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.
The ENEOS Group has accordingly formulated the Basic Policy for ESG Management.
Basic Policy for ESG Management
- ESG management at the ENEOS Group involves formulating management and business strategies based on risks and business opportunities and creating both economic value (profits) and social value (resolution of social issues) through our business in order to realize the ENEOS Group Philosophy.
- The ENEOS Group is a group of companies that strives to earn the trust of stakeholders through the implementation of ESG management in our business operations.
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 president of ENEOS Holdings, analyzes management risks and business opportunities and confirms the status of responses to identified risks and material ESG issues.
Process for Identifying Risks and Material Issues and Confirming Response Status
- 1．Comprehensive discussions (held annually in the fourth quarter) (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．Determination of responses and status confirmation (annually in the first quarter) (see (2) in diagram below)
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 determines the responses for the current fiscal year. - 3．Discussion of business opportunities (as needed) (see (3) 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 (as needed) (see (4) in diagram below)
The Board of Directors passes resolutions on management, the Medium-Term Management Plan and budgets, and also performs monitoring and supervision by receiving reports (twice a year, in principle) on risks and material issues determined by the Executive Council and on the status of responses. - 5. Sharing with Group companies (as needed) (see (5) in diagram below)
We share and communicate the identified risks and material issues with all Group companies, and each Group company reflects 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.
- 4Example: Internal Control Department and Legal & Corporate Affairs Department work together to build and operate a comprehensive internal control structure
Verifying and Identifying Material ESG Issues
The ENEOS 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 2023, we identified nine material ESG issues using resources such as the Sustainability Accounting Standards Board (SASB) guidelines for each business area, prioritizing the degree of impact on society as well as the degree of impact on our business, taking into account our discussions and consideration of our Long-Term Vision and the third Medium-Term Management Plan.
In addition, departments responsible and KPIs are set for each material ESG issue, and the progress of KPIs and the results of measures for material ESG issues are reported to the Executive Council and the Board of Directors.
Identification Procedure for Material ESG Issues
Material ESG Issues Identified for Fiscal 2023
In descending order of assessment score
| Category | Material ESG Issues |
|---|---|
| Environmental | Contribution to the development of a decarbonized society |
| Social | Ensuring safety / Health enhancement |
| Governance | Compliance |
| Social | Diversity and inclusion |
| Environmental | Contribution to the development of a recycling-oriented society |
| Social | Compliance with international principles on human rights |
| Social | Retaining and developing human resources |
| Governance | Appropriate structuring and operation of corporate governance |
| Social | Communication with stakeholders (investors, etc.) |
Status of Responses to Material ESG Issues
For fiscal 2022, we set 23 specific targets (KPIs) for 15 material ESG issues. Twenty of the targets were achieved and three were not.
For fiscal 2023, we have identified nine material ESG issues and set 16 targets (KPIs).
Fiscal 2022 Response Status
Evaluation:Achieved/Steady progressNot achieved
| Category | Material ESG Issues | Initiative | Target (KPI) | Results/Progress | Applicable companies | |
|---|---|---|---|---|---|---|
| Environmental | Contribution to the development of a decarbonized society | Reduction in CO2 emissions (reduction amount through independent efforts) | Reduction in CO2 emissions: Reduce by 4.28 million tons compared to fiscal 2009 |
Reduced by 4.30 million tons compared to fiscal 2009 | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 46 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, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 45 companies including overseas companies) | ||
| Understanding and management of biodiversity risks | Identification of biodiversity risks and examination of responses | Understand risks at manufacturing sites (increase number of sites subject to risk confirmation) |
|
ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 3 companies) | ||
| Understanding and management of water risks | Ensuring prevention of water pollution | Serious environmental incidents: zero Serious legal compliance incidents: zero |
Zero | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 3 companies) | ||
| Identification of water risks and examination of responses | Understand risks at manufacturing sites (increase number of sites subject to risk confirmation) |
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| Control of air pollutant emissions | Ensuring prevention of air pollution | Serious environmental incidents: zero Serious legal compliance incidents: zero |
Zero | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 3 companies) | ||
| Social | Ensuring safety / Health enhancement | Reduction in occupational injuries | Zero serious occupational injuries (occupational fatalities) | Zero | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, and their group companies and contractor companies (Total of 57 companies including overseas companies) | |
| Achieve TRIR* of 1.0 or less *Number of occupational injuries per million working hours (non-lost-time occupational injuries + lost-time occupational injuries and fatalities) |
1.0 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||||
| Ensuring health of employees | Increase the cancer screening rate for employees (recommen-dations) Achieve screening rate of 70% or higher for stomach cancer, colorectal cancer, breast cancer, and cervical cancer |
Achieved only for colorectal cancer (cancer screening rate (recommen-dations): 69.8%) | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |||
| Communication with stakeholders (investors, etc.) | Engagement with external parties | Effective engagement with investors and others | Meetings with investors (overseas IR, meetings for analysts and domestic institutional investors, 157 individual interviews) | ENEOS Holdings | ||
| Compliance with international principles on human rights | Human rights due diligence | Conduct survey of technical intern trainees at suppliers and formulate responses |
|
ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
| Human rights awareness | Implement human rights training | Some companies have not completed the training because the implementation date was extended to the first half of fiscal 2023 due to revisions to the training content | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |||
| Retaining and developing human resources | Development of human resources capable of enhancing corporate value | Implement effective training and evaluation based on the human resources development plan |
|
ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
| Diversity and inclusion | Advancement of women in the workplace |
Maintain rate of women among newly hired university graduates at 25% or higher | 21.9% | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
| Advancement of employees with disabilities | Maintain employment rate of people with disabilities at 2.3% or higher | 2.44% | ||||
| Work-life management | Workstyle reforms | Maintain annual paid leave days taken at 80% or higher | 88.8% | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
| Utilization of work-life balance support systems / programs | Maintain 100% rate of return to work after childcare leave | 100% | ||||
| Governance | Appropriate structuring and operation of corporate governance | Evaluation of the effectiveness of the Board of Directors | Implement improvement measures based on the fiscal 2021 evaluation of the effectiveness of the Board of Directors | Implemented | ENEOS Holdings | |
| Compliance | Legal compliance inspections | Conduct legal compliance inspections | Implemented (no major issues) |
ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 48 companies including overseas subsidiaries) | ||
| Implement training on important laws and regulations | Strengthen management of personal information and provide legal training according to business needs | Implemented | ||||
| Operation of whistleblower systems | Revise and appropriately apply rules based on the amended Whistleblower Protection Act | Implemented | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 122 companies including overseas subsidiaries) | |||
| Social responsibility in the supply chain | Implementation of CSR procurement surveys | Conduct CSR procurement surveys at overseas sites in addition to domestic sites, where surveys have already been conducted | Implemented | Principal overseas group companies of ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 10 companies) | ||
| Effective risk management | Implementation of Group-wide risk management | Steady execution of the risk management process | Implemented | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
Fiscal 2023 Material ESG Issues and Targets (KPIs)
| Category | Material ESG Issues | Initiative | Target (KPI) | Achievement (fiscal year) | Applicable companies |
|---|---|---|---|---|---|
| Environmental | Contribution to the development of a decarbonized society | Reduction in CO2 emissions (reduction amount through independent efforts) |
Reduction in CO2 emissions: Reduce emissions to 30 million tons or less | 2023 | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 87 companies including overseas companies) |
| Contribution to the development of a recycling-oriented society | Reduction in landfill disposal | (Ongoing) Waste-to-landfill ratio: Maintain zero emissions (less than 1%) |
2023 | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 64 companies including overseas companies) | |
| Social | Ensuring safety / Health enhancement | Reduction in occupational injuries | (Ongoing) Zero serious occupational injuries (occupational fatalities) |
2023 | ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, and their group companies and contractor companies (Total of 59 companies including overseas companies) |
| (Ongoing) TRIR* of 1.0 or less *Number of occupational injuries per million working hours (non-lost-time occupational injuries + lost-time occupational injuries and fatalities) |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |||
| Ensuring health of employees | Percentage of employees maintaining an appropriate weight Employees with BMI under 25.0: Maintain at 70% or higher |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | ||
| Reduce the percentage of cigarette smokers Percentage of smokers: Reduce by at least 1.0% from the previous year |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |||
| Communication with stakeholders (investors, etc.) | Engagement with external parties | (Ongoing) Effective engagement with investors (total of 250 cases) |
2023 | ENEOS Holdings | |
| Compliance with international principles on human rights | Human rights due diligence | Human rights due diligence | 2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |
| Human rights awareness | (Ongoing) Implement human rights training |
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| Retaining and developing human resources | Development of human resources capable of enhancing corporate value | (Ongoing) Implement effective training and evaluation |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |
| Diversity and inclusion | Advancement of women in the workplace | (Ongoing) Rate of women among newly hired university graduates of 25% or higher |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |
| Advancement of employees with disabilities | (Ongoing) Maintain employment rate of people with disabilities at 2.3% or higher |
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| Governance | Appropriate structuring and operation of corporate governance | Evaluation of the effectiveness of the Board of Directors and strengthening of compliance | Implement evaluations of the effectiveness of the Board of Directors | 2023 | ENEOS Holdings |
| Provide compliance training for officers | 2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals (Total of 4 companies) | |||
| Compliance | Legal compliance inspections | (Ongoing) Conduct legal compliance inspections |
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 48 companies including overseas subsidiaries) | |
| Compliance with important laws and regulations | (Ongoing) Provide legal training related to business needs and internal issues |
2023 | |||
| Operation of whistleblower systems |
|
2023 | ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, JX Metals, NIPPO Corporation, and their principal group companies (Total of 122 companies including overseas subsidiaries) |
Major Initiatives
Discussions by the Board of Directors
In fiscal 2022 and fiscal 2023, the following ESG-related matters were reported to the Board of Directors.
| FY2022 | FY2023 1H |
|---|---|
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Raising Awareness of the Group Philosophy and Code of Conduct
The ENEOS Group believes that understanding and implementation of the ENEOS Group Philosophy and the ENEOS Group Code of Conduct by all officers and employees plays an important role in the fulfillment of our social responsibilities. Therefore, we have implemented various measures to enable all officers and employees to reference the Group Philosophy and the Code of Conduct at any time in order to maintain their awareness.
In fiscal 2023, we held town hall meetings and established many other venues for dialogue between the management team and employees in order to raise greater awareness internally about the Commitment to Realizing the Group Philosophy, the Long-Term Vision, and the third Medium-Term Management Plan, announced in May 2023.
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 | |
| Translation of Group Philosophy into 10 languages (English, Chinese [Simplified/ Traditional], Korean, Spanish, Portuguese, German, Vietnamese, Thai, Indonesian) and distribution | |
| Promote understanding | Dissemination of information through the Group employee magazine and intranet |
| Training on Group Philosophy and Code of Conduct for newly hired employees and newly appointed managers | |
| Monitoring | Confirmation (annual) using internal control and legal compliance inspections targeting all officers and employees |
Stakeholder Engagement
The ENEOS 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, we held a briefing on the ENEOS Group Carbon Neutrality Plan for investors in July 2023, and we also conduct periodic engagement with Climate Action 100+, a climate change action initiative of institutional investors.
We will continue our engagement with outside experts and stakeholders in our contribution to the resolution of social issues.
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 preservation 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 | For |
|---|---|---|---|---|
| FY2021 | Reporting session on human rights due diligence | Ms. Ito and Ms. Sato of NGO Human Rights Now | Business and human rights | Related departments |
| FY2021 | ENEOS Environment and Safety Forum | Dr. Adachi Naoki, CEO, Response Ability, Inc. | “Era of climate change and biodiversity: The roles of companies determined in the Convention on Biological Diversity adopted at COP15” | Officers and employees |
| FY2022 | ENEOS Environment and Safety Forum | Director & CEO Senoh Ken, The Industry-Academia Collaboration Initiative Nonprofit Organization | “Circular economy created by business, business created by a circular economy: What is the essence of a circular economy?” | Officers and employees |
Participation in Initiatives and Organizations
Endorsement of the UN Global Compact (UNGC)
Four Group companies (ENEOS Holdings, ENEOS, JX Nippon Oil & Gas Exploration, and JX Metals) 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 ENEOS 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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- 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
- Extractive Industries Transparency Initiative (EITI)
- 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 | Director | |
| Japan Chemical Industry Association | Policy Coordinating Committee member, Labor Committee member, Technical Affairs Committee member | |
| Renewable Energy Association for Sustainable Power supply (REASP) | Director | |
| Japan Hydrogen Association | Vice Chairman | |
| JX Nippon Oil & Gas Exploration | Japan Petroleum Development Association | Vice Chairman |
| Japan Natural Gas Association | Director | |
| JX Metals | Japan Mining Industry Association (JMIA) | Managing Director |
| The Sulphuric Acid Association of Japan | Vice Chairman | |
| Japan Copper and Brass Association (JCBA) | Chairman | |
| Japan Society of Newer Metals | Vice Chairman | |
| Japan Catalyst Recovering Association | Chairman |
Selection for Inclusion in ESG-Related Investment Indexes
(As of September 2023)
- FTSE4Good Index Series
- FTSE Blossom Japan Index
- FTSE Blossom Japan Sector Relative Index
- MSCI Japan ESG Select Leaders Index
- MSCI Japan Empowering Women Index (WIN)
- 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.