Management

Identification of Key Sustainability Issues

Materiality at the IINO Group

The external environment surrounding the Shipping Business and Real Estate Business has undergone significant change, and the social demands that are important to society and stakeholders are evolving on a daily basis.

The IINO Group has identified its materiality (key sustainability issues) as ensuring safety and security as action to prevent accidents such as oil spills and have a significant impact on local communities and the environment, and accidents involving tenants and construction-related personnel, initiatives to create a decarbonized society as action on climate change and the reduction of greenhouse gases (GHGs), and biodiversity initiatives as action to preserve ecosystems and prevent pollution.

In addition, with the expectation that companies take action on respect for human rights not only internally but across the supply chain, the IINO Group recognizes its social responsibility as a global company to respect the human rights of all people and also views action on respect for human rights as a key issue.

Furthermore, in integrating specific aspects of materiality with management policies, we recognize the importance of engaging in companywide discussion (highly transparent management) on what social issues to overcome in light of dialogue with stakeholders and having the organizational capacity to take action on those issues (workplace environments in which various people can work, both on sea and on land, and an organization made up of a highly diverse workforce).

Materiality Issue Identification Process

Risks, Opportunities and Major Initiatives for Materiality in FY2023
Categories Materiality Risks and Opportunities Major Initiatives
Environment
  • Protecting the global environment with the introduction of new equipment, technologies, and fuels and the utilization of DX
 Achieving a decarbonized society
Active introduction of new equipment and technologies
Utilization of renewable energy
Proactively adopting energy-saving technologies
KPI: GHG Reduction Ratio
 Risks
  • Accelerated obsolescence of owned assets and intellectual capital, such as know-how
  • Changes to maritime cargo movement due to decarbonization, resulting in reduced cargo volume
  • Extreme weather interfering with navigation or building safety

Opportunities
  • Providing eco-friendly services to customers at a reasonable price
  • Taking various environmental regulations in advance and working with customers to implement new technologies
  • Capturing the demand for new maritime cargo movements generated from the introduction of non-fossil fuels
  • Construction of vessels equipped with dual-fuel main engines
  • Installing rotor sails that harness the propulsive forces of the wind on large gas carriers
  • Collaborating with startups to comply with CII
  • Formulating a roadmap towards a decarbonized society
  • Conducting demonstration tests of biodiesel fuels
Reducing air pollution and waste
Using low-sulfur fuels
Reducing plastic use
Promoting the 3Rs
  • Installation of high-performance water producing equipment on VLCCs for reducing plastics
  • Installation of an automatic PET bottle collecting machine in Hibiya Fort Tower
Preserving biodiversity
Introducing ballast water treatment equipment
Forest development
  • Installation of ballast water treatment equipment
  • Entering into a forest development agreement with Saitama Prefecture
Social
  • Providing safety and security to each stakeholder
  • Securing diverse human resources and utilizing them as human capital
  • Respect for human rights
  • Collaboration with the supply chains
 Safety and security
Developing safe workplace environments
Preventing accidents
Improving the response when accidents occur
KPI: Number of Serious Accidents
 Risks
  • Severe negative impact on the local community due to accidents
  • Decline in corporate competitiveness due to inability to respond to human capital diversification and development
  • Accidents occurring due to human error in connection with deteriorating labor environment
  • Loss of credibility and possible spillover to management risks due to human rights violations occurring not only internally but in the supply chains

Opportunities
  • Ability to provide even more stable services by reducing the accident incidence rate, contributing to improved customer satisfaction
  • Improved productivity due to the accumulation of human capital
  • Developing a resilient organization through the active exchange of diverse human resources
  • Having the Safety and Environment Committee perform a detailed examination of various measures formulated to prevent accidents
  • Implementing drills to confirm the effectiveness of response measures when accidents occur
  • Formulating business continuity plans (BCP) based on scenarios of major earthquakes and the spread of infectious diseases
  • Arranging voyage schedules to reduce the workload of seafarers
Strengthening diversity and human capital
Promoting the diversity of human resources and developing an environment that accepts diverse human resources
Cultivating and strengthening human capital
KPI: Percentage of female employees in career-track positions
: Childcare Leave Utilization Rate
: Number of Employees with Short-term Overseas Training / Expatriate Experience
  • Hiring, cultivating, and enhancing diverse human resources (foreigners, mid-career workers, and female employees)
  • Internally training seafarers for domestic vessels
Action on Human Rights
Promoting action on human rights, including throughout the supply chain
KPI: Human rights training attendance rate
  • Establishing the working group that spans the company
  • Supporting the UN Global Compact
  • Formulating a human rights policy
  • Implementing human rights due diligence
  • Formulating the Procurement Policy and Supplier Code of Conduct
  • Making a declaration concerning the UK's Modern Slavery Act
Governance
  • Enhancing governance and pursuing management transparency
 Compliance Including Anti-Corruption
Preventing corruption, dealing with antisocial forces, complying with antitrust laws		 Risks
  • Scandals and loss of public trust due to inadequate functioning of governance and internal control
  • Unexpected losses from excessive risk taking or loss of opportunity to enhance corporate value due to excessive risk avoidance

Opportunities
  • Putting into practice management accounting from the perspective of each stakeholder through enhanced governance
  • Appropriately managing risks and returns and implementing investment to enhance corporate value
  • Formulating an anti-corruption policy
  • Conducting training on insider trading regulations and harassment prevention workshops
Developing more sophisticated risk management
Developing a system for appropriate risk taking
  • The Board of Directors, the Risk Management Committee, and the Management Audit Office, which is the internal audit department, jointly manage risks.
  • Holding Investment and Loan Committee meetings
Enhancing corporate governance
Strengthening internal control
Establishing a management structure for addressing each ESG issue
  • Appoint an independent outside director as chair of the Nomination and Remuneration Committee
  • Appoint female directors
  • Shorten the term of office of Directors (from two years to one year)
Materiality Matrix

Regarding social issues that are related to the businesses of the IINO Group, based on dialogue with stakeholders and individual questionnaires, we have summarized the social issues that are important to stakeholders, and discussed and evaluated those issues at the Board of Directors meetings based on their level of impact on and importance to society and the IINO Group's businesses, and from the perspective of the status of the Company's response. Nine of these social issues were identified as targets to be tackled by the IINO Group and plotted based on their level of impact. Permanent materiality, safety and security are positioned at the highest level outside the bounds of the matrix, indicating that the IINO Group has declared "ensuring safety" as part of its corporate philosophy and reflecting its strong determination to put the greatest emphasis on safety and security among the values it provides to stakeholders through the Shipping and Real Estate businesses.

Materiality Matrix