Human resources are NRI’s most important asset. I feel that a low ratio of female managers could mean that half of NRI’s overall human resources is being ignored. Would this not be a significant loss for NRI? To raise the ratio of female managers to a global level, there is probably a need to invest in in-house development of female employees.

When recruiting personnel, there are some Japanese companies that hire people into either non-career positions or career positions. The desirable state would be one in which there are no disparities found when looking at gender pay gap data for personnel in career positions. If disparities are found, then thought should be given to what can be done to correct the situation.

If personnel are divided into non-career and career positions, then further divided into age groups, then it is only natural that there would be no gender pay gap within the subdivision. Then why do disparities arise? It is not necessarily an indication that equal pay is not being made for equal work. It means that equal work is not being given. In other words, there is a difference in the ratio of men and women between non-career and career positions, and that is linked to the gender pay gap.
Today, disparities exist at any company. In fact, the gender pay gap has not been corrected even at companies abroad.
I see the disclosure of the gender pay gap for a company overall as the ideal. It is better to disclose averages according to management classifications and the overall average. This is because pursuing the reason for disparities will help in the understanding of where any unconscious biases are present.

In considering the linkage of the sustainability performance and the compensations of member of the Board, I felt that the case of an IT firm in Europe was the most useful reference. Its Board of Directors has committed to the promotion of sustainability, this has been integrated with the management strategy, and targets have been set. External disclosure has been made, and they have gone on record with an improvement idea toward the next fiscal year. At that company, the results of employee engagement are used when determining the compensation amounts of members of the Board.
Rather than simply making the adoption of specific ESG indicators an element for determining compensations, investors believe that it is better to link the compensations of members of the Board to indexes that are linked in real terms to corporate value, such as in the case of that company.

Rather than simply linking compensations with sustainability indexes, it is because the scenario of the Board of Directors committing and integrating sustainability into the strategy is present that there is significance to linking sustainability to compensations at the end. Important points are not only the compensation but also what the Board of Directors commits to.

Since last year, the NGO organization that I belong to has also been linking sustainability performance with the compensation of Board members. Overseas, similar undertakings have already begun, not only at private enterprises but also at NGOs.

When making nature sustainable, response must be made to multiple elements, much in the same way that environmental NGOs have been doing so up to now individually. So, the use of a variety of indicators will probably be adopted. I think that industry type and business category and environmental issues will be the matrices under which discussions will move forward. In the case of NRI, the points when building data centers will probably be where it will be built, how it will be built and what kinds of materials will be used.
If you look at the TNFD from the aspect of business risk or opportunity, I think the opportunity element is stronger for NRI. The ways and areas in which businesses have an impact on nature differ according to the industry and business category - for example, antibiotic substances, forest resources, and aquatic resources, to name a few, in the case of agriculture and animal husbandry. A paradigm shift is indeed about to begin, so consulting will become necessary. There are expectations toward the research and support of think tanks and consulting firms on what needs to be done to protect nature.

I get the sense through exchanges with asset owners here in Japan and abroad, that in regard to expectations toward Japanese companies, many investors are looking at the kind of a growth scenario, in accord with sustainability, the companies have created in their management reform . Recently, there has been a global increase in ESG activists who take up causes related to the environment or society when there are problems with a company. I think that going forward, as sustainability becomes implemented as a part of management strategies, a company will be evaluated on the basis of the balance it is able to maintain between responding to the claims of activities and corporate performance.

Since NRI is on the procurement side of such energy, you probably need a mechanism for fostering the suppliers of renewable energy at the same time. Various regions are trying to create procurement platforms for renewable energy.
However, there is a problem if a major corporation from Tokyo cuts down a regional forest to install solar panels. Renewable energy procurement needs to be discussed together with the resolution of regional issues. The energy produced in a region should be procured within the same region, and such revenues should be returned to the region.

In terms of enabling social value co-creation by NRI as well, the renewable energy procurement should be made with additionality^*. In the U.S. and China, the price of renewable energy became cheaper than coal around five years ago. In other words, Japan is significantly behind other countries in terms of renewable energy. I think this is because demand was not developed alongside the supply of renewable energy. Even if NRI procures renewable energy with additionality, the amount consumed by NRI may not be large enough to have much of an impact on society. However, I do think that it would have a very large impact in terms of what it communicates externally. Japan may be behind in the world, but even so, you should be ahead of others within Japan.

• *

  Additionality：Having the Effect of Creating New Renewable Energy

At Takasaki City University of Economics, there are those students who are interested in ESG, and students who do not know about ESG. I feel there is bipolarization. However, there are now classes on the SDGs at junior and senior high schools. Takasaki City University of Economics, too, offers special lectures on the SDGs. I think that student awareness regarding ESG will become even stronger in the next few years.
Students seem to be looking at companies from three aspects: corporate philosophy, how pleasant the working environment is, and financial performance. These days, students are extremely concerned about the quality of the work style. That is why they seem to avoid highly restrictive companies, such as those that require long working hours, or where employees must follow every single order.

The growing attitude among students and youths in the U.S. is to not want to work for a company that is not undertaking sustainability effort.