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Expectations for SECOM (Third-party Perspective)

We discussed SECOM’s initiatives and future orientation with an expert who offers a third-party perspective.

Hiroaki Ibumi

InterviewerGeneral Manager, Corporate Public Relations Department
SECOM CO., LTD.
Hiroaki Ibumi

Toshihiko Goto

AdvisorRepresentative Director, Sustainability Forum Japan (NPO)Toshihiko Goto

Tagging the business activities together with the SDGs as a first step

Ibumi

Currently, SECOM is exploring the connection between the SDGs and our business activities. We would greatly appreciate your recommendations on how to further incorporate the SDGs into our management and raise awareness throughout our company.

Goto

Response to the SDGs can be considered in three steps. The first step is tagging the 17 SDGs together with business activities at your company. The next step is to align your mid- to long-term strategies with the 169 targets and strengthen initiatives. The final step is to utilize management resources through an outside-in concept to examine how your company can contribute to the goal of “Transforming our world” as raised in the SDGs.

Although Japan is lagging behind other countries, it seems that many Japanese corporations have embarked on the first step during this past year. After thoroughly implementing the first step, it is important to evolve towards the second step.

In terms of raising awareness at your company, one effective and easily-implemented method is to have sales staff and other employees wear SDGs badges. Wearing badges will create opportunities for discussing your company’s SDGs initiatives with outside parties, which will naturally lead to encouraging increased awareness among employees.

Corporations that address climate change issues will succeed

Ibumi

The TCFD recommendations require assessment and disclosure of risks and opportunities based on scenario analysis for the financial impact of climate change. How should corporations respond to these recommendations?

Goto

Currently, the global trend is to use the power of finance to influence industry when addressing climate change. Amidst such conditions, the TCFD recommendations convey a clear message that “corporations that address climate change issues will succeed; corporations that neglect climate change issues will fail.” Ignoring this will leave corporations out of the major financial trends that are essential to business.

SECOM has led other Japanese companies in starting the TCFD scenario analysis. Moving forward, the formulation of a long-term strategy will be a key for your company. I recommend establishing an in-house team for review, incorporating outside opinions as necessary, and making careful preparations.

In terms of scenarios for the future, a large corporation like SECOM should be able to make a transition to 100% use of renewable energy. I recommend that your company work to raise awareness for branding based on the use of renewable energy.

Aggressive disclosure of information that tells a story

Ibumi

Moving forward, what points should we prioritize when disclosing information to ESG investors? Also, how should we respond to trends in integrated reports and the new Environmental Reporting Guidelines (2018)?

Goto

In regards to ESG, the majority of evaluation organizations use approximately 350 items to evaluate corporations. If there is no information disclosure, a score of “0” is assigned to that item. If the total score is low, the corporation is subject to negative screening for ESG investment.

From 2018, charging fees are required to respond to CDP surveys on climate change. However, even if costs are incurred, it will become increasingly important to improve corporate value by aggressively disclosing information. Also, further priority will be placed on integrated reporting that tells a story. The ultimate concept of integrated reporting is a concise summary that integrates financial and non-financial information for presentation to asset owners. The form of integrated reporting can be a separate document or an executive summary attached to the sustainability report.

Finally, the Environmental Report Standards were revised to break away from the existing detailed-based approach and shift to a principle-based approach that is internationally acceptable. Although actual evaluation methods differ depending on each evaluation organization, I recommend that you further clarify the core parts such as vision and strategy required by guidelines.

Ibumi

Thank you very much for your invaluable advice. We will definitely utilize your recommendations in our future initiatives.

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