Understanding Global Trends in Climate Change and the Risks and Opportunities for NEC

Policy

As part of its corporate social responsibility activities, NEC engages in environmental management. NEC seeks to reduce environmental burdens across society by providing environmentally friendly products and services as well as reducing the environmental load of its own business activities, by conserving energy at its facilities and the transportation stage, and reducing the chemical substances it uses. Also, to promote environment-oriented management Group-wide—including NEC on a non-consolidated basis, affiliated companies, production bases, and research facilities—the Company has established the NEC Environmental Policy, which sets out action guidelines. Moreover, we rigorously ensure that all actions of employees and corporate officers comply with this policy. Further, we require all suppliers, contractors, and other stakeholders engaged in our supply chains to behave in a manner consistent with relevant guidelines and agreements while considering the environment.

Framework

Environment-oriented Management Implementation Framework

NEC has put into place a system for advancing environmental management that contributes to the creation of a sustainable society through business activities that consider the environment. NEC has also formulated and implemented rules for environmental management to clarify the roles, responsibilities, and authorities of each organization that puts environmental management into practice.

Discussions are held regarding strategies and the impact of important environmental issues, including climate change, on business execution at the Executive Committee or at the Business Strategy Council (consisting of executive officers, among others), both of which discuss management issues at NEC. Matters to be discussed by the Executive Committee or by the Business Strategy Council are debated beforehand by the environmental management committees in each business unit, as well as by special sub-groups for each topic, and depending on their importance, matters are also deliberated on by the Environmental Management Promotion Council, which comprises managers in charge of the environment in each business unit. 

Matters that have a significant impact on NEC's operations are discussed by the Board of Directors. Each business unit has established environment-oriented management committees and a system for specific measures to be carried out by its divisions, affiliated companies, and subsidiaries of NEC throughout the world. By forming specific action plans based on the environmental strategy devised by the Executive Committee or by the Business Strategy Council, and the Board of Directors, we can implement consistent environment-oriented management throughout NEC.

Climate Change Countermeasure Implementation Process

With regards to climate change, the Environmental Management Promotion Council conducts deliberations on and formulates the NEC Environmental Policy and targets. The council comprises managers responsible for promoting environmental measures in each business unit. The executive officer responsible for environment-related matters confirms the council's proposals and reports them to the Business Strategy Council, an organization that is further up the organizational hierarchy and which provides approval at the corporate level. Risks related to climate change are also shared at the Environmental Management Promotion Council. The executive officer responsible for environment-related matters confirms those risks that could have a significant impact on businesses and, as necessary, reports to the Risk Control & Compliance Committee in accordance with the risk management process.

Risks and opportunities that could significantly affect businesses are also reported to the Board of Directors, as necessary. When such reports are received, the Board of Directors conducts deliberations and then provides instructions on measures, thereby realizing supervision that ensures that NEC advances appropriate climate change countermeasures.

In fiscal 2023, participation in TCP was reported at the Business Strategy Council and the Board of Directors, and management approved the revision of the 2030 targets in conjunction with moving the target for net zero emissions up to 2040 from 2050. The scope of the new target has been expanded to the entire Group through the revision of NEC Eco Action Plan 2025.

In addition, as part of our climate change countermeasures, we are advancing Group-wide measures to reduce our in-house CO₂ emissions by addressing specific aspects of the issue through three special committees: the Eco Product Promotion Sub-group, the Eco Solution Promotion Sub-group, and the NEC Group Energysaving Discussion Working Group. By reporting and submitting proposals to the Environmental Management Promotion Council, these special committees facilitate the Group-wide pursuit of energy-saving initiatives. To ensure all employees are fully informed of matters determined by the council, its directives and reports are issued through the committees of each business unit and business site.

Environmental Management System

Environmental Audit and ISO 14001 Inspection

NEC has established a Group-wide environmental management system based on ISO 14001.

Each Group company conducts in-house environmental audits while the Environmental Promotion Division conducts audits of environmentoriented management. The latter audits are conducted by specialized auditors, including certified ISO 14001 auditors. Audits of environmentoriented management particularly focus on the relationship between each division’s operations and environmental strategy, the progress of environmentally considerate product development, environmental impact reduction, risk management, and monitoring of overall environmental activities such as ISO 14001 conformance, including examination of the effectiveness of the internal environmental audits.

The results of these audits are verified through ISO 14001 audits undertaken by an external investigative body.

ISO 14001 Certification

Environmental Risks

Environmental Risk Countermeasures

Recognizing the impact that such environmental risks as climate change and pollution by hazardous substances could have on its businesses, NEC conducts risk reduction and prevention activities through assessment, inspection, and education.

We classify risk countermeasures under three risk categories: plantrelated risks, product-related risks, and sales and maintenance-related risks. In the first category, countermeasures for plant-related risks cover risks related to leaks of hazardous substances, soil contamination, and groundwater contamination caused by natural disasters or equipment failure. To help prevent such environmental accidents, we conduct prior environmental risk assessments as well as education and training. In the second category, countermeasures for product-related risks are focused on risks such as the inclusion in products of substances regulated by the Restriction of Hazardous Substances (RoHS) Directive in the European Union and violations of labeling regulations. To address such risks, we conduct product assessments to ensure strict compliance with guidelines and use in-house systems to implement centralized management of information. As for the third category, countermeasures for sales and maintenance-related risks are aimed at mitigating such risks as violations of the Waste Management and Public Cleansing Act due to inadequate consignment of waste treatment. Our countermeasures include efforts to ensure compliance by issuing guidelines on waste and regularly conducting education for sales department personnel. In conjunction with these efforts, we have established the Environmental Escalation Manual for Emergencies to strengthen our governance of environmental risks.

Our risk management system includes the Risk Control & Compliance Committee. If a risk is identified that may have a significant effect on businesses, the Risk Control & Compliance Committee deliberates on countermeasures. The committee fulfills a supervisory function for specific risk measures by checking the results of activities, problems, and future plans and by issuing directives on where measures should focus. Further, reports are submitted to the Executive Committee and the Board of Directors, as necessary.

Legal Violations, Accidents, and Complaints

Since fiscal 1999, NEC has used its website to disclose any fines or penalties levied on the Company related to the environment. In both fiscal 2022 and fiscal 2023, NEC was not subject to any fines or penalties related to the environment inside or outside the Company There were no accidents that affected the areas beyond the perimeters of our sites; there were four environmental accidents that were contained within our sites; and three complaints were received.

Prevention Activities: Group-wide Dissemination of Information on Near-misses

Since the latent causes of environmental accidents are present in minor accidents, we thoroughly investigate their causes and implement technological countermeasures even for minor incidents at the near-miss level.
NEC's findings are then passed on to affiliated companies in Japan and abroad, and corrective measures are checked. In this way, we advance accident prevention.

Soil

Among the substances covered by the Soil Contamination Countermeasures Act, NEC completely discontinued the use of the VOCs trichloroethylene and tetrachloroethylene in 1998 and 1,1,1-trichloroethane in 1993. Further, as far as possible NEC has continued to conduct independent soil surveys.

We will continue to conduct soil surveys and comply with the Soil Contamination Countermeasures Act, related ordinances, and the directives of the administrative agency with jurisdiction and will continue taking appropriate measures.

Environmental Training

Aiming to realize the Purpose of the NEC Way, we heighten employees' environmental awareness through environmental education that targets specific business divisions and employee ranks.

Environmental Ratings by External Organizations