The growing impact of environmental and social factors on corporate management in the shipping industry has garnered attention in recent years. Industry analysis has focused largely on market risk, but going forward more stringent environmental regulations are expected to be a new cost factor. The extent of the impact of climate change and regional disputes on the safety of vessel operations also appears to be increasing. It is even possible that changes in global energy supply and demand will lead to major changes in both facility needs (ships) and service needs (operations) related to the question of what to transport.
At the same time, a path is also being cleared for companies to develop a competitive advantage from environmental and social factors. If a company can gain an advantage over other companies in its ability to transport safely, transport with minimal environmental impact, and accommodate new types of cargo, and so forth, there is an increasing likelihood that it will translate into higher corporate value.
I reviewed the report on this premise. First, in the Top Message section, it is evident that safe operation and environmental protection are clearly recognized as important issues. And in the two features as well, the initiatives of the MOL Group are explained in detail, which helped deepen my understanding of them.
With regard to safe operation, the report would have been better if the following had been integrated: 1) the report's recognition of current conditions and issues and its discussion of them, 2) the fact that initiatives are organized both from a facilities standpoint and an operations standpoint, and 3) the effort given to integrate these with information on a broad range of risk measures, including the Somalia Support Project. With respect to environmental protection, I wanted to know about: 1) the acknowledgement of environmental regulations and the real risks associated with climate change, 2) the focus on increased environmental awareness among cargo owners and environmental protection as business opportunities, and 3) the MOL Group's assessment of its own relative achievements. Globally, there has been movement toward actively placing the opening of an Arctic Sea route in the context of environmental protection, and I would like to have learned the thinking of the MOL Group on this issue as well.
In terms of specifics, there was focus on the fact that momentum exists even in the shipping industry to recognize the impact that operations exert down the entire value chain. I give high marks for the report's disclosure of greenhouse gas emissions in Scope 3, which includes emissions from charter ships, initiatives related to vessel procurement, and resource consumption, including ships sold on the presumption that they will be scrapped.
I also think there was substantial improvement in the disclosure of human resources data compared to the previous fiscal year. To take it a step further, I think in general that a dynamic workplace with talented and engaged people is the foundation for excellence in safe operations and environmental protection. I hope to see integrated disclosure going forward.
This year's report was issued during the process of identifying the cause of a maritime accident that occurred in June 2013 involving the containership MOL Comfort. I have much respect for the fact that the latest details have been constantly posted on MOL's website and that the decision was made to implement extra preventive measures for sister vessels. It is expected to take some time for the cause of the accident to be identified, but I hope that measures to prevent reoccurrence will be considered from all angles. I would ask that MOL include in the next issue a candid and open report on the accident that includes how it has instilled a crisis mentality in the company, how it has sparked debate, and how initiatives have evolved.
Addressing the Challenge
Thank you for your invaluable feedback on our Environmental and Social Report. This year's report was organized to improve both the quality and quantity of information disclosed in order to meet the expectations of stakeholders. We appreciate your positive assessment of our recognition of the importance of safe operation and environmental protection, our corresponding initiatives in these areas, and the improvements we have made to environmental data in Scope 3 and other areas, and human resource data. In next year's report, as you have suggested, we intend to enhance initiatives not only in safe operation and environmental protection, but also with respect to further cultivating a dynamic workplace with motivated and talented people, integrate individual measures, and convey them in a way that makes their interconnection more easily understood. Regarding the marine accident involving MOL Comfort, we respect the importance of constant disclosure of the latest information on our website and have decided to implement extra preventive measures for sister vessels. We intend to continue to disclose information on the reoccurrence prevention measures you have indicated and other subsequent initiatives to enable us to earn the trust of all customers, business partners, shareholders and investors, local communities and other stakeholders that have been affected by the incident.
As you have pointed out, in the shipping industry environmental and social factors are having an increasingly large impact on company operations. Given these developments, we intend to continue actively disclosing information and promoting highly transparent management rooted in the MOL Group Corporate Principles.