Bringing value to life. Nippon Yusen Kabushiki Kaisha Nippon Yusen Kabushiki Kaisha Kabushiki Nippon Yusen NYK Report 2018 NYK Report 2018 3-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-0005, Japan Telephone: +81-3-3284-5151 Website: https://www.nyk.com/english/ Printed in Japan Contents Contents/Evaluation from Society 2 Toward Sustainable Growth (Material Issues) 30 Materiality 1 Safety NYK Group at a Glance 4 Initiatives for Safe Operation 32 Materiality 2 The Environment OurWHY purpose in society What Has the NYK Group Accomplished? 4 Proactive Environmental Conservation 36 Materiality 3 Human Resources What Has the NYK Group Been Doing in Utilizing/Strengthening Human Capital 40 Recent Years? 6 Environment, Social, and Governance(ESG) Data Schematic Diagram of 44 the New Medium-Term Bringing value to life. What Is the NYK Group Pursuing Now? 8 Toward Sustainable Growth Management Plan What Is the NYK Group Aiming to Accomplish? 10 (Strategy by Business) 46 At a Glance 46 Global Logistics 48 Our Mission Moving Ahead with Bulk Shipping Business 52 Our Management Plan 12 Others 58 OurWHAT aspirations over the next 10 years 10-year Summary Message from the President 12 60 Our Vision • Contribute to the resolution of social and environmental issues Special 1 Corporate Governance 64 through our business activities Feature Digitalization Medium-Term Directors, Audit and Supervisory Board • Act responsibly and respect the highest ethical and social standards & Green 20 Members, and Corporate Officers 64 Management Plan Expertise and Experience of Directors 66 • Create new value through constant “staying half a step ahead” spirit 2 Dialogue Messages from Independent Outside Directors 67 • Develop a well-balanced revenue structure Ensuring Safe and Dependable Corporate Governance 68 Maritime Shipping through Corporate Data/Editorial Policy for NYK Report Exhaustive and Ongoing 74 Initiatives Extending beyond Compliance PDF The following information is included in the digital version. 26 •Summary of CSR Activities in Fiscal 2017 and Outline of Next Year’s Targets •Environmental Initiative Reports/Environmental Data/ Environmental Accounting Techniques/methodsHOW for executing our vision based on our corporate philosophy •Human Resources Data Evaluation from Society Socially Responsible Investment Environment, Health and Sanitation, and IR, etc. Staying Ahead 2022 Dow Jones Sustainability Indices FTSE4Good Global Index Competitive IT Health and Productivity Internet IR 15 years running 16 years running Strategy Company Management Commendation Award with Digitalization and Green 2 years running (White 500) 6 years running 2 years running Morningstar, Inc. MSCI Global Sustainability Indexes ESI Best Green Shipping Line RoSPA Award Socially Responsible Investment Index 5 years running 2 years running (NYK LNG SMUK) 14 years running THE INCLUSION OF Nippon Yusen Kabushiki Kaisha IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Nippon Yusen Kabushiki Kaisha 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. • We have been first in the Toyo Keizai CSR Ranking’s industry-specific category FTSE Blossom MSCI Japan MSCI Japan Empowering Women Index for 11 consecutive years. Japan Index ESG Select Leaders Index 2 years running • Asuka II cruise ship ranked the #1 “Cruise Ship of the Year” for 26 years running. 2 years running 2 years running NYK has expressed support for the Ministry of the Environment’s “Try to receive your parcel without redelivery requests!” campaign aimed at preventing repeated attempts at home delivery of parcels. 2 NIPPON YUSEN KABUSHIKI KAISHA NYK Report 2018 Contents Contents/Evaluation from Society 2 Toward Sustainable Growth (Material Issues) 30 Materiality 1 Safety NYK Group at a Glance 4 Initiatives for Safe Operation 32 Materiality 2 The Environment OurWHY purpose in society What Has the NYK Group Accomplished? 4 Proactive Environmental Conservation 36 Materiality 3 Human Resources What Has the NYK Group Been Doing in Utilizing/Strengthening Human Capital 40 Recent Years? 6 Environment, Social, and Governance(ESG) Data Schematic Diagram of 44 the New Medium-Term Bringing value to life. What Is the NYK Group Pursuing Now? 8 Toward Sustainable Growth Management Plan What Is the NYK Group Aiming to Accomplish? 10 (Strategy by Business) 46 At a Glance 46 Global Logistics 48 Our Mission Moving Ahead with Bulk Shipping Business 52 Our Management Plan 12 Others 58 OurWHAT aspirations over the next 10 years 10-year Summary Message from the President 12 60 Our Vision • Contribute to the resolution of social and environmental issues Special 1 Corporate Governance 64 through our business activities Feature Digitalization Medium-Term Directors, Audit and Supervisory Board • Act responsibly and respect the highest ethical and social standards & Green 20 Members, and Corporate Officers 64 Management Plan Expertise and Experience of Directors 66 • Create new value through constant “staying half a step ahead” spirit 2 Dialogue Messages from Independent Outside Directors 67 • Develop a well-balanced revenue structure Ensuring Safe and Dependable Corporate Governance 68 Maritime Shipping through Corporate Data/Editorial Policy for NYK Report Exhaustive and Ongoing 74 Initiatives Extending beyond Compliance PDF The following information is included in the digital version. 26 •Summary of CSR Activities in Fiscal 2017 and Outline of Next Year’s Targets •Environmental Initiative Reports/Environmental Data/ Environmental Accounting Techniques/methodsHOW for executing our vision based on our corporate philosophy •Human Resources Data Evaluation from Society Socially Responsible Investment Environment, Health and Sanitation, and IR, etc. Staying Ahead 2022 Dow Jones Sustainability Indices FTSE4Good Global Index Competitive IT Health and Productivity Internet IR 15 years running 16 years running Strategy Company Management Commendation Award with Digitalization and Green 2 years running (White 500) 6 years running 2 years running Morningstar, Inc. MSCI Global Sustainability Indexes ESI Best Green Shipping Line RoSPA Award Socially Responsible Investment Index 5 years running 2 years running (NYK LNG SMUK) 14 years running THE INCLUSION OF Nippon Yusen Kabushiki Kaisha IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Nippon Yusen Kabushiki Kaisha 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. • We have been first in the Toyo Keizai CSR Ranking’s industry-specific category FTSE Blossom MSCI Japan MSCI Japan Empowering Women Index for 11 consecutive years. Japan Index ESG Select Leaders Index 2 years running • Asuka II cruise ship ranked the #1 “Cruise Ship of the Year” for 26 years running. 2 years running 2 years running NYK has expressed support for the Ministry of the Environment’s “Try to receive your parcel without redelivery requests!” campaign aimed at preventing repeated attempts at home delivery of parcels. NIPPON YUSEN KABUSHIKI KAISHA NYK Report 2018 3 NYK Group at a Glance What Has the NYK Group Accomplished? Bringing value to life. Contributing to Industry and People’s Lives Along with the “ ” From 2010 Changing Times Helping Develop 1980 1985 1990 an Energy Value Chain For over 130 years since its founding, the NYK Group has the Group quickly met emerging needs amid those Amid growing awareness of environmental concerns • The Group commenced comprehensive evolved alongside social and economic changes in Japan changes. While responding to the changing times, the and ahead of the competitors, the Group began and around the world. In addition to transporting all Group has continued to draw upon the NYK Group Values global logistics business handling maritime, focusing on liquefied natural gas (LNG), hydrogen, kinds of cargo, the Group contributed to industrial of “integrity”, “innovation”, and “intensity” to provide land, and air transport services and other energy sources that have less development and the livelihoods of countless people as abundant value around the world. environmental burden. The Group joined offshore oil and gas development projects, which have been 1970 growing in number worldwide, while putting From 1885 From 1985 systems in place for broadly responding to energy projects from the upstream to downstream stages of Charting a Course for Supporting the Supply Chains the value chain. Japan’s Shipping Industry to of Various Industries Reach Europe and North America as a Comprehensive At a time when maritime shipping Global Logistics Enterprise routes were practically While its customers progressively globalized their supply monopolized by Western shipping chains, the Group was able to speedily and flexibly respond to companies, the Company was 1960 customers’ diversifying needs by expanding beyond maritime Japan’s first steamship company shipping as a comprehensive global logistics enterprise. to commence long-distance liner 2000 services. Despite severe price competition, the Company helped open the doors to international trade for Japan’s textile industry and other The Tosa Maru (left) was the The Osakabo textile factory (photo