CSR activities in FY2020
Third-Party Opinion
NTN Report 2021 third-party opinion
Vice Dean and Professor, School of Business Administration, Kwansei Gakuin
University
Chika Saka
Profile:
After working as a full-time lecturer and assistant professor (associate
professor) at the School of Business Administration, Kwansei Gakuin University, she has
been a professor since 2008.
Currently, she is a member of the Science Council of
Japan, a member of the Osaka Prefecture Environmental Council, a member of the Osaka
City Environmental Council, and a managing director of the Accounting and Economic
Association of Japan. She received the Japan Accounting Association Award. Her
publications include "Environmental Accounting" (Tokyo Keizai Publishing Co., Ltd.),
etc. in the book.
Fiscal 2020 was a challenging business environment for many companies. Under such circumstances,
NTN identified materiality and established its Human Rights Policy in fiscal 2020. In addition,
NTN launched the new Medium-term Management Plan and supported TCFD recommendations under the
leadership of the new President in fiscal 2021, and accelerated its transformation.
13
items of materiality were identified in light of the United Nations Global Compact signed in
2015. By clearly distinguishing between positive (Strengthen positive impacts) and negative
(Reduce negative impacts), opportunities are acquired through the creation of original
technologies, social cost reductions and risk aversion, and social contribution by steadily
achieving the expectations of society as a global company is included in a well-balanced manner.
It seems favorable that 10 out of 13 items are allocated to reducing negative impact, and for
each of the 10 items, the "NTN Report 2021" reports on one or two pages of substantial efforts.
Another feature is that 7 out of 13 materiality items are "social." Japanese companies tend to
have lower scores for social items than overseas companies, but 10 pages are included in social
items in the NTN Report 2021. In particular, various responses throughout the supply chain based
on the newly established Human Rights Policy are advanced.
As shown on page 102 of the NTN
Report 2021, NTN is included in many SRI/ESG indexes. As of July 2021, FTSE Russell ESG
Ratings*, NTN's overall ESG score is ranked in the top 28% of Japanese assessed
companies. Among ESG, NTN has earned a great reputation for the environment, and in terms of
materiality, NTN emphasizes on society, therefore we expect to see an improvement in the
"Social" evaluation in the near future.
Meanwhile, the trend toward mainstreaming ESG investments has increased the demand for both
financial performance and ESG performance. The strong market capitalization of NTN's shares
reflects the valuation for NTN's ability to generate future income that can be expected through
the detailed value creation story that top management talks directly, and a detailed analysis of
the risks and opportunities surrounding NTN and its countermeasures. Furthermore, in order to
realize NTN's social contribution through creating technologies and developing new products over
DRIVE NTN100's long term, we expect to communicate how to seize new business opportunities and
strengthen the financial base. For that, scenario analyses that have already been addressed in
line with TCFD recommendations are also useful. Carbon neutrality is a growth strategy as well
as a measure to combat global warming, and is expected to promote domestic industries. The draft
of the government's Basic Energy Plan, announced in July 2021, indicates that renewable energy
will account for 36-38% of total power generation in fiscal 2030. While remaining uncertain,
NTN's wind power generation products, other natural energy products and EV related products
which are expected to expand, have significant potential to bring new business opportunities
involving other companies.
In addition to the Comparison Table for GRI Standards web disclosure, NTN Report 2021 also has
begun disclosing information based on the disclosure standards of SASB Standards, making it
easier to obtain KPI information. With regard to ESGs and SDGs, rather than responding to all of
the related requirements, I think it is increasingly important to identify which demands to
focus on and respond to and express this to stakeholders in order to achieve the company's
philosophy. Looking ahead to the next 100 years, we are in an age of increasingly demanding
management based on purpose, and I look forward to NTN's initiatives being developed based on
the “Frontier Spirit” and the “Coexistence and Co-prosperity Spirit” that have been valued over
the past 100 years.
*ESG rating by FTSE Russell. Assessment of the business's ESG risks and the company's commitment to them.
Response to the third-party opinion
Executive Officer CSR Headquarters Toshinori Shiratori
We would like to thank Professor Saka for her valuable opinions.
Through the practice of our corporate philosophy, we aim to contribute to the resolution of social issues surrounding the world and realize a "NAMERAKA society" where people can easily lead a secure and fulfilling life. In fiscal 2020, we identified that we should prioritize materiality in order to achieve the SDGs targets. We received evaluations about how to approach each materiality, and were confident in our efforts so far. We will utilize the recommendations that should be important to promote ESG in future initiatives.
In addition, regarding the expression of our support of TCFD recommendations, by utilizing scenario analysis, we will link it to materiality measures and targets, such as efforts to achieve carbon neutrality in our business and contribution to a carbon-free society through our products and services. We will sincerely listen to the valuable opinions we have received and strive to increase corporate value over the medium- to long-term.