital along the value chain are being examined by the Marine Resource Sustainability Subcommittee, the Marine Environment Subcommittee, the Sustainable Procurement Subcommittee, and the Human Rights Subcommittee. The results of the discussions in each subcommittee are reported to the Board of Directors after deliberation in the Sustainability Committee, and the Board’s opinions and advice are incorporated into our policies.

Priority risks	Risk management organization
Risks related to addressing climate change	Environmental Subcommittee	→	Sustainability Committee
Risks related to addressing biodiversity	Marine Resource Sustainability Subcommittee Marine Environment Subcommittee
Risks related to environmental and human rights in the supply chain	Sustainable Procurement Subcommittee Human Rights Subcommittee

Metrics and targets

The Nissui Group positions the sustainability of marine resources and the conservation of the marine environment as key management issues, managing nature-related dependencies, impacts, risks, and opportunities using the following indicators and targets.

Scope	Metrics	Targets	Method of measurement
Fisheries, aquaculture	Procurement of sustainable marine resources	Procurement of sustainable marine resources 100%	Using the ODP (Note1) evaluation method (based on FishSource scores 1-5), a score of 8 or higher for all Well Managed and 6 or higher for Managed is considered sustainable
	Procurement of endangered species (marine resources)	For marine resources at high risk of depletion, procurement will be suspended if scientific and practical measures are not taken to recover the resources by 2030	Scientific and practical measures for resource recovery 1.Fishery products certified by the Marine Stewardship Council (MSC) or other certification bodies (equivalent to GSSI (Note2) certification), or Fishery Improvement Project (FIP) products. 2.Scientific fishery management by international resource management organizations such as Regional Fisheries Management Organizations (RFMO (Note3)). 3.Rated “Managed” or above based on criteria established by the ODP (Note1) 4.Any other specific measures being taken to achieve 1-3 above.
	CO₂ emissions	Reduced by 30%	CO₂ emissions (Scope 1,2, Compared to FY2018)
Aquaculture	Results of switching to nylon-covered Styrofoam aquaculture floats	100% in FY2024	Switching over to floats that have a low risk of outflowing into the ocean
Aquaculture	Escaped fish	Reduce the escape of fish to zero	Result of escaped fish (If any fish has escaped, all such fish will be identified, recorded in books and tallied regardless of the scale of the escape)

(Note1) ODP: Ocean Disclosure Project. Online reporting platform for voluntary disclosure of seafood sourcing established by the SFP in 2015.
(Note2) GSSI: Global Sustainable Seafood Initiative. An international partnership that verifies programs assessing the sustainability of marine products.
(Note3) RFMO: Regional fisheries management organizations. International organizations established under individual conventions to achieve the conservation and sustainable use of marine resources.