We recently held a roundtable inviting some of our outside officers and senior managers of relevant business functions to discuss the Company’s progress over the past year to addressing the key sustainability issues and initiatives set out in our long-term strategy and medium-term business plan, INPEX Vision @2022. Participants also touched on the sustainability trends and challenges in their respective areas.
Kimihisa Kittaka Director & Senior Managing Executive Officer, Senior Vice President, Corporate Strategy & Planning; Legal Affairs
Masako Takahashi Manager, Climate Change Strategy group, Corporate Strategy & Planning Unit
Hiroko Kiba Audit & Supervisory Board Member (Outside)
Yuko Mori Deputy Manager, PR group. Corporate Strategy & Planning Unit
Hideka Morimoto Director (Outside)
Kimihisa Kittaka Director & Senior Managing Executive Officer, Senior Vice President, Corporate Strategy & Planning; Legal Affairs
Masako Takahashi Manager, Climate Change Strategy group, Corporate Strategy & Planning Unit
Hiroko Kiba Audit & Supervisory Board Member (Outside)
Yuko Mori Deputy Manager, PR group. Corporate Strategy & Planning Unit
Hideka Morimoto Director (Outside)
Topic 1
Evaluation of INPEX’s Energy Transition Initiatives
Kittaka
It has been just over a year since INPEX announced its Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022). From your perspective as outside officers, what is your impression of the progress that has been made to date?
Morimoto
Although last year was only the first year of INPEX Vision @2022, I believe the Company has already achieved steady progress across its oil and gas business and five net zero businesses. Despite unsettled conditions worldwide resulting from the situation in Ukraine, we were able to achieve stable operations at each of our projects, including Ichthys LNG. We have been able to fulfill our important role in the stable supply of energy.
We have also spent much time at Board of Directors meetings discussing our five net zero businesses, and I believe we are boldly progressing in this space with many exciting new initiatives, such as launching an integrated hydrogen and ammonia demonstration project in Kashiwazaki City, Niigata Prefecture—which, if successful, we hope will have broader application in society.
Of course, we need to set up initiatives across all five net zero business areas, but carbon capture and storage (CCS) and carbon capture, usage, and storage (CCUS), as well as hydrogen/ammonia, are the areas expected to be particularly synergistic with our own technologies and knowledge.
Back in January this year, we held a meeting of the Board of Directors in Abu Dhabi, the United Arab Emirates (UAE), where INPEX is developing and producing oil and clean energy such as hydrogen and ammonia. During an opinion exchange, the UAE Minister of Industry and Advanced Technology, Sultan Ahmed Al Jaber, expressed hopes to continue deepening and strengthening partnerships with INPEX in the areas of energy transition, decarbonization, hydrogen, and clean energy development. I feel this meeting in Abu Dhabi was an opportunity to further strengthen ties between our two countries by new opportunities to partner in our net zero businesses in addition to the existing areas of oil and natural gas.
Kiba
In 2022, the situation in Ukraine caused widespread anxiety across Japan in relation to energy supply. I think both the Company and its employees should be proud of the fact that we were able to deliver stable supplies of oil and natural gas under such circumstances. I did have above thought during my visit Abu Dhabi.
This past year, we have also been extremely active in our five net zero businesses. The demonstration project Mr. Morimoto mentioned earlier is just one example of how we can fulfil our social responsibility by becoming a leading company in the hydrogen and ammonia field.
What we should be mindful of going forward is how we communicate these initiatives to our various stakeholders. In particular, I think it is important we actively share INPEX Vision @2022 with our employees to ensure they understand and support our mindset. It is only when all employees work together with a can-do attitude that we can move along the path to success.
We also need to make the public aware of INPEX Vision @2022 and its associated initiatives to enhance our corporate value.
Since January this year, we have provided support for the television program “Promise with the Earth – Sceneries Engraved in the Heart1”, which showcases the beauty of nature across Japan, and the various environmental conservation activities being undertaken across the country. I believe this program has great value for us. Sponsorship of such a quality program will increase our visibility and improve our corporate image. Going forward, I would like to see more programs that highlight our position on different matters, including our plans for future engagement with nature.
1 Broadcast on the Fuji Network across the Kanto area and Niigata Prefecture, Japan.
We have also spent much time at Board of Directors meetings discussing our five net zero businesses, and I believe we are boldly progressing.
Kittaka
Climate change response is one of the pillars of our business; however, discussions within the company tend to be biased towards risks that need to be addressed to maintain stable supply from our upstream business operations. For this reason, we have appointed Mr. Morimoto to our Board of Directors, where we can discuss climate change strategies based on his deep knowledge of this field. In discussions with our Executive Officers, he has been a driving force in treating our climate change response through our five net zero businesses as a profit-making opportunity. His encouragement is very reassuring as we continue to promote initiatives in this area over the coming year.
Likewise, our Executive Officers have really appreciated Ms Kiba’s support in providing consistent guidance on the importance of communication with stakeholders, including employees. This began with discussions about two years ago that led to the creation of our current INPEX Vision @2022. I feel there is a growing awareness in the company, including among top management, that we need to be more proactive in communicating both internally and externally.
I believe all of our outside officers truly embody their roles to promote change to our Executive Officers, through Board of Directors meetings and other discussions. I look forward to your continuing support.
I believe all of our outside officers truly embody their roles to promote change to our Executive Officers, through Board of Directors meetings and other discussions.
Topic 2
Disclosure and Communication of INPEX’s Non-financial Information
Kittaka
The two main ways we disclose information is through our Integrated Report and Sustainability Report, coupled with use of our online resources. In communicating non-financial information, such as our climate change response, we need to carefully choose our words while taking third-party evaluations into consideration. What advice do you have in terms of information disclosure and communication?
Morimoto
With our Integrated Report and other INPEX reports being based on INPEX Vision @2022, I think we are clearly conveying our future vision to stakeholders. Since the disclosure of information on climate change response in Japan has become legally binding this year—as in the case of mandatory disclosure in annual securities reports—individual companies will be asked how they respond to climate change. Such disclosures will enable not only investors and financial institutions, but employees as well, to understand the current and future situation at their companies. Accordingly, the work of our public relations and investors relations (IR) functions will become increasingly important.
New trends in areas such as circular economy2 and biodiversity are also beginning to emerge. For example, disclosures on biodiversity are now mandatory for companies operating in France, so it is possible we will see a similar trend in Japan before long. There is more work to be done going forward, but I believe the company is well prepared for this so long as we keep up our current efforts.
2 Circular economy: A socioeconomic system that maximizes efficient and circular use of resources (including use of recycled materials) and effective use of stock (including product sharing and secondary distribution) across the full market lifecycle
Kiba
I suspect there will be increasingly more work for us all as the number of areas in which we can create value as a company increases, such as in water management or biodiversity conservation. However, I think we should also be more proactive in highlighting the positive aspects of our business.
My message to my colleagues all along has been that, regardless of the medium, whether reports or advertising, our efforts are pointless if we are unable to convey our meaning to others. Specifically, I want technical language to be rephrased into language that anyone can understand. When disclosing information on power generation capacity, alongside the actual units, I suggested we also include expressions that convey a sense of scale to the general public, such as “enough energy to meet the demands of such-and-such prefecture”. I am glad to say that each of my suggestions was quickly adopted. I think a particular strength of the Company is its willingness to consider new ideas and to respond promptly and flexibly.
Morimoto
Something I understand only too well in my work as a university professor is, as Ms. Kiba says, “the importance of conveying rather than communicating information.” One-way communication does not work.
Kittaka
Thank you for your various perspectives. We will definitely continue to work diligently to disclose information on our climate change response. On the other hand, we are being required lately to disclose information that is rather difficult to quantify, such as our investment plans for the coming 20 to 30 years. We have to be careful in our conversations to ensure people understand the reason for such challenging disclosures.
As Ms. Kiba also mentioned, lately we have been using our website as needed to post information that we want our stakeholders to know, even for small matters. We need to continue such communications while considering the perspectives of all stakeholders.
Two of our employees, Ms. Takahashi and Ms. Mori, are with us today. As they are both engaged in information disclosure and communications related to climate change response and public relations (PR), I would like to ask them for their thoughts about what has been said so far.
Takahashi
Since climate change response is a company-wide effort, I think smooth communication with all internal divisions is important. For example, discussions related to climate change include extensive use of Western languages and abbreviations, so when talking to other divisions, we try to carefully explain the topics while avoiding such words and abbreviations. In addition, in terms of the five net zero businesses we are currently promoting, we not only communicate externally, but we are also working hard on measures that raise awareness internally, such as videos and internal newsletters.
Meanwhile, the required content and depth of information required for disclosures to the outside world varies widely, and to be honest, it is unlimited. At such times, we go back to the beginning and ask ourselves who the information is for and what is the purpose. Disclosure rules for climate change response are currently moving toward global standardization. We will be sure to support any changes that are efficient and effective for both the parties making the disclosures and the parties receiving them.
Mori
We consider that the mission of our public relations activities is to promote a deep understanding of our business and the direction our company for both internally and externally. To that end, we actively engage in public relations on a daily basis through various medias including our website and social media. However, since outline of energy industry is not broadly well-known to public and often includes technical terms and specialized topics that are commonly used within the company, we often find that it is difficult for the audience to comprehend. Therefore, we make an effort to use plain language as much as possible and take care to use expressions that allow the readers to correctly understand what we are saying and to convey that information properly.
We also want INPEX employees and employees of INPEX Group companies to feel a sense of affinity with our PR and advertising activities. This is why we consider it important to conduct surveys on PR and advertising activities and reflect the opinions of our stakeholders.
Our efforts are pointless if we are unable to convey our meaning to readers.
Kiba
Listening to you two today, I am confident that there is nothing to worry about. From what you describe, I can see you are closely considering your employees, who are important stakeholders, in your initiatives.
Since climate change response is a company-wide effort, I think smooth internal communication is important.
We consider it is important to reflect the opinions of our stakeholders.
Kittaka
I also believe information from employees like Mr. Takahashi and Mr. Mori, who are close to the frontline and know the Company better than anyone, will resonate with many people. Thank you all again for sharing your various insights today. We will endeavor to have many more opportunities like this for active exchanges of ideas between our Executive Officers and outside officers.
We will also continue our work to expand our range of information disclosures and accelerate initiatives for INPEX Vision @2022.