NX GROUP will actively work to reduce CO2 emissions to help limit the atmospheric temperature increase to +1.5°C above the level of the Industrial Revolution in order to bring an enriched life to future generations through logistics. We view this initiative as Material Issues that are necessary for our Group to achieve sustainable growth and increase corporate value. We believe that by responding to these social changes, we will be able to minimize risk and create new business opportunities.
In May 2022, NX GROUP declared its support for the Task Force on Climate-related Financial Disclosures (TCFD*) recommendations, and in June 2022, based on the recommendations, the Group disclosed information in accordance with the TCFD disclosure framework. We are working to further expand the content of our disclosures based on the revisions made to the TCFD recommendations in October 2021.
* TCFD: The Task Force on Climate-related Financial Disclosures is an international initiative established by the Financial Stability Board in 2015 to encourage companies to disclose information about the financial implications of the risks and opportunities that climate change presents to their businesses
| Index | Main disclosure content | |
|---|---|---|
| Governance | • NX GROUP Sustainability Management Promotion Structure | The role of management in the evaluation and management of climate-related risks and opportunities in NX GROUP and the oversight of the Board of Directors |
| Risk Management | • Implementation of Risk Management | The process for identifying and assessing climate-related risks in NX GROUP as well as the Group-wide risk management system |
| Strategy | • Identification of Risks and Opportunities posed by Climate Change | The identification of short-, medium- and long-term climate-related risks and opportunities based on the 1.5℃ and 4℃ scenarios and NX GROUP's response |
| • Financial Impact Analysis of identified risks and opportunities • Financial Impact Analysis of transition risks • Financial Impact Analysis of physical risks • Financial Impact Analysis of opportunities (products and services) |
The nature and results of the financial impact analysis of identified climate-related risks and opportunities, including transition risks, physical risks, and opportunities (products and services) | |
| Indicators and Targets | • NX GROUP CO2 Emission Reduction Targets • NX GROUP CO2 Emission Reduction Results |
NX GROUP's medium- to long-term targets for reducing CO2 emissions and actual Scope 1, 2, and 3 emissions |
| Transition Plan | • Transition Plan to Achieve 1.5°C Target | The reduction roadmap and financial plans related to the transition to achieving NX GROUP’s medium- to long-term CO2 emission reduction targets |
We have established the Sustainability Promotion Committee for the purpose of promoting the sustainability management of NX GROUP. The Committee is chaired by the President & CEO of NIPPON EXPRESS HOLDINGS, INC. with the Chief Managing Officer in charge of the Sustainability Promotion Division serving as Deputy Chairperson. In addition to the executive officers of NIPPON EXPRESS HOLDINGS, INC., officers in charge of sustainability promotion at major Group companies were newly added as Committee members in July 2023. The Committee discusses policies and strategies related to the promotion of the Group’s overall sustainability initiatives, including the Group’s response to climate change, and reports the results of these discussions to the Board of Directors at least once each quarter depending on report content.
The Board of Directors oversees and reviews business execution of overall sustainability initiatives, including measures to address climate change, and deliberates and resolves basic policies and important matters.
Furthermore, in order to accelerate the promotion of sustainability management, in addition to performance indicators such as consolidated sales revenue, ESG-related non-financial information including climate change is also included as an indicator in the directors’ compensation system.
NX GROUP has established the Risk Management Committee, chaired by the President & CEO of NIPPON EXPRESS HOLDINGS, INC., in an effort to strengthen risk management throughout the Group. In addition, the Sustainability Promotion Committee conducts Material Issues analysis and identifies strengthening our response to climate change as Material Issues. The Material Issues are reported to the Risk Management Committee.
NX GROUP has been continuously conducting scenario analysis with the aim of evaluating and improving the resilience of its business and strategy against climate change.
In addition to the 1.5℃ scenario that our Group is aiming for, the 4℃ scenario was used as the scenario for analysis, in which decarbonization efforts do not proceed from the current level. The Group qualitatively and quantitatively evaluates the business impact of the risks and opportunities identified through scenario analysis on the Group’s business and examines relevant measures.
*The financial impact on NX GROUP under each scenario is rated on a three-point scale of high (¥10 billion or higher), moderate (¥1 to ¥10 billion), and low (under ¥1 billion).
Among the risks and opportunities identified in the scenario analysis, we conducted an analysis of the financial impact on NX GROUP regarding factors assessed to have a significant impact on business. This analysis was based on simulations based on external scenarios, etc., and the achievement of each scenario is not guaranteed.
In order to achieve NX GROUP’s medium- to long-term targets, it is necessary to select reduction measures to be implemented in light of social trends, such as zero-emission technology for large trucks and the state of infrastructure development for new fuels. While multiple scenarios are envisioned as measures to achieve medium- and long-term goals, we conducted scenario analysis of multiple reduction measures in 2030 and 2050 for Group companies in Japan in order to understand the financial impact of each scenario.
*1: Business as usual
*2: Internal Combustion Engine
*3: Battery Electric Vehicle
*4: Fuel Cell Vehicle
*5: Zero-emission ships: Vessels that emit virtually zero CO2 emissions during operation since they use hydrogen fuel, ammonia fuel, and other fuels
*6: Vehicle introduction cost is calculated by dividing the total introduction cost by the statutory useful life of the vehicle, which is 5 years
*7: Vessel introduction cost is calculated by dividing the total introduction cost by the statutory useful life of the vessel, which is 15 years
*8: The emission reduction scenarios are the Existing Technology Utilization scenario and the New Technology Adoption scenario, scenarios where it is assumed that NX GROUP's medium- to long-term CO2 emissions targets will be achieved
*9: The cost of implementing reduction measures covers annual energy costs at NX GROUP companies in Japan and additional costs of introducing vehicles and vessels
*10: Internal carbon price
※11: 新燃料はバイオ燃料や合成燃料(e-fuel)を指す
Among the physical risks (acute) identified through scenario analysis to assess the Group's resilience to risks from weather-related disasters, we conducted a financial impact analysis of the risk of business interruption due to weather-related disasters such as heavy rains, floods, and typhoons, and the risk of cost increase due to damage to company assets. The Group selected 70 warehouses that would be significantly impacted in Japan (accounting for 30% of NX GROUP's warehouse bases), and established a scenario where flooding occurs near the target sites, causing damage to the facilities.
From the analysis, we found that the risk of suspension of business activities due to weather disasters is limited and that the risk of damage to our own assets at main warehouses in Japan within the scope of this calculation was calculated to be ¥0.72 billion. In the future, the Group plans to expand the scope of calculation, etc., and continue evaluation and confirmation.
NX GROUP has established a system to develop and provide low-carbon transportation products designed to reduce Scope 3 emissions. In particular, the use of SAF*12 is important as a measure to reduce CO2 emissions in the aviation field. As a result, our Group is actively promoting such initiatives. Therefore, we estimated the financial impact of the opportunity to increase revenues from the sale of air transportation products using SAF. As a result, we expect a revenue opportunity*13 of between ¥3.22 billion and ¥6.45 billion. The Group will focus on this area and continue to consider other services in order to take advantage of market changes due to decarbonization and to gain a competitive edge.
In order to contribute to the achievement of the global goal of limiting the global average temperature rise to 1.5°C compared to pre-industrial levels, NX GROUP set medium- to long-term targets for the entire Group in January 2023 although reduction targets had previously been set for Nippon Express Co., Ltd. alone.
Furthermore, in May 2023, we submitted a letter of commitment to the SBT Initiative (SBTi)*. Moving forward, we will make further efforts to set and achieve targets consistent with the 1.5°C goal set by the Paris Agreement.
In order to transition to a society that limits global average temperature increase to 1.5°C above pre-industrial levels, NX GROUP sets medium- and long-term CO2 emission reduction targets for the entire NX GROUP with the goal of reducing the Group’s own emissions by 50% from 2013 levels by 2030 and contributing to the realization of a carbon-neutral society by 2050. Furthermore, in May 2023, we submitted a letter of commitment to the SBT Initiative (SBTi) in order to conform with the 1.5°C target set by the Paris Agreement and are currently preparing to submit our targets for official validation.
As a transition plan to achieve the Group’s medium- to long-term targets, we have formulated a reduction roadmap that shows the major measures and milestones at this time.
We are planning measures such as actively introducing environmentally friendly vehicles, including BEV vehicles, switching to LED lighting, and introducing renewable energy power in a systematic manner to serve as specific emission reduction efforts.
In addition, in NX GROUP Business Plan 2028, we plan to invest ¥25 billion in sustainability, including measures to address climate change, such as the introduction of eco-friendly vehicles.
Moving forward, we will steadily move forward with the transition toward achieving the 1.5°C target, and will review and update our roadmap and CO2 emission reduction measures as appropriate, taking into account scientific progress, technological trends, and social trends.
