Nippon Steel’s Sustainability Materiality and KPIs

Concerning initiatives in sustainability materiality, Nippon Steel steadily promotes their execution and follow-up by checking the Key Performance Indicators (KPI) to assess outcome, and strives to contribute to sustainable social development, as well as maintenance and improvement of our corporate value.

Materiality KPIs and status of major initiatives

1. Safety, environment, and disaster prevention

（1）Safety and health

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Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
  • Accident frequency rate of 0.10 or less（2023）
  • Zero fatal accident（2023）
  • Deepened education on compliance with rules and promoted human resource development to build a culture of safety.
  • Continued equipment measures based on risk assessment.
  • Reinforced the system to smoothly carry out the basic cycle of safety activities (completed acquisition of ISO 45001 certification at all works).
  • Accident frequency rate: 0.08（2023）
  • Number of fatal accidents: 1（2023）
（2）Environment

1) Promotion of climate change measures

  • Promotion of the Carbon Neutral Vision 2050

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    Target and KPI Main Initiatives and Achievements in FY2023 (including some results in 2023)
    • Target in 2030: 30% reduction in CO2 emissions
      (compared to 2013)
    • Vision for 2050: Carbon neutral
    • [Hydrogen injection into in blast furnaces]
      Confirmed the world’s highest level of 33% CO2 emissions reduction in the Super COURSE50 test furnace.
    • [Hydrogen direct reduction of iron (DRI)] [High-grade steel production in large size EAFs]
      Established HyDreams™, a base for integrated development of large size EAF and DRI production at Hasaki R&D Center, promoting the construction of test electric furnace and shaft furnace.
    • [High-grade steel production in large size EAFs]
      Started an examination of conversion from the BF steelmaking process to the EAF steelmaking process, with the Kyushu Works Yawata Area and the Setouchi Works Hirohata Area as candidate sites.
    • [CCUS]
      Participated in a survey and study of basic design of three advanced CCS projects for Japan Organization for Metals and Energy Security (JOGMEC).
    • NSCarbolex Neutral
      Inquiries and adoption expanded in various areas including the private sector (domestic/overseas construction, manufacturing) and the public sector (public civil engineering, etc.)
  • Contribution by “Three Ecos”
    • Implementation of “Eco Process”

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      Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
      • Maintaining high-level effective use of energy
      • Effective use of by-product gas (coke oven gas, blast furnace gas etc.) and waste heat
      • Use of by-product gas: 100%
      • Use of waste heat in steam generation: 75%
      • In-house generated energy use in in-house power generation: 70%
      • Promotion of adopting advanced energy-saving technology
      • Adoption of high-efficiency power generation equipment and oxygen plant: regeneration burner in reheating furnace
      • Investment cost for energy-saving: ¥9.2 bn
    • Enhancement of “Eco Products”

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      Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
      • Supply of high-performance steel products to help reduce CO2 emissions through use of their end products
      • NSCarbolex Solution: Disclosed the applicable product/technology line-ups on a dedicated website.
      • Acquired the SuMPO EPD (former Eco-Leaf) environmental label.
      • Expanded to over 100 products and technologies
      • Acquired over 60 labels that cover almost all the products
    • Contribute with “Eco Solutions”

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      Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
      • Transfer and dissemination of the world-leading energysaving technology to help CO2 emission reduction globally
      • Growing cumulative CDQ delivery record by Nippon Steel Engineering in the Group
      • 143 CDQ cumulative units (FY2022)
        (contributing to 30.44 mn t-CO2 reduction, FY2021)

2) Contribution to creation of a circular economy

  • Realization of zero emissions within the Company

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Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
  • Reduction in final disposal amount: 263 thousand tons or less (FY2025 target)
  • Promotion of recycling of by-products (slag, dust, sludge, etc.) in and out of the Company
  • Final waste disposal: 282 thousand tons
  • Realization of recycling of waste generated in society

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  • Establishment of a waste plastics recycling system to expand its collection volume
  • Aggressive promotion of recycling treatment, according to the Chemical Recycling Act
  • Packaging/container plastic waste treatment: 180 thousand tons (equivalent to 30% of Japan’s total plastic waste)

3) Conservation of biodiversity and nature positive

  • Contribution to the conservation of biodiversity and nature positive
Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
  • Promoted activities aimed at achieving the 30by30 biodiversity target
  • Chita Peninsula Green Belt, in which Nippon Steel participated, was certified as a site in harmony with nature.
  • Promoted the Creation of Hometown Forests at steelworks
  • Conducted activities of the Creation of Sea Forests
  • Certified in October 2023
  • Greenery space: 838 ha (decreased mainly due to the entire closure of the Kure Area)
  • Creation of Sea Forests at 56 spots in total (+12 spots from the previous year)

4) Promotion of environmental risk management

  • Protection of the air environment
Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
  • Maintaining low-level emissions of NOx and SOx
  • Installment of equipment that reduces SOx and NOx emissions; shifting to low-sulfur fuel; adoption of low NOx regenerating burners
  • SOx: 11 mn Nm3
  • NOx: 23 mn Nm3
  • Maintaining of lower discharge levels than voluntary targets in chemical substances
  • Emission of VOC (Volatile Organic Compounds): 1,106 tons/year (down 30% vs. FY2000)
  • Emission of benzene: 172 tons/year
    (voluntary target, along with the government target)
  • Continual efforts based on the voluntary reduction plan
  • VOC: 509 tons/year
  • Benzene: 69 tons/year
  • Water environment preservation

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  • Recycling of water; high-level stable use of recycled water
  • Water treatment, recycling and reuse of freshwater used by the Company
  • Use of recycled water: app. 90%
(3) Disaster prevention
  • Elimination of disaster risks and group-wide sharing of effective measures
Target and KPI Main Initiatives and Achievements in 2023 (including some results in 2023)
  • Zero serious disaster-related accident (2023)
  • Promoted activities to prevent recurrence and prevention of disaster-related accidents based on risk assessment
  • Promoted initial response training aimed at minimizing damage when a risk occurs
  • Implemented various monitoring (audits) as a survey of disaster prevention activities. Evaluation of disaster prevention activities through third-party monitoring, hearings from head office management, and self-monitoring by steelworks disaster prevention managers
  • Serious disaster-related accidents: 1 (2023)

2.Quality

(1) Quality control and guarantee
Target and KPI Main Initiatives and Achievements in FY2023
  • Systemization and automation aimed at more credibility in testing and inspection
  • Continuing a shift from manual data input to automatic data input as a measure to prevent input errors and falsification of pre-shipment judgment data
(2) Research and development and intellectual property investment/utilization
Target and KPI Main Initiatives and Achievements in FY2023
  • Promotion of strategic research and development aimed at sustainable business growth
  • Respect for intellectual property and enhancement of its strategic protection and utilization
  • Actively promoted research and development related to priority issues such as product sophistication, process efficiency improvement, and the development of carbon-neutral-oriented innovative processes
  • Promoted utilizing intellectual property by strengthening patent applications related to priority issues, response to infringement of patent rights, technical tie-ups, and other means
  • R&D expenses: ¥72.7 bn (consolidated)
  • The number of patents held: app. 33,000
    (15,000 in Japan and 18,000 overseas)
(3) Solution that result in customer satisfaction
Target and KPI Main Initiatives and Achievements in FY2023
  • Number of awards from customers, government, and institutions
  • The 70th Okochi Memorial Production Prize
  • The 56th Ichimura Prize in Industry against Global Warming for Distinguished Achievement
  • The 2024 Commendation for Science and Technology by the Minister of MEXT
  • The 2024 National Commendation for Invention
  • Number of awards from customers, government, and institutions: 10

3.Production

(1) Stable production and supply
Target and KPI Main Initiatives and Achievements in FY2023
  • Initiatives for more stable production and supply (hardware and software)
  • Enhancement of the stable supply system by promoting measures to expand the electrical steel sheet capacity and improve quality in Setouchi Works Hirohata Area and Kyushu Works Yawata Area
  • Standardization of veterans’ operational skills and extended use of experts
  • Use of IoT and AI for operational support, improved efficiency of facility inspection and operation monitoring, and reinforcement of predictive monitoring

4.Human resources, and diversity & inclusion

(1) Human resource development
Target and KPI Main Initiatives and Achievements in FY2023
  • Promotion of measures to develop human resources
  • Promoted various measures to maximize human resources to enhance their productivity and technological advancement
  • Hours of training and education: 990 thousand hours/year (35 hours/person, year)
(2) Diversity & inclusion
Target and KPI Main Initiatives and Achievements in FY2023
  • The number of female employees in management positions: at least 2 times, (vs. 36 in FY2020), and 3 times as target in 2025; at least 4 times, and 7 times as target by 2030
  • The ratio of paid holidays taken: 75% or higher
  • Wellness management aimed at maximizing people’s ability up to the age of 65, and support to enhance mental and physical health
  • Continued to actively recruit women, implement measures to improve the retention rate, support career development and work-life balance, and provide education for supervisors
  • Continued to expand the system and improve the environment to realize flexible work styles and holidays
  • Continued various initiatives to promote mental and physical health
  • Number of women in managerial positions: 70 (as of April 2024)
  • The ratio of paid holidays taken: 86.2%
    (FY2023)
(3) Respect for human rights
Target and KPI Main Initiatives and Achievements in FY2023
  • Identification of adverse human rights impacts and establishment of human rights due diligence mechanisms to prevent or mitigate them
  • Appropriate response for corrective actions or remedy, if it becomes clear that our business activities have caused or contributed to a negative impact on human rights
  • Established the Nippon Steel Group Human Rights Policy, based on the recognition that respect for all human rights is fundamental to corporate activities
  • Conduct business activities ethically while fully respecting human rights

5. Together with local communities

(1) Environmental preservation/creation activities in communities
Target and KPI Main Initiatives and Achievements in FY2023
  • Green space development to contribute to the local environment
  • Funding for green space development and maintenance
  • Expenses for green space development and maintenance: ¥1.3bn
(2) Activities mainly in the support of education, sports, and arts
Target and KPI Main Initiatives and Achievements in FY2023
  • Ongoing promotion of hosting plant visits
  • Proactively accepting plant visits by shareholders, investors, and junior high/elementary school students
  • Number of plant visitors: app. 70,000
    (FY2023 results)
  • Continual support of music culture via Nippon Steel Arts Foundation
  • Support of music culture via presentation of Nippon Steel Music Awards and operation of the Kioi Hall

6. Corporate value enhancement and profit distribution

(1) Securing of profit and enhancement of corporate value
Target and KPI Main Initiatives and Achievements in FY2023
  • ROS of 10% (FY2025 plan target)
  • ROE of 10% (FY2025 plan target)

Please see the following: Integrated Report

“Financial Strategy”(21.3MB)

“FY2023 Operating Results, FY2024 Forecasts and FY2025 Outlook”(21.3MB)
  • ROS 9.8%
  • ROE 12.3%
(2) Profit distribution
Target and KPI Main Initiatives and Achievements in FY2023

1) Salary and wages payment to employees

  • Bonus payment amount
  • Revised amount of salary

Additional facts “Wage and bonus”

https://www.nipponsteel.com/en/factbook/2024/09-02.html
  • Base bonus amount: ¥2.30 mn (FY2024)
  • Revised amount of salary:+ ¥35,000 (FY2024)

2) Appropriate tax payment

  • Tax payment (consol.)

Policy on taxation

https://www.nipponsteel.com/en/csr/tax/index.html
  • Tax payment (consol.): ¥126.5 bn

3) Dividend payment to shareholders

  • Dividend payment

Note: Target consolidated payout ratio: around 30% (FY2025 management plan)
  • Dividend per share: ¥160/year

Thorough implementation of compliance

Adhering to laws and regulations as a base of all activities

Please see the following: Integrated Report

“Corporate Governance Structure”(21.3MB)

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