Why Nissui, a pioneer in TNFD disclosure, was able to issue its report early on (Part 2)

In October 2023, five rooms Responsible for publishing "Nissui Group TNFD Report 2023"Nissui Co., Ltd. Mr. Akihiko Nishi, General Manager of the Sustainability Promotion Department. In the first part, we asked him about what prompted him to take on the TNFD (Task Force on Nature-related Financial Disclosures) ahead of other fisheries companies, and what he discovered through the project. (Part 1Read more

In Part 2, they talk about the challenges they faced as pioneers, the reaction they received from stakeholders, challenges they face toward sustainability, and their outlook for the future.

Unexpected reactions from a variety of stakeholders

--It must have been difficult to create a TNFD report, something that no one had done before.

I read the TNFD's final recommendations and accompanying materials at the draft stage, but of course it was all in English, which made it difficult to understand and took a considerable amount of time. Assuming that there would be changes when the recommendations were finalized, we made provisional preparations and then reviewed them after the final recommendations were published. Although we had been preparing for disclosure, we had not initially decided to disclose them, as we thought it would be better to wait until we had a proper understanding of "what is truly required." As I mentioned in the first part, the decision to disclose was prompted by comments made by speakers on the second day of the program at TSSS2023, and we reviewed everything and published the report in December 2023.

What kind of reaction did you get from people who read the report?

We received contact from a wide range of stakeholders, from investors and financial institutions to NGOs, academia, and government agencies, regardless of field, and received many requests for interviews and lectures. We were surprised to receive multiple approaches from overseas. People came to Japan to meet with us, and it felt like our world had suddenly expanded with just one report.

In addition, an explanatory meeting for investors was held the month after the issuance, and was attended by about 40 domestic investors. During the question and answer session, a securities analyst asked, "How do nature-positive initiatives like TNFD lead to economic value?"

I felt frustrated that I was unable to provide a quantitative explanation at this point, but I believe that not only our company, but any company around the world, has yet to clearly demonstrate the relationship between TNFD and economic value.

The tough questions asked at the information session were good training in a way, and also an opportunity to reaffirm the expectations from various parties. In the post-event survey, we received messages of support from institutional investors with a long-term perspective, which motivated us for the future.

Meeting with overseas experts: Mr. Nishi (third from the left), Professor Jan Bebbington of Lancaster University, UK (third from the right), and Dr. Neytullah Ciftci (center)
(Image provided by Nishi)

-Have you seen any concrete results since publishing the TNFD report?

In March 2025, Sumitomo Mitsui Trust Bank will provide "Nature Impact Finance"* 6We have concluded a loan agreement for this first nature-themed financial product. The loan is conditional on monitoring the project's targets, such as the "sustainable procurement ratio" and "procurement volume of endangered species," which are set based on the content of the TNFD report. I think this is a groundbreaking example of a company and a financial institution working together to contribute to the development of a sustainable society.

*6 Evaluates the impact that business activities of companies and other organizations have on nature, and encourages companies to enhance information disclosure based on TNFD, etc. Supports companies' efforts to protect nature and contributes to the development of a sustainable society.

Issues surrounding sustainable seafood revealed by the TNFD

--A goal has been set to make sustainable seafood mainstream by 2030. What do you think is necessary?

I think there are three major reasons.

The first is awareness. Companies need to recognize their dependency on the ocean and incorporate nature issues into their management.

The second is "collaboration." The ocean is connected to countries around the world, and also to rivers. The TNFD has a concept called the landscape approach. In the case of the ocean, I think it is called the seascape approach, which is a method of integrated management and planning of the entire region while simultaneously considering multiple goals of ecosystems, society, and the economy. Collaboration among stakeholders in the region, not just individual companies, will be the key to solving the issues. However, this is easier said than done, and I think it will be very difficult to reach a consensus when there are complex interests involved.

Nissui is a participant of SeaBOS (Seafood Business for Ocean Stewardship, an initiative aimed at sustainable seafood businesses). The photo shows the 2023th SeaBOS Conference held in Busan in October 10 (Image provided by Nishi).

The third is "regulation." Even if we say "let's be considerate of nature," we won't see much progress if we leave it up to individual awareness. To significantly change people's behavior, some kind of regulation is needed. In other words, I think it is necessary to put a price on the burden on society and the environment, "internalizing external diseconomies."

For example, when plastic bags were made to cost money, 7-8% of people refused them. When they were free, it was only about 3%, so a mere 3 yen charge moved about 50% of people. In the same way, I think that sustainable seafood can solve some problems with the power of a small amount of money. At the same time, I think it is very important to recognize that "nature is not free."

TNFD is a tool for dialogue

-How do you plan to develop the TNFD report?

The TNFD aims to shift the global flow of finance towards nature from negative to positive outcomes - in other words, to use the power of money to change the state of nature from negative to positive.

Although we have been disclosing information in accordance with the TCFD since 2022, we have not had many opportunities to meet with investors and stakeholders based on the contents of the TCFD. However, we feel that the TNFD has become a tool for dialogue with investors.

Going forward, it will be important for us to deepen the understanding of our company among many stakeholders through TNFD and use this to encourage investment and lending. I believe that the ideal form for our company is to provide feedback to management and business divisions on areas where we are lacking, and to develop and implement nature-positive strategies.

One step at a time, starting with what we can do now

-Finally, please give some advice to the next generation of ocean leaders.

I think it's okay to just take things one step at a time, starting with what you can do, without trying to be perfect. If you try to strive for perfection, you'll only notice the things you can't do and you'll get stuck.

No one would like to run a marathon without a goal, right? But I think you can make progress by taking one step at a time, starting with what you can do now, and taking one step today compared to yesterday.

I think it is important for Nissui to continue to steadily move forward with each and every initiative. I would be delighted if, by taking the first step in the industry, more companies would follow in our footsteps, and eventually this would become a big wave that could move the entire industry.

Akihiko Nishi
Joined Nippon Suisan Kaisha, Ltd. (now Nissui Co., Ltd.) in 1993. Since joining the company, he has mainly worked in the frozen food business in the food division. In 2020, he was transferred to the CSR Department (now the Sustainability Promotion Department) and was involved in formulating the company's mission and rebranding. In 2023, he published the "Nissui Group TNFD Report 2023." He is currently in charge of TNFD and human rights, and oversees Nissui's sustainability in general.

Written by: Ryoko Nakagawa
After working as a practical and research assistant for environmental education courses for citizens at a university, she became a freelancer in 2023. She is a staff member at Sakanayamarukama, a cooperative fish sales outlet that connects the local community. She is also a member of the Science Readings Research Association newsletter editorial department. She writes while being involved in science education and environmental education.