Materiality | Sustainability Management

Identification and Review of Materiality

The Background of Reevaluating Materiality

Recognizing that improving medium- to long-term enterprise value and achieving sustainable growth are important issues, the Maruha Nichiro Group has been reevaluating materiality in the area of sustainability that were identified in February 2018, which has taken about one year from February 2021, and has formulated the new Medium-term Management Plan "For the Ocean, for Life MNV 2024.”

As interest in sustainability issues, including social and global environmental issues, grows worldwide, and as the external environment in which we operate changes daily, the Maruha Nichiro Group has identified nine materiality areas with an emphasis on responding to change, spreading awareness of key issues within the Company, and reflecting the opinions of internal and external stakeholders in its management. From now on, we plan to manage our operations with the aim of realizing "environmental value" and "social value" in each materiality. We plan to reevaluate materiality on an ongoing basis.

Newly Identified Materiality

Creation of Environmental Value

Action for climate change
Contributing to a recycling-oriented society
Action for marine pollution by marine plastics
Action for preserving biodiversity and ecosystem

Creation of Social Value

Provision of safe and secure food
Food provision contributing to creating health value and sustainability
Build a work environment that diversified employees can work with a sense of security
Respect for human rights in business operations
Development of Sustainable Supply Chain

Materiality Identification and Review Process

Step 1: Extracted Items to Be Evaluated as Candidates for Materiality

In the materiality reevaluation, in addition to GRI, ISO 26000, SDGs, and other standard items, 484 items were extracted from a comprehensive long list of social issues based on the Company's materiality in the current Medium-term Management Plan, the materiality of other companies, and policy issues raised by the Japanese government were used as candidates for the materiality evaluation. The items on the long list were narrowed down in consideration of their relevance to the Group's value chain after sorting out similar items, and 43 items were compiled as the short list of items to be evaluated.

Step 2: Evaluated by External Stakeholders, Stakeholder Engagement (Dialogue), and Evaluated from Our Own Company’s Perspective.

A short list of 43 items was sent to the external stakeholders below who were asked to rate the importance of each item to our Company and to provide reasons for their rating. For the evaluation of our own Company's perspective, we conducted an internal questionnaire. In addition to collecting opinions from 1,576 employees of Maruha Nichiro Corporation, including 66 executive officers, unit heads, and department heads, opinions were collated from 50 President & CEOs of Japan and overseas consolidated Group companies, to ensure an extensive perspective, including a group perspective.

Also, one of the external stakeholders, Executive ESG Analyst Mr. Megumi Sakuramoto of Asset Management One, Co., Ltd., and the Company's President & CEO Masaru Ikemi, discussed the sustainability issues that should be emphasized.

Main Feedback from Stakeholders

Sumitomo Mitsui DS Asset Management Ms. Keiko Akuto	Consideration of human rights, including forced labor and child labor, is important since economic losses are significant when human rights violations occur. The problem of marine plastics and the conservation of marine biodiversity are high priorities because of their impact on the fishery business.
CEO, Response Ability, Inc. Executive Director, Japan Business Initiative for Biodiversity (JBIB) Dr. Naoki Adachi	There is an urgent need to develop and transition to fishing gear that takes into consideration marine resources and the surrounding ecosystems (organisms). There should be a greater sense of urgency and responsibility for the fact that most marine resources are barely on the edge of abundance. I would prefer Maruha Nichiro to lead the government on resource management and regulation. There is also room for improvement in fishing methods.
Founder of First Penguin Ms. Liyong Huang	I think there are many things Maruha Nichiro can do to reduce food loss, from procurement of raw materials to processing, sales, and disposal. Not all resources and raw materials are infinite, and we are facing a planet boundary, so it is efficient to give top priority to the practice of open innovation, including industry-academia collaboration.
Executive ESG Analyst, Asset Management One Co., Ltd. Mr. Megumi Sakuramoto	Addressing climate change issues are very important in the seafood industry. How to address the circular economy and other aspects of a recycling-oriented society are also important.
Attorney at Law, Kotonoha Sogo Law Office Ms. Akiko Sato	In Japanese society, the lack of sufficient human resources is one of the reasons for the delay in sustainability initiatives, so we also expect proactive investment in human resources that can play a key role in sustainable growth. There is also an urgent need to address food loss, which has become a serious problem in Japanese society.
Executive Officer of the Development Bank of Japan Inc. Deputy General Manager, Industrial Research Department and Section Chief, Sustainability Management Office, Corporate Planning Department Mr. Keisuke Takegahara	As strategies to reduce greenhouse gas emissions to net zero by 2050 are required in all industries and business categories, expectations are high, especially from the perspective of the cold chain. The practice of the aquaculture business in consideration of the environment impacts our long-term enterprise value not only as a means of adaptation and BCP, but also as an opportunity to demonstrate technological capabilities.
Board Chair, CSO Network Japan Ms. Yukiko Furuya	As the recent revision of the Corporate Governance Code has shown, sustainability initiatives by boards of directors will be increasingly important, and it is essential to have diversity and sustainability experts (preferably independent outside Directors) on boards. Business activities that are sensitive to human rights, including the issues of forced labor and child labor, are priority issues for companies.
Resona Asset Management Co., Ltd. Executive Officer and General Manager, Responsible Investment Mr. Minoru Matsubara	The realization of an abundant diet can be a differentiating factor and an outcome for Maruha Nichiro. In B to C businesses, reducing the environmental impact of packaging and containers is essential.
Executive Director, Japan NGO Center for International Cooperation (JANIC) Mr. Hideki Wakabayashi	As an overall corporate activity, it should be consistent with sustainable economic activities, balancing the environment and society. It is necessary to engage in human rights due diligence on an ongoing basis, including human rights policy development, management structure development, training, awareness-raising, stakeholder engagement, and remediation.
Outside Director Somuku Iimura	As a leader in the food industry, it is critical for us to be environmentally conscious by reducing CO₂ emissions and food loss, as well as reducing plastic waste. Within the Compliance Committee, we feel the need to address compliance and risk management, especially with regard to factories and subsidiaries.
Outside Director Yoshiro Nakabe	As the No. 1 global seafood supplier, we must take a flagship role in the protection of sustainable marine resources. Compared to other companies, the advancement of women has lagged behind, so I would like to see more emphasis placed on diversity, especially among women and foreign nationals.
Outside Director Sonoko Hatchoji	Since we are a “For the Ocean, for life” company, the most important part of our business is the conservation of marine resources, in the sense that we obtain value from the ocean and return value to the ocean. In order to create the three values of "economic values, social values, and environmental values," we are expected to have the ability to solve optimization issues in a well-balanced and flexible manner.

Collating Extensive Opinions from within the Maruha Nichiro Group

The opinions of 1,576 employees (65% of all employees) of Maruha Nichiro Corporation, including 66 executive officers, unit directors, and department heads were collated.
To secure a wide range of perspectives, including the Group's perspective, opinions are collated from 50 President & CEOs of Japan and overseas consolidated Group companies, as well as from production bases in various regions.
In the evaluation from the company's perspective, the majority of respondents supported GRI Standards, such as supplying safe and secure food as well as the problems of marine plastics and food loss.
Opinions from executives focused on climate change, the risk of depletion of marine resources and active investment in human resources, while unit directors emphasized GRI Standards such as the promotion of research and new product development to strengthen competitiveness and a diversified Board of Directors, all with an awareness of the sustainability of the business.

Engagement with Stakeholders (Institutional Investors)

In reviewing the company's materiality, Executive ESG Analyst Megumi Sakuramoto of Asset Management One, Co., Ltd., and the Company's President & CEO Masaru Ikemi, discussed the sustainability issues that should be emphasized.

Click here for details about the discussion

Step 3: Management Discussed, Reviewed, and Identified Materiality

The items to be evaluated by external stakeholders were plotted on the vertical axis and the items to be evaluated by our own Company on the horizontal axis to form a materiality matrix. Subsequently, in addition to the materiality evaluation, the management team discussed and reviewed the possibility of integrating each of the items to be evaluated, their expressions, etc., and identified the nine items below as materiality.

- Creation of Environmental Value

Action for climate change
Contributing to a recycling-oriented society
Action for marine pollution by marine plastics
Action for preserving biodiversity and ecosystem

- Creation of Social Value

Provision of safe and secure food
Food provision contributing to creating health value and sustainability
Building a work environment that diversified employees can work with a sense of security
Respect for human rights in business operations
Development of Sustainable Supply Chain

The ideal state of each materiality in 2030, their basic approach, and the main SDGs to which they will contribute are listed below.

Materiality	KGI (ideal state by 2030)	Basic approach
1. Action for climate change	We are leading the industry on decarbonization and climate change	Climate change, an issue of global importance, is also an important issue to the Maruha Nichiro Group. There could be an impact on marine resources due to rising seawater temperatures, and an impact on agricultural and livestock raw materials due to abnormal weather conditions. Maruha Nichiro is aware that addressing climate change is an important issue on a company-wide level, and we will respond to climate change issues by reducing greenhouse gas emissions through the use of sustainable energy.
2. Contributing to a recycling-oriented society	We are spreading a recycling-oriented economy through efficient use of resources and practicing within the Group	In order to realize a recycling-oriented society, it is important to manage and reduce waste generated by business activities. For companies that handle food products, the occurrence of food loss and the low effective utilization rate of plastic waste have become an issue. Maruha Nichiro is working to reduce the occurrence of waste and food loss throughout the product life cycle, and to reduce the environmental impact of packaging and containers and packaging, by reducing the amount of plastic resources used in accordance with the plastic resource recycling strategy.
3. Action for marine pollution by marine plastics	We practice zero discharge of plastics into the ocean along our supply chain, including from our own Company	Environmental pollution caused by marine plastic spills is an issue of global importance, and the Maruha Nichiro Group, which is deeply involved in the ocean, sees it as an equally important issue. We will promote our response to the marine plastic issue in cooperation with industry associations, related NGOs, and others to make our activities more effective.
4. Action for preserving biodiversity and ecosystem	We confirm that there is no risk of depletion of the marine resources we handle	For the Maruha Nichiro Group, which conducts its business activities while receiving blessings from a wide variety of living organisms, including marine resources from around the world, the conservation of biodiversity is an important issue. In order for the Group to sustainably carry out its business activities, we will promote the conservation of marine and onshore biodiversity and ecosystems by promoting activities that are in line with our business, such as the promotion of international resource management and aquaculture business practices in consideration of the environment.
5. Provision of safe and secure food	We provide food that people can eat with peace of mind to tables around the world	We believe that quality is the most important factor in providing wholesome, safe, and healthy food. We will always be aware that each and every employee is responsible for quality in all processes of the value chain, from design and development, procurement, production, logistics, and sales and communication, and we will work to improve quality.
6. Food provision contributing to creating health value and sustainability	We established our brand as a top food enterprise that contributes to the creation of health value and sustainability	The Maruha Nichiro Group's philosophy is to contribute to the enrichment of people's lives by providing wholesome, safe, and healthy food. To realize this philosophy, we believe it is essential to contribute to improving the health value of consumers and to continue to provide consumers with a stable supply of sustainable food that takes into consideration social and environmental issues. The Maruha Nichiro Group will continue to provide food that contributes to the creation of health value and sustainability, thereby contributing to the enrichment of everyone's daily life.
7. Building a work environment that diversified employees can work with a sense of security	We have built a work environment where diversity is respected and employees can work with peace of mind	The Maruha Nichiro Group believes that the growth of its people contributes greatly to the growth of the Company, based on its Company Credo “People: Loyal to our people, the most important asset of our company,” and strives to respect the human rights of its employees, provide fair and good working conditions, and build a safe and comfortable working environment. We both realize diversity and inclusion by accepting and recognizing diverse human resources, while proactively investing in human resources who can play a key role in the sustainable growth of the Maruha Nichiro Group and creating an organizational culture that enables employees to demonstrate their abilities.
8. Respect for human rights in business operations	We have achieved zero human rights abuses, including forced labor, in our supply chain, including our own Company	The Maruha Nichiro Group's business activities are conducted while using marine products, agricultural and livestock products, and other blessings of nature from all over the world as raw materials. In order to conduct our business activities in a sustainable manner, we are aware that it is essential to build a supply chain that takes into consideration human rights and labor practices, such as the prohibition of forced labor and child labor, and we will promote sustainable procurement practices.
9. Development of sustainable supply chain	We are able to build a sustainable procurement network through collaboration with our suppliers.	The Maruha Nichiro Group's business activities are conducted while using marine products, agricultural and livestock products, and other blessings of nature from all over the world as raw materials. In order for the Group to carry out its business activities, it is essential to establish a socially responsible, environmentally sound, and sustainable supply chain. We will promote sustainable procurement practices, taking into consideration coexistence and co-prosperity with our suppliers.

A list of each materiality's KPIs can be found here

In the Medium-term Management Plan "For the Ocean, for Life MNV 2024" starting in FY2022, we will promote activities for each materiality and manage progress toward achieving KPIs.