Climate Change Data

Environmental Metrics

ESG Focus Areas

• Work-life balance
• Diversity and Inclusion
• Disability employment
• Human rights
• Employee safety and health
• Talent development and career support

Social Achievements

• Extended childcare leave and short-hour work system to elementary school graduation.
• Introduced support for pregnancy and infertility treatment.
• Achieved and exceeded the legally mandated employment rate for people with disabilities.
• Received the Minister of Health, Labour and Welfare Award for excellent disability employment.
• Implemented a mental health support program.
• Reduced the number of employees with multiple risk factors for lifestyle-related diseases by approximately 25%.

Governance Achievements

• Established a company-wide Human Rights Awareness Promotion Council.
• Conducted human rights training for 4,770 employees.
• Implemented measures to prevent sexual harassment.

Climate Goals & Targets

Environmental Challenges

• Work-life balance challenges for employees, particularly women.
• Maintaining a healthy work environment and preventing mental health issues.
• Ensuring compliance with disability employment regulations.
• Promoting human rights awareness and preventing harassment.

Mitigation Strategies

• Implemented various work-life balance initiatives, including childcare leave, short-hour work systems, and telecommuting.
• Launched a mental health support program with management training.
• Actively promoted disability employment and exceeded legal requirements.
• Conducted human rights training and awareness campaigns.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Minister of Health, Labour and Welfare Award for excellent disability employment (2005)

Environmental Metrics

ESG Focus Areas

• Safe and Secure Society
• Climate Change and Environmental Preservation
• Inclusion in the Digital Society
• Customer Trust
• Empowering People
• Risk Management and Compliance
• Solving Social Issues Through Business Activities

Environmental Achievements

• Reduced CO2 emissions by 2.12 million tons in fiscal 2011
• Improved overall energy efficiency of products by 53% since fiscal 2006
• Developed a bioplastic using non-food plant materials

Social Achievements

• Provided cloud-based web hosting and corporate accounting services free of charge to businesses in disaster-affected areas
• Donated over ¥100 million in assistance following the March 11th disaster
• Implemented a biometric voter ID solution in Bolivia, increasing voter registration by more than 40%
• Delivered flight information system for Haneda Airport focusing on universal design

Governance Achievements

• Implemented a Stakeholder Review based on the ISO 26000 standard
• Strengthened risk management and compliance activities, including information security and business continuity plans
• Provided individual compliance guidance to personnel stationed at overseas subsidiaries

Climate Goals & Targets

Environmental Challenges

• March 11th, 2011 earthquake disaster impacted operations
• Speed of execution of Mid-Term Growth Plan "V2012"
• Limited awareness of human rights beyond discrimination
• Need for enhanced OH&S management at overseas sites

Mitigation Strategies

• Restored normal operations at five factories in Tohoku region by March 23rd
• Provided disaster relief exceeding ¥100 million
• Implemented the One NEC Business Continuity Support System
• Developed BCPs for overseas subsidiaries
• Implemented measures to raise compliance awareness at overseas subsidiaries
• Introduced OH&S management systems and pursued OHSAS 18001 certification

Supply Chain Management

Supplier Audits: Approximately 2,000 suppliers assessed annually

Responsible Procurement

• Supply-Chain CSR Check Sheet
• Educational programs for suppliers on confidential information management

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes)

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and solutions (e.g., cloud computing, smart grids, lithium-ion batteries)

Reporting Standards

Frameworks Used: GRI

Certifications: OHSAS 18001 (at Abiko and Sagamihara plants), BS25999 (in progress)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient thin client systems
• Energy storage systems
• Bioplastics

Awards & Recognition

• SAM Gold Class award
• Global 100 Most Sustainable Corporations in the World

Environmental Metrics

ESG Focus Areas

• Risk Management and Compliance
• Social Issues Through Business Activities
• Stakeholder Communications
• Environmental Preservation
• Human Rights
• Diversity
• Customer Satisfaction
• Supply Chain Management
• Business Continuity
• Information Security

Environmental Achievements

• Development of energy-efficient server/storage capable of operating at an external ambient temperature of 40ºC
• Biodiversity preservation programs at the Abiko Plant, removing exotic fish and establishing a biotope for an endangered species.
• Published the NEC Annual Environmental Report 2013

Social Achievements

• NEC TOMONI Project supporting recovery from the Great East Japan Earthquake.
• NEC Internet Safety Classes for children.
• Initiatives to help impoverished women in rural India generate income from cultivating strawberries.
• Support for areas affected by flooding in Thailand.
• Donation of herbal candles and folded cranes with flower seeds for the victims of the Great East Japan Earthquake in Fukushima.
• Call center customer satisfaction enhancement activities for East Japan Railway Company (JR East).

Governance Achievements

• Fully revised the “Explaining the Code of Conduct” publication and published an English version.
• Annual web-based compliance training programs for all officers and employees.
• Established the Basic Guidelines on Prevention of Bribery.
• Established the Compliance Hotline (whistle-blowing system).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to natural disasters (e.g., floods in Thailand)
• Ensuring compliance at overseas business sites.
• Maintaining high customer satisfaction levels.
• Addressing the conflict minerals issue.
• Maintaining a healthy work-life balance for employees.

Mitigation Strategies

• Developed business continuity plans (BCPs) and implemented disaster response drills.
• Provided compliance training and guidance to overseas employees.
• Implemented quick response initiatives to address customer inquiries.
• Participated in the JEITA Responsible Minerals Trade Working Group.
• Implemented measures to reduce extensive overtime and promote a better work-life balance.

Supply Chain Management

Supplier Audits: On-site CSR assessments (CSR-PMR) conducted on a trial basis in Japan and China.

Responsible Procurement

• Supply-Chain CSR Check Sheet based on JEITA guidelines.
• Green procurement system.
• Conflict Mineral Guideline for Suppliers.
• Information security standards for suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative), UN Global Compact, ISO 26000

Certifications: OHSAS 18001 (at several plants), Privacy Mark

Sustainable Products & Innovation

• Energy-efficient server/storage

Awards & Recognition

• Included in 4 major SRI indices
• Included in several SRI funds
• 95th place in Fortune magazine’s “The World’s Most Sustainable Corporations in the World”
• 2012 Grand Prize Award for Best Corporate Internet IR

Environmental Metrics

ESG Focus Areas

• Risk Management and Compliance
• Solving Social Issues through Business Activities
• Stakeholder Communication
• Customer Satisfaction
• Quality and Safety
• Human Resources Development
• Diversity and Inclusion
• Environmental Preservation
• Human Rights
• Supply Chain CSR

Environmental Achievements

• Published NEC Annual Environmental Report 2014
• Reduced society's CO2 emissions by 2.29 million tons annually
• Obtained OHSAS 18001 certification at 9 NEC Group companies

Social Achievements

• Conducted stakeholder review based on ISO 26000
• Implemented NEC Make-a-Difference Drive (MDD) with 48,269 participants
• Launched "Think About Your Career, Your Dreams" event for female employees
• Improved customer services at railway stations using SDN technology
• Realized safer bus operations in Hong Kong using FMS
• Contributed to sustainable growth in Myanmar through communications infrastructure

Governance Achievements

• Strengthened risk management and compliance across the NEC Group
• Established the Diversity Promotion Group
• Implemented the NEC Group Code of Conduct globally
• Obtained ISO 22301 certification for 44 business units

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to natural disasters
• Ensuring human rights compliance in global operations
• Maintaining high levels of information security
• Addressing climate change and reducing CO2 emissions
• Promoting diversity and inclusion within the workforce
• Improving customer satisfaction

Mitigation Strategies

• Developed business continuity plans (BCPs) and implemented business continuity management (BCM)
• Implemented human rights awareness-raising activities and due diligence processes
• Strengthened information security measures and infrastructure
• Provided IT-driven solutions to help lower CO2 emissions across society
• Established the Diversity Promotion Group and implemented various diversity initiatives
• Conducted customer satisfaction surveys and implemented improvement initiatives

Supply Chain Management

Supplier Audits: On-site CSR assessments conducted in China, planned expansion to other regions

Responsible Procurement

• NEC Group Procurement Policy
• Supply-Chain CSR Guidelines
• Conflict Minerals Guideline

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Opportunities

• Development of energy-efficient products and solutions

Reporting Standards

Frameworks Used: GRI, UN Global Compact, ISO 26000

Certifications: OHSAS 18001, ISO 22301, Privacy Mark

Sustainable Products & Innovation

• Energy-efficient products and solutions
• ICT solutions for disaster response

Awards & Recognition

• 42nd ITU-AJ Award (International Cooperation Field Accomplishment)
• Best Public Service Application Grand Award at the Hong Kong ICT Awards 2013
• Ethibel Pioneer & Excellence rating
• Inclusion in various SRI indices

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Compliance and Risk Management
• Human Rights
• Labor Practices
• Environment
• Fair Trading
• Diversity and Inclusion
• Customer Satisfaction
• Supply Chain Management
• Innovation Management
• Social Contribution

Environmental Achievements

• NEC Kobe Data Center achieved a PUE of 1.18, one of the most power-efficient data centers in Western Japan.
• 100% green procurement rate for product-related materials (excluding some internal supplies).

Social Achievements

• Continued inclusion in various SRI indexes (FTSE4Good, STOXX Global ESG Leaders, Global Compact 100, Euronext Vigeo World 120, MSCI Global Sustainability).
• Received Silver Class distinction and named Industry Mover in the RobecoSAM Sustainability Award 2016.
• Implemented in-house LGBT training with ReBIT.
• NEC Para-sports Support Project certified as "Model Corporation Promoting Sports in Tokyo."
• Number of employees participating in biodiversity conservation exceeded the goal (9,931 vs 9,700).
• Number of participants in NEC Pro bono Initiative exceeded the target.

Governance Achievements

• Adopted NEC Corporate Governance Guidelines in June 2016.
• Included CSR Reporting as a regular part of the Board of Directors Meeting.
• Established a scheme for Directors to discuss and approve sustainability themes.
• Promoted human rights due diligence through participation in the UN Global Compact framework.

Climate Goals & Targets

Environmental Challenges

• Balancing social issue solutions and profit in the social solutions business.
• Data utilization and privacy protection in the social solutions business.
• Due diligence and finding solutions in human rights and labor issues with suppliers.
• Competition law infractions and bribery prevention.
• Maintaining information security involving subcontractors.

Mitigation Strategies

• Developing internal awareness and systems for solving social issues.
• Establishing “NEC’s Work Style” (fundamental work principles).
• Implementing human rights due diligence worldwide.
• Formulating Competition Policy and Anti-bribery Policy.
• Conducting CSR audits of suppliers.
• Strengthening global information security infrastructures.
• Developing Global Cyber Attack Protection System (GCAPS).

Supply Chain Management

Supplier Audits: On-site CSR assessment for four Chinese OEMs in 2016.

Responsible Procurement

• Group Procurement Policy based on CSR management.
• Supply-Chain CSR Guidelines.
• Conflict Minerals Guidelines.
• Green Procurement Guidelines.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4, UN Global Compact, ISO 26000

Certifications: ISO 22301 (42 business areas), Privacy Mark (29 NEC Group companies)

UN Sustainable Development Goals

• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 11: Sustainable Cities and Communities
• Goal 13: Climate Action
• Goal 16: Peace, Justice and Strong Institutions

NEC's seven social value creation themes directly relate to the SDGs.

Sustainable Products & Innovation

• Bio-plastics

Awards & Recognition

• RobecoSAM Sustainability Award (Silver Class, Industry Mover)
• Make a CHANGE Day Grand Award
• Model Corporation Promoting Sports in Tokyo
• United Nations Decade on Biodiversity - Japan Committee (UNDB-J) certification

Environmental Metrics

ESG Focus Areas

• Governance and Compliance
• Climate Change
• Human Resource Development
• Security
• Privacy
• Dialogue and Co-creation with Our Stakeholders
• Innovation Management
• NEC Safer Cities
• NEC Value Chain Innovation

Environmental Achievements

• Reduced CO2 emissions across the supply chain by 1.60 megatons from fiscal 2017 to 6.16 megatons in fiscal 2018. Main factor was a reduction in emissions from product use due to decreased shipment of energy-intensive hardware.
• DMIC Logistic Visualization Solution in India reduced approximately 170,000 t-CO2e emission annually.

Social Achievements

• Launched NEC Pro Bono Initiative, supporting NPOs and social entrepreneurs.
• Implemented various initiatives to support work-life balance, including childcare and nursing care support systems, resulting in increased paid leave rates and decreased overtime hours.
• Achieved 4.3% employment rate of female managers in Department Head or higher positions.

Governance Achievements

• Established NEC Compliance Day to reinforce compliance awareness.
• Implemented web-based compliance training with a 98.3% completion rate in NEC Corporation.
• Revised NEC Group Procurement Policy and Supply-Chain CSR Guidelines to address modern slavery.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (implied)
• Reducing CO2 emissions in Category 11 of Scope 3 (“Use of sold products”), which is a major issue for NEC.
• Balancing higher-level functions and services demanded by customers with energy-saving in products to reduce energy consumption and CO2 emissions.

Mitigation Strategies

• Developed alternative sourcing strategies (implied)
• Set a goal of reducing company CO2 emissions to zero by 2050 and reducing CO2 emissions from the whole supply chain by cooperating with suppliers and partners.
• Offering energy-saving products and services, solutions aimed at preparing for the risks of natural disasters, and products and services to cope with environmental issues caused by climate change.

Supply Chain Management

Supplier Audits: Approximately 100 on-site assessments in 2018

Responsible Procurement

• NEC Group Procurement Policy
• Supply-Chain CSR Guidelines
• Basic Rules for Procurement
• Conflict Minerals Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Increasing number of natural disasters caused by abnormal weather conditions
• Depletion of water resources
• Effects on the supply of and demand for food

Transition Risks

• Regulatory changes, market shifts (implied)

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN Global Compact, ISO26000

Certifications: Privacy Mark, ISO22301 (various business areas), OHSAS 18001 (7 NEC Group affiliate companies)

Third-party Assurance: Japan Quality Assurance Organization

UN Sustainable Development Goals

• Goal 3
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 16
• Goal 17

NEC's initiatives contribute to these SDGs through various projects, including NEC Safer Cities and NEC Value Chain Innovation.

Sustainable Products & Innovation

• DMIC Logistic Visualization Solution
• Energy-efficient mobile phone base stations

Environmental Metrics

ESG Focus Areas

• Supply Chain Management
• Human Rights
• Occupational Health and Safety
• Fair Trade
• Environment
• Information Security
• Product Quality and Safety

Environmental Achievements

• Maintained a 100% green procurement rate for product-related materials (excluding some internal use supplies).
• Monitored CO2 emissions related to purchased items since fiscal 2013 and disclosed data after third-party validation.

Social Achievements

• Established the “NEC Group Procurement Policy” based on ISO 26000 and ISO 20400.
• Developed “Supply-Chain CSR Guidelines” to deepen mutual understanding with suppliers.
• Implemented Supplier Visit Record (SVR) to address human rights, occupational health and safety, and environmental issues.
• Provided a Compliance Hotline for suppliers since 2003.
• Conducted regular training for procurement personnel on CSR, corporate ethics, and legal compliance.

Governance Achievements

• Established a response structure for conflict minerals, collaborating with JEITA’s Responsible Mineral Trade Working Group.
• Appointed compliance promoters at NEC Corporation and major subsidiaries to enforce legal compliance.
• Held compliance promoter conferences twice a year to share best practices.

Climate Goals & Targets

Environmental Challenges

• Ensuring sustainable procurement throughout a globalized supply chain.
• Addressing human rights, occupational health and safety, fair trade, environmental, information security, and product quality and safety risks within the supply chain.
• Managing compliance with chemical substances regulations (RoHS, REACH).

Mitigation Strategies

• Developed the “NEC Group Procurement Policy” and “Supply-Chain CSR Guidelines”.
• Implemented basic contracts, dissemination of guidelines, document review, and on-site assessments.
• Established a Compliance Hotline and conducted regular training for procurement personnel.
• Participated in the CDP Supply Chain Program.
• Conducted document checks and on-site assessments of suppliers.

Supply Chain Management

Supplier Audits: 77 suppliers assessed via SVR in 2019; 37 suppliers visited for information security assessment.

Responsible Procurement

• NEC Group Procurement Policy
• Supply-Chain CSR Guidelines
• Basic Rules for Procurement
• Green Procurement Guidelines
• Conflict Minerals Guidelines
• Information Security Standards for NEC Group Business Partners

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 26000, ISO 20400

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Supply Chain Management
• Innovation Management
• Governance and Compliance
• Dialogue and Co-creation with Stakeholders

Environmental Achievements

• Achieved a 5.2 times contribution to CO2 emission reductions across the whole supply chain (target was 5 times)
• Included in CDP Climate Change and Water A List
• Reduced electric power consumption by around 40% at NEC Platforms Thai Company Limited plant through smart factory initiatives
• Reduced CO2 emissions by 3% compared with previous models in SX-Aurora TSUBASA

Social Achievements

• Increased ratio of employees who strongly agree or agree that NEC is changing to create social value by 2.3% (target was 7%)
• Achieved nearly 100% return rate of employees from childcare leave
• Received Excellent Company Award for Employment of People with Disabilities
• Launched the “Will be” cafeteria-style benefits and welfare system

Governance Achievements

• Revised NEC Group Code of Conduct to reflect heightened social awareness of ESG and SDGs
• Established NEC Compliance Day
• Introduced Compliance Excellent Award
• Acquired ISO 22301 certification (mainly in system maintenance and datacenter operation divisions)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (e.g., flooding in Thailand)
• Maintaining high information security levels across the supply chain
• Addressing human rights risks in the supply chain, particularly in relation to new technologies and labor practices
• Achieving targets for reducing CO2 emissions and expanding renewable energy use

Mitigation Strategies

• Established business continuity plans (BCPs) for physical risks, including earthquake and flood countermeasures
• Implemented supplier audits and responsible procurement practices (including the Supplier Visit Record initiative)
• Developed a risk-based approach to addressing human rights issues in the supply chain, engaging with external experts and stakeholders
• Acquired SBT designation and promoted initiatives to expand renewable energy use

Supply Chain Management

Supplier Audits: 192 critical suppliers audited in fiscal 2020 for human rights and environmental issues; 104 on-site assessments conducted

Responsible Procurement

• NEC Group Procurement Policy
• Guidelines for Responsible Business Conduct in Supply Chains
• Green Procurement Guidelines
• Environmental Specifications Pertaining to Procurement Restrictions for the Inclusion of Chemical Substances in Products
• NEC Group’s Responsible Mineral Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (flooding, typhoons)
• Power outages impacting data centers

Transition Risks

• Increased costs associated with carbon pricing
• Decreased demand for products and services due to stakeholder concerns

Opportunities

• Increased demand for products, software, and services that contribute to climate change mitigation and adaptation
• Development of energy-efficient products and solutions

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC, ISO 26000

Certifications: ISO 14001, ISO 22301, Privacy Mark

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for the Goals)

NEC's initiatives contribute to these goals through various programs and solutions

Sustainable Products & Innovation

• Vehicle Interface Box
• SX-Aurora TSUBASA
• Batch-type System Development Platform
• NeCycle biomaterial

Awards & Recognition

• CDP Climate Change A List
• CDP Water A List
• Tokyo Smooth Biz Promotion Grand Award
• Japan Telework Association Telework Promotion Award
• Resource Recycling Technology and Systems award
• Excellent Company Award for Employment of People with Disabilities
• Top 100 Global Innovator Award (Clarivate Analytics)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Inclusion & Diversity
• Supply Chain Sustainability
• Corporate Governance
• AI and Human Rights
• Data Privacy

Environmental Achievements

• Approximately 21.0% reduction in Scope 1 and Scope 2 CO2 emissions (compared with fiscal 2021)
• 180,072 MWh of renewable energy used in fiscal 2023
• Achieved 98% recycling rate for collected IT devices

Social Achievements

• Launched NEC Social Entrepreneurship School, graduating 70 groups as of fiscal 2023
• Launched NEC Pro Bono Initiative, collaborating with various organizations on social projects
• Increased ratio of women among all employees to 21.1% (as of March 31, 2023)

Governance Achievements

• Transitioned to a company with a Nominating Committee, etc., with a majority of independent outside directors
• Established Sustainability Advisory Committee to consult with external sustainability experts
• Zero cases of serious involvement with cartels and/or bid-rigging in fiscal 2023

Climate Goals & Targets

Environmental Challenges

• Insufficient indicators for evaluating initiatives linking ESG and sustainability with opportunities and growth
• Difficulty measuring the direct impact of non-financial initiatives on financial performance
• Risks from carbon pricing and supply chain disruptions due to weather-related disasters
• Increasingly sophisticated cyber attacks and the risk of unauthorized access to sensitive information

Mitigation Strategies

• Collaboration with ABeam Consulting Ltd. to clarify correlation between human capital and financial performance
• Causal analysis of initiatives to confirm and improve the effectiveness of measures related to human capital
• Implementation of robust cybersecurity measures based on the CISA Zero Trust Maturity Model and NIST Cybersecurity Framework
• Internal carbon pricing to drive decarbonization activities and reduce risk associated with carbon taxes and emissions trading
• Risk assessment of the entire supply chain and implementation of BCP measures to mitigate climate change risks
• Supplier engagement initiatives to reduce CO2 emissions and assess biodiversity risks

Supply Chain Management

Supplier Audits: Survey of approximately 1,000 suppliers in fiscal 2023

Responsible Procurement

• Guidelines for Responsible Business Conduct in Supply Chains
• NEC Green Procurement Guidelines (replaced by Guidelines for Responsible Business Conduct in Supply Chains)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, landslides, water shortages)
• Disruption of supply chains

Transition Risks

• Carbon pricing
• Higher costs associated with decarbonization efforts

Opportunities

• Development of low-emission transport infrastructure
• Support for expanding renewable energy use
• Support for reducing energy use
• Preparation for increase in weather-related disasters

Reporting Standards

Frameworks Used: GRI, UNGC, SASB, TCFD, ISO 26000, METI’s Guidance for Collaborative Value Creation

Certifications: ISO 14001, ISO 45001, PrivacyMark

Third-party Assurance: Third-party assurance provider (specified for environmental and social data)

UN Sustainable Development Goals

• Not disclosed

The report mentions alignment with the SDGs throughout, but doesn't explicitly list specific goals and their corresponding initiatives.

Sustainable Products & Innovation

• Eco Products
• Eco Symbol products
• Eco Symbol Star products
• NeCycle® bioplastic

Awards & Recognition

• Select Committee’s Special Award 2022 from the Nature Conservation Society of Japan Environmental Conservation Awards
• Culture Day Environmental Award of Merit from Chiba Prefecture
• India CSR Leadership Award (NEC Corporation India Private Limited)
• Grand Prize in the Corporate Volunteer Awards (Tokyo Council of Social Welfare)
• Special Prize in the Kawasaki SDGs Awards (Kawasaki City)
• Special Jury Prize in the Nikkei Smart Work Awards 2023
• Gold rating in PRIDE Index 2022

Environmental Metrics

ESG Focus Areas

• Climate Change (Decarbonization)
• Respecting Human Rights
• AI and Human Rights
• Diverse Human Resources
• Corporate Governance
• Supply Chain Sustainability
• Compliance

Environmental Achievements

• Reduced Scope 1 and Scope 2 CO2 emissions by 31.1% compared with fiscal 2018.
• 9.5% of electricity used was renewable energy.
• Reduced Scope 3 CO2 emissions by 26.6% compared with fiscal 2018.

Social Achievements

• Employee engagement score reached 35%, a 10-point increase from the previous fiscal year.
• Launched Employee Resource Groups for women and foreign nationals.
• Increased the number of newly registered employees in NEC Volunteer Support Service by 2,943 people.

Governance Achievements

• Established the Sustainability Advisory Committee.
• Had zero cases of serious involvement with cartels and/or bid-rigging.
• Increased the percentage of independent directors, non-executive directors, and women and foreign nationals.

Climate Goals & Targets

Environmental Challenges

• Scope 3 CO2 emissions increased in fiscal 2022 due to increased shipments of mobile infrastructure equipment and increased raw material value.
• Risks in obeying the law regarding new technologies and new fields.
• Risk management systems in response to changes in risks.
• Human rights risks throughout the value chain, including the usage phase of products and services.
• Difficulty in visualizing upstream risks in the supply chain.
• Geopolitical risks and their financial impact.
• Data management risks, including data leakage and privacy.
• Lack of skills and information sensitivity.

Mitigation Strategies

• Accelerating environmental management toward achievement of SBT 1.5ºC by 2030.
• Contribution to CO2 reduction through customer DX.
• Collaboration with ABeam Consulting Ltd. to analyze the relationship between non-financial indicators and financial performance.
• Revising the NEC Group Human Rights Policy.
• Developing a plan for the medium to long term and confirming its achievement.
• Establishing auditing standards for suppliers.
• Conducting impact assessments by country and business on a continual basis.
• Developing a Plan B as part of scenario planning.
• Proactive decisions to ensure business continuity.
• Internal knowledge sharing.
• Strengthening supply chain security management.

Supply Chain Management

Supplier Audits: Survey of about 1,000 suppliers on sustainable procurement.

Responsible Procurement

• NEC Group Procurement Policy
• Guidelines for Responsible Business Conduct in Supply Chains
• NEC Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Disruption of the supply chain due to weather-related disasters
• Long-term outages of lifelines

Transition Risks

• Risks from carbon pricing

Opportunities

• Development of low-emission transport infrastructure
• Support for expanding renewable energy use
• Support for reducing energy use
• Preparation for increase in weather-related disasters

Reporting Standards

Frameworks Used: GRI, UNGC, SASB, ISO 26000, TCFD

Certifications: ISO 14001, ISO 45001, PrivacyMark

Third-party Assurance: Third-party guarantees or verification for some achievements

UN Sustainable Development Goals

• Not disclosed

NEC's Purpose and actions are aligned with the SDGs aspiration to “leave no one behind”.

Sustainable Products & Innovation

• Environmentally friendly products, software, and services
• Cellulose-based bioplastics
• AI tools for food loss countermeasures

Awards & Recognition

• Select Committee’s Special Award 2022 from the Nature Conservation Society of Japan
• CSR Leadership Award (NEC Corporation India Private Limited)

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environment (E)
• Society (S)

Governance Achievements

• Transition to a Company with a Nominating Committee structure.
• Review of the director remuneration system to incentivize increasing corporate value.
• Increased number of outside directors.

Climate Goals & Targets

Environmental Challenges

• NEC has been navigating a difficult period since 2000, requiring reorganization, portfolio transformation, and cultural renewal.

Mitigation Strategies

• Full-scale corporate governance transformation to establish a platform for management decision-making and propel growth.
• Engaging outside directors with diverse perspectives and experiences.
• Reviewing and improving the director remuneration system to align with shareholder value.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Corporate Governance
• Supply Chain Sustainability
• AI and Human Rights
• Employee Well-being

Environmental Achievements

• Approximately 31.0% reduction in Scope 1 and Scope 2 CO2 emissions (compared with fiscal 2021)
• Increased renewable energy share to 34% of total electricity consumption
• Achieved SBT Net-Zero certification
• Reduced plastic waste output by 46% per unit of sales

Social Achievements

• Increased employee engagement score to 39%
• Improved ratio of female managers to all managers to 10.2%
• Increased ratio of female and non-Japanese officers to all officers to 15.3%
• Launched Japan's first electronic medical record system powered by generative AI
• Established a job-based compensation system to eliminate gender-based wage disparity

Governance Achievements

• Transitioned to a company with a Nominating Committee and a majority of independent outside directors
• Zero cases of serious involvement with cartels and/or bid-rigging
• Implemented sustainability-linked bonds with ESG performance targets

Climate Goals & Targets

Environmental Challenges

• Widening regional differences in government services
• Environmental burden due to increased energy consumption
• Delays in DX implementation due to human resource shortages
• Increased costs due to carbon pricing
• Risks of human rights violations in the value chain
• Harassment and long working hours

Mitigation Strategies

• Collaboration and integration with government and various industries
• Increased demand for solutions that enable efficient traffic accommodation and carbon neutrality
• Enhanced DX human resource development
• Increased use of renewable energy and improved efficiency
• Strengthening AI governance and supply chain sustainability
• Implementing anti-harassment measures and work-life balance initiatives

Supply Chain Management

Supplier Audits: Approximately 1,300 suppliers surveyed in fiscal 2024

Responsible Procurement

• Guidelines for Responsible Business Conduct in Supply Chains
• NEC Green Procurement Guidelines
• STEP program for CO2 emissions reduction

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting data centers

Transition Risks

• Cost increases due to carbon pricing
• Lower sales due to reputation risk

Opportunities

• Increased sales of energy solutions
• Increased sales due to preparations for changes in suitable areas for agricultural production

Reporting Standards

Frameworks Used: GRI, UNGC, SASB, TCFD, ISSB and SSBJ Exposure Drafts

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Third-party assurance provider (name not specified in report)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Eco Products
• Eco Symbol Products
• Eco Symbol Star Products
• CropScope

Awards & Recognition

• Special Jury Award at the Nature Conservation Society of Japan Awards 2022
• Chiba Prefecture Cultural Day Award for Merit, Environmental Merit Award
• Certified as a Nature Coexistence Site by the Ministry of the Environment
• Special Jury Prize in the Nikkei Smart Work Awards 2023
• Gold rating in PRIDE Index 2023