INPEX’s basic approach to sustainability management is to promote both a stable supply of energy and energy transition initiatives, while addressing climate change and other sustainability issues through its business and value chains. Following this approach, we conduct sustainability management focusing on the sustainability-related materiality of greatest importance to us and our stakeholders.
We identified our materiality by considering the financial effects the environment and society had on us, and our impacts on the environment and society. To achieve this, we assessed sustainability-related risks and opportunities that affected anticipated financial effects in terms of the likelihood and magnitude of the financial effects. We also assessed the impacts of our business on the environment and society in terms of the likelihood and severity of the impacts.
Materiality Assessment Process
To identify materiality for the Company, we assessed all materiality through workshops with external experts and interviews with external and internal stakeholders. The assessment process is detailed below.
Understanding of the INPEX value chain and businesses
We gained deeper insight from our company's value chain and stakeholders through the following publications and internal documents.
- Annual Securities Report
- Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022)
- INPEX Vision 2035
- Results of past materiality assessments
- Basic policies
- Results of human rights due diligence assessments
- Results of stakeholder engagement
Identification of the topic list
We have extracted potential issues relevant to our company, referencing various reporting guidelines below, and have created a list of topics.
- GRI (Global Reporting Initiative) Standards
- European Sustainability Reporting Standards (ESRS)
- SASB (Sustainability Accounting Standards Board) Standards: Oil & Gas – Exploration & Production
- International Sustainability Standards Board (ISSB)
- Sustainability Standards Board of Japan (SSBJ)
- Task Force on Climate-related Financial Disclosures (TCFD)
- Task Force on Nature-related Financial Disclosures (TNFD)
- Ipieca Sustainability reporting guidance for the oil and gas industry
- Disclosure Documents from Other Companies in the Same Industry
Definition of IRO
We compared each issue against our value chain and businesses, and defined impacts, risks, and opportunities (IRO) that could occur over the short, mid and long terms.
Setting of assessment criteria and scoring
We identified our materiality while considering the financial effects the environment and society had on us, and our impacts on the environment and society. We assessed sustainability-related risks and opportunities that affected our financial effects in terms of the likelihood and magnitude of the financial effects (monetary, reputation, etc.). We also assessed the impacts of our business on the environment and society in terms of the likelihood and severity of the impacts (scale, scope, and irremediability).
We set the likelihood assessment axis with reference to country-specific and business-specific ratings, including the past numbers of incidents by ourselves and other companies in the same industry.
Engagement with stakeholders
We conducted surveys and interviews with internal and external stakeholders to confirm their expectations and concerns related to issues we should address. Stakeholders include officers, employees, investors, and other companies in the same industry.
As a result, we found that our internal assessment of our sustainability issues and the viewpoint of external stakeholders are aligned.
Identification of priority issues
Based on scores calculated through 'Setting Assessment Criteria and Scoring', we conducted mapping and identified our materiality as the sustainability issues we need to address as a priority.
Our materiality were assessed by each department in accordance with our risk management process, and discussed by the Sustainability Working Group.
Management review
Our materialitiy were resolved by the Sustainability Committee and Executive Committee, as the main committees within our sustainability promotion structure, and then reported to the Board of Directors.
INPEX’s Materiality
Of our materiality, we selected Climate Change, Safety, and Human Capital as financial materiality due to the significant financial effects the environment and society have had on us.
We revise our materiality every year.
Message from the Officer in Charge
Director, Senior Managing Executive Officer, and Executive Vice President in charge of the Corporate Strategy & Planning Division
This year, we once again identified our materiality by considering the financial effects the environment and society have on us, as well as our impact on them.
We identified six materiality: Climate Change, Safety, Human Capital, Human Rights, Biodiversity and Environmental Pollution Measures. Of these, we assessed Climate Change, Safety, and Human Capital as having major financial effects on us. Therefore, we disclosed these three as financial materiality in the annual Consolidated Financial Statements. This allowed us to explain to stakeholders, in a more detailed and reliable way, the financial effects the environment and society have had on our business activities.
Regarding our environmental initiatives, we recognize that, in addition to addressing climate change, conserving biodiversity and managing blowouts and oil spills – despite their unlikely occurrence – are major issues due to the nature of our business. Consequently, we have identified Environmental Pollution Measures as one of our key materiality and plan to continue enhancing our efforts in this area.
From the perspective of the impact our business has on society, it is important we enhance our human rights initiatives. Since last year, we have been working on these initiatives, and this year, upon identifying further human rights issues, we expanded our survey to include not only our oil and natural gas business but also our renewable energy business. We also broadened the scope to include suppliers alongside our project partners. We plan to consider and monitor mitigation measures for the identified issues.
We will continue to sustainably develop, produce, and supply energy as part of our sustainability management, with a focus on this identified materiality.