The first step to achieving harmonious coexistence with nature from a corporate perspective is becoming a Taskforce on Nature-related Financial Disclosures (TNFD) Adopter. Generally speaking, TNFD reports visualize the relationship between business activities and the natural environment. In recent years, NEC has been drawing attention as a pioneering TNFD Adopter through its release of TNFD reports, with business opportunities, cross-organizational efforts, and speed all playing a key role. Since June 5 is “World Environment Day”, we’ll be delving into NEC’s efforts to achieve environmental and business sustainability in this edition of NEC Stories.

Business opportunities and risks: Becoming a catalyst for change in the world

TNFD was created at the urging of the G7 Ministerial Meeting on Climate, Energy and Environment to ensure that money from around the world is channeled into protecting the natural environment. TNFD reports, which disclose the relationship between corporate activities and the natural environment along with the associated risks and opportunities, are becoming a tool by which investors and financial institutions evaluate companies.

Digital technology, an area in which NEC excels, plays a major role in visualizing the relationship between corporate activities and the natural environment. For example, with food and apparel industries being asked to disclose the environmental impact on agricultural lands used to produce raw materials in TNFD reports, NEC's agricultural ICT platform CropScope, which supports farming management, is proving quite useful. Moreover, by storing environmental information in Obbligato, a product lifecycle management system for which NEC boasts a high market share, companies can reduce environmental impact through design, procurement, and production. According to Yutaka Okano, who leads the editing of NEC's TNFD reports, "NEC has the potential to become a catalyst for change in the world as a provider of IT systems to customers across all industries." Okano also added, "We view this as a tremendous business opportunity."

In addition to opportunities like this, NEC must also face any risks that arise. Regarding the environmental impact of factories and data centers, we conduct on-site interviews with municipal officials and local stakeholders to confirm that the risk to aquatic and other environments is minimal and include such information in the report. Many companies are now referring to this approach to conduct their own risk surveys.

A cross-organizational community comprised of 1,800 members who actively engage in information sharing

One thing that sets NEC's TNFD reporting apart is comprehensiveness. For the second edition of the report released in 2024, NEC analyzed 150 different businesses, including NEC's submarine cable business. Supporting this comprehensiveness is an internal cross-organizational community. In 2021, a community named "NEC for Green" was launched internally through Microsoft Teams to facilitate the exchange of information on environmental issues. This community that started off with several people who came together voluntarily now boasts more than 1,800 participants. Even those outside the company have voiced their surprise at the sheer level of employee participation, asking "How do you get this many employees to participate in a community focused on environmental issues?"

In this community, participants exchange information with one another regardless of their division or job title. For example, in response to one post by a young employee declaring that they had summarized the latest market trends, a corporate officer replied, "I'll be sure to share it with other corporate officers." This is possible because the secretariat, led by the founding members, frequently responds to support the creation of a community with a feeling of safety. Whenever a sales representative requests recommendations for a technology or solution to resolve an issue facing a customer, they receive a wealth of feedback. Happy news such as the launch of a new business, the acquisition of a new order, or an invitation to speak at an international conference is also often shared and met with great excitement by other participants.

Okano, who joined NEC after working for a leading automotive manufacturer and a startup company, says, "NEC is making the shift from an inward-looking culture to a dynamic one. I am seeing more and more colleagues joining us on our journey to provide social value."

This community plays an integral role in preparing TNFD reports, and approximately 80 employees from 25 departments, including those in NEC Group companies, were involved in the creation of the first report.

Leading the world by moving fast

Another defining aspect is speed. NEC issued its first edition in July 2023. This edition was created in reference to the beta version of the TNFD framework, and it was the first report of its kind to be released by a Japanese IT company. Two months later in September, immediately after the official version of the TNFD framework was released, NEC held the very first explanatory seminar in Japan, drawing in more than 500 participants.

Things move fast in the environmental field, and the dissemination of information can be a race against the clock. Therefore, it's vital to think not in terms of months or years but to remain focused on delivering good information to society as quickly as possible. NEC's TNFD report is continuing to evolve at a rapid pace. The second edition was released in 2024, providing a comprehensive analysis of the environmental implications of 150 different projects. For the third edition scheduled for release in 2025, NEC has been using Agentic AI to improve the sophistication and efficiency of creating the report.

Efforts like these have been highly commended, strengthening NEC's presence in international society. In addition, through invitations to the G7 session of the 16th Conference of the Parties to the Convention on Biological Diversity (COP16), and events such as those hosted by national ministries of the environment across the globe and business associations, NEC has had the opportunity to introduce these efforts to audiences worldwide. As a result, NEC is constantly being consulted by international institutions and startups around the world about potential collaborations.

As underscored by Okano, who says, "Ultimately, we would like to see more and more businesses worldwide where the more profitable they are, the better the environment becomes," the NEC Group will continue promoting a more sustainable world as it works to fulfill its Purpose.

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