ESG Management
Basic Approach
To achieve sustainable growth, we must achieve social recognition of our value by building more credibility with our stakeholders through our response to social needs and the resolution of social issues through our business activities.
The ENEOS Group has accordingly formulated the Basic Policy for ESG Management.
Basic Policy for ESG Management
- (1) The intent of ESG management in the ENEOS Group is to realize the ENEOS Group Philosophy through the formulation of management and business strategies based on risks and business opportunities and the creation of economic value (earnings generated) and social value (contribution to the resolution of social issues) through business activities.
- (2) The ENEOS Group aims to be a group of companies that advances ESG management and earns the trust of stakeholders.
ESG Management Structure
Pursuant to its Basic Policy for ESG Management, the ENEOS Group has established a structure in which the ENEOS Holdings Executive Council, chaired by the CEO of ENEOS Holdings, formulates business strategies taking into account significant management risks and material issues, and manages the status of responses to identified risks and material issues.
Process for Identifying Risks and Material Issues and Confirming Response Status
- 1．Discussions on risks (once annually, in principle) (see (1) in diagram below)
The Executive Council comprehensively discusses the following matters to ensure effective discussion and quick decision-making.- Material risks identified through the enterprise risk management (ERM) system
- Material ESG issues identified through ESG risk analysis
- Internal control risks identified through the internal control system
- 2．Identification of risks and material issues and determination of responses and status confirmation (once annually, in principle) (see (2) and (3) in diagram below)
The Executive Council identifies risks and material issues, and under the guidance of the departments in charge at ENEOS Holdings, the relevant departments and principal operating companies work together in a cross-functional manner to develop and implement responses for the identified risks and material issues.
The Executive Council confirms the status of responses for the previous fiscal year and responses for the current fiscal year. - 3．Discussion of business opportunities (at least once annually) (see (4) in diagram below)
The Executive Council discusses business opportunities when it deliberates on the Medium-Term Management Plan and fiscal year business plans, as well as the budgets based on these plans. - 4．Reporting to the Board of Directors (at least twice annually) (see (5) in diagram below)
The Board of Directors passes resolutions on management strategies, the Medium-Term Management Plan and budgets, and also performs monitoring and supervision of the execution status by receiving reports (twice annually, in principle) on risks and material issues identified by the Executive Council and on the status of responses. - 5. Sharing with Group companies (as needed) (see (6) in diagram below)
We share and communicate the identified risks and material issues with all Group companies with the intention of having each Group company reflect them in their business strategies.
ENEOS Group ESG Management Structure
- 1For details, see Enterprise Risk Management (ERM).
- 2For details, see Verifying and Identifying Material ESG Issues.
- 3For details, see Internal Control.
Verifying and Identifying Material ESG Issues
The Group identifies material ESG issues every year based on various guidelines as well as the assessment items and weightings of ESG assessment organizations.
For fiscal 2025, we followed specific procedures to identify 10 items, and after discussions in the Executive Council we added corporate governance and risk management, which are of great importance for the Company, for a total of 12 items as ESG items. We consolidated these into four material ESG issues based on characteristics such as similarity. We assign relevant departments and targets (KPIs) for each material ESG issue and report the progress and results of initiatives for each of these KPIs to the Executive Council and Board of Directors.
Identification Procedure for Material ESG Issues
Material ESG Issues for Fiscal 2025
| Category | Material ESG issues | ESG items |
|---|---|---|
| Environmental (E) | Contribution to the preservation and development of a sustainable global environment | Contribution to the development of a decarbonized society |
| Contribution to the development of a recycling-oriented society | ||
| Appropriate understanding and management of biodiversity risks | ||
| Social (S) | Strengthening safety | Ensuring safety |
| Human capital management | Retaining and developing human resources | |
| Diversity, equity and inclusion | ||
| Health enhancement | ||
| Governance (G) | Strengthening governance and achieving thorough compliance | Appropriate structuring and operation of corporate governance |
| Compliance | ||
| Effective risk management | ||
| Social responsibility in the supply chain | ||
| Compliance with international principles on human rights |
Status of Responses to Material ESG Issues
For fiscal 2024, we set 20 specific targets (KPIs) for 10 material ESG issues. Fourteen of the targets were achieved, five were not, and response is underway for one more. For fiscal 2025, we set and are working to achieve 22 targets (KPIs) for 12 ESG items based on four material ESG issues.
Fiscal 2024 Material ESG Issues, Targets (KPIs), Results, and Progress
Evaluation: Achieved/Steady progress Not achieved
| Category | Material ESG Issues | Initiative | Targets (KPIs) | Results/Progress | Applicable companies | |
|---|---|---|---|---|---|---|
| Environmental (E) |
Contribution to the development of a decarbonized society | Reduction in CO2 emissions | Reduction in CO2 emissions: Reduce emissions to 29.50 million tonnes or less | 24.68 million tonnes | ENEOS, Xplora, ENS, Power, ERE, JXAM, NIPPO, and their principal group companies (Total of 75 companies including overseas companies) | |
| Contribution to the development of a recycling-oriented society | Reduction in landfill disposal | Waste-to-landfill ratio: Maintain zero emissions (less than 1%) | 0.8% | ENEOS, Xplora, ENS, Power, ERE, JXAM, NIPPO, and their principal group companies (Total of 65 companies including overseas companies) | ||
| Appropriate understanding and management of biodiversity risks | Understand the degree of dependence and impact on natural capital | Understand the degree of dependence and impact on natural capital in main business sectors |
Utilized ENCORE* to perform analysis and understand degree of dependence and impact * Exploring Natural Capital Opportunities, Risks and Exposure: A tool to help organizations investigate their exposure to nature-related risks and understand their dependencies and impacts on nature |
ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 6 companies) | ||
| Social (S) |
Ensuring safety / Health enhancement | Reduction in occupational injuries | Serious occupational injuries*: zero *Occupational fatalities |
1 | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM, and their principal group companies and contractor companies (Total of 70 companies including overseas companies) | |
| TRIR*：1.0 or less * Number of occupational injuries per one million work hours (non-lost-time occupational injuries + lost-time occupational injuries and fatalities) |
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2.24 (Total of employees and employees of contractor companies) |
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| LTIR*：0.0 for employees, 0.3 or less for employees of contractor companies * Number of lost-time occupational injuries and fatalities per one million work hours |
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0.67 for employees, 0.90 for employees of contractor companies |
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| Ensuring health of employees | Percentage of employees maintaining an appropriate weight: 70% or higher of employees with BMI under 25 | 68.8% |
HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
| Reduce the percentage of cigarette smokers Percentage of smokers: Reduce by at least 1.0% from the previous year |
Reduced 0.5% from the previous year | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | ||||
| Communication with stakeholders (investors, etc.) | Engagement with investors, etc. | Effective engagement with investors, etc. (total of 250 cases) | 415 cases, including new initiatives | HD | ||
| Compliance with international principles on human rights | Human rights due diligence | Follow up human rights due diligence conducted in fiscal 2023 | - | Response underway | HD | |
| Human rights awareness | Implement human rights training | Implemented | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
| Retaining and developing human resources | Retaining human resources capable of enhancing corporate value |
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HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | ||
| Developing human resources capable of enhancing corporate value | Establish a system to strategically allocate and develop management personnel through visualization of human resources | System established at ENEOS Holdings Rollout completed at principal operating companies |
HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
| Diversity, equity and inclusion (DE&I) | Advancement of women in the workplace |
Maintain rate of women among newly hired university graduates at 25% or higher | 28.9% | HD, ENEOS, Xplora, ENS, ERE, JXAM (Total of 6 companies) | ||
| Advancement of employees with disabilities | Maintain employment rate of people with disabilities at 2.5% or higher | 2.7% | HD, ENEOS, Xplora, ENS, ERE, JXAM (Total of 6 companies) | |||
| Governance (G) |
Appropriate structuring and operation of corporate governance | Evaluation of the effectiveness of the Board of Directors | Implement evaluations of the effectiveness of the Board of Directors (including evaluations of improvement processes) | Implemented | HD | |
| Training for officers | Conduct training for officers | Held four lectures given by external parties | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
| Compliance | Strengthening compliance activities |
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HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | ||
| Fostering compliance awareness | Implementation of compliance and legal training tailored to each company’s business risks and internal issues | Implemented (e-learning for officers and employees) | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
| Operation of whistleblower systems |
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Conducted training to improve skills of personnel in charge of whistleblower systems | HD, ENEOS, Xplora, ENS, Power, ERE, JXAM (Total of 7 companies) | |||
- Note:
- Abbreviations for the names of the companies in the table are as follows:
HD: ENEOS Holdings, Xplora: ENEOS Xplora, ENS: ENEOS Materials, Power: ENEOS Power, ERE: ENEOS Renewable Energy, and JXAM: JX Advanced Metals.
Fiscal 2025 Material ESG Issues and Targets (KPIs)
| Category | Material ESG Issues | ESG items | Targets (KPIs) | Achievement (fiscal year) | Applicable companies |
|---|---|---|---|---|---|
| Environmental (E) |
Contribution to the preservation and development of a sustainable global environment | Contribution to the development of a decarbonized society | CO2 emissions: Reduce emissions to 27 million tonnes or less | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE, NIPPO, and their principal group companies (Total of 47 companies including overseas companies) |
| Methane emissions: Reduce emissions to 1,072 tonnes or less | 2025 | Xplora | |||
| Avoided emissions (materials): 1.5 million tonnes or more | 2025 | ENEOS, Xplora, ENS, Power, ERE (Total of 5 companies) | |||
| Contribution to the development of a recycling-oriented society | Implementation of two concrete initiatives for the realization of a recycling-oriented society (starting waste plastic liquefication business, demonstration of production processes for low-carbon lubricant base oil) | 2025 | ENEOS | ||
| Waste-to-landfill ratio: Maintain zero emissions (less than 1%) | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE, NIPPO (Total of 7 companies) | |||
| Appropriate understanding and management of biodiversity risks | Understand the degree of dependence and impact on natural capital in main business sector supply chains | 2025 | ENEOS, Xplora, ENS, Power, ERE (Total of 5 companies) | ||
| Social (S) |
Strengthening safety | Ensuring safety | Serious occupational injuries*: zero * Occupational fatalities |
2025 | HD, ENEOS, Xplora, ENS, Power, ERE, NIPPO, and their principal group companies (Total of 46 companies including overseas companies) |
| TRIR: 1.94 or less (down 15% compared to fiscal 2024) | 2025 | ||||
| LTIR: 0.67 or less (down 15% compared to fiscal 2024) | 2025 | ||||
| Human capital management | Retaining and developing human resources | Training investment per person: 100,000 yen/year or more | 2027 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) | |
| Growth opportunity score in engagement surveys: 75% or more | 2027 | ||||
| Diversity, equity and inclusion (DE&I) | Job satisfaction score in engagement surveys: 75% or more | 2027 | |||
| Work environment score in engagement surveys: 75% or more | 2027 | ||||
| Health enhancement | Presenteeism*: 20% or lower during the period of the Medium-Term Management Plan * A state in which an employee continues to work without taking time off despite physical or mental health issues, resulting in decreased productivity (percentage of lost labor productivity) |
2027 | |||
| Governance (G) | Strengthening governance and achieving thorough compliance | Appropriate structuring and operation of corporate governance | Execution of improvement processes through evaluations of the effectiveness of the Board of Directors | 2025 | HD |
| Maintain a ratio of 50% or more of outside directors, with an outside director as chairman of the Board | 2025 | ||||
| Conduct training for officers (total of four times) | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) | |||
| Compliance | Material compliance violations*: Zero * Compliance violations with a significant impact on the relevant company’s management or reputation |
2025 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) | ||
| Effective risk management | Enhance cross-Group risk management systems | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) | ||
| Social responsibility in the supply chain | Institution of four categories of business partner support education programs (CSR procurement, human rights, CO2 emissions volume calculation, circular economy) | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) | ||
| 100% implementation of business partner follow-up visits based on CSR procurement surveys | 2025 | ENEOS | |||
| Compliance with international principles on human rights | Follow up human rights due diligence conducted in fiscal 2023 | 2025 | HD, ENEOS, Xplora, ENS, Power, ERE (Total of 6 companies) |
- Note:
- Abbreviations for the names of the companies in the table are as follows:
HD: ENEOS Holdings, Xplora: ENEOS Xplora, ENS: ENEOS Materials, Power: ENEOS Power, and ERE: ENEOS Renewable Energy.
Major Initiatives
Discussions by the Board of Directors
In fiscal 2024 and fiscal 2025, the following ESG-related matters were reported to the Board of Directors.
ESG-Related Matters Reported to the Board of Directors
| FY2024 | FY2025 1H |
|---|---|
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- * In April 2025 the Company established the Sustainability Promotion Office within the Corporate Planning Department for the promotion of ESG management and to ensure information disclosure in accordance with the three Sustainability Disclosure Standards (SSBJ Standards) set out by the Sustainability Standards Board of Japan (SSBJ). We are making thorough preparations for the release of the March 2028 annual financial statements, when these standards will be applied to the Company.
Raising Awareness of the Group Philosophy and Code of Conduct
The ENEOS Group Philosophy and the ENEOS Group Code of Conduct were adopted by resolution of the ENEOS Holdings Board of Directors. The Board of Directors also supervises the internal control system, which is based on the Group Philosophy and Code of Conduct, by receiving regular reports on its development and operation.
The ENEOS Group believes that understanding and implementation of the Group Philosophy and Code of Conduct by all officers and employees plays an important role in the fulfillment of our social responsibilities.
In fiscal 2024, we continued to hold town hall meetings, as in the previous fiscal year, to deepen communication between management and employees. We also conducted an employee awareness survey to understand the level of awareness and understanding of the Group Philosophy and Code of Conduct in order to consider future measures for their thorough instillment throughout the Group. To further instill the Group Philosophy and Code of Conduct, we plan to hold group training for officers and e-learning for both officers and employees in fiscal 2025.
Measures to Raise Awareness of the Group Philosophy and Code of Conduct
| Purpose | Measures |
|---|---|
| Ensure awareness | Distribution of Group Philosophy cards and Code of Conduct handbooks |
| Posters | |
| Digital signage in company workplaces | |
| E-learning | |
| Translation of Group Philosophy into 11 languages (English, Chinese [Simplified/Traditional], Korean, Spanish, Portuguese, German, Hungarian, Vietnamese, Thai, Indonesian) and distribution | |
| Promote understanding | Training on Group Philosophy and Code of Conduct for newly hired employees, newly appointed managers, and mid-career hires |
| Monitoring | Fixed-point monitoring of instillment through engagement and compliance surveys targeting all officers and employees, as well as internal control inspections (annually) |
Stakeholder Engagement
The Group conducts its business activities through its relationships with stakeholders, including shareholders, investors, customers, business partners and employees. We actively engage in dialogue with stakeholders and work to ensure that our business activities meet their expectations and requirements.
The Group also solicits the views of outside experts and stakeholders regarding specific ESG-related themes and responds accordingly. To date, we have carried out engagement with outside experts and stakeholders as indicated in the table below, entitled Engagement with Stakeholders. Separate from this engagement, in fiscal 2024, we held a meeting for investors and outside directors on ESG-related matters, and we also conduct periodic engagement with Climate Action 100+, a climate change action initiative of institutional investors.
We will continue to contribute to the resolution of social issues through our engagement with outside experts and stakeholders.
ENEOS Group Stakeholders
| Stakeholders | Activities | Main means of communication | Main contacts |
|---|---|---|---|
| Shareholders and Investors | ENEOS Holdings is committed to the prompt, proper, and fair disclosure of information to shareholders and investors in accordance with its Disclosure Policy. |
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| Customers | The Group is committed to developing and delivering products and services that fulfill customer needs and expectations and earn customer trust and satisfaction. |
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| Business Partners | The Group makes purchasing information available to business partners on its websites, actively provides business opportunities, and strives to ensure fair business opportunities. |
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| NPOs/NGOs | The Group has built cooperative relationships with NPOs and NGOs and actively undertakes environmental conservation and social contribution activities. |
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| Local Communities / Global Society | The Group strives to engage in responsible corporate activities by responding to the needs and expectations of and engaging in active communication with the local communities in the areas where it conducts its business operations, as well as international society. |
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| Employees | The Group considers employees to be critical stakeholders in its operations and has established various systems to ensure that each employee can work with peace of mind and to his or her full potential. |
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Engagement with Stakeholders
| Fiscal year | Event | Speaker | Theme | Intended for |
|---|---|---|---|---|
| FY2023 | ENEOS Environment and Safety Forum | Professor Komatsubara Akinori, Department of Industrial and Management Systems Engineering, School of Creative Science and Engineering, Faculty of Science and Engineering, Waseda University | “Safe behavior on the living frontlines” | Officers and employees |
| FY2023 | In-house presentations by outside directors | 3 female outside directors Outside Director Oka Toshiko Outside Director Kawasaki Hiroko Outside Director (at the time) Mitsuya Yuko |
“The ENEOS Group as seen by Outside Directors” | ENEOS Group employees |
| FY2024 | ENEOS Environment and Safety Forum | Director Jonai, Research Center for Chemical Information and Management, National Institute of Occupational Safety and Health, Japan | “Future-oriented chemical management: Regulatory updates and corporate responsibilities under the revised Industrial Safety and Health Act” | Officers and employees |
Participation in Initiatives and Organizations
Endorsement of the UN Global Compact (UNGC)
ENEOS Holdings (ENEOS, ENEOS Xplora, ENEOS Materials, ENEOS Power) and ENEOS Renewable Energy participate in the UN Global Compact, supporting the compact’s 10 principles in the four categories of human rights, labor standards, the environment, and anti-corruption.
The Ten Principles of the UN Global Compact
| Human Rights | Businesses should support and respect the protection of internationally proclaimed human rights; and | Principle 1 |
|---|---|---|
| make sure that they are not complicit in human rights abuses. | Principle 2 | |
| Labour | Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; | Principle 3 |
| the elimination of all forms of forced and compulsory labour; | Principle 4 | |
| the effective abolition of child labour; and | Principle 5 | |
| the elimination of discrimination in respect of employment and occupation. | Principle 6 | |
| Environment | Businesses should support a precautionary approach to environmental challenges; | Principle 7 |
| undertake initiatives to promote greater environmental responsibility; and | Principle 8 | |
| encourage the development and diffusion of environmentally friendly technologies. | Principle 9 | |
| Anti-Corruption | Businesses should work against corruption in all its forms, including extortion and bribery. | Principle 10 |
Endorsement of Task Force on Climate-related Financial Disclosures (TCFD) Recommendations
In May 2019, we signed the TCFD recommendations, and we disclose information on climate change in accordance with the TCFD recommendations to the greatest extent possible. In addition, we have participated in the TCFD Consortium since its inception as a venue for discussing effective approaches to information disclosure.
Initiatives and Organizations We Participate In
The Group endorses and participates in a number of other initiatives and organizations in addition to the UNGC and TCFD.
- Challenge Zero
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- GX League
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- International Emissions Trading Association (IETA)
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- IPIECA—a global oil and gas industry association for advancing environmental and social performance
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- CDP
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- Council for Better Corporate Citizenship (CBCC)
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- Japan Business Initiative for Biodiversity (JBIB)
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- Business for Nature Call to Action
- Human Capital Management Consortium
Communication with Industry Organizations
| Organization name | Position held by Group Executive, etc. | |
|---|---|---|
| ENEOS | Petroleum Association of Japan | Vice-President |
| Japan Petrochemical Industry Association | Vice Chairman | |
| Japan Chemical Industry Association | Policy Coordinating Committee member, Labor Committee member, Technical Affairs Committee member | |
| Japan Hydrogen Association | Vice Chairman | |
| ENEOS Xplora | Japan Energy Resources Development Association | Chairman |
| Japan Natural Gas Association | Director | |
| ENEOS Renewable Energy | Renewable Energy Association for Sustainable Power supply (REASP) | Director |
| Japan Wind Power Association (JWPA) | Director |
Selection for Inclusion in ESG-Related Investment Indexes
(As of September 2025)
- FTSE4Good Index Series
- FTSE Blossom Japan Index
- FTSE Blossom Japan Sector Relative Index
- MSCI Nihonkabu ESG Select Leaders Index
- Morningstar Japan ex-REIT Gender Diversity Tilt Index
- S&P/JPX Carbon Efficient Index
- SOMPO Sustainability Index
THE INCLUSION OF ENEOS Holdings, Inc. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF ENEOS Holdings, Inc. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.