ESG Management Promotion Activity Report

Summary of ESG Management Promotion Activities in Fiscal 2022 and Outline of Next Year's Targets

The content of ESG Management Promotion Activities is organized and summarized from the perspectives of the NYK Group's materialities of "Safety," "The Environment," "Human resources," and "Governance."

Please see the GHQ Environmental Management Program for FY2022 for a summary of environmental activities and goals.

1.Safety

【ISO26000 Core Subjects】 O:Organizational Governance, H:Human Rights, L:Labour Practices, E:Environment, F:Fair Operating Practice, CI:Consumer Issues, CD:Community Involvement and Development

[Self-evaluation standard] Achieved: ◎ Almost Achieved:〇 Partially Achieved:△

Targets for FY 2022 ISO26000
Core Subjects
Achievement/progress at the end on December in 2022 Achievement
rate
Targets for FY 2023
1.Reduction of fleet accidents (Ensuring safety)
  1. 1Eliminate major accidents
  2. 2Reduce fleet downtime (10 hours / year / vessel)
  3. 3Conduct emergency preparedness and response
L,E

*From 2020, the calendar year (CY) is used instead of the company’s fiscal year (FY).

  1. 1-1Conducted NAV9000 audits (of ship-management companies and ships); audited 152 vessels and six companies, producing 844 corrective-action requests
  2. 1-2Near Miss 3000 activities (increased companies to be covered); 29 target companies and 59,920 reports
  3. 1-3Convened various safety promotion meetings and safety seminars
    Held a Global SEMC*1 meeting (Nov, remote and face to face), fleet safety promotion meetings (July, remote, two meetings (a morning meeting in Japanese and an afternoon meeting in English), and meetings of the president, captains, and chief engineers (September)
  4. 1-4Distributed safety information; a total of 30 documents
  5. 1-5Conducted safety campaigns (done remotely); 241 vessels involving 401 participants
  6. 1-6Developed method for preventing engine plant accidents by utilizing big data
    →Founding of Remote Diagnostic Center (RDC) in the Philippines to monitor engine plants on NYK vessels
    →RDC and its operation was recognized by ClassNK with its highest rating of Class S* of Innovation Endorsement (Providers)
    →Started installing SIMS3 (high granularity data collection (every 1 minute), improvement of real-time performance)
    →Started operation of Data Quality Management System (SIMS data quality monitoring)
  7. 2Continued activities to minimize fleet downtime (overall) 15.6 hours/vessel (of this 7.4 hours/vessel for engine trouble)
  8. 3-1Conducted emergency response drills and reviews six times
  9. 3-2Conducted media response drill and reviews conducted drill (January 2023) and employee e-Learning (Nov-Jan)
  10. 3-3Responding to seafarer manning issue caused by COVID-19; establishment of COVID-19 Crew Change Task Force
  1. 1Eliminate major accidents
  2. 2Reduce fleet downtime (10 hours / year / vessel)
  3. 3Conduct emergency preparedness and response
2.Safety activities with vessel owners and customers
  1. 1Visit vessel owners and conduct seminars for vessel owners
  2. 2Information sharing with shipmanagement firms
L,CI
  1. 1Called for cooperation in blackout recovery tests for chartered vessels, held safety seminars, and shared information and exchanged opinions with vessel owners
  2. 2Conducted emergency communication training with relevant outside parties, such as terminals, shipmanagement companies, customers, etc. (four times)
  1. 1Visit vessel owners and conduct seminars for vessel owners
  2. 2Information sharing with shipmanagement firms
3.Prevention of accidents, investigation of causes, and gathering information for terminal
  1. 1Adopt and implement an internal audit system. Evaluate whether work is conducted according to safety standards
  2. 2Continue to raise on-site capabilities through mutual safety cross-patrols conducted among terminals in Japan
L,F
  1. 1Internal audits are being conducted at each company. (Since internal audits are being conducted within each company, they are not conducted at individual terminals.)
  2. 2Mutual participations in safety patrols have been regularly conducted.
    Joint safety patrols were also carried out with ONE
  1. 1To evaluate whether internal audit at each company is being conducted in accordance with safety standards.
  2. 2Continue mutual safety cross-patrols of terminals in Japan,
    develop safety standards for other group port companies and use
    that as a base to establish a safety standard policy to further
    enhance our on-site operating capabilities.
4.Ensuring thorough safety management at shipyards and
ship equipment manufacturers
Ensure safety management based on safety standards at each company E,F Japan Marine Science Inc. (formerly Nippon Yusen Engineering) makes use of its QMS for safety management by conducting regular patrols of each ship site and conducting daily correction requests. Ensure safety management based on safety standards at each company
5.Preparation for disasters
  1. 1Update the Company’s business continuity plan (BCP)
  2. 2Conduct disaster drill and BCP training to raise the effectiveness of disaster prevention plans and business continuity plans
O,CD
  1. 1Revised BCP document (May)
  2. 2Conducted disaster drills and BCP training regularly.
    Conducted emergency contact training utilizing IT tools for all employees
  1. 1Update the Company’s business continuity plan (BCP)
  2. 2Conduct disaster drill and BCP training to raise the effectiveness of disaster prevention plans and business continuity plans
  1. *1SEMC:Safety & Environmental Management Committee

2.Human Resources

【ISO26000 Core Subjects】 O:Organizational Governance, H:Human Rights, L:Labour Practices, E:Environment, F:Fair Operating Practice, CI:Consumer Issues, CD:Community Involvement and Development

[Self-evaluation standard] Achieved: ◎ Almost Achieved:〇 Partially Achieved:△

Targets for FY 2022 ISO26000
Core Subjects
Achievement/progress at the end on December in 2022 Achievement
rate
Targets for FY 2023
1.Workstyle reforms
  1. 1Establish an environment and cultivate a workplace atmosphere that enable diverse human resources to play an active role
  2. 2Reduce work hours, promote work-life balance, implement workstyle reform, and use IT to improve the work environment and increase efficiency and productivity
  3. 3Promote measures to improve employee health
H,L,F
  1. 1Conducted seminars for parents, pre- and post-maternity leave counseling, returnee counseling; introduced a mentor program; supported career development while managing workstyle and work hours
  2. 2Revised workstyle by continuing remote-work option for all employees; encouraged use of flex-time system to raise employee awareness of a mechanism to increase labor productivity
  3. 3Certified as a company in the large enterprise category of the Certified Health and Productivity Management Organization Recognition Program for excellent health and productivity management for a sixth year in a row; held a Charity RUN + WALK+α; ensured thorough implementation of health checks (consultation rate: 99.3%)
  1. 1Establish an environment and cultivate a workplace atmosphere that enable diverse human resources to play an active role
  2. 2Reduce work hours, promote work-life balance, implement workstyle reform, and use IT to improve the work environment and increase efficiency and productivity
  3. 3Promote measures to improve employee health. Headquarters (non-consolidated) aiming for a 100% health checkup
2.Human resources development in Japan and overseas
  1. 1Implement a variety of training and human resources exchange programs in Japan and overseas based on the HR philosophy*2 to enable group employees to fully utilize their abilities in a broad range of business areas
  2. 2Development of problem-solving leaders utilizing advancements in DX
H,L
  1. 1-1Implemented NYK Business College training for enhancing the total ability of group employees (about 55 courses)
  2. 1-2Held Global NYK Group Week 2022 (face to face) for the first time in three years
  3. 2.Enhanced human resources development through original in-house NYK program (61 people completed the program since the start in 2019)
  1. 1Implement a variety of training and human resources exchange programs in Japan and overseas based on the HR philosophy*2 to enable group employees to fully utilize their abilities in a broad range of business areas
  2. 2Development of problem-solving leaders utilizing advancements in DX
3.Seafarer training
  1. 1Conduct review of NYK Maritime College (NMC)
  2. 2Conduct of practical training on dangers
  3. 3Educate seafarers and transfer knowledge in LNG projects
L,E
  1. 1Conducted NMC reviews to improve vessel safety and raise the training quality. Beginning in the current fiscal year, added e-learning to the classroom instruction of the NMC training and drills to further instill NYK maritime skills to our group seafarers
  2. 2Conducted training at the NYK-TDG Maritime Academy (NTMA) in the Philippines and the Tolani Maritime Institute in India; during the COVID-19 pandemic, 150 seafarers attended NYK-FIL MARITIME E-TRAINING, INC. (NETI) in FY2021, 293 seafarers in FY2022 (7,066 have participated since the academy's start in 2015); from February 2023, training will be resumed in India, where the training has been postponed due to COVID-19
  3. 3Resumed the education of Angolan and Nigerian seafarers at educational facilities which had been suspended due to COVID-19
  1. 1Conduct review of NYK Maritime College (NMC)
  2. 2Conduct of practical training on dangers
  3. 3Educate seafarers and transfer knowledge in LNG projects
  1. *2HR philosophy: Continually develop diverse talent at all group companies across global fields

3.Governance

【ISO26000 Core Subjects】 O:Organizational Governance, H:Human Rights, L:Labour Practices, E:Environment, F:Fair Operating Practice, CI:Consumer Issues, CD:Community Involvement and Development

[Self-evaluation standard] Achieved: ◎ Almost Achieved:〇 Partially Achieved:△

Targets for FY 2022 ISO26000
Core Subjects
Achievement/progress at the end on December in 2022 Achievement
rate
Targets for FY 2023
1.Human rights due diligence,
Human rights awareness
  1. 1-1Development of internal system to strengthen human rights initiatives
  2. 1-2Strengthen human rights initiatives based on the United Nations Guiding Principles on Business and Human Rights
  3. 2Establishment of various consultation windows, such as those addressing harassment
  4. 3Group employees surveyed on employee human rights topics through HR survey and CSR e-learning questionnaire
O,H,F

In fiscal 2022, we reorganized the former Global Compact Promotion Committee established in 2010 as the UN Global Compact Promotion Subcommittee, as one of the subordinate organizations of the ESG Management Committee. The purpose of the subcommittee is to promote the United Nations Global Compact (UNGC) and to establish systems based on it in the Company and its Group companies. We held the subcommittee four times in fiscal 2022

  1. 1-1Established and disclosed "NYK Group Human Rights Policy" on November 2022
  2. 1-2Identified the salient human rights issues for the Group through Verisk Maplecroft's assessment and the human rights due diligence workshop. Moreover, conducted on-site interviews with the workers of Automotive logistics in India as human rights impact assessment
  3. 2Conducted human-rights-awareness building during our new employee training and new manager training, shared information during Human Rights Week on the theme of harrassment on paternity, maternity, child-care
  4. 3Hightened the level of awareness for LGBT by HR e-learnig or annnonimous questionnaire. Obtained a bronze rating in the 2022 PRIDE Index 2 years in a row from 2021, which is a recognition based on an evaluation of LGBTQ+ initiatives in the workplace
  1. 1Strengthen human rights initiatives based on the United Nations Guiding Principles on Business and Human Rights
  2. 2Establishment of various consultation windows, such as those addressing harassment
  3. 3Group employees surveyed on employee human rights topics through HR survey and CSR e-learning questionnaire
2.Environment-friendly vessel sales and dismantling operations
Promotion of ship recycling based on NYK standards H,L,E,F Preparation of management manual for ship-recycle yards which includes the elements of NYK ship-recycling policy.
Strengthening of monitoring function and establishment of its process
Promotion of ship recycling based on NYK standards
3.Compliance inspections
  1. 1Conduct overall inspections (NYK and domestic companies within NYK Group)
  2. 2Implementation of compliance training
O,F
  1. 1At the NYK, results of awareness survey reported at Compliance Committee meeting in October, and feedback provided to employees through in-house bulletin board. For the domestic companies within the NYK Group, implementation status is going to be confirmed at the end of the fiscal year.
  2. 2Compliance trainings have been conducted on topics that include antitrust law and bribery
  1. 1Conduct overall inspections (NYK and domestic companies within NYK Group)
  2. 2Implementation of compliance training
4.Antitrust law risk assessment
  1. 1Conduct surveys, interviews, risk evaluations, and periodic inspections after risk assessment regarding antitrust law compliance at group companies in Japan and overseas as well as the various departments at the headquarters
  2. 2Hold meetings of the Executive Committee Overseeing Thorough Law Compliance
  3. 3Review on investment projects
  4. 4Continuation of the pre-notification system for meetings with compepitors
  5. 5Acquisition of a written pledge to comply with antitrust and competition laws
F
  1. 1Conducted risk assessments and regular inspections at NYK headquarters departments and group companies in Japan and overseas
  2. 2Convened the Executive Committee Overseeing Thorough Law Compliance (September 2022)
  3. 3Cases brought to consultation given appropriate responses
  4. 4Responded appropreately. Systems and operations of each group company shall be confirmed through regular inspections.
  5. 5Written pledge has been acquired
  1. 1Conduct surveys, interviews, risk evaluations, and periodic inspections after risk assessment regarding antitrust law compliance at group companies in Japan and overseas as well as the various departments at the headquarters
  2. 2Hold meetings of the Executive Committee Overseeing Thorough Law Compliance
  3. 3Review on investment projects
  4. 4Continuation of the pre-notification system for meetings with compepitors
  5. 5Acquisition of a written pledge to comply with antitrust and competition laws
5.Information system security measures
  1. 1Establishing and enhancing the system against cyber attack to take quick action for anomaly detection/response/recovery
  2. 2Reinforcement of maritime security
  3. 3Reinforcement of data governance
  4. 4Tightening security standards
O,CI,CD

Global efforts are being made to address cyber security measures for land-based systems, including the establishment of a 24-hour monitoring system by Security Operation Center (SOC)

Started cyber threat monitoring on vessels through the collaboration with Dualog (cyber risk management system for ships) and GSOC

Promoting the formulation of company-wide data utilization mechanisms and regulations, including the maintenance of master data

Compliant with US standards (NIST CSF)

Reviewing processes to improve the effectiveness of the system from monitoring to detection to restoration.
We will also work to expand the scope of coverage to include group companies.

Work to strengthen the response system after detecting abnormalities and to increase the number of vessels covered.

Continous support, including thorough compliance with regulations and maintenance of master data.

Follow-up efforts to ensure compliance with regulations, including actions to be taken after abnormalities are detected.
We will also work to expand the scope of coverage to include group companies.

6.Dialogue with investors
  1. 1Actively promote communications from the president and management, such as directors, at small meetings with institutional investors and quartely financial results briefings, as well as between the IR Division and investors
  2. 2Visit people in charge of the exercise of voting rights at institutional investors to engage in dialogues and exchenge opinions about ESG topics.
O
  1. 1Financial results briefings: 3 times, attended by 526 people (excluding our directors, executive officers, and employees)
    Small meetings: 2 times, 45 companies have participated in total.
    IR briefing for environment topics: attended by 128 people (excluding our directors, executive officers, and employees)
  2. 2Dialogues with people in charge of the exercise of voting rights at institutional investors inside Japan: 17 companies in total
    ESG engagements: conducted 31 times and attended by 63 companies in total
  1. 1Actively promote communications from the president and management, such as directors, at small meetings with institutional investors and quartely financial results briefings, as well as between the IR Division and investors
  2. 2Visit people in charge of the exercise of voting rights at institutional investors to engage in dialogues and exchenge opinions about ESG topics.
7.Ensuring thorough SCM
(fuel supplier evaluations)
Employees in charge evaluate all suppliers that we deal with and reflect the results in future purchasing activities (Evaluation items include quality, delivery, price, support for trouble, the provision of information, etc.) O,F Purchasing agreements are being made based upon multifaceted evaluations of supplier pricing, services, and performance at the time of agreement. Agreements are accompanied by compliance contracts and are updated every three or six months
We will continue to consider new evaluation methods and reflect them in systematic purchasing activities
Employees in charge evaluate all suppliers that we deal with and reflect the results in future purchasing activities (Evaluation items include quality, delivery, price, support for trouble, the provision of information, etc.)