Basic Policy
With the impact of climate change aggravating each year, it has become a global issue that requires urgent attention. Amid rising social interest represented by the Sustainable Development Goals (SDGs), Paris Agreement goals and netzero greenhouse gas (GHG) emission goals in various countries, business corporations are required to take proactive action.
As a provider of marine transportation services, NS United Kaiun Group also recognizes that climate change is an important management issue, in view of its potential of having a great impact on our business environment.
In the company's medium-term business plan FORWARD 2030, strengthening the brand power, building a sustainable business structure, and establishing a resilient management base are recognized as priority strategies. In the Basic Sustainability Policy adopted in autumn of 2021, reinforcement of climate change initiatives has been established as one of our materialities (priority issues).
For further sustainable growth of corporate value, we announced its support of the TCFD Recommendations in July 2021 and has decided to disclose information regarding the four elements in the Recommendations (governance, risk control, strategy and indicators/goals).
Active information disclosure in compliance with the Recommendations is expected to continue into the future. As a member of the Japanese Shipowners' Association, the Company also plans to work toward realizing carbon neutrality for all of society through its supply chain and strive to realize net zero CO2 emissions in 2050.
*TCFD: Task Force on Climate-related Financial Disclosures
Governance
Due to the grave importance of climate change in terms of the sustainability of our business operations, the Company's president and executive officer is fulfilling the responsibility and is engaged in the development and execution of measures under the supervision of the Board of Directors.
Board of Directors
The Board is the decision-making body on basic management policy and important matters and is also responsible for supervision of the status of business execution. It convenes once a month as a general rule.
Board of Executive Officers
With the introduction of the executive officer appointment system, the Board of Executive Officers engages in business execution regarding management issues and priority matters, including climate change, under the resolutions and supervision of the Board of Directors and based on the basic policy passed by the Board of Directors.
ESG Committee
In recognition of ESG initiatives as the foundation of business sustainability, the previous CSR Committee was reorganized in 2020 into the ESG Committee in order to strengthen its governance framework. Recognizing also that the commitment of the Board of Directors toward ESG is important, the Committee is fulfilling its role as the driver in this area under the supervision of the Board of Directors.
Safety and Environmental Committee
Headed by the company president and executive officer, the Committee reviews and conduct assessments into the state of progress achieved in the annual targets, activities organized, the means employed, activity schedule, etc., in order to achieve the environmental goals. The environmental issues are reported by the Committee to the Board of Executive Officers, with the output applied to the plan for the next fiscal term. Additionally, the state of activity and activity plans of the Committee are reported to the ESG Committee.
Environmental Management System (EMS)
Under the Environmental Policy of the NS United Kaiun Group, an environmental management system has been developed for steady and effective execution of activities aimed toward environmental protection and improvement. Each year, internal audit is conducted on all vessels under management and each business department, with the findings reported to the company president and executive officer, who chairs the Safety and Environmental Committee, for inspection and confirmation that the system is functioning effectively. The system has been certified under the international standard ISO 14001:2015, with external audit conducted annually by Nippon Kaiji Kyokai (ClassNK).
Analysis of the Impact of Climate Change
In order to identify the risks and opportunities pertaining to climate change, a long-term phenomenon involving a high level of uncertainty, scenario analysis has been executed in accordance with the TCFD Recommendations in order to engage in objective debate over its impact on the Group.
In order to secure the resilience of the entire Group in the face of future uncertainties, Scenario Analysis is being conducted on the “under 2℃ scenario” targeted to achieve the goals of the Paris Agreement to “limiting global warming to well below 2℃ and pursuing efforts to limit it to 1.5℃ above pre-Industrial Revolution level.” In addition, the “1.5℃ scenario” assuming the realization of net zero CO2 emissions and carbon neutrality by 2050, long-term goal, and the “3℃ scenario” that assumes measures against climate change around the world fail to make adequate progress are being examined.
The identified risks and opportunities vis-à-vis changes in the future business environment assumed in each scenario are shown in the following chart.
Click to enlarge
These risks and opportunities are described as potentially arising in each time horizon: short-term (by 2025), medium-term (by 2030), and long-term (by 2050). For conducting scenario analysis, we have referred to the Sustainable Development Scenario (SDS), Announced Pledges Scenario (APS), Net Zero Emissions (NZE), and Stated Policies Scenario (STEPS), from the IEAʼs World Energy Outlook (WEO).
NS United Kaiun Group initiatives
International Shipping
Others
International Shipping
Development and Implementation of Ammonia-fueled Ship Project
(Announced in October 2021)
We formed a joint project with four other companies to apply for the Green Innovation Fund Project (Development Project for Next Generation Ships: Development of Ammonia-Fueled Ships) hosted by the New Energy and Industrial Technology Development Organization (NEDO). The project was adopted and aims to commercially implement ammonia-fueled ship technology as early as possible before 2028 in Japan ahead of other countries, looking to lead the global industry for developing relevant propulsion systems and shipbuilding techniques as well as ownership and operation.
joint research on fuel efficiency technology using wind power from sails (Conducted in March 2022)
For development and implementation of wind-powered fuelsaving technology using sails, joint research with Namura Shipbuilding Co., Ltd., has been conducted since May 2021.
Trial Navigation Using Biodiesel Fuel
(Conducted in March 2022)
With the cooperation of Nippon Steel Corporation and Toyota Tsusho Petroleum Pte., Ltd., a trial navigation was conducted using biodiesel fuel supplied to the very large ore carrier NSU BRILLIANCE.
The adopted fuel was based on recycled cooking oil, and thus is expected to reduce total life-cycle GHG emissions stemming from a range of processes from production to consumption, compared with conventional fossil fuels.
Coastal Shipping
Agreement for Constructing an LNG-fueled Vessel
(Announced in September 2021)
This vessel is scheduled to be delivered in February 2024 as Japan’s first to be equipped with an LNG-fueled main engine. We also plan to adopt an onboard LNG tank made of steel with a nickel content of 7%, developed by Nippon Steel Corporation, representing its first-ever application for this purpose.
CO2 emissions from the main engine are estimated to be reduced by 23.56% (30% during normal output operations) from equivalent conventional vessels. The vessel will be equipped with a hybrid propulsion system using lithium-ion batteries, with the aim of achieving zero-emission navigation within a port.
Hybrid Vessels Start Operations
(Launched in February 2019)
Steel carrier UTASHIMA was launched, becoming Japan’s first coastal cargo carrier equipped with a hybrid propulsion system powered by lithium-ion batteries.
The onboard batteries, equivalent to those for 2,700 hybrid cars, are designed to enable CO2 emission-free operations while anchored or cruising within a port, marking the first step to achieve a zero-carbon ship.
UTASHIMA, operated by NS United Naiko Kaiun Kaisha, Ltd., was awarded the Ship of the Year 2019 award in the small cargo ship category by the Japan Society of Naval Architects and Ocean Engineers, in recognition for being Japan’s first lithium-ion battery powered hybrid ship.
Others
CO2 Emissions Monitoring Service
We use the Energy Efficiency Operational Indicator (EEOI) and related services provided by Weathernews Inc. to quantify and visualize a vessel’s CO2 emissions.
This tool enables us to understand the environmental performance of individual vessels, a key step to promoting the entire fleet’s CO2 emissions reduction and increased efficiency.
Head Office Switching to Renewable Energy
In November 2021, we began to use 100% renewable energy sourced electricity in the head office for the entire facility except for air conditioning.
This is expected to achieve an annual 120-ton CO2 emissions reduction.
Other Initiatives
In addition to the above, we implement the following initiatives:
- Hull cleaning, adoption of low-friction coatings
- Propeller cleaning and silicone coating applied in drydock
- Internal education on environmental regulation trends, new fuels, and new technologies
Risk Management
We create a risk map in order to comprehensively understand substantial risks that may impact management and identify them by priority, and implement corporate-wide risk management measures. Particularly, to visualize climate change-related risks, we have prepared a matrix chart factoring in the level of risk impact and the possibility and timing of occurrence, which provides an overview of risk levels. This is incorporated into the corporate-wide risk management framework in order to build the relevant risk identification and assessment structure.
We have built an appropriate environmental management system, under which various environmental issues, including those related to climate change, are subject to information exchange, deliberations, and decisions under the leadership of the Safety and Environmental Committee. Also, the written Environmental Policy, containing a commitment to ongoing improvement, is posted on each vessel and in major places in the Company to familiarize employees with the policy as well as on our corporate website.
The progress of activities to achieve environmental goals is monitored by the Safety and Environmental Committee, and the monitoring results are evaluated at the annual management review session. Then, the evaluation results undergo a third-party verification (ClassNK), as part of external audit for ISO 14001:2015 standards. According to these standards, we review the targets every year, and make necessary updates and revisions based on the PDCA cycle. These activities are steps to achieve the goals we have set, prevent or reduce negative effects, and attain continued improvement.
Indicators & Goals
Medium-term goal
25% reduction in annual GHG emissions
by 2030 compared to 2019 level
In our medium-term business plan, FORWARD 2030 II, we set new medium-term goal for 2030 to achieve carbon neutrality by 2050.
Long-term goal
Achievement of carbon neutrality by 2050
In support of the decarbonization goals set by the Japanese government and the Japanese Shipowners’ Association, and aiming for carbon neutrality throughout the entire supply chain and society as a whole, we have taken on the challenge of achieving net zero emissions by 2050.