Disclosure in Line with TNFD Recommendations
In recent years, the loss of biodiversity and the degradation of natural capital and ecosystem services have become increasingly severe worldwide, raising concerns about their potential impact not only on society as a whole but also on corporate management over the medium to long term. We place particular importance on understanding and addressing the impacts that the loss of natural capital may have on our business activities, and we are advancing initiatives toward achieving a Nature Positive society while enhancing information disclosure in alignment with the TNFD (Taskforce on Nature-related Financial Disclosures) recommendations. This page provides an overview of our disclosures, and the full text can be downloaded as a PDF from the link below.
Governance
The Sustainability Committee defines material issues related to the Company’s sustainability, deliberates on the progress of these initiatives, and reports important matters to the Board of Directors. The Committee also identifies and evaluates nature-related risks and opportunities, and conducts discussions on the promotion of corresponding initiatives.
Strategy
We have adopted the LEAP approach (Locate, Evaluate, Assess, Prepare) recommended by the TNFD to identify and understand our Group’s dependencies and impacts on natural capital resulting from business activities, as well as the related risks and opportunities.
The following section explains, in sequence, the identification and evaluation of dependencies, impacts, risks, and opportunities associated with “Strategy,” one of the four pillars of the TNFD.
Locate: Identify the organization’s interfaces with nature
Identifying Dependencies and Impacts
First, we organized our business value chain and defined the scope to include the building and civil engineering businesses, which have significant impacts on natural capital, as well as upstream activities such as construction materials. We then prepared an initial summary of the dependencies and impacts of these activities on natural capital (ecosystem services). The light green shaded areas in the table below indicate the scope of this disclosure.
【Value-Chain Mapping】
【Dependencies／Impacts on Natural Capital】
Identification of Priority Locations
In assessing regional characteristics, analyses were conducted for direct operational sites using tools such as IBAT and WRI Aqueduct. In addition, recognizing the necessity of incorporating the Company’s unique perspective, a working group engaged in extensive discussions to integrate both internal insights and external assessment results.
As a result, priority locations were comprehensively identified by considering both “Sensitive locations” and “Material locations” in relation to significant dependencies and impacts on nature.
Taking into account both “sensitive” and “material” locations, the Company identified eight priority locations in total—two building construction projects, five civil engineering projects, and one satoyama conservation and management site.
【Priority Locations】
Evaluate: Assessment of Material Dependencies and Impacts
Identification of Significant Dependencies and Impacts
Civil engineering projects (road and railway construction) and building construction projects (new developments) located within the previously identified Priority Locations were used as model cases to assess the Company’s material dependencies and impacts on natural capital.
In the upstream value chain, given the difficulty of identifying sourcing regions, the assessment was conducted using ENCORE for target materials such as timber, cement, sand, and steel.
【Degree of Dependency on Natural Capital in construction materials】
【Degree of Impact on Natural Capital in construction materials】
Assess: Evaluation of Nature-related Risks and Opportunities
Scenario Development
To assess how risks and opportunities arising from changes in biodiversity and ecosystem services may affect the Group, scenarios were developed based on the two axes of transition risk and physical risk as illustrated in the TNFD recommendations.
- Transition Risk: Heightened societal and regulatory attention to natural capital.
- Physical Risk: Severity of ecosystem service degradation and biodiversity loss.
【Assumed Scenarios】
Risk and Opportunity Assessment
The risks and opportunities identified as material to the Group are as follows.
Prepare: Management Responses and Disclosure
Specific Initiatives within the Group
The TNFD Report presents specific initiatives undertaken by the Group to mitigate nature-related risks and enhance nature-related opportunities.
Through these initiatives, the Group seeks not only to contribute to the conservation of the natural environment and biodiversity, but also to strengthen long-term resilience and create new business opportunities.
Risk and Impact Management
Based on the LEAP approach, the Group has identified its dependencies and impacts on natural capital arising from its business activities, as well as the associated nature-related risks and opportunities.
These management responses are integrated into each business unit’s short-term strategy to advance implementation. The Group manages risks by monitoring progress on a quarterly basis.
Metrics and Targets
To quantitatively assess the Group’s impacts and dependencies on natural capital and biodiversity, reference is made to the Core Global Disclosure Indicators and Metrics set out in the TNFD recommendations.
The alignment with the Core Global Disclosure Indicators and Metrics is presented below.
| Metric no. |
Driver of Nature Change | Indicator | Metric / Reference |
|---|---|---|---|
| C1.0 | Land / Freshwater / Ocean-use Change | Total Spatial Footprint | ー |
| C1.1 | Land / Freshwater / Ocean-use Change | Extent of Land / Freshwater / Ocean-use Change | |
| C2.0 | Pollution / Pollution Removal | Pollutants Released to Soil split by type | |
| C2.1 | Pollution / Pollution Removal | Wastewater Discharged |
|
| C2.2 | Pollution / Pollution Removal | Waste Generation and Disposal |
|
| C2.3 | Pollution / Pollution Removal | Plastic Pollution |
|
| C2.4 | Pollution / Pollution Removal | Non-GHG Air Pollutants |
|
| C3.0 | Resource Use / Replenishment | Water Withdrawal and Consumption from Areas of Water Scarcity |
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| C3.1 | Resource Use / Resource Renewal | Quantity of High-risk Natural Commodities Sourced from Land / Ocean / Freshwater |
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| ー | Supplementary Metric | Creation and Conservation of Green Areas |
|