Disclosure of information under the TNFD
Kajima recognizes that addressing environmental challenges, including biodiversity, is one of its key management issues. It has therefore set “Contributing to society's transition to a carbon-free footprint" as its material issues, in which it also addresses harmonious coexistence with nature.
In August 2023, the Company endorsed the principles of the Taskforce on Nature-related Financial Disclosures (TNFD) and joined the TNFD Forum.
The full TNFD framework is expected to be published in September 2023. Ahead of this, Kajima has conducted a pilot project to identify and assess nature-related risks and opportunities and consider responses for its own direct operations and the supply chain for cement, a key construction material, in accordance with the TNFD Beta Framework (v0.4) that was released in March 2023.
Identifying the dependence and impact of key business activities on nature-related factors and selecting targeted business activities
First, five business activities (construction projects for offices (public/private), etc.; flood control; offshore wind power construction; road construction; and management and operation of overseas hotels) were selected as Kajima's main activities and considered to have many links with biodiversity. The relationships between the business activities and natural capital and biodiversity were then organized based on dependency and impact screening criteria. Next, a heat map was created using dependency and impact as the vertical and horizontal axes to select business activities for priority assessment. The project with the highest dependency and impact was the overseas hotel project. However, after considering the scales of the projects, the project activity with the highest overall impact, "Construction of offices (public/private), etc.," was selected as the target project activity.
Identifying and assessing nature-related risks and opportunities for the targeted business
Next, the LEAP approach advocated by TNFD was applied to the selected "Construction of offices (public/private), etc." to locate natural interfaces, diagnose dependencies and impacts on nature, assess risks and opportunities, and consider responses. "LEAP" is an acronym for the four phases of Locate, Evaluate, Assess, and Prepare. The LEAP approach covers the entire supply chain, but for this pilot, five key building materials were selected for the upstream part of the supply chain, of which "cement," a typical material in the construction industry, was selected and targeted.
Through the above approach we have identified the risks, opportunities, and mitigating actions set out in the table below.
| Risks and opportunities | Countermeasures | ||
|---|---|---|---|
| Natural risks | Direct Business | Damage to the ecosystem caused by construction |
|
| Supply Chain | Damage to the ecosystem caused by resource mining |
|
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| Transition risks | Supply Chain | Decrease in the supply amount and cost increase due to more stringent mining restrictions |
|
| Accused of causing damage to the ecosystem at resource mines (reputation damage) |
|
||
| Physical risks | Supply Chain | Occurrence of disasters due to mining (such as landslides) and decrease in the supply amount |
|
| Opportunities | Direct Business | Expansion of ecosystem regeneration and mitigation markets |
|
| Supply Chain | Cement saving technologies to address the decrease in the supply amount |
|
|
* The supply chain analysis was only conduced for cement materials.
Regarding direct business risks, the results confirmed that the environmental management system during construction is effective, while for cement supply-chain risks, the results showed that risk management using indicators is a challenge. In terms of opportunities, the results suggested that the development of environmental remediation technologies and alternative cement products would be effective.
In the future, Kajima will work towards applying the full version of the TNFD framework, including setting strategies and targets related to natural capital while taking societal demands such as Nature Positive into account.
