After endorsing the TNFD recommendations in February 2023, the Company has announced early adoption. as a
TNFD Early Adopter in January 2024. The initial disclosure for FY2024 based on the TNFD recommendations
encompasses Shimizu Corporation's construction, real estate investment, and green energy businesses,
including the solar power generation business while considering the financial impact of our business.
This page is an overview of our disclosures. You can download the full text as a PDF. The full text
also contains comments from experts about future issues relating to the disclosure contents.
TNFD Recommendations: Thematic Areas of Nature-related Information Disclosures
| General requirements | General requirements relating to disclosures |
|---|---|
| Governance | The organization’s governance around nature-related risks and opportunities |
| Strategy | Identification of dependencies and impacts in
business, materiality issues, and our response Analysis of risks and opportunities with scenario analysis and assessment of the degree of impact Strategy to be nature positive （efforts for Environmental KY（Kiken Yochi）and sustainable formwork plywood） Identification of priority locations |
| Risk and impact management | Methods used by the organization to identify, manage and assess nature-related risks |
| Metrics and targets | Disclosure of the global core metrics in the TNFD recommendations |
General requirements relating to disclosures
| 1.The application of materiality | Concept focusing two impacts: financial impact on our company and the impact of our activities on nature |
|---|---|
| 2.The scope of disclosures | Disclosures in fiscal 2024 will cover the upstream, direct operations and downstream of three businesses: construction business in Japan, real estate development business in Japan and solar power generation business in Japan |
| 3.The location of nature-related issues | Construction business: Construction sites Real estate development business: Facilities we own Solar power generation business: Solar power plants in operation |
| 4.Integration with other sustainability-related disclosures | Conduct TNFD scenario analysis jointly with TCFD scenario analysis members to understand the mutual impacts and then state them in their respective disclosure documents |
| 5.The time horizons considered | Short-term: 3 years or less / medium-term: 10 years of less / long-term: over 10 years |
| 6.Stakeholder engagement | Engage in business activities while emphasizing engagement with regional communities in accordance with the Shimizu Group Basic Human Rights Policy（Only in Japanese） and Code of Corporate Ethics and Conduct（Only in Japanese） |
Governance
We have built a governance structure centered on the Sustainability Committee (Chairperson: President) in
the same way as with climate-related issues.
Furthermore, the Group has established the Shimizu Basic Human Rights Policy. We have also established
an external whistleblowing hotline for subcontractors.
We also recognize the importance of collaborating with local communities to minimize nature-related
risks and implement effective conservation and restoration measures. In addition to measures during the
construction work period we have been taking since previously, we are grasping nature-related issues in
areas around construction sites at an early stage with the Environmental KY (Kiken Yochi) initiative.
Environmental KY (Kiken Yochi)
Shimizu Group Governance Structure for Environmental Issues
Strategy
（1）Identification of Dependencies and Impacts on Nature（Ecosystem Service）
We used the ENCORE nature-related risk analysis tool recommended in the TNFD recommendations to grasp the relationship between our businesses and natural capital. We analyzed the construction business, real estate development business and the solar power generation business in our green energy development business in consideration of the financial impact on our company.
Summary of the Dependencies and Impacts on Nature (Ecosystem Service) in the Three Businesses
（2）Identification of Important Issues in Businesses
Identification of Important Issues in the Upstream
We compiled our response after organizing the volume of procurement items we handle and the product raw materials in addition to the results of the analysis on the dependencies and impacts in identifying the important issues in the upstream of our businesses. We then established measures and target values relating to the procurement of sustainable formwork plywood.
Efforts to Use Sustainable Concrete Formwork Plywood
Response to Procurement Items with a High Degree of Priority
| Item | Manufacturer and Raw Materials Flow | Size of the Supplier | Our Response |
|---|---|---|---|
| Steel Material | ・Steel Manufacturers ・Raw materials are imported or recycled |
Large company | Encourage with CSR procurement questionnaires and cooperate where necessary |
| Cement | ・Cement Manufacturer ・Lime is domestically produced |
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| Glass | ・Glass Manufacturers ・Raw materials are domestically produced or imported |
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| Aluminum | ・Manufacturer (sash etc.) ・Raw materials are imported or recycled |
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| Ready-mixed concrete | ・Ready-mixed concrete factory near the
construction site ・Gravel and sand are collected domestically ・Using wood for formwork |
Regional SMEs | Collaborate for improvements by supplying technologies and information |
Identification of Important issues in Direct Operations
We began efforts to mitigate and reduce our impact on the natural environment in response to the impact changes in land use have on terrestrial ecosystems. We are comprehensively grasping the natural state of places and the potential for nature-related risks looking at all construction sites currently in operation and planned projects.
Environmental KY (Kiken Yochi)
Identification of Important Issues in the Downstream
An important issue in the downstream of our businesses is construction by-products. Our entire company is promoting the 4R activity (refuse, reduce, reuse and recycle).
Efforts to Reduce Construction By-products
（3）Identification of Risks and Opportunities Based on Scenario Analysis
In addition to the TCFD working members, employees, including those in finance as well as in upstream (procurement) to downstream (by-product management) departments, conducted scenario analysis using the four quadrant scenarios in the TNFD recommendations.
Scenario Analysis Results (Selection of the Scenarios with the Greatest Degree of Impact on Our Businesses)
| Business scope | Matter | R：Risks O：Opportunities |
Degree of Impact | Timing | Shimizu’s Response | |
|---|---|---|---|---|---|---|
| Upstream | Demand for traceability and environmental | R | Competition resulting from market consolidation, price increases, and quantity limitations | ↓↓ | Short to medium-term |
|
| O | Securing an advantage through new technology | ↑↑↑ | Short to medium-term |
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| Difficulty and instability in obtaining construction materials (disasters and resource depletion) | R | Unclear and unstable material prices and construction delays | ↓↓ | Short to long-term |
|
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| O | Rebuilding and strengthening the supply chain and securing an advantage through new technology | ↑↑↑ | Short to long-term |
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| Direct operations | Tight restrictions on land modification and a fundamental review of land use | R | Decrease in new construction demand | ↓↓↓ | Long-term |
|
| O | Increase in renovation and renewal work and implementation of nature-friendly and reclamation projects | ↑↑ | Long-term |
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| Tighter nature-related regulations and monitoring at construction sites | R | Reputational risk and brand damage | ↓↓ | Short to long-term |
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| Downstream | Demand for evaluation and monitoring of natural performance*5 | R | Prolonged construction responsibility, increase in post-construction work, and increase in management workload | ↓↓ | Short to medium-term |
|
| O | Technology that realizes natural performance*5 for differentiation | ↑↑ | Short to medium-term |
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| Strong demand for recycling, including regulation of total emission | R | Tight restrictions from design stage | ↓↓↓ | Long-term |
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| O | Demolition technology directly ties into construction skills | ↑↑↑ | Long-term |
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- Our self-propelled SEP vessel with one of the world’s largest loading and crane capacities
- A building operating system equipped with a building operation digitalization platform function for easily linking and controlling equipment and IoT devices inside the building with various applications
- A hydrogen energy utilization system for buildings that electrolyzes water using surplus renewable energy, stores the generated hydrogen in a storage alloy, and then extracts it as needed to generate electricity
- A business concept where the blessings of nature are returned to the whole region by developing infrastructure while making wise use of the functions of nature and adding the software and technology of the Shimizu Group
- This is the ability to show how effective selected construction methods and measures are for targets when targets have been set for the state of nature and construction methods and measures have been taken to achieve them. For example, this is the ability of small animals to actually be able to move by setting up migration routes for them and the ability to achieve a lower impact than existing construction methods by selecting a construction method which reduces the impact on bird roosts.
- A system that enables efficient and integrated management of construction by-products, including forecasts of the amount of by-products generated by type, presentation of reduction options, issuance of electronic manifests, and management of company-wide by-product emissions
（4）Shimizu Corporation’s Strategy to Be Nature Positive
Grasping the Current State of the Natural Environment and Predicting Opportunities for Conservation and Restoration with Environmental KY (Kiken Yochi)
We have developed Environmental KY (Kiken Yochi). This is an initiative to assess and comprehensively
visualize nature in the areas around construction sites based on the degree of vegetation nature
to easily grasp it. Environmental KY (Kiken Yochi)allows us to grasp and assess the state of nature in
the areas around construction sites. We can then discover measures focused on risk management
considering the impact on nature when carrying out construction and opportunities for nature
restoration. This means we can propose nature restoration and creation. In this way, it is an initiative
which contributes to being nature positive. We have named this initiative Environmental KY (Kiken Yochi)
after the risk prediction activity to assess and identify tasks which are likely to cause work-related
accidents and incidents. Risk prediction also contains the meaning of opportunity prediction to restore
nature.
We can make business decisions upon considering the impact on nature by implementing this initiative to
asses nature from the sales stage. In addition, we can grasp nature-related issues at an early stage and
take measures in line with the mitigation hierarchy (avoid, reduce, restore and offset) concept.
Visualization of Nature in the Areas around Construction Sites with Environmental KY (Kiken Yochi)
Introduction to Actual Examples to Be Nature Positive
UE-Net® (Urban Ecological Network): Visualizing Urban Ecosystem Network Assessment（Only in Japanese）
Efforts to Use Sustainable Concrete Formwork Plywood
Efforts to Reduce Construction By-products
（5）Identification of Priority Locations
Our construction business implemented the Environmental KY (Kiken Yochi) initiative when identifying priority locations looking at 1,064 construction sites in operation in fiscal 2023. We have not yet identified priority locations in the upstream and downstream. Nevertheless, we plan to continue assessing sites in the future.
Priority locations for Construction Sites in Operation in Fiscal 2023
Risk and impact management
Management Process for Nature-related Issues
| Range of Business | Management Item | Management Technique |
|---|---|---|
| Upstream | Nature-related risks over the supply chain in general |
|
| Important issues (concrete formwork) |
|
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| Direct operations | Identification of priority locations Nature-related risks Opportunities for restoration of nature |
|
| Downstream | Construction by-products |
|
Metrics and targets
（1）Metrics and Targets Relating to Dependencies and Impacts
TNFD Global Core Disclosure Metrics for Dependencies and Impacts and Our Record (Fiscal 2024)
| Measurement Metric Number | Causes of Changes in Nature | Metric [Unit] | Measurement Item | Record | Target |
|---|---|---|---|---|---|
| TCFD | Climate change | Greenhouse gas emissions | CO2 emissions | Refer to TCFD | Refer to TCFD |
| C1.0 | Changes in land, freshwater and ocean use | Total spatial footprint [km2] | Area of construction work range | Aggregation of the construction work range [See the next item] | - |
| C1.1 | Range of changes in land, freshwater and ocean use [km2] | Area of changes in land due to construction work | Aggregation of the area of changes in land due to construction work [See the next item] | - | |
| C2.0 | Contamination and decontamination | Contaminants released into the soil | (compliance with the Soil Contamination Countermeasures
Act)
|
Zero environmental problems | Zero environmental problems |
| C2.1 | Wastewater discharge | (Compliance with water contamination prevention-related
laws)
|
Zero environmental problems | Zero environmental problems | |
| C2.2 | Generation and treatment of waste [t] | (Compliance with construction by-product-related laws)
|
Refer to Environmental Performance Data | Final disposal rate of less than 3.0% by 2030 | |
| C2.3 | Plastic contamination |
|
Refer to Environmental Performance Data (we plan to disclose this from our record in fiscal 2023) | Final disposal rate for plastics of 15% or less by 2030 | |
| C2.4 | Air contaminants other than greenhouse gases [t] | （Compliance with air contamination prevention-related
laws）
|
Refer to Environmental Performance Data | - | |
| C3.0 | Use of resources | Amount of water intake and consumption from regions with a lack of water [m3] | （Compliance with water contamination prevention-related
laws）
|
Refer to Environmental Performance Data | - |
| C3.1 | Amount of high-risk natural primary products procured from the land, ocean and freshwater [t] |
|
Breakdown by type of formwork plywood （efforts to use sustainable concrete formwork plywood） |
Zero plywood produced overseas（non-certified timber）by 2030 | |
|
Refer to Environmental Performance Data | - |
Changes in land, freshwater and ocean use
We looked at construction work projects completed in fiscal 2023. We aggregated the total area of the
construction work range in completed construction work projects in the reporting year for “C1.0: Total
spatial footprint.” We aggregated the area of land whose state changed due to construction work for
“C1.1: Range of changes in land, freshwater and ocean use.”
Although we recognize that land use is an important issue for our company, ewe have not set target
figures in the construction business, which is our main business, due to the nature of the structure of
construction by contract. However, we need to grasp changes in land use as a result of the real estate
development business and solar power generation business which is part of our business. Therefore, we
plan to aggregate the figures in those businesses in the future.
C1.1：Range of Changes in Land, Freshwater and Ocean Use by Degree of Nature and Type of Business（Projects Completed in Fiscal 2023）
Naturalness of the area surrounding the construction site = A score representing the weighted average of the extent of natural vegetation within a 2 km radius from the center of the construction site, based on area.
High: Within a legally protected area, with a naturalness score of 7 or more (containing a lot of natural vegetation and secondary forests that closely resemble natural vegetation)
Medium: Naturalness score of 4 or more (secondary forests, plantations, grasslands, etc.)
Low: Naturalness score of 2 or more (golf courses, parks, residential areas with lots of greenery, rice fields and farms, etc.)
Minimal: Naturalness score of less than 2 (includes a lot of artificial land use)
Efforts to Reduce Construction By-products
We have disclosed our actual figures for construction by-products in our environmental performance data. We plan to disclose the figures for plastics from our record in fiscal 2023. We have set out these targets in our Eco-First Commitment（Updated）.
Eco-First Commitment（Updated）（Only in Japanese）
Use of Resources
We conducted a questionnaire on our subcontractors in relation to concrete formwork plywood that is one of our important issues in the upstream. The results showed that the proportion of plywood produced overseas used in our construction sites in fiscal 2023 was 52% certified timber and 45% non-certified timber. We have set a target for plywood produced overseas of zero non-certified timber by 2030 based on the nature positive approach to put ecosystems back on track. Based on this target, we are promoting efforts to use sustainable timber.
Efforts to Use Sustainable Concrete Formwork Plywood
（2）Metrics and Targets relating to Risks and Opportunities
There are many metrics whose performance we have not confirmed. Therefore, we plan to consider our
response in the future for the fiscal 2024 TNFD recommendations.
We have estimated the costs incurred in concrete formwork plywood among the transition risks in metric
number C7.0 in this section.
Comments by Experts
We received comments about our disclosures in fiscal 2024 and our future issues from two TNFD taskforce
members in The Norinchukin Bank’s Mr. Hirotaka Hideshima and Ms. Kaori Fujita.
Based on the comments we received, we plan to deepen our offensive efforts as business creation
opportunities in the future. Moreover, we will position the TNFD recommendations as a means to confirm
our progress on realizing a sustainable society through decarbonization, resource recycling and living
in harmony with nature as we are aiming to achieve by 2050. We will then report our rate of achieving
our targets to our diverse stakeholders.
