Printed in Japan

2023

Nippon Steel Corporation Sustainability Report 2023 (April 2022 to March 2023)

PS23–0017

Nippon Steel Sustainability ReportMake Our Earth Green

CONTENTS
01 Introduction
01 Corporate Philosophy, Management Principles
03 Attractiveness of Steel
05 Nippon Steel Group’s Businesses
07 Nippon Steel Group’s Contribution to SDGs
09 Message from the President

11 Materiality of Sustainability Issues
15 Environment
15 Environmental Management
17 Environmental Management System
19 Climate Change Measures
33 Creation of a Circular Economy
37 Conservation of Biodiversity and Nature Positive
40 Environmental Risk Management

43 Respect for Human Rights
45 Diversity & Inclusion
51 Human Resources Development
55 Safety
56 Disaster Prevention
57 Quality
59 Production and Supply Chain Management
61 Together with Local Communities
63 Corporate GovernanceNippon Steel adopts our own new initiative “Nippon Steel Carbon Neutral Vision 2050,”
as a part of our widespread efforts toward achieving a decarbonized society.

65 Independent Assurance Report
66 Awards Received in FY2022

We will consider and implement various measures as a top priority management issue
in order to continue to lead the world’s steel industry.

Corporate Philosophy

Nippon Steel Corporation Group will pursue world-leading
technologies and manufacturing capabilities, and contribute

Editorial policy
This Sustainability Report is the 26th since the former Nippon SteelCorporation issued what is the first sustainability report by a Japanese steel
manufacturer, in 1998. We believe it is extremely important to promotebusiness activities that contribute to the realization of a sustainable society.
We are therefore committed to diverse initiatives based on this idea.
In this report, in order to clearly express our approach toward helping
realize a sustainable society, we present our sustainability initiatives indetails with representative examples.

to society by providing excellent products and services.

Period covered
The period covered in the report is fiscal 2022 (from April 2022 to March 2023).
For some activities, the period from April 2023 to June 2023 is included.

Management Principles

Boundary of report• Activities of Nippon Steel and its group companies in Japan and overseas• Economic aspects: The Nippon Steel Integrated Report 2023 (issued in
September 2023) also covers the contents of the economic report.

1

We continue to emphasize the importance of integrity and reliability in our actions.

2

We provide products and services that benefit society, and grow in partnership with our customers.

3

We pursue world-leading technologies and manufacturing capabilities.

4

We continually anticipate and address future changes, innovate from within, and pursue unending progress.

5

We develop and bring out the best in our people to make our Group rich with energy and enthusiasm.

Reference for guidelines• GRI (Global Reporting Initiative) Standards• “Environmental Reporting Guidelines 2018” by the Ministry of theEnvironment• Final Report: Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), established by the Financial Stability Board

03

Attractiveness of Steel04

Attractiveness of Steel
Steel is one of the most familiar materials and is indispensable for our daily lives. Thanks to its diverse
properties and infinite potential, steel will continually contribute to a sustainable society.
Theoretical strength1

The Life Cycle Assessment (LCA) is therefore important.

Let’s consider the overall life cycle

Some materials have low environmental impact in use but may havehigh environmental impact in the overall life cycle.

The Life Cycle Assessment method (LCA) is a way of thinking toevaluate environmental impact of a product over its entire life
cycle. While many aspects of environmental impact cannot beseen, the LCA is an attempt to visualize the impact over the life
cycle of a product, from production of its raw material to use,
disposal and recycling of the end product.
From the LCA perspective, steel’s environmental impact
can be said to be very low relative to other materials. In order tocontinue to supply steel as a sustainable material, while taking
advantage of its excellent LCA characteristics, we aim to realize
carbon-neutral steel production process.

(3.5 GPa)

ive strength)

sure tensile strength. Giga denotes a factor of one billion (109).

Environmental
impact highlighted
in comparison toother materials

Environmental
impact that isoften overlooked

Steel represents 90% or more of metal products,
as steel being abundant, low-priced, and having goodworkability, and has a wide range of applications.

Environmental
impact that isoften overlooked

LCA-basedassessment
BAD

High

Steel

Resources

Steel is a sustainable material to be reborn in new steel products endlessly

Impact in
manufacturing

90

Coal

Other

1/3

Iron ore

Converter

Blast
furnace

Impact in use

Steel

Impact when disposedor recycled (Impact ofwaste disposal andrecycling effect)

90% or more

Coal

Comparison of GHG (Green House Gas) emission in producing an automotive
Resources
part that has the same strength as conventional steel (kg-CO2e)
Other

Price

1/3

Industrial
product life

757

Iron scrap

Diverse properties that support a wide range of applications
Weldability

Toughness

Paintability

Robustness

Magnetism

Heat resistanceSteel is a material with great potential due, in part, to its having a much higher
theoretical strength than other materials.
In addition to adjusting carbon and other content to give a certain steel
product specific desired characteristics, steel’s properties can be finely
controlled to meet function and performance requirements. We do this bycontrolling the combination of its temperature and rolling at the manufacturing
stage or by adding alloys. Further development in steel and its usage will push
the potential horizon further outward.

Workability

Corrosion resistance

GHG emissions per unit
(kg-CO2e/kg)

Environmental

Environmental
Concrete(compressive strength)
impact highlighted

Weather resistance

impact that isoften overlooked

in comparison to
CFRP
other materials

BAD

Electric furnace

Steel
1 kg

Iron oreIndustrial
product life

Infinite recycling of steel

Coal

Metal products

22.0
Environmental
impact that isoften overlooked

BAD

Note: Moreover, high-tensile steel is about 25% lighter than conventional steel and has alower environmental impact.
GOOD
Strength of present
application level
Tensile strength (GPa2)

Strength of sheet materials
for automobiles Low0
1 2 3

Theoretical strength1

4

LCA-basedassessment
BAD

5

6

10

Recycling
Going forward, withthe aim to further reduce(3.5 GPa)effects
Concrete (compressive
strength)environmental
impact on climate change, Nippon
Steel
CFRP
Impact in
Impactin useImpact when disposed
Steel will makemanufacturing
development
towardcarbonor recycled (Impact of
disposal andneutrality in steelmaking process.waste
recycling effect)(10.4 GPa)

Iron and steel

GOOD

impact highlighted
in comparison toother materials

Steel’s environmental impact in production isextremely lower than other materials, some of which
are lighter than steel.

(3.5 GPa)

Environmental
impact that isoften overlooked

2.3 Environmental
11.3

High

Some materials have low environmental impact in use but may have
(10.4 GPa)
Iron
andenvironmental
steel
high
impact in the overall life cycle.
Aluminum and alloy

2.3
Environmental
impact that isoften overlooked

Based on the public data of WorldAutoSteel

Theoretical strength1
Strength of present
Strength of sheet materials
application level
for automobiles
The Life Cycle
Assessment (LCA) is therefore important.
0
1 2 3 4 5 6
10
Tensile strength (GPa2)

1 Theoretical strength is said to be 1/5 to 1/7.5 of the modulus of rigidity. The above data uses 1/7.5.
2 Gigapascal
High (GPa) is a unit to measure tensile strength. Giga denotes a factor of one billion (109).

NIPPON STEEL CORPORATION

Functional equivalentweight (kg)

Potential capacity and present application level of material strength

Cold resistance

90% or more

Aluminum and alloy

Iron scrap

Blast
furnace

1 Theoretical strength is said to be 1/5 to 1/7.5 of the modulus of rigidity. The above data uses 1/7.5.
2 Gigapascal (GPa) is a unit to measure tensile strength. Giga denotes a factor of one billion (109).

Comparing product materials...

Converter

Resources
Electric furnace

Some materials have low environmental impact in use but may have100
67impact in the
45overall life cycle.
high75environmental
Acquisition of the EcoLeaf

Lighter weightmaterials than steel(3.5 GPa)
and alloyand deserves recognition
been used in a wide range Aluminumof applications
as thestrength)most outstandingConcretematerial(compressive
for the infrastructureof society, a material that
supports people’s lives and overall economic
CFRP development.
Steel1 isTheoreticalclose strength
to us andliveof the
without
products.
Steelforis saidweto becannot
1/5 to 1/7.5
modulussteelof rigidity.
The above datausesis1/7.5.
(GPa) is a unit to measure tensile strength. Giga denotes a factor of one billion (109).
here for all2 Gigapascal
of us nowand will be with us in the future.

Steel

990

Carbon fiber
Conventional
High-tensile
reinforced
AluminumsteelThe LifePrice
Cycle
is therefore important.
steel Assessment (LCA)plastics
materials

Infinite potential

Steel

(10.4
Ironasandsteel and easiness to work, steel
Due to diverse advantages suchstrength
has GPa)

173

Environmental impact

Diverseproperties and a wide range of applications
4 5 6
10
Tensile strength (GPa2)

Strength

230 1 kg

Theoretical strength1

ials than steel

Strength of sheet materials
for automobiles0
1 2 3

The blast furnace (BF) route to reduce iron ore to make steel may
appear to generate a higher environmental impact than the methodthat melts steel scrap in an electric arc furnace (EAF) to makesteel. However, the BF route creates steel products that generate
scrap that, through recycling, has an effect of CO2 emission
reduction. As that scrap recycling effect offsets the CO2 emissions
in the BF process, environmental impacts of the BF and EAF routes
Converter
inBlasttotal terms are
the same as steel
is repeatedly recycled. Used as various types ofProcessing and production
furnaceproducts
This approach is recognized in the ISO 20915 and the JIS
Q by people
20915 and is becoming a global standard.

LCA overall
impactMetal products

Water

Strength of present
application level

Iron scrap

Comparing product materials...

Steel
1 kg
UsedWater
as various types of
1 kg by people
products

Resources

Infinite recycling of steel

Industrial
product life

Iron ore

Processing and production

Electric furnace

Recycling

Infinite recycling effectsof steel

Lighter weightmaterials than steel

and can be endlessly recycled without causing deteriorationin quality — quite a unique characteristic. Steel is a perfectmaterial for recycling as it can be recycled endlessly into all
Metal products
kinds of steel products after the end of its product life.

Electric furnace

Environmental impacts of steel madevia the BF and EAF routes, using an
LCA approach

Steel

% or
more
Steel is Steeleasily sorted
froma mixture with other materials

nvironmental impact

Other

Used as various types of
products by people

Processing and production

GOOD

Steel

Low

Price

Converter

Blast
furnace

Coal

Lighter weightmaterials thansteel

Metal products

GOOD

BAD

Steel

Water
1 kg

Iron ore

Lighter weightmaterials than steel

Steel
1 kg

Steel

90% or more

Lighter weightmaterials than steel

1/3

Environmental impact

Steel

Other

Infinite recycling

environmental label

LCA-basedassessment

Nippon Steel has obtained the EcoLeaf — an ecolabel
BAD
certifiedby the Sustainable Management Promotion
Organization (SuMPO), in compliance with the ISO 14025
international standards, for 47 products, representing morethan 80% of its products.
GOOD
The EcoLeaf is an EPD3 certification program in use
in Japan to disclose quantitative environmental information
Assessment (LCA) is therefore important.
about the entireThelife Life
cycleCycleof a product,from resourceSome
miningand manufacturing
materials
have low environmental impact in use but may
Thehave
Life C
to disposal and recycling.
allowshighThisenvironmental
impact in the overall life cycle.Some materi
customers to assess the environmental
highEnvironmental
impact of the
products they use.
Environmental
Environmental
impact highlighted
LCA-based
Lighter weight materials than steel

Iron is believed to constitute one-third
1/5 to 1/7.5 of the modulus of rigidity. The above
uses 1/7.5.
of thedataEarth’s
weight.

Steel is an affordable material and ischeaper than water in a plastic bottle(in comparing price per unit weight).

impact that is
impact that isin comparison tooften overlooked
often overlooked
3 EPD (Environment Product Declaration): Theothertype IIImaterials
environmental label specified
LCA overall
in the ISO 14025 international standard, which is designed to disclose quantitative
impactenvironmental
data certified by a third-party organization.
Highonmental impact

CFRP

Sustainability report 2023
BAD

Environmental
assessment
impact that isoften overlooked

BAD

High

GOOD

than steel

Steel is an abundant, sustainable material that can be reborn endlessly

Environmental impact

10

Steel

6

(10.4 GPa)and steelum and alloy

5

Lighter weight materials than steel

4

Lighter weightmaterials thansteel

Strength of sheet materials
for automobiles0
1 2 3

Steel is an outstanding material from the Life Cycle Assessment (LCA) perspective

05

Nippon Steel Group’s Businesses

06

Nippon Steel Group’s Businesses
The Nippon Steel Group’s main business is in steelmaking with annual crude steel production
capacity of approximately 47 million in Japan and 19 million tons overseas, and overseas
annual steel processing capacity of 37 million. The Group is promoting business in four
segments, including steelmaking.

Business segments
Based on the long accumulation of technology through steelmaking, the Nippon Steel Group operates businesses in four areas: steelmaking and fabrication,engineering and construction, chemicals and materials, and system solutions, with the core business being steelmaking.

Chemicals and materials business¥

Domestic manufacturing and R&D bases (Nippon Steel)
Nippon Steel is engaged in production at six steelworks —North Nippon, East Nippon, Nagoya, Kansai, Setouchi andKyushu — and R&D activities in three centers in Futtsu,
Hasaki, and Amagasaki.

North Nippon Works
Muroran Area
Kamaishi Area

Amagasaki R&D Center

Setouchi Works

East Nippon Works

Hirohata Area

System solutions business274.5 bn

292.5 bn¥

Nippon Steel Chemical & Material Co., Ltd.

NS Solutions Corporation

Nippon Steel Chemical & Material aims tocontribute to society by combining chemical andmaterial operations and utilizing its original material
technologies. With coal chemicals, chemicals,
functional materials and composite materials as its
four main operating sectors, the company pursues
sustainable growth by creation of new businesses,
overseas expansion of its core operations, and thefurther promotion of global operations.

With the advent of the digital innovation age inwhich intensive use of IT changes the way of
doing business, NS Solutions provides IT solutions
including DC, Cloud, IoT, AI, 5G, and Big Data for awide range of industries by leveraging its advanced
and practical technical capabilities and abundantbusiness knowledge cultivated through steelmaking.

FY2022
consolidated revenue¥7,975.5 bn

Naoetsu Area

Kure Area

Kashima Area

Hanshin Area (Toyo, Osaka, Kanzaki, Sakai)Engineering and construction business

Kimitsu Area¥

Kyushu Works
Yawata Area (Tobata, Yahata, Kokura,
Hikari Titanium Production Div.)

Research & Engineering Center (Futtsu)

Nagoya Works

Kansai Works

352.2 bn

7,245.5 bn¥(Elimination of intra-company transactions, etc. −¥189.2 bn)

Nippon Steel Engineering Co., Ltd.

Hasaki Research and Development Center

Oita Area (Oita, Hikari)

Steelmaking and steel fabrication businessNippon Steel Corporation

Nippon Steel Engineering undertakes numerous
projects worldwide in various fields: the environment
and energy-related facilities (i.e., waste, offshorewind, biomass, and geothermal power generation);various pipelines; building construction and large
steel structures (i.e., offshore steel structures, port
construction), and steelmaking plants.

Enhancing technological superiority, Nippon Steelprovides a variety of high-grade steel products(i.e., steel plates; flat products; bars & wire rods;
construction products; pipes & tubes; railway, automotive & machinery parts; and titanium stainlesssteel) to many customers in Japan and overseas.

Wakayama Area (Wakayama, Kainan, Sakai)
Amagasaki Area
Osaka Area

Revenue (consolidated basis)

Business profit (consolidated basis)

Profit attributable to owners of the parent(consolidated basis)(¥ billion)
9,000(¥ billion)
1,000(¥ billion)
800

938.1

7,975.5

Overseas manufacturing bases

Sales composition by region

The Nippon Steel Group has established a global supply network of 37
million tons in steel processing capacity, mainly for use of automobiles,
infrastructure, electric appliances and containers, resources and energy, etc.

Japan
Overseas

RegionNS Group’s
capacity

59%
41%

Regional
Asia
composition: Europe
North America
South America
Middle East
AfricaPacific(Regional demand)

As of March 2023

Crude steel production
capacity

6,000(mln tons/year)

58%
13%
12%
10%
5%
2%
0.4%

India
South America
ASEAN
EuropeNorth andCentral America

6,808.8

6,177.9 5,921.5

3,000

0.2

0

200

2021

2022

76.5

110.0

2019

2020

–400

–431.5

–600

2018

(FY)

–32.4

–200

0

2020

251.1

0

336.9

200

2019

694.0

400

400

2018

637.3

600

600

4,829.2
9.8
4.4
3.5
1.3

916.4

800

2021

2022

2018

(FY)

2019

2020

2021

2022

(FY)

China

3.6 (920.9)
mln tons/year

Ovako (Sweden)

North andCentral America

BNA (China)

6.2 (132.9)

EuropeNumber of employees (consolidated basis)

Crude steel production volume (non-consolidated basis)

R&D expenditures (consolidated basis)

120,000(million tons)
50(¥ billion)80

mln tons/year

1.1 (151.7)

India

mln tons/year

10.5 (114.9)
mln tons/year

100,000

105,796 106,599 106,226 106,528 106,068

43.73
40

ASEAN

7.8 (72.6)

Middle East

mln tons/year

0.8 (51.3)

AM/NS Calvert (USA)

mln tons/year

South America

6.9 (45.4)
mln tons/year

80,000NIPPON STEEL CORPORATION

Usiminas (Brazil)

77.6

60

34.25

60,000

65.3

66.4

2020

2021

70.5

40
20
20

10

20,000G/GJ Steel (Thailand)

38.68
33.00

30

40,000AM/NS India (India)

72.0

41.85

0

0

2018

2019

2020

2021

2022

(FY)

0

2018

2019

2020

2021

2022

(FY)

2018

2019

2022

(FY)

Sustainability report 2023

07

Nippon Steel Group’s Contribution to SDGs

08

Nippon Steel Group’s Contribution to SDGs

PICKUP 2022

The Nippon Steel Group is committed to SDGs through continually supplying steel, a basic element supporting society, in various partsof the world by using its world-leading manufacturing capability.
Steel contributes to make our life more convenient and pleasant, by being
used everywhere in our life and society, and as an indispensable part ofresilient infrastructure against natural disasters caused by earthquakes,
abnormal weather driven by climate change, and other factors. Steel is also
an indispensable material element for achieving SDGs, as it helps reduce
environmental impact due to its weight reduction, extension of its product life,
etc. on top of being abundantly available and able to be recycled. As a supplierof steel, we strive to implement our Three Ecos and innovative technologies
and to advance the Carbon Neutral Vision as measures against climatechange. We also promote sustainable measures so as to not waste resources.
These measures include use of by-product gas generated in steelmaking,reuse of recycled water, and recycling of by-products and waste generated inand out of the Company.

1R eduction of vulnerability to disaster based on use of Nonframe method(construction method to stabilize slopes without damaging the naturalenvironment)

June 2022

Thorough compliance training, such as for the Anti-Monopoly Act
Eliminating unfair discrimination, based on the respect on human rights
pp. 43–44
pp. 43, 46

Expanded hiring of women and non-JapaneseU se of converter slag fertilizer, a by-product of steelmaking, to improvep. 38
farming productivity and salt damage in farmland

Provision of various indispensable Eco Products for daily livesP rovision of titanium and stainless steel, which have excellent seawater
corrosion resistance, for seawater desalination plants, securing
agriculture water evelopment of Nonframe method, which protects houses from disasterD
while maintaining views of natureP romotion of air, water, soil risk management and chemical substance
pp.40–42
managementP romotion of air, water, soil risk management and chemical substance
pp. 40–42
management

 evelopment and provision of steel products that contain no substances ofD
concern, such as lead and hexavalent chromium

Full recycling of by-products, including slag, dust, and sludgep. 61

Study sessions for teachers, internship for students

Improvement of working environment for women, support for careerpp. 45–46
formation and work-life balanceIncrease in female employment and the number of female employees inp. 46
management
Prevention of harassment

p. 50

Recycling and reuse of limited water resources
Promotion of water quality risk management

July 2022

Nippon Steel and raw material supplier Anglo American PLC signed amemorandum of understanding to jointly deliberate and discuss solutions foraccelerating the transition toward carbon neutral steelmaking.
Based on this memorandum, the companies plan to reduce CO2 emissions
for the current blast furnace steelmaking process through the optimal use ofhigh-grade iron ore, along withfocusing on research related tothe use of high-grade iron ore forthe direct reduction steelmaking
process, which has a lower
environmental impact.

Titanium (TranTixxii-Eco) ingot

3

High-grade iron ore mining site

As part of the DX-based initiative for promoting“mechanization, remote control, and automation” —Nippon Steel started the field operation of a small drone
in a large structural facility at steelworks

4

July 2022

pp. 33–34

P romotion of measures against climate change by implementing thepp. 21–27
Carbon Neutral Vision
 evelopment and provision of Eco Products, such as high-tensile, lightD
weighted, energy-efficient steel sheets and light-weight railway wheels
pp. 26, 32
and axles for high-speed railways

With the heightening global concerns about “food safety,” Nippon Steel Kyushu
Works has been working to improve its manufacturing and product managementlevels, recognizing a growing demand for strict hygiene management throughout
the food industry chain (food chain), including packaging and containers, andthe need for objective assessment, successfully acquiring FSSC 22000, aninternational food safety standard certification, for its container steel sheets
used to make beverage and food cans for the first time as a Japanese steel
manufacturer. Going forward, we aim to have our other manufacturing sitesthat produce container steel sheets acquire
the same standard certification as soon as
possible. At the same time, we will strive tomeet the strict hygiene management levels
our global customers expect.

pp. 8, 28, 37

Regeneration of seaweed beds with the use of steel slagP romotion of sea area environmental improvement with the use of steel slag
pp. 33, 37

Voluntary clean-up activities at seashore nearby steelworks

For its container steel sheets (tinplate, TFS, can light,
and others) — Nippon Steel became Japan’s first steel
manufacturer to receive FSSC 22000, an international foodsafety standard certification
December 2022

We studied the field implementation of a small industrial drone, IBIS, jointly with
Liberaware Co., Ltd., starting its operation in July 2022. Utilizing this industry’s
smallest-class airframe equipped with an advanced attitude control function
enabled the drone’s stable flight and high-precision imaging inside a narrowand complex facility. With the help of this inspection drone, we will pursue thestabilization and efficiency improvement of our production processes by reducing high-place work and the burden of maintenance work and by promoting
advanced equipment maintenance using three-dimensional data.

p. 34

p. 61

 ollaboration with an NPO, “Mori wa Umi no Koibito” (participation inC
p. 61
tree-planting, etc.)

Appearance of IBIS
and its flight

Food safety system certificationP romotion of air, water, soil risk management and chemical substance
pp. 40–42
management

p. 35
p. 40

Provision of titanium and stainless steel for seawater desalination plants
Provision of lining steel pipes for delivery of clean waterEfficient use of energy, such as 100% use of by-product gas

Signed regarding decarbonization solutions between
Nippon Steel and raw material supplier Anglo American
PLC — A MOU

Provision of earthquake-resistance steel products

Promotion of recycling of waste plasticsP romotion of employee training to raise skills (i.e., OJT, Off-JT, sending
trainees to Junior College for Industrial Technology), hosting technology
pp. 51–52
triathlon

2

We developed TranTixxii-Eco, an environment-oriented designing material
made of pure titanium for the first time in the world, starting to supply it to
Snow Peak, Inc. This TranTixxii-Eco is a material that achieves CO2 emission
reduction and resource conservation without sacrificing its excellent design.
This product is made from a titanium ingot containing more than 50% of titanium scrap that has undergone
stringent quality control and pretreatment with the help of a newelectron beam melting furnace toensure that no dissimilar or foreign materials get mixed into thefeedstock of the titanium ingot.

Examples of specific initiatives
J ob creation through establishment of operating companies in emerging
p. 5
countries

Developed and launched “TranTixxiiTM-Eco”, theenvironment-oriented designing material made of puretitanium for the first time in the world

“Creation of Hometown Forests” to promote greenery within steelworks
p. 37

Site cleaning activities around steelworks
p. 35

Provision of materials for fuel cells that produce energy from hydrogen evelopment and provision of steel materials for high-pressure hydrogenD
p. 26
to support a hydrogen-oriented society

5

p. 61

Bribery prevention guidelines to be established and made well known
p. 62

November 2022

Elimination of antisocial forces
Thorough confirmation of no use of conflict materialp. 59

Thorough management of security export control
P romotion of diversity & inclusion (i.e., female empowerment, how to workand how to take time off from work, health promotion, and employment of
pp. 45–50
the elderly and the disabled)P romotion of DX to improve workstyle, productivity, worker safety
pp. 8, 60
management, etc.
P ursuit of Eco Processes to help raise resource/energy efficiency andpp. 35–36
reduce environmental impacts

Creation of Sea Forests, a seaweed bed creation
project using steel slag — Joint acquisition of J-Blue
CreditTM certification for the first time between a fisherycooperative association and a private company

E co solutions to transfer and spread environmental, energy-saving
p. 29
technologies to emerging marketsJ apan-India and Japan-ASEAN regular exchanges among public andp. 29
private steel-related parties
S upport for human resources development to build an energy
management system in emerging countries

January 2023

In the seaweed bed creation project using steel slag VivaryTM Unit, in which
Nippon Steel and Mashike Fishery Cooperative Association (Mashike,
Hokkaido) have been working together since 2004, the CO2 absorbed in
the blue carbon ecosystem received J-Blue Credit certification through the
J-Blue Credit certification process operated
by the Japan Blue Economy Association, atechnical research association approved by the
Ministry of Land, Infrastructure, Transport andTourism. This accomplishment marks the firstjoint acquisition of J-Blue Credit certification
between a fishery cooperative association anda private company.

Introduction of advanced technologies through bilateral cooperation (India,p. 29
ASEAN, etc.)
Use of steel slag in road materials and materials for civil engineering

6

Nippon Steel’s CORSPACETM, coating cycle extension steel,simultaneously received the 9th Monodzukuri Nippon
Grand Award, Excellence Prize, and the 55th Ichimura Prize
in Industry for Distinguished Achievement

Certificate of J-Blue Credit

March 2023

In response to the issue of reducing the life cycle cost of aging social
infrastructure, such as steel bridges and port facilities, we developed acorrosion-resistant steel material, CORSPACE, which can reduce the environmental impact by almost doubling the painting cycle compared to ordinary
steel structures under the same painting and installation conditions, thereby
reducing VOC emissions through a fewer number of repainting operations.
This technology has received many awards, recognized for supporting
the development of Japaneseindustry and culture andsignificantly contributing to theformation of a prosperous life forthe citizen.
Example of application(Kesennuma Bay Crossing Bridge)

p. 33

NIPPON STEEL CORPORATION

Sustainability report 2023

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Message from the President

10

Towards theRealization of a
Sustainable Society,and the SDGs

Eiji Hashimoto
Representative Director and President

I would like to thank our shareholders and all other stakeholders for yourunderstanding and support to the Nippon Steel Group.
In March 2021, we announced a new medium- to long-term management
plan, with the aim of continuing to grow to “become the best steelmakerwith world-leading capabilities,” that supports Japan’s industrial competitiveness. We have since been undertaking our corporate management
accordingly. By including “Nippon Steel Carbon Neutral Vision 2050”
within the plan, we have identified our efforts concerning climate change
issues as our greatest priority issue. Our basic approach toward realizing
a decarbonized society is to win in the development competition with othercountries and continue to lead the world’s steel industry. Through these
efforts, we are committed to establishing a virtuous cycle of environmental
sustainability and corporate growth and improving corporate value.
In this Sustainability Report 2023 we are pleased to present to you
the current status of promoting the Carbon Neutral Vision 2050 as wellas wide-ranging sustainability-related initiatives as we advance towardrealizing a sustainable society. Specific themes include the environment,
human rights, diversity & inclusion, safety, disaster prevention, and quality.

NIPPON STEEL CORPORATION

Having positioned environmental matters as priority issues that
underlie our corporate management as stated in our Basic Environmental
Policy, we have pledged to contribute to the creation of a society oriented
toward environmental preservation and with low environmental impact.
With the progressing initiatives for achieving the Sustainable Development
Goals (SDGs) adopted by the United Nations, we will conduct our operations to proactively contribute to creating sustainable communities by
providing integrated solutions to the issues of climate change measures,the creation of a circular economy, and the conservation of biodiversity,
including maintaining and improving a favorable living environment.
As for climate change measures, we set forth the Nippon Steel Carbon
Neutral Vision 2050, which aims to reduce total CO2 emissions by 30%
by 2030 compared to 2013 levels and to become carbon neutral by
2050. Under the vision, we will support our customers in improving theircompetitiveness by offering two values: “providing high-performance steel
products and solutions that contribute to reducing CO2 emissions throughout society” and “providing carbon neutral steel through decarbonizing oursteelmaking processes.”

In addition, we launched a new comprehensive brand, NSCarbolexTM,
under which we offer through these efforts “high-performance products
and solutions that contribute to reducing CO2 emissions across society.”
Reducing carbon in the steel industry is not easy, so it is expected to takea long time to develop decarbonation technologies. Under such a circumstance, we will offer NSCarbolex Neutral products to supply customers
with steel products with a reduced carbon footprint early on by allocating
the total amount of CO2 emissions that we have reduced through projects
aimed at reforming and improving our manufacturing processes to any
given steel product using the mass balance method. Furthermore, we will
also offer NSCarbolex Solution high-performance products and solutions
that contribute to not only reducing CO2 emissions in our manufacturing
processes but also reducing CO2 emissions in society.
This is an enormous challenge. We find it crucial to solidify ourdevelopment prospects ahead of others and start actual use of the new
manufacturing processes at an early stage. We are taking this dramaticchange in the business environment as a great opportunity to reestablish
our overwhelming superiority in the world steel industry, and we aredetermined to actively address it as a top management issue.
Creating a circular economy is an essential issue from the viewpoint offurther growing the economy while building a sustainable society. Steelis a material which can be easily sorted and endlessly recycled withoutcausing deterioration in quality. Steel can be described as a perfectembodiment of a circular economy. We are also actively engaged in use
of by-products generated in steelmaking for achieving zero emission.
We also recycle 100% of used and collected plastic containers andpackaging generated in society and collected by us, with Nippon Steelalone processing about 30% of the total volume collected across thecountry. Furthermore, VivaryTM Unit, a mixture of steel slag (a by-productof steelmaking) and fermented waste wood, contributes to restoringsea desertification, with a CO2 fixation effect as blue carbon expected.
Because Vivary Unit acquired a J-Blue CreditTM, it is fair to say this product contributes to creating a circular economy and provides integrated
solutions to promote the conservation of biodiversity and climate change
measures. We are committed to contributing to the realization of a circular
economy by means of tireless technological innovations.
Amid increasing movement toward the 30by30 biodiversity target as has
been seen at the G7 Summit in the U.K. in 2021 and in the KunmingMontreal Global Biodiversity Framework adopted at the Convention on
Biological Diversity COP15 in 2022, we are moving toward biodiversity
conservation. This past March, in support of these goals for biodiversity
conservation, we also participated in the 30by30 Alliance established by
the Japanese government. We have long been involved in the “Creationof Hometown Forests” at each steelworks, and “blue carbon” activities
designed to create seaweed beds and absorb CO2 in coastal waters.

We are thus developing initiatives that harmonize nature protection andproduction activities. We believe we can contribute significantly to Japan’snational efforts by actively promoting various initiatives backed by ourmanagement resources.
As for creating sustainable communities, we believe environmental risk
management, including accident and trouble prevention, must take precedence over anything else from the standpoint of business continuation,
just like safety and disaster prevention. Concerning the recent drainage
incident in the Kimitsu Area, we take it seriously, implementing finely
tuned environmental impact reduction measures from both hardware andsoftware perspectives by reaffirming the significance of the incidence,going back to basics, and understanding the realities at each operationalbase, including compliance with local ordinances and standards as well as
conformity to laws and regulations.
As for our response to social issues, we consider it an essential elementfor our corporate management, including interactions with various stakeholders such as diversity and inclusion and coexistence with communities
and society, as well as safety, disaster prevention, quality, and production
as outlined in our “Manufacturing Values.” In particular, while promoting
business activities that respect varying values and consider human rights
issues, we are aggressively working on activities related to diversity andinclusion from the perspective of becoming a company that encourages
diverse employees to work with high productivity and demonstrate theirfull capabilities with pride and a sense of satisfaction. Based on the belief
that the development of excellent personnel is a prerequisite for the
production of excellent products, we are working on strengthening ourmanufacturing capability with emphasis on the development of our humanassets. In order to live up to our Corporate Philosophy of contributing to
the development of society and to be continually trusted by everyone, weare committed to fulfilling our social responsibility.
Sustainability issues are considered as one of our priority management
issues, which form part of the base that supports sustainable corporate
growth. We have thereby identified priority issues (materiality) of
sustainability issues that should be addressed in a focused manner,with due consideration to our corporate principles, values, stakeholders’expectation, and our growth strategy. We intend to steadily promote
its execution and follow-up by checking Key Performance Indicators toassess outcomes of our efforts.
We set forth a corporate philosophy, “Nippon Steel Corporation Groupwill pursue world-leading technologies and manufacturing capabilities,
and contribute to society by providing excellent products and services.”
We hope to continue to be a company that contributes to realizing asustainable society through core business activities.

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Materiality of Sustainability Issues

12

Materiality of Sustainability Issues

Materiality, KPIs and major initiatives in FY2022 (including some results in FY2021)

Nippon Steel recognizes that sustainability initiatives are one of the important issues and form the base that supports the very
existence and growth of the Company. Among the initiatives, the issues to be focused by taking into account our shareholders’expectations and our Corporate Philosophy, Values, and growth strategy have been identified as materiality (priority issues).

1
1

Safety, environment, and disaster prevention
Safety and healthp. 55

Target and KPIProcess to identify materiality
Consider requests from stakeholders
on environmental, social issues andlisting candidate issues

Generalize the issues in due
consideration of the Company’s
corporate philosophy and values

Verify the issues from theviewpoint of the Company’s value
creation process and strategy

Main Initiatives and Achievements in 2022

Accident frequency rate of 0.10 or lessP romotion of thorough adherence to the six company-wide compliancerequirements and promotion of greater machine safety, in order toeliminate serious accidents and similar accidents

Accident frequency rate: 0.11

Zero fatal accident

Prevention and risk reduction of accidents, based on safety risk evaluation

Number of fatal accidents: 1

A cquisition of occupational safety and health management system(ISO45001) and establishment of internal audit system

Discuss and approve issues in the
Board of Directors meeting
2

Environment
1 Promotion of climate change measures
Target and KPI

Evaluate importance based on evaluations and comments from investors, NGOs, and ESG rating agencies
Evaluation through dialogue with investors, NGOs, and sustainability experts

Main Initiatives and Achievements in FY2022
L aunched a new comprehensive brand, NSCarbolexTM, to offer “high-performance products and solutions that contribute to reducing CO2
emissions across society” in the global market.

[Promotion of the Carbon Neutral Vision 2050]

Identified materiality (priority issues)
1

Safety, environment,
and disaster prevention

2

Quality

Together with local
communities

6

3

Production

4

Human resources,and diversity & inclusion

Corporate valueenhancement andprofit distribution

Thoroughimplementation ofcompliance[CCUS] Participated in three advanced CCS projects led by the Japan Organization for Metals and Energy Security (JOGMEC).
Use of by-product gas: 100%

Our Corporate Philosophy (Our Values) states: “The Nippon Steel Corporation
Group will pursue world-leading technologies and manufacturing capabilities, andcontribute to society by providing excellent products and services.”
Concerning “provision of excellent products and services,” our critical mission
as a responsible manufacturing company is to reliably produce and deliver quality
products that satisfy customers. Needless to say, the prerequisites to enable thismission include “safety, environment, and disaster prevention” as well as thoroughcompliance to rules and regulations.
The “world-leading technologies and manufacturing capabilities” are realizedby our human capital. Securing and fostering of outstanding personnel is an
important challenge to be overcome in order to strengthen overall manufacturing
capabilities. We firmly believe that respect for human rights and diversity &inclusion, as well as promotion of physical and mental wellness strength are thebasics for our employees to work vigorously.
With regard to the relationship with society, we must maintain good relationship with the community where our steelworks or other facilities are located. This isindispensable for us to continue operating business in the future. We are pledged tooperate in an environmentally-friendly manner and maintain good communication
with local communities, as a corporate citizen.

solutions to customers. In order to reproduce such processes, stable production
and continual profit generation are indispensable.
In addition, having positioned environmental matters as priority issues that
underlie our corporate management, we have pledged to contribute to the creationof a society oriented toward environmental conservation and with low environmental impact. We have also been engaged in building of a circular economy throughreduction of CO2 emissions by the three “Eco” initiatives and innovative technology
development, and recycling of industrial waste (such as plastics).
Concerning the climate change problems that affect the survival of humanity,
we are making efforts aimed at carbon neutrality by 2050 from two aspects:
Provision of high-performance steel products and solutions to reduce CO2
emission of the society as a whole, and breakthrough technology development todecarbonize steelmaking processes.
3Corporate value enhancement and profit distribution

We are committed to continuing operations as a sustainably growing company bygenerating profit and raising corporate value from business activities, including
sustainability initiatives. We will also contribute to society by providing excellent
products and services, and distributing profit to employees, government, shareholders, and other stakeholders.
4 Thorough compliance2

 ateriality with due consideration of the Company’s valueMcreating process and potential changes in business environment

A base of our value creation process is to use a diverse range of financial/non-financial assets and competitive advantages, and to provide products and

NIPPON STEEL CORPORATION

Promotion of adopting advanced energy-saving technology
pp. 4, 26

As a responsible leading company, we thoroughly adhere to laws and regulations,which is fundamental to all of our activities. It should be achieved by our independent efforts, based on our corporate philosophy, value, code of conduct and alike.

[Contribute with “Eco Solutions”]

E ffective use of by-product gas (coke oven gas, blast furnace gas etc.)
and waste heat

Use of waste heat in steam generation: 76%

A doption of high-efficiency power generation equipment and oxygen
plant; regeneration burner in reheating furnace

Investment cost for energy-saving: ¥37.4 bn

In-house generated energy use in in-house power
generation: 72%

 ecided to make an additional investment to increase the production capacity of high-grade non-oriented electrical steel sheets at theD
Setouchi Works Hanshin Area (Sakai) and the Kyushu Works Yawata Area (90 billion yen, a cumulative total of 213 billion yen).

S upply of high-performance steel products to help reduce CO2
emissions through use of their end products

In consideration of our stakeholders’ expectations, we have defined the materiality based on the following principles. We believe that tackling these materiality issues willcontribute to the achievement of the United Nations’ 2030 Agenda for Sustainable Development, featuring Sustainable Development Goals (SDGs).

 ateriality with due consideration of the corporate philosophy
Mand priorities in manufacturingp. 35

Maintaining high-level effective use of energy[Enhancement of “Eco Products”]

Nippon Steel’s Materiality

1[High-grade steel production in large size electric arc furnace (EAFs)] Started the commercial operation of a new electric arc furnace in the
Setouchi Works Hirohata Area. Started full-scale studies on the shift from the blast furnace steelmaking process to the electric arc furnacesteelmaking process, with the Kyushu Works Yawata Area and the Setouchi Works Hirohata Area as candidate sites.

Vision for 2050: Carbon neutral[Implementation of “Eco Process”]

5[Reduction with hydrogen in blast furnaces (BFs)] Decided to introduce facilities to demonstrate hydrogen-rich gas injection technology at theNo. 2 blast furnace in the East Nippon Works Kimitsu Area, in preparation for the demonstration tests scheduled to start in January 2026.

p. 21

Target in 2030: 30% reduction in CO2 emissions (compared to 2013)

Expansion of products that acquire the EcoLeaf environmental labels (Increased by 12 from the previous year to a total of 47)

p. 29

 rowing cumulative CDQ delivery record by Nippon Steel Engineering inG
the GroupT ransfer and dissemination of the world-leading energy-saving
technology to help CO2 emission reduction globally

1 37 CDQ cumulative units(contributing to 28.73 mn t-CO2 reduction, FY2021)

2 Contribution to creation of a circular economy
Target and KPI[Realization of zero emissions within the Company]

Main Initiatives and Achievements in FY2022
p. 33

R eduction in final disposal amount: 263 thousand tons or less
(FY2025 target)P romotion of recycling of by-products (slag, dust, sludge, etc.) in and outof the Company

Final waste disposal: 271 thousand tonsA ggressive promotion of recycling treatment, according to the Chemical
Recycling Act

P ackaging/container plastic waste treatment: 200 thousand
tons (equivalent to 30% of Japan’s total plastic waste)[Realization of recycling of waste generated in society]pp. 34, 35
E stablishment of a waste plastics recycling system to expand its
collection volume

3 Conservation of biodiversity and nature positivepp. 37–39

Target and KPIMain Initiatives and Achievements in FY2022[Contribution to the conservation of biodiversity andnature positive]

Participated in the “30by30 Alliance” for biodiversity
Promoted the Creation of Hometown Forests at steelworks

Promoted activities aimed at achieving the 30by30 biodiversity target

4 Promotion of environmental risk management

Conducted activities of the Creation of Sea Forests

Participated in March 2023
Greenery space: 850 ha
Creation of Sea Forests at 44 locations in total(+6 areas from the previous year)

pp. 40–42

Target and KPI[Air environment preservation]
Maintaining low-level emissions of NOx and SOx

Main Initiatives and Achievements in FY2022
Installment of equipment that reduces SOx and NOx emissions; shifting to
low-sulfur fuel; adoption of low NOx regenerating burners

SOx: 13 mn Nm3
NOx: 23 mn Nm3

 aintaining of lower discharge levels than voluntary targets in chemicalM
substances
Emission of VOC (Volatile Organic Compounds): 1,106 tons/year(down 30% vs. FY2000)

Continual efforts based on the voluntary reduction planVOC: 396 tons/yearBenzene: 80 tons/yearE mission of benzene: 172 tons/year(voluntary target, along with the government target)[Water environment preservation]
Recycling of water; high-level stable use of recycled water

Water treatment, recycling and reuse of freshwater used by the Company

Use of recycled water: app. 90%

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Materiality of Sustainability Issues
3Disaster prevention

14

p. 56

Target and KPIMain Initiatives and Achievements in 2022
P romoted activities to prevent recurrence and prevention of disasterrelated accidents based on risk assessment[Elimination of disaster risks and group-wide sharing ofeffective measures]

Zero serious disaster-related accidentP romoted initial response training aimed at minimizing damage when arisk occurs
Implemented various monitoring (audits) as a survey of disasterprevention activities
Evaluation of disaster prevention activities through third-party monitoring,
hearings from head office management, and self-monitoring bysteelworks disaster prevention managers

5
1

1

2

Serious disaster-related accidents: 0

Quality control and guarantee

Main Initiatives and Achievements in FY2022

Systemization and automation aimed at more credibility in testing and inspection

P romoting a shift from manual data input to automatic data input as a measure to prevent input errors and falsification of pre-shipment
judgment data

Research and development and intellectual property investment/utilization

Solution that result in customer satisfaction

P romoted utilizing intellectual property aimed at strengthening patentapplications related to priority issues, response to infringement of patentrights, and technical tie-ups

R&D expenses: ¥70.5 billion (consolidated)1 ontinual execution of corporate philanthropy in the support of music via
C
Nippon Steel Arts Foundation

S upport of music activities via presentation of Nippon Steel Music Awards
and operation of the Kioi Hall

Number of plant visitors: app. 130,000(FY2019 results; almost no implementation in FY2020,
FY2021 and FY2022 due to the COVID-19 pandemic)

Corporate value enhancement and profit distribution
Securing of profit and enhancement of corporate value

 eceived the awards and prizes including the 69th Okochi Prize, theR55th Ichimura Industrial Prize in Industry for Distinguished Achievement,
the FY2023 Commendation for Science and Technology by the Ministerof Education, Culture, Sports, Science and Technology, and the 9th
Monodzukuri Nippon Grand Award

Main Initiatives and Achievements in FY2022

ROS of 10% (FY2025 plan target)

Please see the 11-Year Financial Performance section of Nippon Steel’s
Integrated Report pp. 105–106.

ROE of 10% (FY2025 plan target) umber of awards from customers, government, andN
institutions: 10

2

Production

ROS of 11.5%
ROE of 18.1%

Profit distribution
Target and KPIMain Initiatives and Achievements in FY2022

1 Salary and wages payment to employees

Base bonus amount: ¥2.35 mn

Bonus payment amount

Revised amount of salary: ¥2,000

Revised amount of salaryp. 60

Initiatives for more stable production and supply (hardware and software)

Please see the following:
Fact Book: Wages and Bonuses
Integrated Reportp. 44: Financial Strategy
pp. 103–104: 11-Year Financial Performance

Main Initiatives and Achievements in FY2022

2 Appropriate tax payment
Tax payment (consol.)Standardization of veterans’ operational skills and extended use of experts
 se of IoT and AI for operational support, improved efficiency of facility inspection and operation monitoring, and reinforcement ofU
predictive monitoring

3 Dividend payment to shareholders

Tax payment (consol.): ¥214.4 bn

Dividend per share: ¥180/year

Dividend payment
Note: Target consolidated payout ratio: around 30% (FY2025 management plan)

Human resources, and diversity & inclusion
Respect for human rights
Target and KPIMain Initiatives and Achievements in FY2022
“Respect for Human Rights”

p. 43

Main Initiatives and Achievements in FY2022

T he number of female employees in management positions: at least 2 times,(vs. 36 in FY2020), and 3 times as target in 2025; at least 4 times, and 7 times
as target by 2030
The ratio of paid holidays taken: 75% or higher

Thorough implementation of compliance
Adhering to laws and regulations as a base of all activities

Diversity & inclusion
Target and KPI“Diversity & Inclusion”

Number of women in managerial positions: 65(as of April 2023)

p. 45

Please see the Corporate Governance section of Nippon Steel’s Integrated Report pp. 81–90.

The ratio of paid holidays taken: 82.9%(FY2022) ellness management aimed at maximizing people’s ability up to the age of 65,
W
and support to enhance mental and physical health3P roactively accepting plant visits by shareholders, investors,
and junior high/elementary school students

Target and KPI elined the No. 3 blast furnace at the Nagoya Works and innovated the steel scrap and pig iron melting process at the Setouchi WorksR
Hirohata Area (the start of commercial operation of the electric arc furnace)2

Main Initiatives and Achievements in FY2022

Ongoing promotion of hosting plant visitsp. 66

Target and KPI

1

6

T he number of patents held: approximately 30,000(14,000 in Japan and 16,000 overseas)

Main Initiatives and Achievements in FY2022

Number of awards from customers, government, and institutions

4

p. 62

p. 58

A ctively promoted research and development related to priority issues
such as product sophistication, process efficiency improvement, and thedevelopment of carbon-neutral-oriented innovative processes

Target and KPIStable production and supplyE xpenses for green space development and maintenance:¥1.3 bn

Main Initiatives and Achievements in FY2022

R espect for intellectual property and enhancement of its strategic protection
and utilization

1

Activities mainly in the support of education, sports, and arts

p. 57

P romotion of strategic research and development aimed at sustainable businessgrowth3

Funding for green space development and maintenanceTarget and KPITarget and KPI

p. 37

Main Initiatives and Achievements in FY2022

Green space development to contribute to the local environment

Quality

Target and KPI

3

Environmental preservation/creation activities in communities
Target and KPI

2

2

Together with local communities

Human resource development
Target and KPIPromotion of measures to develop human resources

NIPPON STEEL CORPORATION

Main Initiatives and Achievements in FY2022
“Human Resources Development”

p. 51

 ours of training and education: 800 thousand hours/year
H(28 hours/person, year)

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Environment

16

Environmental Management

Specific initiatives in five priority areas

Nippon Steel has set the Basic Environmental Policy based on its belief that the environmental management is an integral part ofcorporate mission. We are dedicated to managing the Company so as to reduce and minimize impact on the environment at all stages,
from technological development work to the purchase of raw materials and equipment, manufacturing processes, transportation of
products, and onward to their use, recycling and disposal.

Recognizing that efforts in the five priority areas are important for the realization of a sustainable society, we are steadily implementing measures in each of theseareas. In particular, since we announced the Carbon Neutral Vision 2050 in March 2021, we have been actively working on climate change measures as the mostimportant management issue.

Five priority areas

Basic Environmental Policy
Under the principle of “Environmental Management,” Nippon Steel is committed to contributing to the creation of a sustainable society through its operations. To thisend, we will conduct our operations to actively contribute to creating sustainable communities through integrated solutions to the issues related to climate change
measures, the creation of a circular economy, and the conservation of biodiversity, including maintaining and improving a favorable living environment.

Three priority issues

Climate Change Measures educing environmental impacts at every stage of operations
R(Eco Process)1

At every stage of business activities including production processes and transportationof products, Nippon Steel will, besides complying with environmental laws and regulations, promote activities to reduce environmental impacts primarily through voluntary
efforts, in cooperation with customers and other industries, with the aim of further
improving environmental preservation and the efficiency of resources and energy, andof promoting reduction and recycling of waste inside and outside the company.
25Development of innovative technologies

Ensure progress toward the Carbon Neutral Vision 2050

Nippon Steel will address on a medium and long-term basis the development of innovative technologies focused on the future issues of resources and the environment
with the aim of providing society with technologies and products that contribute toenvironmental preservation, resource conservation and energy conservation.

E fforts for climate change measures in the resource recycling
and biodiversity fields
Make efforts to adapt to climate change
Transfer and diffuse decarbonization technologies overseas

Development of a rich natural environment

Disclose information according to recommendations of the TCFD

As a member of each community where we operate in Japan, Nippon Steel will contribute to the conservation of biodiversity and nature positive by promoting greenery
environment in land areas, environmental improvement in sea areas, and many otheractivities. In addition, when conducting business activities overseas, we will ensure
the preservation of the natural environment of partner countries.

Offering of environment-oriented products (Eco Products)
With the aim of reducing environmental impacts at every stage of the life cycle of our
products offered to domestic and overseas markets, Nippon Steel will make efforts,
making good use of its innovative technologies, to develop and offer products that contribute to environmental preservation, resource conservation and energy conservation.

3

4

6

P roposing environmental preservation solutions from a global
perspective (Eco Solution)
Nippon Steel will further improve its long-accumulated technologies and environmental
management system that are related to environmental preservation, resource conservation, and energy conservation technologies. We offer them in Japan and abroad tocontribute to, in addition to the reduction of environmental impacts, the development of
infrastructure for disaster prevention with due consideration given to nature and scenery
as well as to solving environmental issues outside Japan through technology transfer.

pp. 19–32

Promotion of environmental relations activities
To gain social trust consistently, Nippon Steel will proactively promote relationship-building activities that contribute to environmental management, including
environmental education for our employees, disclosure of environmental information
on an adequate and timely basis, and close exchange with stakeholders.

NEDO “Hydrogen utilization in iron andsteelmaking processes” project

Creation of a Circular Economy

Conservation of Biodiversity andNature Positive pp. 37–39

pp. 33–36

Expand efficient use of resources and energyP romotion of efforts to conservation of
biodiversity and nature positive

Promote internal zero emission

 ontribution to activities aimed atCachieving the target of 30by30 alliance for biodiversity

Accelerate recycling of waste generated in society

Initiatives for priority areas
In order to achieve the SDGs, we identified three priority issues and two bases that help solve these issues based on the Basic Environmental Policy, implementing
various initiatives defined as five priority areas.

Five priority areas
Construction using a soil modifier made fromsteelmaking slag

Raising challenges

Waste plastic processing equipment

Climate Change Measures

Creation of Hometown Forests(Reproducing “Chinju-no-Mori ” (sacred shrine
forests) inside steelworks)

Creation of Sea Forests(Improving environment of sea areas usingslag products)

Sustainable Development Goals (SDGs)
Creation of a
Circular Economy

Three priority issues

Conservation of
Biodiversity andNature Positive

Two bases

Environmental
Risk Management
Two bases
Environmental Risk
Management

Environmental
Management System

pp. 40–42

Environmental
Management System

pp. 17–18

Conserve air environment

Establish an environmental management organization

Conserve water environment

 ork at managing and improving the level of environmentalWmanagement

R espond to other environmental risks(soil, chemical substances and wastes)Groupwide environmental management

Contribution
NIPPON STEEL CORPORATION

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Environment

18

Environmental Management System

Efforts to maintain and improve environmental management levels

Nippon Steel has built an environmental governance and management system that includes not only its
own steelworks and factories, but also its group companies in Japan and abroad. Activities to reduce
environmental risks are promoted by combining internal and external environmental audits and following theplan-do-check-act (PDCA) cycle.

Establishment of environmental management system
Nippon Steel has three committees to respond to environmental issues, including climate change: the Environmental Planning Committee, the Environmental
Technology & Management Committee, and the Green Transformation
Development Committee.
The Environmental Planning Committee is chaired by the Executive
Vice President in charge of Environment. The Environmental Technology &Management Committee is chaired by the Executive Vice President in chargeof Technology. Other Executive Vice Presidents, Directors, and Executive
Officers are members of these committees. Meetings of each committee
are held every six months. The Environmental Planning Committee and theEnvironmental Technology & Management Committee manage environmental
issues such as response to climate change, biodiversity, and nature positive,
and response to environmental risks and to create circular economy associated with the atmosphere, water, and waste, respectively.
As a part of the enhancement of governance, we regularly holdEnvironmental Managers’ Meetings and Environmental Group Leaders’Meetings across all steelworks. In particular, Nippon Steel works to reducerisks related to settled dust, wastewater, and waste including activities, basedon the work of expert’s conferences held for each of these areas.

The Green Transformation Promotion Committee is chaired jointly by the
Executive Vice President in charge of Environment and the Executive Vice
President in charge of Technology. Other Executive Vice Presidents, Directors
and Executive Officers are also members of the Committee. The committee
meets as needed to review important matters related to the promotionof carbon neutrality (changes in the external environment, update on theinitiatives, etc.)
The content of discussions on climate change and the environment at thethree committees are reported and discussed as one of the risk management
items of the entire company at the Management Committee and the Boardof Directors meetings, both of which are attended by the Chairman and thePresident. The Board of Directors oversees the risk management by being
regularly reported about important management risks which were initiallyreported and discussed at the Management Committee. Environmental issues,
including climate issues, are addressed at least four times a year. In this way,
climate change and other environmental management are integrated into ouroverall governance.

In accordance with the international standard ISO 14001, Nippon Steel has
built an environmental management system, with each steelworks generalmanager serving as the responsible person. Each year, in addition to aninternal auditing of each steelworks and a management review by its generalmanager, each steelworks is audited by the Environmental Technology &Management Division of the Head Office. Environment officers of other steelworks and facilities also participate in these audits to cross-check. In addition,
periodical reviews are conducted by the ISO certification agency.
For the Group companies (73 companies subject to environmental review)
including those overseas, a direct interview is conducted by a member ofthe Environmental Technology & Management Division of the Head Office

From the Group companies in Japan, Nippon Steel has identified 51
companies (as of April 2023) as having certain environmental impact andholds meetings for those companies twice a year. In the meetings, we share
information including the latest trends of environmental laws and regulations,

Costs associated with environmental conservation (Environmental accounting)Nippon Steel has adopted environmental accounting to be used as guidelines
for corporate activities, and to accurately track the environmental costs andeffects. Environmental conservation costs, which combine the costs of capital
investment associated with environmental measures, energy-saving measures,

Pollution Prevention Costs
Global Warming Prevention Costs

Matters to be discussed and reported in the Board of Directors meetings• Reporting on the environmental situation (climate change circular economy, biodiversity, etc.)• Sustainability-related information disclosure• Status of studies on carbon neutrality, etc.

Costs of Recycling Resources

Management Committee
Environmental Management
Activities Cost

Environmental Technology & Management Committee

Green Transformation Promotion Committee
Research and Development Costs

Agenda items

Agenda items

Agenda items• Climate change issues• Efforts to conservation of
biodiversity and nature positive, etc.

• Update on environmental risk management efforts• Challenges for establishing a circular-oriented society• Important matters concerning the Carbon Neutral Vision(changes in the external environment, update on theinitiatives, etc.)

Social Activity Costs
Other Environmental Costs

Collaboration

Information sharing
Incident reporting

Environmental general manager
meeting and group leader meeting

Environment Division (Steelworks)

Auditing

Group Companies
Environmental Conference

Domestic Group companies

Overseas Group companies

NIPPON STEEL CORPORATION

and recycling measures, and expenses incurred to conserve the environment,
totaled ¥185.0 billion in fiscal 2022: ¥17.4 billion for capital investmentand ¥167.6 billion for environmental conservation. Details for environmental
conservation costs are listed below.

(¥ billion)

FY2022

Collaboration

Green Transformation
Development Sector (Head office)Collaboration

External companies
and institutions

Capital expenditures

Total expenses

Air pollution control (including measures against dust), etc.

8.2

35.1

Water and soil pollution prevention, noise and vibration prevention

6.8

10.6

Energy saving measures

2.4

7.4

Recycling of resources and generated materials

–

50.3

Industrial waste treatment (including PCB, coal ash, etc.)

–

12.5

Business-related general waste treatment, etc.

–

0.5Construction of EMS and acquisition of ISO14001 certification–

0

Monitoring and measurement of environmental loads–

1.2

Personnel expenditures related to environmental measures, etc.

–

3.1

Development of Eco Products–

6.8

Development of products which have low environmental impact
during manufacture, etc.

–

34.1

Beautification and greening of offices–

1.3

Supporting environmental organizations, etc.

–

0.7

Environmental fines, etc.

Total

–

4.1

17.4

167.6

Information sharing

Meeting

ISO14001
external audit

cases of environmental initiatives with the goal of reducing environmental
risks. In addition, we have established a venue to share information within the
portal site to disseminate information on environmental regulatory trends andthe troubles.

Item• Environment Planning Division (Head office)• Environmental Technology & Management Division (Head office)Internal audit (on-site patrol)

Environmental conservation costs

Board of Directors

External companies
and institutions

Internal audit (hearings)

Environmental risk management concerning Group companies

Environmental management system

Environmental Planning Committee

to improve management levels. This is part of the corporate governanceconducted by the Internal Control/Audit Department of the Head Office.

It is difficult to quantify environmental preservation effects in monetary terms
since such calculation would require many assumptions. Therefore, effects
taking environmental measures are kept track of as environmental preservation performance, which are reported in this report and on our website.
For example, energy consumption is shown on page 19; water consumption volume, on page 40; and various resources spent, on page 35. For waste

products, final disposal volume is stated on page 33; atmospheric substances,
SOx and NOx emissions, on page 40; and water quality, soil, and hazardous
chemical substances, on page 42.

Sustainability report 2023

19

Environment

20
1

Climate Change Measures

CO2 emissions in the value chain
CO2 emissions originated from energy source and generated in Nippon Steel’s manufacturing process (Scope 1 and Scope 2) as well as CO2 emissions in the value
chain (Scope 3), which are calculated by using the Green Value Chain Platform of the Ministry of the Environment and other methods are as follows.

Nippon Steel recognizes climate change as a priority problem that threatens survival of the human race.
Climate change would also severely affect our business environment and earnings. In order to ensuresustainable operations, we are striving to reduce the impact of climate change by working at energy
conservation and CO2 emissions reduction throughout our supply chain.

Scope 1 and 2

marks: Items assured by the third party

2013

2018

CO2 emissions (thousand t-CO2)
2019
2020
2021

2022

Scope 1 Direct emissions from owned sources
associated with use of fuel89,57881,33778,5757

63,0107

71,3157

63,397

Scope 2 Indirect emissions from the generation ofpurchased energy

13,825

12,85012,1007

11,035

12,4627

11,9125

Scope 1 + 2(Energy consumption per ton of crude steel: t–CO2/t)

103,403
1.89

94,187
1.89

90,6757
1.93

74,0457
1.97

83,7787
1.88

75,3095
1.92

5,474

4,990

4,709

3,766

4,445

3,913

(FY)

Nippon Steel Group’s efforts for energy conservation and CO2 emissions reduction
In March 2021, we announced the Nippon Steel Carbon Neutral Vision
2050, in support of the Japanese government’s ambitious policy to realize
a carbon-neutral society in 2050. Through carbon neutralization, we willoffer two types of value: “Provision of high-performance steel products andsolutions that contribute to reducing CO2 emissions in society” and “provisionof carbon neutral steel through decarbonizing steelmaking processes.” We
aim to reduce CO2 emissions at the time of production and processing by ourcustomers, at the time of use of our products by end consumers; and in the
supply chain of our customers.

In addition, Nippon Steel by itself as well as the Nippon Steel Group
including consolidated crude steelmaking companies that have blast furnaces
and electric furnaces with high CO2 emissions have set a target for 30%
reduction in CO2 emissions in 2030 compared to 2013. Also, our majordomestic consolidated subsidiaries aim to be carbon neutral in 2050. Our
overall Group will work together to tackle climate change issues.

Crude steel production8 (consolidated-base, 10,000 tons)

Scope 3

Nippon Steel Group’s energy consumption and energy-derived CO2 emissions

mark: Items assured by the third party

CO2 emissions (thousand t-CO2)
2020
2021
2022

In fiscal 2022, due to the effects of these energy conservation initiatives
and the decrease in production affected by the global slump in demand forsteel products, our energy consumption and energy-derived CO2 emissions
significantly dropped to 926 petajoules (PJ) and 78 million t-CO2 (a preliminary
figure), respectively.

Energy consumption

Energy-derived CO2 emissions(PJ)(million t-CO2)
mark: Items assured by the third party

75

1,100

73

90

1,077

1,044

94
3

–30%

1,025
67

1,171

912

926

58

62

80

800

87
3

102
94

91

78
3

0

75

75

0

2013

2018

2019

Energy consumption (Group Companies)

2020

2021

2022

(FY)

Energy consumption (Nippon Steel)[Calculation method]
Calculation for the Company and its domestic subsidiaries is based on the metrology of the Carbon Neutrality Action Plan.
Overseas subsidiaries follow local regulations or guidelines for calculation.
[Conversion factor]
The Company and its domestic subsidiaries use the “Table of heat generation and carbon emission coefficient byenergy source” (revised January 31, 2020) of the Agency for Natural Resources and Energy, METI.
Overseas subsidiaries use relevant emission factors according to local regulations or guidelines.
[Boundary of data collection]
Nippon Steel2, 3, associated EAF mills (Osaka Steel, Sanyo Special Steel, Nippon Steel Stainless Steel, Oji Steel, Tokai
Special Steel, Nippon Steel Structural Shapes Corporation, Tokyo Kohtetsu, Ovako, Sanyo Special Steel Manufacturing
India, and Standard Steel), and three Sanso Center companies4
The data collection period used is each company’s accounting period. As Ovako has changed its fiscal year end,
Ovako’s fiscal 2021 results cover a period from January 1, 2021 to March 31, 2022 (15 months).

NIPPON STEEL CORPORATION

15,994

12,939Calculated using method9 below for purchased ironore, coking coal, coke, and oxygen

2 Capital goods

1,632

1,400

1,503

[Amount of capital expenditures] X [Emission factor]

3 Fuel and energy related activities not included in Scope 1 or 2

291

338

293

[Amount of electric power procured and fuel used] X[Emission factor]

4 Upstream Transportation and Distribution

629

710

638

[Transportation distance reported in the Energy
Saving Law document] X [Emission factor]

5 Waste generated in operations

4

5

5

[Amount of waste] X [Emission factor]

6 Business travel

4

4

4

[Number of employees] X [Emission factor]

7 Employee commuting

14

14

13

[Number of employees] X [Emission factor]

1,125

1,053

1,193

15 Investments

2013

2018

2019

2020

Energy-derived CO2 emissions (Group Companies)

2021

2022

2030

(preliminary)1

Target[Emissions by subsidiaries and affiliates that emit
GHG of over 10,000 tons] X [Equity stake of eachcompany]

9 Iron ore and coal: [Amount purchased of procured iron ore and coal] X [Emission factor]
Coke: [Amount purchased of procured coal at source] X [Emission factor] + [Amount of energy used in productionof coke] X [Emission factor by energy source]
Oxygen: [Amount of energy used in production of oxygen] X [Emission factor by energy source]
In FY2022, due to partial changes in the source of emission intensity, CO2 emissions decreased compared to FY2021.
If we use the same emissions factor as in FY2021, CO2 emissions in FY2022 would be 14,619 thousand t-CO2.

Example of Scope 3 efforts: CO2 emission reduction by raising efficiency in logistics

83

74

864

854

77
3

70

957

14,379[Source of emission factor]“Emissions unit value database for accounting of greenhouse gas emissions throughout the supply chain (ver. 3.3)”(March 2023, Ministry of the Environment)“Table of heat generation and carbon emission coefficient by energy source” (Revised January 31, 2020; METI,
Agency for Natural Resources and Energy)[Boundary of data collection] Nippon Steel

98
4

65

1 Purchased goods and services

4

1,109

1,000
900

mark: Items assured by the third party

107
100

1,151

Calculation method

Scope 3 All indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company

Nippon Steel has been working on energy conservation from diverse starting
points: improving efficient use of energy generated in the steelmaking process(i.e., power generation from recovered by-product gas and waste heat); making
operational improvements in each process; renovation of older coke ovens andother equipment; introduction of high-efficiency power generation facilities andoxygen plants; and conversion to regenerative burners in the reheating furnaces.

1,200

Based on the Carbon Neutrality Action Plan.
See the boundary of data collection statedbelow.

5 Preliminary figure: The amount of CO2 per unit of purchased electricity from each of general power companies inJapan in fiscal 2022 is assumed to be the same amount as in fiscal 2021.
6 E xcluding CO2 emission associated with the IPP operation by the steelworks.
7 Due to a review of the summary values and changes in coefficients and other factors, the figure for this past year
was revised retroactively.
8 This does not include G/GJsteel.

[Conversion factor]
The Company and its domestic subsidiaries use the “Table of heat generation and carbon emission coefficient byenergy source” (revised January 31, 2020) of the Agency for Natural Resources and Energy, METI.
Overseas subsidiaries use relevant emission factors according to local rules or guidelines.
[Boundary of data collection]
Nippon Steel6 and associated EAF mills (Osaka Steel, Sanyo Special Steel, Nippon Steel Stainless Steel, Oji Steel, Tokai
Special Steel, Tokyo Kohtetsu, Nippon Steel Structural Shapes Corporation, Ovako, Sanyo Special Steel Manufacturing
India, and Standard Steel). The data collection period used is each company’s accounting period. As Ovako has changed
its fiscal year end, Ovako’s fiscal 2021 results cover a period from January 1, 2021 to March 31, 2022 (15 months).

(FY)

1,246

Calculation method(FY)

Energy-derived CO2 emissions (Nippon Steel)

1 Preliminary figure: The amount of CO2 per unit of purchased electricity from each of general power companies inJapan in fiscal 2022 is assumed to be the same amount as in fiscal 2021.
2 Excluding energy consumption and CO2 emission associated with the IPP operation by the steelworks
3 The amounts of energy consumption required for production of coke purchased by Nippon Steel and CO2 emissions
are included in the aggregate.
4 Concerning the three Sanso Center companies, the amount of energy consumption required for production ofoxygen purchased by Nippon Steel Group and CO2 emissions are included in the aggregate.

Nippon Steel maintains a high modal shift rate10 of 98% and works at reducing
CO2 emission by raising efficiency in logistics, such as by use of large vessels.
As part of the efforts, we have begun to use “Utashima” — a hybrid-type cargovessel, equipped with lithium-ion batteries. This vessel was awarded the Small
Cargo Vessel Award of the Ship of the Year 201911. In the past, our seven cargovessels have been rated the highest in the Coastal Ship Energy Conservation
Rating of the Ministry of Land, Infrastructure, Transport and Tourism.
We have also decided to introduce cargo vessels equipped with a hybrid
propulsion system consisting of a natural
gas-fueled engine and battery, for marinetransportation of domestic raw materials.

Hybrid Cargo Ship “Utashima” equipped with lithium-ion batteries

We will continue to cooperate with relevant ministries, agencies, andorganizations to promote use of ships utilizing alternative fuels, in order toreduce greenhouse gas emissions in marine transportation.
Logistics sector’s ton-kilometer12 achievements for FY2022
Transportation quantity:
10,000 tons/year
Ship
Railway

1,827

(57%)

Million ton-kilometers/
year
12,195(91%)(Reference)

g-CO2/
ton-kilometers
39

6

(0%)

35

(0%)

25

Truck and trailer

1,424

(43%)

1,244

(9%)

211

Total

3,257

(100%)

13,474(100%)10 M
 odal shift rate: Modal shift means replacing a means of transport from trucks to trains and ships. The modal shift
rate, according to the definition by the Ministry of Land, Infrastructure, Transport and Tourism, is a ratio of volumetransported by trains and marine transportation (including ferries) in long distance transport of over 500 km.
11 Award by the Japan Society of Naval Architects and Ocean Engineers
12 Ton-kilometer: Total sum of the weight of load (ton) transported multiplied by transport distance (km). The reference
amounts (in grams) of CO2 emissions per ton-kilometer travelled are the average for all industries (Ministry of Land,
Infrastructure, Transport and Tourism)

Sustainability report 2023

Environment

22

Decarbonization of steelmaking processsteel by decarbonizing the steelmaking process” through the realization of the“Nippon Steel Carbon Neutral Vision 2050”.

Providing two type of values targeted by the Carbon Neutral Vision 2050
In support of the ambitious government policy to realize a carbon neutral society in 2050, we announced
the Carbon Neutral Vision 2050 as a part of the Medium- to Long-Term Management Plan in March 2021.

Producing iron from iron ore (such as Fe2O3) requires reducing the oxygen
contained in the iron ore. Using carbon has been the only technology thatenables such reduction in a large-scale and stable manner, although it
generates CO2. However, decarbonizing the existing steel production process
would require the development of breakthrough technologies to reduce ironore using hydrogen instead of carbon.
Therefore, as our top management issue, we are developing andimplementing the following three breakthrough technologies ahead of othercountries: 1) Reduction with hydrogen in BFs (injecting hydrogen into existing
BFs for partial replacement of carbon use), 2) Hydrogen direct reduction ofiron (producing solid reduced iron by hydrogen reduction in direct reduction

Providing two types of values by achieving carbon neutrality

Reduce CO2 emissions at
the time of production andprocessing by customers

Providing carbon neutral steel through decarbonizationof the steelmaking process

Reduce CO2 emissions at thetime of use of our products
by end customers

We are determined to satisfy the decarbonization needs of our customers (approximately 6,000 companies
in Japan) and bolster their international competitiveness by providing high-performance steel products
and solutions, promoting the decarbonization of the existing steelmaking process ahead of other countries,and supplying carbon neutral steel to the market as soon as possible.

Decarbonization scenario of “Carbon Neutral Vision 2050”
We have formulated a target of reducing total CO2 emissions by 30% by 2030,
compared to the 2013 baseline and of achieving carbon neutrality in 2050.
We are working to develop and actually implement breakthrough technologies
in steelmaking process ahead of steel companies in other countries.
Our plan is ambitious compared to those of our global peers, and isintended to significantly contribute to the Japanese government’s plan.

Our CO2 emissions reduction scenario

Total CO2 emissions4 (million tons/year)

Reduction

CO2
One ton of steelmaking
emits about 2 tons of CO2.

Rolling

Melting

CO2

OUTPUTFe

Scrap(vs. 2013)

CarbonneutralReduction withhydrogenfrom iron ore

2013

Process

H2

70

2030
TargetCokingcoal

Green hydrogen

Green power

Note: BF: Blast Furnace,
BOF: Basic Oxygen Furnace,
EAF: Electric Arc Furnace

Hydrogen direct reduction of iron

Fe2O3

Ambition to become carbon neutral

Iron oreThree breakthrough technologies
Three external conditions required to achieve carbon neutrality

INPUT

30% reduction

102

NIPPON STEEL CORPORATION

Process

Electric
furnaceConverter

Carbon neutral steel production process (conceptual)

2 COURSE50: Abbreviation for CO2 Ultimate Reduction System for cool Earth 50

3 Carbon Capture, Utilization and Storage

C

Blast furnace

1 This is a project that commission or subsidize research and development of the New Energy and Industrial
Technology Development Organization (NEDO), a national research and development corporation, to support
companies and others implementing projects that aim to achieve ambitious 2030 targets (e.g., CO2 reduction) in
focused areas of the Green Growth Strategy Action Plan.

30% or more reduction in total CO2
emissions vs. 2013

Ambition to become carbon neutral by taking up the challenge to mass produce
high-grade steel in large size EAFs and to realize hydrogen steelmaking (i.e.,Super COURSE50 use of BFs; hydrogen direct reduction of iron), and withmulti-aspect approach, including CCUS3 and other carbon offset measures.

Note: BF: Blast Furnace,
BOF: Basic Oxygen Furnace,
EAF: Electric Arc Furnace

Electricity

plans of the roadmap of development and practical implementation.

30% reduction in total CO2 emissions vs. 2013 by implementing the
COURSE502 in the existing BF and BOF process, reducing CO2 emissions inexisting processes, and establishing an efficient production framework.

Vision 2050

Fe2O3

Steel is produced.

With the assistance of the Green Innovation Fund1, we are working on specific2030 Target

Carbon (C) removes theoxygen (O) (reduction) in theiron ore as carbon is morereactive than iron (Fe).

Coking coal

INPUT

Reduction with carbon
From iron ore thatexists as iron oxides(e.g., Fe2O3) in nature,

Reduce CO2 emissions incustomers’ supply chains

Iron ore

BF + BOF process

Provision of high-performance steel products and solutions
that contribute to reducing CO2 emissions in society

Scrap

furnaces (DRFs) instead of BFs), and 3) High-grade steel production in large
size EAFs (improving the productivity of EAFs to manufacture high-grade steel
not producible today using direct reduced iron and iron scrap). We aim toachieve carbon neutrality by 2050 by converting the existing BFs into the EAF
steelmaking process or introducing an applicable CO2 reduction technology,
such as reduction with hydrogen in BFs, over the next few decades. In
addition, we will continue to actively urge the government and relatedorganizations to establish the development of social infrastructures required
to achieve this carbon neutrality, including the “low cost and stable supply ofgreen hydrogen and green electricity” and the introduction of “CCUS.”

CarbonoffsetHydrogenremoves oxygen Reduction(reduction)

2050
Vision[Scope of scenario]
Domestic
Scope 1+2 (direct emissions in our production sites + indirect emissions from purchased electricity)
4 Including Nippon Coke & Engineering Co., Ltd. and Sanso Center Co., Ltd.

Directreduced ironHydrogen injection into BF

Increase in use of scrap

H2O

High-grade steel production
in large size EAF

Converter

Rolling

CO2• No CO2 generation• Endothermic reaction

Steel is produced

Directreduced iron

EAF route

We aim to achieve CO2 reduction in our supply chain by offering two values:“providing high-performance steel products and solutions that contribute to
reducing CO2 emissions throughout society” and “providing carbon neutral

EAF process

Promotion of Carbon Neutral Vision 2050

BF and BOF route

21

OUTPUTFe

CCUS

Smelting is required
Smelting
in the next process

Chemicals, biofixing,
underground storage

Sustainability report 2023

23

Environment

24Progress of Carbon Neutral Vision 2050

CCUS technology development

The Carbon Neutral Vision 2050 aims to achieve carbon neutrality using three
breakthrough technologies: “Reduction with hydrogen in BFs,” “Hydrogen
direct reduction of iron,” and “high-grade steel production in large size EAFs.”
Concerning “high-grade steel production in large size EAFs” a new EAF
installed in the Setouchi Works Hirohata Area started its commercial operationin October 2022, making it the world’s first integrated EAF steelmaking processthat enables the production and supply of high-grade electrical steel sheets.
Regarding the shift from the BF steelmaking process to the EAF steelmaking
process, we are starting its full-scale studies at two candidate sites, the Kyushu
Works Yawata Area and the Setouchi Works Hirohata Area. In addition, we aresetting up a small EAF (with a capacity of 10 tons) in the Hasaki Research andDevelopment Center of R&D Laboratories (located in Kamisu, Ibaraki), with its
experimental operation expected to start in fiscal 2024.
Concerning “Reduction with hydrogen in BFs,” Japan’s three blast furnacesteelmakers, including Nippon Steel, are jointly developing the COURSE50
blast furnace, designed to replace carbon used in the BF as a reducing agent
with hydrogen-rich gases generated in steelworks. This project has alreadyestablished the technologies that can reduce CO2 emission in a COURSE50
test furnace (12m3).
In February 2023, we decided to conduct demonstration tests using
No. 2 BF at the East Nippon Works Kimitsu Area, a large size BF in operation

and approximately 400 times larger in scale than the test furnace. We are
installing the equipment for the demonstration tests scheduled to start inJanuary 2026.
In parallel with the tests described above, we have been working since
May 2022 on the technology development aimed at developing the SuperCOURSE50 technology for further reductions in CO2 emissions with the help ofheated hydrogen by retrofitting the existing COURSE50 test furnace.
In the past tests, we confirmed a 22% reduction in CO2 emissions fromthe BF, with additional tests scheduled within 2023 aimed at reducing CO2
emissions by 30% or more. Going forward, we will implement additional
demonstration tests with the aim of further reductions in CO2 emissions anddeveloping various enabling technologies, striving for the early establishmentof the Super COURSE50 technology in large size BFs (50% or more reductions
in CO2 emissions).
Regarding “hydrogen direct reduction of iron,” we will set up a small
test furnace at our Hasaki Research and Development Center and startdemonstration tests in fiscal 2025. Then, by 2050, we aim to solve issues
such as utilization of low-grade iron ore and conversion of reduction material
from natural gas to hydrogen, and to commercialize a direct hydrogen
reduction reactor using low-grade iron ore from Australia and other countries
as feedstock.

Progress of Carbon Neutral Vision

High-grade steel
production in large
size EAFs

2022

2023

Start of commercial
operation ofHirohata EAF

Start of full-scalestudies of a shift to
EAFs

Accumulatingknowledge about highgrade steel production
in large size EAFs

Expansion ofHirohata EAFs

Integrated development of a large size EAF and production of reduced iron as feedstock at the Hasaki Research and Development Center

2024

–2030

Hasaki Research andDevelopment Center
Start of installation and testof small test EAF (10t/ch)

Yawata replacement
to EAFs

2025

Hydrogen direct
reduction of iron

Reduction withhydrogen in BFs

–2030

2022
Start of tests using
Kimitsu test furnace–2030

Start of demonstration
tests in the Kimitsu No. 2
BF in operation

COURSE50
implementation

Implementation of high-temperature hydrogen
injection tests
Verification of a 22% reduction in CO2 emissions

Nippon Steel Group’s CCUS technology development efforts
CaptureCO2 Separation and Recovery Technology (NEDO COURSE50 Project)
Nippon Steel Engineering Co., Ltd. in the Nippon Steel Group has commercialized
an energy-saving CO2 chemical absorption process called ESCAPTM (Energy Saving
CO2 Absorption Process), which uses chemical absorption, one of the methods forCO2 separation and recovery. Two units are already in operation in Japan, including
the one installed in the North Nippon Works Muroran Area.

Development of low-concentration CO2 separation and capture
technology (subsidized by the Green Innovation Fund)We ramped up the development of separation/capture technology for lowconcentration CO2 contained in industrial emission gases in corporation with Oita
University, Osaka University, Kyoto University, Chiba University, Nagoya University,
Hokkaido University, and Resonac Holdings Corporation.
To separate and capture CO2 efficiently from low-pressure, low-concentration
emission gases (with a CO2 concentration not exceeding 10% at the atmosphericpressure), we will take on the development and social implementation of a new CO2
separating agent (structurally flexible PCP), which has higher CO2 selectivity thanthe conventional CO2 separating agent (zeolite) and enables CO2 adsorption anddesorption with minimal levels of pressure operation.

In April 2023, Nippon Steel, Osaka Metropolitan University, and UBE Corporation
started research and development related to the “development of one-step synthesis process for polycarbonate diol from CO2.” Polycarbonate diol is a representative
material for producing high-value-added carbon compounds that do not requirehydrogen. It is also a raw material for high-performance polyurethanes, widelyused worldwide and whose demand is expected to grow further. However, the highenvironmental impact of its synthesis process has been a major issue. On the other
hand, this research and development aims to develop an innovative green processthat effectively utilizes CO2 instead of highly toxic gases such as CO and achieves
high yields in one-step synthesis.

NIPPON STEEL CORPORATION

Nitrogenmolecule

Structurally
flexible PCP

HO

OH
R

Diol
Biomass

H

O

R

O

O

R

OH

On

Polycarbonate diols

CO2

Metal oxide catalyst

Green polymers made fromrenewable resources

Storage

COURSE50 Project1, Super COURSE50 Project2

The COURSE50 project focuses on the technology for reducing the amount of carbon
to be injected into blast furnaces. This is done by using by-product gas generated
in integrated steel mills, which is currently used in furnaces. The project aims at
realizing the hydrogen steelmaking in some degree, given the current circumstances,
under which there is no social infrastructure for supplying large volumes of hydrogen.
From 2008 to 2021, we have developed technologies to lower CO2 emissions
by 30%: a 10% lowering emissions from a blast furnace by adopting technologies
to reduce iron ore by use of hydrogen gases and a 20% offset by CO2 capture
from BF gases. As for the reduction technology that utilizes hydrogen in part, a
10% reduction of CO2 emissions has been verified at a 12 m3 experimental blast
furnace at the Kimitsu Area of the East Nippon Works. As for the latter CO2 emission
reduction technology, the project developed a high-performance CO2 separation andrecovery technology based on chemical absorption techniques, which has alreadybeen put into practical use in the CO2 industry.

CO2 molecule

ZeoliteSuper-COURSE50
implementation

CO2 storage technology

TOPICSThe ESCAPTM is characterized by high energy efficiency with a more than
40% reduction in heat consumption compared to general-purpose technology.
In addition, its proprietary impurity removal facility enables recovery of more than
99.9% of high-purity CO2 from raw material gas with high impurities.

Utilization

Start of demonstration
tests of scale-up

2025

absorption liquid) and development of CO2-based manufacturing technologies
for chemicals and fuels. The necessary external conditions include thesecuring of the storage space, the establishment of the storage infrastructure
for CCS, legislation, and tax incentives, the ensuring of business profitabilityof chemicals and fuels manufactured by CCU (Carbon Capture and Utilization),and preferential treatment of carbon recycled products. The Nippon SteelGroup is aggressively engaged in developing these technologies to help realizesocial implementation of CCUS.

Technology to produce chemical products from CO2(Commissioned project by NEDO)

2027

Hasaki Research andDevelopment Center
Start of installation and testsof small test reduction furnace

CCUS (Carbon Capture, Utilization and Storage) is a technology that separates,
captures, and stores CO2 in the ground, or directly uses CO2 or converts it into
other materials and utilizes it. In the carbon neutral steel production process,
CCUS technology is used to process CO2 still generated from the steelmaking
process even after it has been minimized. Realization of this technology
requires the related technology development as well as preparation of external
conditions. The required technologies include development and installment
of CO2 separation and recovery technology (high-performance chemical

We are also involved in development under the Super COURSE50 subsidized
by the Green Innovation Fund project, with an eye on the era when the social
infrastructure for sufficient hydrogen supply is available toward realizing the Carbon
Neutral Vision. The Super COURSE50
is designed to purchase hydrogenfrom outside steelworks, increase theamount of hydrogen injection into the BF
further, maximize the portion of hydrogen
reduction, and minimize the amount ofcarbon injected into the BF.

NEDO “Hydrogen utilization in iron and steelmaking
processes” project1 Commissioned project by the New Energy and Industrial Technology Development Organization (NEDO)
2 The Green Innovation Fund “Hydrogen utilization in iron and steelmaking processes” project (NEDO’s R&D
outsourcing support and assistance project)

As part of the Survey on the Implementation of Japan Advanced CCS Projects that
the Japan Organization for Metals and Energy Security (JOGMEC) adopted for its
publicly solicited projects in fiscal 2023, Nippon Steel participates in three joint
projects: the Tohoku Region West Coast CCS Project, the Metropolitan Area CCS
Project, and the Oceania CCS Project. In this project, we will work jointly with eachparticipating company to secure storage sites, develop storage infrastructure,and establish external conditions such as developing regulatory requirements.
At the same time, we will take the initiative in studies related to CO2 separation/
capture, liquefaction, and shipping terminals, actively promoting the early social
implementation of CCS infrastructure.

Estimated
Estimatedemission source emission
area

Estimatedstoragearea

Tohoku Region West Coast CCS
Capture CO2 frombroad emission
sources in Japan

Metropolitan Area CCS

Transportation
Integrated CO2 ship transportation (NEDO-commissioned project)
Jointly with Japan CCS Co., Ltd. Engineering Advancement Association of Japan,
and ITOCHU Corporation, we have commenced the R&D and demonstration project
related to the integrated CO2 ship transportation.

Oceania CCS
Transport and store
CO2 in Oceania

Sustainability report 2023

25

Environment

26

NSCarbolexTM Solution

Efforts to reduce carbon emission in power generation
We generate 89% of the electricity we use at steelworks, 75% of which isfrom internally generated energy sources such as waste heat and by-productgases. We also use LNG, petroleum, and coal as external-source auxiliary
fuels. Therefore, in order to reduce the carbon content of our electric power
structure, we will eliminate all use of inefficient coal-fired power, increase
efficiency of thermal power fired by by-products, and utilize CCUS. We will also
consider use of non-fossil fuels for external auxiliary fuels (expanded use ofzero-emission fuels such as biomass, ammonia, and hydrogen) and purchaseof green power.

Issues to consider and promote reducing carbon in the electric power structureTotal elimination of inefficient coal-fired powerIncrease efficiency in thermal power fired by by-products, utilization of
CCUS, and use of non-fossil fuels for external auxiliary fuels (expanded
use of zero-emission fuels such as biomass, ammonia, and hydrogen)Purchase of green power

NSCarbolexTM Solution offers high-performance products and solutions that contribute to reducing CO2 emissions in society, including NSafeTM -AutoConcept,
which contributes to reducing CO2 emissions during automobile manufacturing
and driving, High-Efficiency Electrical Steel Sheets that contribute to improving
the efficiency of motors and reducing energy loss in power transmission/distribution networks, building material solution brand ProStructTM that contributes
to enhancing productivity at construction sites, and HYDREXELTM stainless steel

for high-pressure hydrogen environments, which contributes to realizing ahydrogen society. Through these products and solutions, we will contribute to
reducing CO2 emissions in various sectors of society.

NSCarbolex Solution: Product and Solution Lineups

Products and technical solutions that contribute to reducing CO2 emissions in various areas of society
NSCarbolexTM
NSCarbolex is a brand that integrates NSCarbolex Neutral, steel products
allocated the amount of CO2 emissions reductions in the steel making process,and NSCarbolex Solution. Under the Nippon Steel Carbon Neutral Vision 2050
set forth toward the realization of a carbon neutral society in 2050, we arecommitted to reducing CO2 emissions in society by providing high-performance
products and solutions, in addition to CO2 emission reductions in our
manufacturing processes.

Automobiles and home appliances• CO2 reduction in manufacturing processes• CO2 reduction in product use, etc.

Energy• Contribution to energy transition in society• Energy saving in electricity transmission, etc.

NSafe-AutoConcept

Brand system of NSCarbolex

Steel for LNG tankIts high resistance to extreme lowtemperature contributes to construction of highly safe LNG tank Contribute to CO2 reduction in
manufacturing process andvehicle rides Contribute to expansion of
LNG use Contribute to CO2 reduction in
manufacturing process andvehicle rides

Its high strength and easy welding
features contribute to construction ofhydrogen stations
Photo by Iwatani Corporation

Hairline finished electrolytic zinc-nickel alloy
plated steel sheet FeLuceTM Contribute to customers
in reducing CO2 by cutting
processes

NSCarbolex Neutral
Reducing CO2 emissions in the steel industry is not easy, so it is expected totake a long time to develop decarbonization technologies.
Under such a circumstance, NSCarbolex Neutral enables us to supply
customers early on with steel products with a reduced carbon footprint bytracking the total amount of CO2 emissions by project that we have reduced byreforming and improving our manufacturing processes and allocating it to any
given steel product using the mass balance method.
We believe that tackling decarbonization earlier than anybody else would
enhance our customers’ competitiveness amid society’s rapidly increasingT hese products have received assurance from a third-party certificationbody that the total reduction in CO2 emissions and the amount allocatedto each product are appropriate.
These products help customers reduce their CO2 emissions (Scope 3).
T his brand is applicable to all steel products Nippon Steel manufactures.

NIPPON STEEL CORPORATION

NSCarbolex
NeutralStandard
products

CO2 emissions equivalent
to Scope 1 and 2

Allocation(third-party assurance)

Certificate ofthird-party assurance

CO2 emission reductions
applied to NSCarbolex Neutral

CO2 emission reductions
obtained from our CO2
reduction projects(third-party assurance)

Enable high-strength and lightweighthigh-speed railway wheels and axles The weight reduction contributes
to reducing CO2 emissions
during railcar operation

Designing titanium TranTixxiiTM Contribute to CCS
development Contribute to reducing CO2
emissions during construction
and maintenance Reduces CO2 emissions from use of automobiles andhome appliances Improves power transmission efficiency

CO2 emissions

High-speed railway wheels and axles

Aesthetic colors and design are added
to the surface of corrosion resistant,strong, and lightweight titanium

Reduces energy loss in electric devices

TOPICS

Simplify Hyper beam design andextend labor-saving benefits during
processing to ultra-large sizes

Its world-class resistance to corrosion
contributes to welling in highconcentrate CO2 environment

High-efficiency electrical steel sheets

decarbonization needs. We will contribute to our customers’ decarbonization
efforts by establishing a stable supply system of NSCarbolex Neutral as soon
as possible.

Features and mechanism of NSCarbolex Neutral
Products under this brand utilize the CO2 emissions Nippon Steel has
reduced by reforming and improving its manufacturing processes.

 Contribute to the realization ofa hydrogen society

High-alloy OCTG seamless pipes

Exquisitely designed surface allows
omitting additional surface treatment

Mega-sized fixed external dimension
H-section steel MEGA NSHYPER BEAMTM This product enables construction
with fewer materials in a shorter
period, which contributes toreducing CO2 emissions.

Stainless steel pipe for high-pressurehydrogen HYDREXEL

Eliminate the need for annealing
treatment in secondary processes atcustomers. Enable vehicle body weight
reductions using high-strength materials

Advanced products and technical solutions that
contribute to reducing CO2 emissions in society• CO2 reduction in construction processes• Improvement in energy efficiency in railway, etc.

Contribute to making lightweightvehicles by providing high-strength steel
and our original processing techniques

Steel for high-strength gear

Steel products allocated the amount of CO2 emissions
reduction in the steelmaking process

Infrastructure

Corrosion resistant coated steel ZEXEEDTM• Prevents corrosion even in severely corrosive situation• Enables omitting of coating Enhances durability of solar power generation mount Reduces CO2 emissions from customers’
manufacturing maintenance processes

Further expansion of high grade non-oriented electrical steel sheets and green bond issuance

In May 2023, we decided to implement further actions toward increasing the
manufacturing capacity of non-oriented electrical steel sheets in the Setouchi Works
Hanshin Area (Sakai) and the Kyushu Works Yawata Area, along with the previously
announced measures for electrical steel sheet manufacturing capacity and quality
improvement. The new capacity expansion measures will take full effect in thefirst half of fiscal 2027, with the manufacturing capacity of non-oriented electricalsteel sheets for eco-friendly cars expected to become about five times the current
capacity (approximately 1.6 times the previously announced measures). The total
accumulated investment amount, including the previously announced measures,will be approximately 213 billion yen.
In March 2023, we issued a green bond (unsecured straight corporate bond)totaling 50 billion yen. The bond was issued to procure part of the funds needed
to finance “production facilities, research and development expenses, and otherrelated expenditures for non-directional electrical steel sheets used in eco-friendly
car-driving motors.” These funds have been fully appropriated, and details of thesefunds we disclosed in the Reporting.
We position the issuance of green bonds as financing required to ensure thesteady progress of our commitment to the Carbon Neutral Vision 2050.
We also believe that issuing green bonds allows us to reiterate messages about ourcommitment to our stakeholders.
As for other funds needed to finance production facilities, research anddevelopment expenses, and other related expenditures required to offer products
and solutions under the NSCarbolex Solution and NSCarbolex Neutral brands, wewill look for the most appropriate financing methods based on our future investment
plans and other conditions.

Sustainability report 2023

27

Environment

28

Collaboration with society, policy proposals, and industry activities to achieve carbon neutrality
Decarbonization of steelmaking is an extremely ambitious challenge.
In addition to development of carbon neutral technology options, carbon-freehydrogen and electricity, the CCUS, and other factors of social infrastructure
are indispensable.
The realization of carbon neutrality in the steel industry is not just achallenge for steelmakers, given that steel as the basic material underpins
international competitiveness in Japan’s overall manufacturing. It is a national
challenge that the whole nation should take it up, based on the policy ofaiming at achieving the industry’s international competitiveness and carbon
neutrality, as well as the national strategy that provides strong, continuous
fiscal and other support.
The realization of carbon neutrality in the steel industry requires huge
R&D expenditures and capital expenditures for practical use. Nippon Steelalone is expected to roughly require ¥0.5 trillion in R&D expenses and ¥4–5
trillion in capital expenditures. The decarbonizing technology development forthe steelmaking process is presenting an appearance of a state-to-state competition. In order to continue to lead the world and maintain and strengthen
Japan’s overall industrial competitiveness, long-term, continuous government
support is indispensable for “discontinuous” innovation and other R&D efforts
and equipment implementation.
Europe, the United States, and China have adopted a variety ofpolicies aimed at achieving carbon neutrality on the premise of securing
international competitiveness in the steel and other basic materials

industries. Japan also needs to introduce a drastic policy system based onnational strategy under strong government leadership in order to achievecarbon neutrality ahead of those countries and to maintain and strengthen
the international industrial competitiveness.
For realizing these policies, Nippon Steel is determined to take every
opportunity to make various proposals on Japan’s climate change measuresand energy policies based on the Paris Agreement, and to spearhead activities
through industry organizations.

Investments needed for the carbon neutral steel projectalr practic
CAPEX fo tationn
implemelion¥4-5 trilenses

R&D exp
2021–

1

Recycling of waste plastics

4

Using coke ovens at seven areas of Nippon Steel’s five steelworks, about
200,000 tons of used plastic containers and packaging collected from generalhouseholds nationwide are recycled 100%, in compliance with the Act for
Promotion of Use of Recycled Resources. This contributes to reduction of
about 600,000 tons of CO2 a year.
In order to contribute to Japan’s strategy to recycle plastic resources,
we are developing technologies to expand waste plastic processing
capacity of coke ovens, to densify waste plastic pellets as raw material, andto dechlorinate.

2

Maximum use of steel scrap

Recycling of steel scrap is one of the key measures for achieving carbon neutrality.
We will significantly reduce CO2 emissions in steelmaking process by
maximizing the use of domestic steel scrap.

n1

0.5 trillio¥
Approx.

Efforts for climate change measures in the resource recycling and biodiversity fields

1 Minimum level estimated to be required for the time being3

Blast furnace cement

Blast furnace cement is made up of 45% blast furnace slag mixed withconventional cement, which reduces CO2 emission by 40% (320 kg per ton of
cement) compared to ordinary cement production.

Blue carbon

Nippon Steel has promoted scientific analysis on usefulness and safety ofuse of steel slag — a by-product from the steelmaking process. To improve
this technology, we began a basic study on blue carbon (CO2 absorption
and fixation in the marine ecosystem), which is getting more attention as ameasure against climate change.
In fiscal 2022, we calculated the CO2 fixation effect in a seaweed bed
creation project, on which we have been working over the past nearly 20
years, applying for J-Blue CreditTM certification jointly with the Mashike Fishery
Cooperative Association (Mashike, Hokkaido). As a result, we acquired J-Blue
Credit certification for 49.5 t-CO2 as the amount of CO2 absorbed and fixed(blue carbon) over the five years between 2018 and 2022.
This accomplishment marked the first blue credit certification for aseaweed bed in Hokkaido, and it was the firstjoint application between a fishery cooperative
association and a private company.
Encouraged by this accomplishment incalculating the amount of CO2 absorbed, we
will spread this approach to other ocean areasin Japan where the creation of sea forests isunderway and publicize the total amount of
CO2 absorbed.

Certificate of J-Blue Credit

Policy recommendations for realizing a carbon neutral society
President Hashimoto of Nippon Steel is a member of the Strategic Policy
Committee, under the Advisory Committee for Natural Resources and Energyof the Ministry of Economy, Trade and Industry (METI), Vice Chairman of
Nippon Keidanren (Japan Business Federation), and a member of the Green
Transformation (GX) Implementation Council. The Executive Vice President incharge of Environment is also a member of the Central Environment Council ofthe Ministry of the Environment, representing Keidanren.
In meetings of these government councils and committees and Keidanren,
we express our commitment and determination of the steel industry forachieving carbon neutrality. We have also recommended to promptly create
Japan’s policy package that combines climate change measures andmeasures to maintain and enhance international competitiveness of industries,
led by the government.
In addition, we have been arguing for the need for a policy to change
the energy supply structure including active promotion of nuclear power

utilization, for promotion of policies to achieve carbon neutrality in thematerials industry, for robust and continuous measures to promote public
and private investment across all stages for the decarbonization transition
from research and development to equipment implementation, for measures
to ensure equal footing to deal with hydrogen, electricity, and raw material
operation cost increases, and for the need to develop a roadmap to realize
CCUS implementation. We contribute to policy formulation, as exemplified by
the recently passed GX Promotion Act and GX Decarbonization Electricity Act,
which reflected these recommendations.
Moreover, we are actively developing policy proposals to achieve carbon
neutrality by making use of all opportunities with the government, relevant
ministries and local governments, etc. other than the above-stated councils
and committees.

Efforts to address climate change through industry organizations
To promote Japan’s efforts to achieve the mid-term goal of the Paris
Agreement, the Japan Iron and Steel Federation (JISF) declared that Japan’s
steel industry would take up the bold challenge of achieving carbon neutrality.
In March 2022, the JISF set the goal of “reducing energy-derived CO2 emissions in fiscal 2030 by 30% compared to fiscal 2013 levels,” an ambitious
goal even from an international perspective.
In May 2022, Keidanren announced its initiative, Towards Green
Transformation (GX), recommending measures needed to achieve carbon

NIPPON STEEL CORPORATION

neutrality in 2050 (GX policy package) and other agendas. We are also
taking a leading role in the JISF and Keidanren formulating their climatechange measures.
Meanwhile, we participate in climate action of the global steel industry,
led by the worldsteel association, serving as the worldsteel Climate Action
data provider to calculate and report CO2 emissions from steelworks using
universal methods.

Efforts to adapt to climate change
In addition to taking mitigation actions against climate change, we take into account the diverse impact of climate change and appropriately prepare for risks, as
adaptive initiatives, and at the same time seek to capture business opportunities.

Preparation for risks
There is a risk that operations and shipments may be interrupted due tothe flooding of steelworks and other events, including some caused byabnormal weather as a consequence of climate change. To prevent suchrisks, we are implementing measures against typhoons and heavy rains,measures to prevent crane overturn, installation of levees, reinforcementof embankments and gradients, and measures to prevent wind and flood
damage at each steelworks.
Moreover, our steelworks have enhanced facilities to prevent waterpollution. These facilities were provided to increase waste water treatment
capacity and involved installation of a large storage tank so that water tainted
with iron ore powder would not directly be released into the sea even if oursteelworks were subjected to localized heavy rain.
In addition, some administration offices are built on a piloti structure,
which means there is open space with no walls on the ground level. This
makes the buildings less vulnerable to tsunami. This is a part of our efforts tobe well prepared for emergencies such as flooding and high waves.

Capturing business opportunities
We have many products that are used for a long time as construction material
for embankments and other public infrastructure. They contribute to providing
solutions for “national resilience,” such as protecting towns from flooding or
high tides caused by heavy rains or typhoons. Adaptation to climate changes
also leads to business opportunities for Nippon Steel.
For example, we have developed and provided for actual use various
types of products and product utilization technologies in the civil engineering
field. They include hat-type sheet piles (contributing to national resilience in awide range of ways, including measures against liquefaction of river levees,
water leakage, and tsunami reaching coastal levee), linear-type steel piles(having a high-tensile strength at the joints, being suitable to cell-type quays,
erosion-control dams and water shut-off work, and contributing to measures
for sand embankments and against landslide at the time of heavy rain or atyphoon), and a method of preventing subsidence by use of sheet piles.

Sustainability report 2023

29

Environment

30

Activities to transfer and diffuse decarbonization technologies overseas

Information disclosure according to recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD)ECO SOLUTION
With the understanding that the transfer of Japan’s advanced energy-saving technologies overseas can be effective ways to globally reduce CO2 emissions, Nippon Steel is participatingin many energy-saving and environmental initiatives in Japan and overseas. For example, we work with the World Steel Association and directly with countries such as China and India.

Japan’s steel industry’s international cooperation in energy conservation
As a core member of the Japan Iron and Steel Federation (JISF), Nippon
Steel is involved in multinational projects such as those for the Environment
Committee of the World Steel Association.
In addition, the JISF is promoting 1 joint meetings of public and private
steel-related parties, 2 preparation of customized list of technologies, and1

3 assessment of steelworks as to energy-saving status. These are thethree pillars of collaboration for bilateral energy-saving and environmental
cooperation with India, Southeast Asia, and other countries and regions.

priorities that the planet is facing today. Based on the recommendations, weare committed to information disclosure on the climate change impact to ourbusiness activities.

[Mapping table of TCFD recommendations and their location page]

TCFD’s recommendations and supporting recommended disclosures

Reference page

[Governance] Disclose the organization’s governance related to climate-related risks and opportunities.

Joint meetings of public and private steel-related parties

2 The technologies customized list

In public-private steel-related joint meetings, we share the technologies customized list, theWe identify the appropriate technologies for each country and region, andresults of assessment of steel mills, and introduce detailed technical information and financing

in addition to detailed technical information, we conduct the assessment

schemes, in order to realize the early transfer of energy-saving technologies to emerging

of steel mills, and provide the technologies customized list, which complies

countries. By fiscal 2022, joint meetings have been held: 11 times in India and 15 times in

information such as on suppliers, for reference. The technologies custom-

six ASEAN countries. In 2022, we held the “2022 Public and Private Collaborative Meetingized list was updated into the fifth version on blast furnace (BF) steelmaking

between Indian and Japanese Iron and Steel Industry” with India and the online “ASEAN-JAPANand the 4.2 version on electric arc furnace (EAF) steelmaking for India. And

Steel Initiative Webinar 2023 - Pathways to Carbon Neutrality” conference with ASEAN

for the ASEAN countries, into the fourth version on BF steelmaking and 3.2

countries and shared examples of energy saving and environmental conservation measures.

version on EAF steelmaking in fiscal 2021.

Experts from the Japanese steel industry visit the

Activities as a Climate Action member

steel mills overseas to propose energy-saving

Nippon Steel participates in the Climate Action

technologies, provide operational improvement advice

Program of the World Steel Association, which uses

based on the operational conditions of the facilities,

universal methods to calculate and report on the CO2

and conduct the energy-saving assessment of steel

emitted by steelworks. As a Climate Action member

Technologies customized list

mills using the international standard ISO14404. Up to(data provider), our 16 years of contribution has beenfiscal 2022, we had carried out the assessment of 14

highly recognized.

Nippon SteelCorporation

Climate Action
DATA PROVIDER

2022

15-yearrecognition

In recognition of yourparticipation in theworldsteel Climate Action
data collection programme.

Edwin BASSON
Director General

Sajjan JINDAL
worldsteel Chairman*Valid from September 2022 to September 2023

Assessment of steelworksa) Describe the board’s oversight of climate-related risks and opportunities.

p. 17b) Describe management’s role in assessing and managing climate-related risks and opportunities.

p. 17[Strategy] Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s
businesses, strategy, and financial planning where such information is material.

3 Assessment of steelworksa) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

p. 31b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

p. 31c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C
or lower scenario.

p. 31[Risk Management] Disclose how the organization identifies, assesses, and manages climate-related risks.
a) Describe the organization’s processes for identifying and assessing climate-related risks

p. 17b) Describe the organization’s processes for managing climate-related risks.

p. 17c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overallrisk management.

p. 17

Climate Action DATA PROVIDER certificate

steel mills in India and 16 mills in six ASEAN countries.

Contribute to reduction of CO2 emission on a worldwide scale
Japan’s steel industry can contribute to reduction of CO2 emission on aworldwide scale by transferring its advanced energy-saving technologies
to emerging countries. The reduction effects of CO2 emission by transfer ofJapanese steelmakers’ energy-saving technologies have amounted to 75.55
million ton reduction in CO2 emissions per year in total.

Given the international community’s commitment to achieving long-termgoals of the Paris Agreement, Nippon Steel signed the statement of support
for the TCFD in May 2019, considering the climate change as one of(10,000 t-CO2/year)
Number of units

CO2 emission reduction

CDQ1

137

2,873

GTCC2

58

2,545

TRT3

64

1,129

Oxygen Converter Gas collection

22

821

Heat recovery

798

Oxygen Converter Gas waste heat collection

8

90

Total

296

[Metrics and Targets] Disclose the metrics and targets used to assess and manage relevant climate-related risks andopportunities where such information is material.
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk
management process.

p. 12b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

p. 20c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

p. 12

7,555
(FY2021)

Japanese steel industry’s energy-saving technologies are spreading globally (units installed in numbers)
PolandTRT2

Ukraine
GTCC4China
CDQ99TRT19GTCC44

1 All CDQ units were installed by the Nippon SteelGroup (such as Nippon Steel Engineering).
2 GTCC: Highly-efficient GTCC power generation
3 TRT: Top Pressure Recovery Turbine

South Korea
CDQ13
TRT23
GTCC6

Netherlands
GTCC4

Scenario analysis

Germany
CDQ1
India
CDQ12TRT4TaiwanCDQ5
TRT6
Vietnam
CDQ2

USA
TRT2

Indonesia
TRT1

BrazilCDQ5TRT6Australia
TRT1

NIPPON STEEL CORPORATION

For each transition factor and physical factor, we have identified risks andopportunities that may have a significant impact on our business in the areasof upstream procurement, direct operations, and downstream demand for
products and services. We have then considered strategies for each scenario.
In conducting the scenario analysis, we referred to the two scenarios(the below 2°C and 4°C warming scenarios4) of the International Energy
Agency (IEA) and evaluated them over a medium- to long-term time period,
up to 2050. In addition, the 1.5°C scenario (IEA NZE2050), which assumes
progress in reducing and eliminating carbon emissions, was also adopted asa reference scenario in the analysis. At the same time, we have formulated a

new climate change countermeasure vision with the aim of achieving “carbon
neutral in 2050” consistent with the 1.5°C warming scenario, and havedecided to tackle development of breakthrough technologies aimed at carbon
neutral, as a challenge for the management.
4 The below 2°C warming scenario is a case wherein much-needed measures will be implemented to keep global
average temperature increase below 2°C (1.75°C) compared to pre-Industrial Revolution times.
The 4°C warming scenario is a case that global average temperature will increase by 4 degrees, without taking any
economic or additional measures against climate change.

Sustainability report 2023

80

102
94

31

Environment

77
3

91

70

78
3

75

83

32

75

74
0

2013

Scenario

Factors
Events (expectations and(risks and opportunities) concerns of stakeholders)
Transition factor 1
Advance in electric vehicles(EVs)

Transition factor 2
Shift to other lightweightmaterials, prompted by tighter
fuel efficiency regulations,etc. (multi materials)

Transition factor 3
Shift to low-carbon steel(steel that generates low CO2
emissions in production)

Below
2°C

World EV sales: 65 million
units, 60% market sharein 2030 (vs. 6.6 million
units, 8.6% market sharein 2021)1)

Opportunities in demand growth for our steel products
Increase in the global total number of cars and resultant
increase in steel demand despite a decline in the share ofsteel demand for cars equipped with internal combustion
engines due to the growth of EVs’ share of the new car
marketIncrease in demand for high-performance steel products— our area of strengths, such as electrical steel sheets
for EVs

Nippon Steel’s strategy (including future responses)
 apture growing demand by strengthening the global supply ofCelectrical steel sheets (see PICK UP on p. 32)

Opportunities in demand growth for high-strength steel
and capturing of demand for other materials
Some possibility of switching to other lightweight materials
but little prospect for significant progress since steel excels
in environmental evaluation from the LCA perspective,
including the production stage and material recycling, andautomakers increasingly emphasize the evaluation from the
LCA perspective
Increase in demand for high-tensile steel, carbon fiberreinforced plastic (CFRP), titanium, etc.

S trive to further popularize the LCA concept through activities toraise customers’ understanding and lobby the government for
regulatory changeFurther increase the high-tensile strength of steel and provide
the lightweight steel structure technology by proposing acomprehensive automotive solution (NSafeTM-AutoConcept)(see PICK UP on p. 32)
Capture demand for CFRP and other products in cooperation
with Nippon Steel Chemical & Material Co.)

Accelerating shift to lowcarbon steel due to change
in customers’ demand

Opportunities in demand growth for low-carbon steel
Some shift to EAF steel with low CO2 emissions in
production
Continued increase in demand for BF steel due toinsufficient increase in EAF steel to satisfy growing
worldwide demand, caused by the limited supply of scrap

 cquire the “EcoLeaf” environmental label for more productsA(see p. 12)
Accelerate the Carbon Neutral Vision (breakthrough technology
development, including high-grade steel production in large-sized
EAFs and hydrogen steelmaking) (see pp. 21–23)
Promote the use of direct reduced iron and other measures toreduce CO2 emissions in existing processes
Supply of NSCarbolexTM Neutral

Higher needs for
decarbonization insteelmaking process

Needs for a fundamental review of the steelmaking
process aimed for decarbonization
Potential to gain a great competitive advantage if ourtechnological development and investments advance aheadof global peers
Increase in investment burden and operating cost for the
introduction of new technologies

F acilitate the development and implementation of innovativetechnologies by utilizing government support such as the Green
Innovation Fund (see pp. 23–24)
Consider sharing of cost by society (see p. 27)

Shift to other lightweightmaterials, prompted bytighter fuel efficiency
regulations, etc.

Transition factor 4
Higher needs for energyefficient products andtechnology

Eco-friendly technology
solution to boost demand

Opportunities in demand growth for eco-friendly
technology
Increased demand for products that realize energy savingsin the processing by customers
Increased demand for products that contribute to energy
savings in use of end products
Increase in profits through the provision of the Group’s
technology solutions that enable energy saving insteelmaking processE xpansion of NSCarbolex Solution, a brand that offers productsthat realize energy conservation in customers’ manufacturing
processes, products that contribute to energy conservation inusing their end products, and products that contribute to energy
transformation in society. (see PICK UP on p. 32)
Government-private cooperation, technologies customized list,
and steelworks diagnosis to provide energy-saving technologies
to emerging countries (contribution to the global value chain),e.g. dissemination of CDQ, all of which are handled by Nippon
Steel Engineering, into emerging countries (see p. 29)

Transition factor 5
Higher needs for products
and solutions associated witha society based on renewableenergy and hydrogen

Ratio of renewable energy
in world power generation:
88% in 2050 (vs. 28%
in 2020)
World production ofhydrogen: 490 mn tons
in 2050 (vs. 90 mn tons
in 2020)2

Opportunities in demand growth for products of our GroupProfit growth by provision of the Group’s products andsolutions that support a renewable-energy-oriented society
Profit growth by provision of the Group’s products andsolutions that support a hydrogen-oriented societyE nhance the Group’s product menu for the renewable-energy
society and expand sales in Japan and overseas, e.g. highcorrosion-resistant steel sheets for solar power generation
mount, steel plates and steel anchor chains for offshore wind
power generation, and steel pipes for geothermal and biomass
power generation
Enhance the Group’s product menu for the hydrogen society andexpand sales in Japan and overseas, e.g. HYDREXELTM stainlesssteel for high-pressure hydrogen environments

Increasing burdens on our cost due to CP introduction
The GX Promotion Act states that the introduction of CP
will help companies secure the funds and time required towork on technology development and capital investment
aimed at decarbonization. While the impact of CP is not
so significant for the time being, the burden on our costs
will increase due to the CP system design cost and the
movement of passing the burden of CP on to electricity
charges, etc. we pay.

 educe CO2 emissions through the expanded use of directR
reduced iron, reduction in CO2 emissions in existing processes,
and advance in breakthrough technologies such as hydrogensteelmaking and production of high-grade steel using large
EAFs (see pp. 21–24)
We will request the government to take measures to support
heavy emission-producing industries, which have few options
for decarbonization, and measures to support narrowing productprice increases due to the rise in energy costs

Difficulty in procuring
Physical factor 1
Abnormal weather to suspend raw materials, caused byabnormal weather
raw material suppliers’
operation

Limited impact by taking measures for risks
Limited assumed risk in securing stable procurement of
raw materials by taking the following measures:
Material sourcing from multiple regions in the world
Keeping raw material inventories in steelworks and ships

Continue multiple sourcing
 ppropriately manage days of inventory and risks
A

Physical factor 2
Difficulty in operation,
Abnormal weather to suspend caused by a naturaloperation and shipment
disaster

Limited impact by taking appropriate measures
Adoption of BCP measures. Limited risks in production
disruption caused by natural disaster. Excessively abnormal
weather may result in suspension of operation, etc.

 ontinually adapt measures in consideration of long-term trends
C
Measures against typhoons and heavy rain, measures toprevent crane overturns, measures against earthquakes andtsunami (securing emergency evacuation places, embankment
reinforcement, etc.)

Physical factor 3
Natural disaster caused by
Heightened needs for solutions abnormal weather
for “national resilience”
against natural disasters

Demand growth of steel for national land resilience
Profit growth by providing products and solutions fornational resilience against earthquakes, tsunamis, heavy
rain, typhoons, etc.

E nhance the Group’s product menu and expand sales in Japanand overseas, e.g. steel-slit dams and NS ECO-PILETM method

Transition factor 6
Incremental introduction
Increase in cost caused byof carbon pricing (CP)adoption of carbon pricing (CP) measures

4°C

Impact to Nippon Steel(opportunities in , risks in

1 Source for EV-related data: the NZE 2050 Scenario of the IEA Global Electric Vehicle Outlook 2022
EVs include battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHVs).
2 Source for data on renewable energy and hydrogen: the NZE 2050 Scenario of the IEA World Energy Outlook 2021

NIPPON STEEL CORPORATION

2018

2019

2020

PICKUP Scenario Analysis

TCFD scenario analysis

Transition factor 1

2030

World annual sales of EVs(Net Zero Emissions by 2050 Scenario)(Million Units)

Unit sales of EVs (left scale)Market share of EVs (right scale)

(%)

80

80

60

60

40

40

20

20

0

0

2021

2025

2030

(year)

Prepared by Nippon Steel based on the IEA “Global Electric Vehicle Outlook 2022”

Response to meet the needs for lightweight materials (NSafeTM-AutoConcept)

In response to the increasing demand for reduction of vehicle body weight and enhanced
collision safety, we accelerated research and development, and started to make proposals not just on materials but also on the NSafe-AutoConcept (NSAC), a comprehensive
solution for the development of next-generation steel vehicles, in 2019. An extended
version NSafeTM-AutoConcept xEV has also been added to the lineup. We are working
with our customers to develop advanced vehicles.
Reduction in vehicle body weight has long been desired by automakers but thatneed has been increasing in recent years, as it can contribute to reducing CO2 emissions
during vehicle production as well as driving. Concerning collision safety, the evaluation
method has become diversified, and the advance in material strength and structuraldesign are required more than ever before. Ultra-high-tensile steel sheets such as1470 MPa high-tensile sheets and 2.0 GPa hot-rolled high-tensile materials for vehicle
bodies, and 980 MPa high-strength steel plates for chassis can satisfy such needs. The
application of the high-tensile steel products and the proposed structure and processing
method have reduced the body weight of steel cars by 30%. This has made the steel car

Transition factor 3

2022

Response to advance in electric vehicles (EVs)

The social needs behind the drive for attaining carbon neutrality include increasing
demand and the requirement for high performance (higher efficiency, smaller size, andlighter weight) for EV motors and the reduction of energy loss in motors and transformers to meet the tighter global regulations for high-efficiency transformers. The mostrational means to meet such needs is the provision of high-grade electrical steel sheets,
such as non-oriented (NO) electrical steel sheets used in motors and grain-oriented (GO)electrical steel sheets used in transformers.
In response to the increasing demand for these electrical steel sheets and therequest for high-grade types, we decided to implement further actions toward increasing
the manufacturing capacity of non-oriented (NO) electrical steel sheets in the Setouchi
Works Hanshin Area (Sakai) and the Kyushu Works Yawata Area, along with the previously announced measures for electrical steel sheet manufacturing capacity and quality
improvement in the Kyushu Works Yawata Area and the Setouchi Works Hirohata Area.
The total accumulated investment amount, including the previously announced measures,will be approximately 213 billion yen. The capacity expansion measures announced thistime will take full effect in the first half of fiscal 2027, with the manufacturing capacity of
non-oriented (NO) electrical steel sheets for eco-friendly cars expected to become about fivetimes the current capacity (approximately 1.6 times the previously announced measures).

Transition factor 22021

to have the similar weight to that of an all-aluminum car and to provide higher collisionsafety performance.
Material makers, including ourselves, used to focus on material development but
the NSAC is contributing to the car making process in the areas of material development,
structural and functional design, process development, and performance evaluation in
addition to material development.

Expanded menus for products and solutions under the NSCarbolexTM Solution brandIn November 2022, we launched a new comprehensive brand, NSCarbolex Solution,
which offers high-performance products and solutions that contribute to reducing CO2
emissions in society.
Since then, we have been presenting value propositions through NSCarbolex
Solution from the following three perspectives: reducing CO2 emissions in customers’
manufacturing processes, reducing CO2 emissions during the use of customers’
products in society, and contributing to energy transformation in society to realize acarbon neutral society. As a result, the number of NSCarbolex Solution brand menus has
increased to 110.
To facilitate customers selecting the most suitable NSCarbolex Solution menu, wealso opened a dedicated website that lists explicitly the fields and types of all NSCarbolex
Solution lineups, target menu search functions based on perspectives of contributing to
CO2 emission reductions, and viewpoints of contributing to CO2 emission reductions foreach menu.
In the future, we will help our customers easily understand the benefits NSCarbolex
Solution can provide by quantifying the effect of CO2 emission reductions with the helpof each menu of NSCarbolex Solution and opening it on our website. At the same time,
we will expand NSCarbolex Solution lineups through further product and technicaldevelopment, contributing to customers progressing in their decarbonization efforts,
enhancing their competitiveness, and eventually realizing a carbon neutral society.

NSCarbolex Solution website

NSCarbolex Solution
https://www.nipponsteel.com/product/nscarbolex/solution/product_list/

Sustainability report 2023

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Environment

34
1

Creation of a Circular Economy

Recycling of dust and sludge

Steel is a flexible material that can be repeatedly recycled: it is a perfect example of a circular economy.
Nippon Steel strives for the greatest efficiency possible, including minimization or elimination of waste,
in use of our energy and limited resources, in every process of steelmaking. By utilizing this steelmaking
process, we also work to recycle internally-generated by-products so that we can realize zero emission.
We are also actively engaged in recycling of waste generated in society or by other industries.

By-products and recycling (FY2022)

To recycle the dust1 and sludge2 generated in the iron and steelmaking
processes, for them to be used as raw materials, Nippon Steel operates a dust
reduction kiln (RC: Resource circulating oven) at East Nippon Works Kashima
Area and a rotary hearth reduction furnace (RHF) at East Nippon Works Kimitsu
Area and NIPPON STEEL Stainless Steel Corporation (Hikari). This enables us
to recycle all internally-generated dust.
1 Fine dust collected with a dust collector
2 Semi-solid slurry recovered from industrial wastewater or sewage treatment

By-productAmount generated

Recyclingrate

Recycling application(wet weight – million tons)

Blast furnace cement, fine aggregate,road base, etc.
Road base, civil engineering materials,
fertilizer, etc.
Raw materials for use in-houseand also zinc refining

Blast furnace slag

10.58

Steelmaking slag

4.57

Dust

2.89

Sludge0.41

Raw materials for in-house use

90%

Coal ash

0.46

Cement raw materials,
construction materials

100%

100%
98%
100%

Waste furnacematerials

0.27

Reuse, etc.

64%

Others1.39

In-house use, others

99%

Total

20.57

Total recycling rate

99%

Efficient use of resources and energy
We use industrial water and energy resources such as electricity and fuel inproducing steel products, which are mainly made of iron ore mined overseas, coalused as a raw material for reducing iron ore, and iron scrap recycled by society.
Nippon Steel’s steelworks use 100% of by-product gas generated in thesteelmaking process, as fuel for heating of steel or as energy for an onsite

Promotion of in-house zero emissions
By-products generated and final disposal
In the iron and steel-making process, over 600 kg of by-products, such as
steel slag, dust, sludge, and used refractory bricks, are generated for each tonof crude steel produced. In fiscal 2022, Nippon Steel produced 34.25 million
tons of crude steel and generated 20.57 million tons of by-products. We arecommitted to recycling these by-products both in and outside the Company,
maintaining the high recycling rate of 99%. For the final disposal amount, we
will continue efforts to reduce generation of by-products toward achieving the
fiscal 2025 target.

power plant. Concerning water resources, 90% of water used in coolingand cleaning of products and manufacturing facilities are reprocessed andrepeatedly used. These are examples of our efforts to make maximum use oflimited resources and energy, without waste.

Nippon Steel’s final disposal amounts(10,000 tons [wet]/year)
100

Recycling rate

91.9

99%

80
60
40
20

38.1

33.4

38.0
25.0 24.8

26.3 25.6 26.6 28.9 22.9

Increase in recycling of waste generated in society (waste plastics)
We recycle 100% of waste plastics collected from ordinary households
through chemical recycling by using a coke oven in accordance with theContainers and Packaging Recycling Law of them. Specifically, waste plastics
are used as hydrocarbon oil (40%), coke furnace gas (40%), and part of coke(20%). Currently, Nippon Steel is processing approximately 200,000 tons
annually, or about 30% of the volume of waste plastics collected nationwide,in cooperation with local governments. Our method of using coke oven has anextremely high recycling efficiency and a great treatment capacity, contributing
to a circular economy in many regions. The cumulative amount processed infiscal 2000–2022 was approximately 3.91 million tons, equivalent to 12.50
million tons in terms of reduction in CO2 emissions (the amount of annual
CO2 absorption3 in artificial cedar forests in the area as big as approximately
300,000 Yankee Stadiums).

Recently, chemical fibers and food trays have also been recycled by thesame method. Furthermore, as the Plastic Resource Recycling Promotion Law
enacted in fiscal 2022 calls for collection not only of container packaging
plastics but also products made of plastics in bulk collection, we are also
recycling plastics collected in bulk. In addition, we are also working hardto develop technologies for expansion of treatment to meet the increasing
plastics processing needs in the future.
This expanded use of waste plastics has been incorporated in our “Carbon
Neutral Vision 2050” measures to combat climate change, and is presented
as one of the examples of the efforts of Nippon Keidanren (Japan Business
Federation) member companies’ activity in its “Recycling Economic Partnership.”3 One hectare of artificial cedar forest absorbs approximately 88 tons of CO2 per year (source: the website of theForestry Agency).

FY2025target30.7 27.1

26.3<< Recycling of waste plastics >> Thermal decomposition enables 100% effective re-use of plastics
Households

0

Recycle as plastic products

Use plastic products

40%

Hydrocarbon oil

2000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2025
(FY)

Effective use of steel slag
Almost all steel slag is effectively utilized. Approximately 70% of blast furnace
slag is used for blast furnace cement, while steelmaking slag is used formaterials for road base layers, civil engineering work, soil improvement,
marine environment improvement, fertilizer, etc.
“Blast furnace cement,” a mixture of pulverized blast furnace slag andordinary Portland cement, contributes to a 40% reduction of CO2 emissions
during manufacturing, since the cement clinker burning process can beomitted. The blast furnace cement also excels in long-term strength and isregistered as Eco Mark-certified product. The steel slag products help reduce
natural crushed stone mining and have the energy saving impact during
cement manufacturing. As a result, they are designated as a “designatedprocurement item” under the Act on Promoting Green Procurement, and havebeen certified as recycled products by some local governments.
Nippon Steel’s pavement materials, KATAMATM SP, are advantageously
used in keeping with the characteristics of steel slag which hardens by reacting with water. They are used for forest roads and farm roads, as well as forweed preventive pavement to be installed near mega-solar panel installations
and other locations.

NIPPON STEEL CORPORATION

Geo-TizerTM made of steel slag can be mixed with soft soil (mud, suchas surplus excavated soil from construction sites or farmland soil) to reformthe soil to make it usable. Unlike conventional soil-improvement materials(i.e., cement and lime), this soil produces less dust, significantly reduces CO2
emissions, and is less expensive, enabling reduction of construction cost. The
remediated soil is outstanding in compacting and can also be easily excavated,
as it does not excessively solidify.
Calcia modified soil — a mixture of steelmaking slag calcia modifier anddredged soil — has been used to improve the marine improvement, suchas by backfilling deep-dug seabed areas and creating shallow bottoms andtideland. In addition, Nippon Steel’s VivaryTM Unit, which are composed of steelslag and humus made from waste wood, provides iron needed for seaweeds toflourish, promoting regeneration of an area of the sea bed that had lost muchof its living organisms.
Moreover, as steel slag contains nutrition that helps plants grow, it is also
widely used as fertilizer, contributing to improving farming productivity.

Sort, and discard
unusable materials

Pre-treatment
process

Thermal decomposition
process (coke oven)

Remove metals and otherextraneous materials fromplastic transported frommunicipalities, crush plastic

Plastics are put into a tightlyclosed coke oven chamber andpyrolyzed in a superheatedatmosphere free of oxygen andused in entirety to producehydrocarbon oil, coke, and cokeoven gas.

Municipalities
Collect and store
plastic productsContainer packages

Coke

Secondary crushed plastic, after
being sorted and with non-plastic
materials removed

Coke

Blast furnace

Iron ore

After being cooled,
the coke is put in ablast furnace and isused as an iron ore
reducing material.

Coke oven gas

Compress and package plastic
Coke oven

Plastic pellets

20%

Collect and sort plastic products
collected from households

Agglomerated plastic solidified andformed with heat generated by friction

Tar

Recycled as plastic and other chemical raw
materials in a chemical plant and supplied
to manufacturers of the following products

Nippon Steel
Plastic bags, plastic wrap
Bottles, tubes
Trays, packages, cups

Light oil

40%

Fuel gas which mainly contains hydrogenand methane
The coke ovengas is used asenergy at a thermal
power plant withinsteelworks.
Power plant

Sustainability report 2023

35

Environment

36

Energy Material Balance

Energy efficiency in steelmaking by country (2019)
Efforts for efficient use of various resources have resulted in Japan’s steel industry achieving the world-leading level in energy efficiency.

We are not only moving toward the achievement of zero emissions with minimal environmental impact and recycling internallygenerated materials, with utilizing the steel manufacturing process, but also actively recycling waste materials generated bysociety and other industries.

Energy efficiency in steelmaking (Japan = 100)

140
130

129

128

120
110

100

102

Japan

South Korea

100

110

111

Germany

China

115

116

UK

France119

Source: International Comparisons of Energy
Efficiency (Sectors of Electricity
Generation, Iron and steel, Cement),
RITE, 2019 (The Japanese translationand numerical values were provided by
the Japan Iron and Steel Federation.)

90

INPUTS

India

RussiaUSA

OUTPUTS

Steelworks
Manufacturing process

Crude steel production(non-consolidated)

Iron ore

Coke oven49.93 million tons

Sinteringfacilities

Blast
furnaceConverter

Electric
furnaceContinuous
casting facilities

Hot rolling, cold rolling Plating equipment

Approx. 1.6 tons per ton of steel

Recovery of
by-products(steel slag, tar)

Recovery of
waste heat

2

4

Coal

24.97 million tons

76%

Alloys, auxiliary materials, etc.

100%

72%

3

Use of exhaust
heat via generationof steam

In-house use

Steel plate

1

Rate of reuse
and recyclingof waterRate of use of
by-product gas

Rate of use of
in-house generated
energy in power
generation

Approx. 0.7 tons per ton of steel

million tons/year

Recycling of dust
and sludge

Recovery of
backwater

Use ofby-product gas

34.25

Pipe-making
equipment

90%

Steel sheet

Industrial
water
Water resupply rate 10%

Fuels

Bar, wire rod

Generation ofelectricity
Pipe & tube

Fuels from outside 28%

Generation of
steam

5

Fossil fuels

Recycling rate ofby-product

Fuels from outside 24%

57 thousand kl/year

Construction
materials

99%

etc.
Industrial water
0.6 billion m3/year

Waste plastics 200,000 tons

Slag products

6
Recycling rate of waste plastics(chemical recycling)

Recycling

Purchased electricity1

Coal chemical products

Final waste disposal 1%

3.7 billion kWh/year

Scrap

Use in society

End products
Note: Numbers represent FY2022 performance
1 Purchased electricity (kWh) excludes electricity purchased from Cooperative Thermal Power Companies

Efficient use of resources
1 Water resources

p. 40

Of water used in cooling and cleaning of products andmanufacturing facilities, approximately 90% is reprocessed
and repeatedly used, while the remaining approximately 10%,which disappears mainly due to evaporation, is replaced.

4Electricity

Nippon Steel itself generates 88% of the electricity it uses atsteelworks, 72% of which is from internally generated energy
sources such as exhaust heat and by-product gases. In the
future, we will also consider making more efficient facilities
and switching fuel in order to further lower carbon generation.

NIPPON STEEL CORPORATION2

By-product gas

3

By-product gases, such as coke oven gas generated whencoal is thermally cracked in an oxygen-free environment in thecoke manufacturing process and blast furnace gas generated
from blast furnaces, are fully utilized as fuel gas for steel
heating furnaces or energy sources for power generation
plants on the premises of steelworks.
5

By-products

p. 34

By-products generated in steelmaking are recycled for reusein the same process or for commercial use. We thus promoteachieving zero emission and contribute to conservation of
resources and energy.

Coke Dry Quenching (CDQ) for large-scale waste heat recovery

Use of exhaust heat

Exhaust heat, generated in the blast furnaces, sintering facilities, coke ovens, converters, and other facilities, is recovered
and used in steam generation and power generation.

6

Recycling of waste plastics

p. 35

Approximately 200,000 tons per year, or about 30% of
plastic containers and packaging collected from households
nationwide, are fully recycled by a chemical processing
method using coke furnaces.

The CDQ equipment quenches hot coke madein the coke oven with inert gas, and the heat isused to generate steam for power generation.
Compared to the conventional wet quenching,
40% energy saving has been achieved.

Nippon Steel Group’s2 Electricity Supply and Demand Balance (FY2022)
Electricity consumed within the Group88%
Electricity generated by the Group

39%

12%
Purchased
electricity

61%

Electricity supplied to
the local community
The Group internally generates 88% of the electricity it uses.
The Group supplies 39% of internally-generated electricity to the local community.
2 Including cooperative thermal power companies and affiliated electric arc furnaces

Sustainability report 2023

37

Environment

38

Conservation of Biodiversity and Nature Positive
Some animal inhabitants of the Hometown Forests
Creation of Hometown Forests

Nippon Steel has affirmed the Declaration of Biodiversity by Keidanren and Action Policy of the Japan
Business Federation and has accordingly been taking initiatives on biodiversity preservation. We also
participate in the 30by30 Alliance for Biodiversity, established by a coalition of volunteers from governments,
companies, and NPOs, contributing to the vitalization of nature positive efforts through these activities.

Hokkaido (Mashike)

Creation of Sea Forests

Hokkaido (Yoichi)
Hokkaido (Suttu, Tomari, Shakotan)
North Nippon Works(Muroran Area)
Hokkaido (Hakodate)

Hokkaido (Muroran)
Aomori (Ooma, Kazamaura)

MuroranEzo deer, Ezo red fox, Ezo squirrel, eagle, buzzard, magpie

KamaishiMoon bear, Japanese serow, deer, hare, black-tailed gullNaoetsuJapanese dace, carp

KashimaPheasant, shrike, duck

Kimitsu

Bulbul, pheasant, little tern, swallow, egret

NagoyaRaccoon, pheasant, bulbul, shrike, swallow, great tit

Osaka

Weasel, starling, bulbul

Wakayama Raccoon, marten, bulbul, tiger keelbuck
Sakai

Kyushu Works (Yawata Area)
Fukuoka (Kitakyushu,
Fukutsu, Fukuoka)

Policy for the initiatives

Kyushu Works(Oita Area)
Kyushu Works Oita Area
(Oita, Hikari)

We will promote the initiatives on conservation of biodiversity, which are closely aligned with measures to deal with climate change and creation of a circular
economy, under the following policy.

East Nippon Works(Naoetsu Area)

Setouchi Works(Hirohata Area)

North Nippon Works(Kamaishi Area)

Hyogo (Himeji)
Toyama (Nyuzen)

Duck

Amagasaki Heron, bulbul, lizard, killifish, white-tailed skimmer
Hirohata

Buzzard, shrike, oriental turtle dove, bulbul, starling, bunting

YawataWeasel, pheasant, gray heron, Japanese cormorant

KokuraGull, Japanese wagtail, graphium sarpedon

Oita

Whooper swan, kingfisher, killifish, mayfly, firefly

Hikari51 species of birds including black-tailed gull and herring gull

East Nippon Works (Kashima Area)
Kyoto (Miyazu, Maizuru)As a member of Nippon Keidanren, we comply with the “Declaration of Biodiversity by Keidanren and Action Policy.”

East Nippon Works (Kimitsu Area)
Chiba (Hota, Tateyama)R ecognizing both that our business activities greatly rely on the nature’s gifts, and that biodiversity is vital for realizing a sustainable society, we understand therelationships of our business activities with biodiversity and are pledged to respond to challenges rooted in diverse local features, in order to build a society inharmony with nature.

Tokyo (Miyakejima)

Nagasaki (Seihi,
Segawa, Matsuura,
Iki, Isahaya,
Sasebo, Ojika)A s a member of the international community, we also recognize that initiatives aimed at building a society in harmony with nature are closely related to global
issues of measures to deal with climate change and creation of a circular economy. We aim to realize a sustainable society through an integrated environmental
corporate management which includes these initiatives in business activities.

Wakayama (Tanabe,
Kushimoto, Yura)
Kochi (Susaki, Muroto)
Oita (Himeshima, Saiki, Kunisaki)
Miyazaki (Nobeoka)
Kagoshima (Tanegashima, Kirishima)

Nagoya Works
Mie (Shima)

Gray heron

BuzzardJapanese dace

BulbulWhite-tailed skimmer

Little tern

Duck

RaccoonKansai Works (Amagasaki Area)
Kansai Works (Osaka Area)
Kansai Works (Wakayama Area)

Specific initiatives
1

Creation of Hometown Forests

2

Creation of Sea Forests

3

Participation in community projects

4

Contribution by use of by-products

Reproducing “the grove of a village shrine” and nurture biodiversity

Implemented in 44 spots in Japan to improve sea desertification

Participation in ecological preservation activities in the community

Steel slag being used for rice cultivation

We have carried out the “Creation of Hometown Forests” projects at oursteelworks and factories in Japan under the guidance of the late Dr. Akira
Miyawaki (professor emeritus of Yokohama National University), with the aim offacilitating harmonious coexistence between nature and humans. This projectcomprises research on the natural vegetation inherent to a certain area ina nearby grove associated with a historical shrine (Chinju-no-mori ), carefulselection of suitable trees, growth of their saplings in pots, and planting themin designated places by local residents and our employees.
This was the first project by a private company in Japan to create a forestthat harmonizes with the local scene and is based on an ecological approach.
This is one way we try to raise the awareness of our employees regarding theenvironment. At present, our forests in aggregate have grown to total around
850 ha (about the size of 180 Yankee Stadiums).
Wild birds and animals visit the forests we make and maintain at oursteel works sites across Japan. Wild birds and animals inherent to the land
return to the forests. Thus, the “Creation of Hometown Forests” helps conserve
biodiversity, and sequester CO2.

With the aim of offsetting a part of the decline in the supply of iron from nature,
which is said to be one of the causes of sea desertification, Nippon Steel has
developed the iron supply material “VivaryTM Unit” via joint research with The
University of Tokyo and uses it to promote regeneration of seaweed beds.
While humic acid iron is the combination of iron ions and humic acid in
the soil of a land forest in the natural environment, we have developed thetechnology to artificially generate humic acid iron by using steel stag andhumic substance originated from waste wood. The Vivary Unit has received asafety certificate from the Safety Check and Certification System of steel slag
products of the National Federation of Fisheries Cooperative Associations.
In Mashike Town, Hokkaido, starting from an experiment in 2004, wedeveloped a large-scale project (300-meter coastal line) by 2014, confirming
expansion of seaweed beds and an increase in intake of sea urchin. This projectis also expected to restore once-atrophied seabed and steadily raise biodiversity.

Since 2012, the Nagoya Works of Nippon Steel has participated in the
Inochi-wo-Tsunagu (Life Sustaining) Project, which has participation by alocal students’ planning committee, representatives of 11 companies, the
Eco-Asset Consortium and the Japan Ecologist Association of Support (NPO).
This project seeks to develop an ecosystem network to link green areas ateach company site and vicinity. To thereby increase the potential of the linked
areas, an animal path was established and a fixed-point observation camera
has recorded raccoons coming and going through the pathway. The project
also included experience-based activities, including corporate greenery visits,
fun-filled learning events for families, and craft-making events. The project
received the Minister of the Environment Award at the 2021 Sustainable Social
Development Award as this activity’s creation of a network that transcends
student and corporate boundaries, which led to a wide range of cooperative
activities, were highly evaluated.

Steel slag, a by-product of steelmaking, contains nutritional matter that helps
grow plants. It is therefore used as a fertilizer for rice cultivation, dry-field
farming, and pasture grass. Silica contained in steel slag promotes photosynthesis by keeping leaves upright and improving their light receiving orientation,
while iron is effective in preventing root rot and leaf blight. The steel slag also
contains phosphoric acid, manganese, boron, and various other componentsof fertilizer. Nippon Steel donated converter slag fertilizers to cooperate forresearch by Tokyo University of Agriculture for salt removal in farmland in the
Soma area of Fukushima Prefecture, which was devasted by the earthquakes
and tsunami of March 2011. The slag fertilizers has proved effective in rapid
and efficient salt removal. The restoration of rice fields also means to restore
habitats for birds, frogs, and various other living things.

NIPPON STEEL CORPORATION

Sustainability report 2023

39

Environment

401

Environmental Risk Management
Contribution to activities aimed at achieving the 30by30 biodiversity target
In March 2023, we participated in the 30by30 Alliance for Biodiversity tocontribute to achieving the 30by30 diversity target the Japanese government
strives to achieve, based on the rationale of the Kunming-Montreal Frameworkadopted at the 15th Conference of the Parties to the Convention on Biological
Diversity (COP15) held in December 2022. The alliance is a coalition ofvolunteers working on the public-and-private sectors to conserve and protect

at least 30% of their own country’s land and sea areas by 2030 (30 by 30),
with the goal of halting and reverse biodiversity loss by 2030 (nature positive).
We aim to have our areas under conserved biodiversity registered as Other
Effective area-based Conservation Measures (OECM), including the Creation ofHometown Forests at our steelworks and the Creation of Sea Forests.

Nippon Steel is promoting management of environmental risk with the aim of continually enhancing
preservation of the environment in various regions, with due consideration of environmental risks, which
differ by each steelworks and factory, and with due consideration to compliance with Japan’s Air Pollution
Control Act and other regulations.

What is an Other Effective area-based Conservation Measures (OECM)?

Atmospheric risk management
An OECM is an area with a biodiversity value, under conserved biodiversity through various efforts by companies, private organizations/individuals, and local governments, and where the government certified that “it is under conserved biodiversity through private-sector efforts.”
A certified area will be registered in the international database as an OECM, with its overlap with protected areas excluded.

Atmospheric pollution prevention
In order to reduce emissions of sulfur oxides (SOx) and nitrogen oxides (NOx),
Nippon Steel is taking measures such as using low-sulfur fuel, adopting
low NOx generating burners and installing effective equipment, including
equipment that reduces SOx and NOx emissions.

Prevention of scattering of raw materials and dust

Strengthening initiatives for biodiversity conservation and nature positive
With biodiversity conservation and nature positive now drawing attention as
significant global issues, just like carbon neutrality and a circular economy,
we regard nature positive as a critical environmental issue, strengthening ourefforts to take various measures. At the same time, we will strive to enhance
the quality of information disclosure considering the Task Force on Naturerelated Financial Disclosures (TNFD), which we are now formulating for releasein September 2023.

Enhancement of governanceWe report and discuss environmental policy-related issues every six months at
the Environmental Planning Committee chaired by the Representative Director
in charge of Environment, with “biodiversity conservation and nature positive”
added from fiscal 2023 as one of the deliberation/review items.
As with other environmental policy-related issues such as climate change
measures and the creation of a circular economy, the current review details on
biodiversity conservation and nature positive are also reported and deliberated
at the Management Committee and the Board of Directors meetings under thesupervision of the Board of Directors.

Identification of nature-related risks and opportunities
Today, the state of nature is said to be deteriorating at the fastest pace inhuman history, raising concerns about the possibility that many of nature’s
essential services benefitting society (ecosystem services) may decline.
It is said that this natural degradation is attributable directly to thepressure on nature caused by various human activities, such as changes in
how to utilize nature, resource exploitation, climate change, pollution, andinvasive alien species in the land, freshwater, and oceanic areas.
Therefore, we began to survey the impact of steel production on natureusing various assessment tools (such as IBAT, Biodiversity Risk Filter, andAqueduct etc.), for our directly operated steelworks and iron ore and coking
coal mines in the upstream supply chain, following the LEAP approach1
advocated by the TNFD.
From now on, we will strive for information disclosure in line with the
TNFD and based on the results of this survey.

1 The process to survey the impact our business activities have on nature (LEAP approach)[Locate][Evaluate][Assess][Prepare]Detect interfaces with nature

Evaluate dependencies
and impacts

Assess material risks
and opportunities

Prepare response
and reporting(priority area identification)• Evaluate activity areas• Extract areas assessed as high risks• Assess dependences and impacts between
business activities and nature• Extract high-risk dependencies and impacts• Identify material risks and opportunities• Analyze risks and opportunities• Consider management approaches

To curb emissions of soot and dust generated from factories and raw material
yards, we try to enhance their function by installing dust collectors andprevent scattering of particles by installing windscreens, windbreak trees andsprinklers, based on air pollution risk analysis through scientific simulation.
We also conduct constant monitoring and regular patrols to ensure that noabnormal emissions are released.

Emission of SOx and NOx
Sulfur oxides (SOx)

Nitrogen oxides (NOx)(106Nm3)
100

89
80

60

44

40

28
14

27

26

25

20

14

14

14

2017

2018

2019

25

21

23

11

13

13

2020

2021

2022

0

1973 1975 2016

(FY)

Water environment preservation
Efforts to control the water intake and reduce
wastewater discharge in steelworks
We use about 6.0 billion m3 of industrial water a year, of which approximately
90% is derived from recycled or reused water to reduce wastewater discharge,at all of our steelworks and factories combined. We try not to waste precious
water resources, and to control wastewater discharge. To achieve this, we
make daily efforts to maintain and improve the performance of wastewater
treatment equipment, and the inspection and control of wastewater quality.
Our operational bases in Japan are evaluated by the World Resources Institute(WRI) Aqueduct to confirm that we are not prone to high-level water stress.
Nevertheless, in preparation of the remote chance of a water intake restriction,some of our steelworks possess their own water reservoir. In certain circumstances, we contribute to easing water stress of the community by providing
water for agricultural use or by cooperating in other ways.

• Make strategic plan based on analysis results• Set target and examine progress management• Consider disclosure details

Nippon Steel’s water consumption (excluding power generation facilities)(billion m3)
10

Recycled water represents approximately
90% of the water consumption.

8

6

6.4

6.5

5.7

5.8

6.5

6.5

5.9

6.0

5.2

5.4

5.9

4

5.8

5.8

5.2

2

0

0.7

0.7

0.7

0.7

0.7

0.7

0.6

2016

2017

2018

2019

2020

2021

2022

Recycled water(FY)

Water intake

Measures to reduce the risk of violating laws and regulations
What is the Task Force on Nature-related Financial Disclosures (TNFD)?
Aiming to support shifting global financial flows from negative to positive for nature under the recognition of biodiversity and natural resources risks, the TNFD is adisclosure recommendation with a mission to develop and provide a framework for risk management and information disclosure to encourage organizations to reportand act on ever-changing nature-related risks.
According to its latest draft framework, while considerations are given to the consistency between the TNFD and the Task Force on Climate-related Financial
Disclosures (TCFD), such as the same basic design. However, the TNFD requires broader consideration, due to, for example, difference from the TCFD in theevaluation of activity areas in “Strategy,” traceability in “Risk Management,” the quality of stakeholder involvement, and the consistency between their climate change
and nature targets in “Indicators and Targets” and so on.

NIPPON STEEL CORPORATION

In consideration of the importance of complying with the Water Pollution
Control Law and conserving the water quality in the sea area to which it
is discharged, we ensure that in the event of an operational problem thedrainage outlets will not release abnormal wastewater outside the steelworks.
Water drainage automatic monitoring systems, water shutoff gates, emergency
reservoirs, etc. are installed to prevent water pollution.
We also strive to check, repair, and maintain equipment in order to prevent
water pollution, and to train our personnel in methods of checking of operations
and controlling work procedures. Moreover, our steelworks have taken
measures, such as to install a large storage tank so that water tainted with ironore powder would not directly be released into the sea even if our steelworks
were struck by a local torrential rain caused by weather abnormality.

If there is a crack in an embankment facing the sea, there is a risk ofa leakage of groundwater with unknown contaminants. In order to prevent
this, the embankment is regularly inspected from the sea side enabling us
to maintain and manage it in a sound condition. In areas with potential riskof leakage of water which may exceed permissible levels of contaminants,
boards or a sheet water barrier may be installed so as to prevent leakage even
if a crack develops on the embankment.
Regarding the draining of effluent that exceeded the effluent standards
in the Kimitsu Area of our East Nippon Works in fiscal 2022, we sincerely
apologize for having caused concerns and inconveniences to residents, themunicipal authorities, and all other stakeholders. Our measures to prevent therecurrence of this environmental incident are described on the following page.
Sustainability report 2023

41

Environment

42

Measures to prevent the reoccurrence of environmental incidents in the Kimitsu Area of the East Nippon Works
In the Kimitsu Area of the East Nippon Works, colored effluent containing coke gas
desulfurization liquid flowed out from our sites in June 2022, and, between June 30
and July 2, the draining of effluent that exceeded the effluent standards was foundto have occurred at Effluent Outlet No. 7. Furthermore, our subsequent internal
investigations identified the draining of effluent that exceeded the regulatory values
at other effluent outlets and drainage channels and our inappropriate treatmentof water quality measurement results. We sincerely apologize for the significant
concern and inconvenience to nearby residents, municipal authorities, and all otherstakeholders caused by these incidents. We fully recognize the seriousness of thismatter. We are thoroughly taking measures to ensure such incidents will not occur
again, based on our investigation of causes and evaluation of countermeasures.

1. Concerning the incident of colored effluent outflow
In June 2022, desulfurizing liquid leaked from a repaired section of a tank that
temporarily stores coke gas desulfurization liquid. The colored effluent overflowed
above a dike surrounding that tank, inflowed into drainage systems via therainwater collection side ditch and the underground passage and flowed out
from our sites. The tank had undergone overhaul inspections and wall thickness
measurements as well as daily and monthly inspection and it had been repaired
accordingly, however, this could not prevent the leakage that occurred this time.

In response to this incident, we have decided to implement thoroughcountermeasures to prevent reoccurrence via a three-tiered approach: “no leaks,”“no inflow into drainage systems even if a leak occurs,” and “shutting-off of leaks
within drainage systems.” This involves not only renewal of the desulfurization
liquid tanks, but also installation of dikes, and shutting off the drainage system,and other measures.

2. Concerning the draining of effluent exceeding the effluent standards via Effluent Outlet No. 7
In response to the colored effluent outflow incident, we conducted daily water
quality measurement at all effluent outlets. As a result, between June 30 to July 2,
we found that the effluent at Outlet No. 7 indicated measured values of cyanide andtotal nitrogen exceeding the effluent standards, which was attributable to the dust
collection water for a blast furnace. Furthermore, during this investigation into thecauses, we found effluent discharge had been conducted using methods different
from those in the notification to the authorities, such as the redundant water
generated in the dust collection system of the blast furnace being sent to a different
drainage system utilizing a temporary pump. We also identified the existence ofmultiple temporary pumps and cyanide treatment facilities not described in the
notification to the authorities. It can be inferred that the draining of effluent thatexceeded the effluent standards at Effluent Outlet No. 7 described above occurredbecause one of these pumps fell off and pumped out redundant water whileagitating and dispersing sludge with a high concentration of cyanide.
We have removed all the temporary pumps that were not notified to theadministrative agencies. In addition, we are carrying out dual measures for cyanide
treatment by reinforcing and renewing the treatment equipment in the dust
collection system of the blast furnace.

3. Concerning the incident identified from voluntary thorough inspections
As a result of a voluntary comprehensive inspection that we conducted in responseto the incident described above, we found that there were unreported cases of
exceeding the effluent standards and the values agreed upon with municipal
authorities at multiple effluent outlets and drainage channels. This included thecases where, in statutorily required measurements at Effluent Outlet No. 16, incases where measurement results had exceeded the effluent standards for cyanide
and total nitrogen, such measurement results were not reported to the administrative agencies concerned. Instead, additional sample collection was conducted,
and the measurement results that fell within the effluent standards were recorded
and stored as the statutorily required measurement results. Also, the cases wefound included where, in measurements other than the statutorily required ones
at Effluent Outlet No. 16, the draining of effluent exceeded the effluent standards

for cyanide and total nitrogen, but had not been reported to the administrative
agencies concerned.
In the course of investigating the cause of the draining of effluent thatexceeded the effluent standards at Effluent Outlet No. 16 described above, we
also found that some persons concerned recognized that the redundant watercontaining cyanide and nitrogen generated in the dust collection system of the blast
furnace had unintentionally overflowed from some tanks and flowed into the rainwater drainage system connected to Effluent Outlet No. 16, but that fundamental
measures had not been taken.
Presently, we are implementing the same dual measures for cyanide treatment
for this dust collection system of the blast furnace as described under heading 2
above, in addition to installing equipment to prevent water overflow.

4. Issues with mindset, issues with organizational/operational systems, and countermeasures to prevent reoccurrence
We consider that the causes of these incidents include mindset issues, such as
misconceptions about statutorily required measurements and notifications under
the Water Pollution Prevention Act, insufficient sharing of risks with supervisors
and other departments, and insufficient dissemination of the awareness regarding
environmental compliance among those involved in water treatment operations;and issues with organizational and business operation structures, including thestructure related to blast furnace dust collection water treatment and business
operations related to water quality measurement. Therefore, we are implementing
the following measures to prevent the reoccurrence of these incidents.

Countermeasures to prevent the reoccurrence[Measures taken in the Kimitsu Area]
1. Reorganize the organizational structure and establish divisions specializing inenvironmental and plant safety
2. Strengthen environmental management within East Nippon Works• Bring about a change in awareness that prioritizes legal compliance andpreservation of the regional environment• Elevate the priority of water quality control among senior management of
East Nippon Works• Enhance training of personnel in charge of water quality control• Revise the roles of the division in charge of water quality measurement andsubcontractors• Restructure of water quality measurement workflow (fundamental overhaulof the workflow from sampling to measurement and data receipt, and establishment of a structure for reporting to administrative agencies concerned)• Reinforce of internal audits• Establish a system to prevent and check for inadequate notifications offacilities to the administrative agencies• Transfer the responsibility for the quality management of dust collection
water for blast furnaces to the operating department[Company-wide measures]
1. Reorganize the organization within the headquarters, and establish theEnvironmental Technology and Management Division specializing in the
management of environmental risks at the company-wide level
2. Reinforce the company-wide environmental management function• R estructure the Environmental Committee into the Environmental
Technology and Management Committee, whose role is to review issues
and measures related to water quality, air, and other environmental risks
and the Environmental Planning Committee• R einforce and review of the content of environmental audits and internal
factory audits• E xpand the implementation of managerial and other such measures
undertaken in the Kimitsu Area to other works and areas, where necessary

For more information about this matter, please refer to the press release. https://www.nipponsteel.com/en/news/• Submission of the Report on the Effluent Incidents at Kimitsu Area of East Nippon Works (September 30, 2022)
NIPPON STEEL CORPORATION

Soil risk management
We are taking appropriate soil management in compliance with the “SoilContamination Countermeasures Act,” “guidelines for investigations andmeasures based on the Soil Contamination Countermeasures Act” issued
by the Ministry of the Environment, and the regulations set forth by local
government ordinances, and so on. We report to the local government when

performing landform modification work such as excavation which is required tobe reported. We conduct pollution surveys when needed.
Starting in fiscal 2018, the Revised Soil Contamination Countermeasures
Act is being enforced in stages will be expanded. We will continue to comply
with relevant ordinances.

Management of discharged chemical substances
Comprehensive management of discharge

Voluntary priority control of select chemical substances

Nippon Steel appropriately manages and tries to improve the production,
handling, and discharge or disposal of chemical substances in accordance with
the Chemical Substance Management Law1, Chemical Substance Evaluation
and Regulation Law2, and other laws concerning the management of chemical
substances as well as the procedures employed. According to the targets of
the Chemical Substance Management Law, we thoroughly manage the materialbalance, which includes the amount of chemical substances handled, theamount discharged to the environment, disposable amount, and the amountused as products. We are making preparations to properly submit notifications
in fiscal 2024 in accordance with the revised Control Law that came into effecton April 1, 2023. Similarly, we take care in managing the Volatile Organic
Compounds (VOC3), which are said to cause photochemical oxidants andsuspended particulate matter. In complying with the Chemical Substance
Evaluation and Regulation Law, we identify and provide notification of theamounts of production and sales of the targeted chemical substances. Nippon
Steel also took the lead in promoting use of alternatives to using steelmaking
materials and equipment that contain hazardous materials such as polychlorinated biphenyl (PCB) and mercury. According to safe handling standards, we
systematically replace or dispose possibly hazardous parts and materials, given
the time limit for disposal or the expiration date, stipulated for each area.

DioxinSome of our facilities, such as sintering facilities and incineration facilities,
are a source of emissions of dioxins into the atmosphere. All these facilities
have conformed to the emission concentration standard and have achieved
levels of emissions far below the voluntary reduction target, based on the JISF
guidelines, relative to fiscal 1997.

Management of discharge based on the Chemical
Substance Management Law

1,000

In 1999, two years before the enforcement of the Chemical SubstanceManagement Law, Nippon Steel began surveying chemical substances
according to the voluntary control manual developed by the Japan Iron andSteel Federation (JISF). At present, in compliance with the Chemical SubstanceManagement Law, we monitor 462 chemical substances and try to control
their emission and improve the way we manage it. In fiscal 2022, there were
50 target substances for notification and the emission amount was 337 tons
into the atmosphere and 23 tons to public water areas, while the disposal
amount of mostly manganese, chrome, other metals, and their compounds tooutside of the steelworks was 5,395 tons in aggregate.
Every year, data is compiled by each steelworks and experience incarrying out reduction measures is shared with other steelworks. In addition,
the compiled results are disclosed on our website.
We have similarly been working on reducing volatile organic compounds(VOCs). In fiscal 2009, the 30% reduction target relative to fiscal 2000 wasachieved. Since then, low discharge levels have been maintained.

Benzene, tetrachloroethylene, dichloromethane
We developed a voluntary reduction plan of hazardous air pollutants specified
in the environmental standard, which we handle. As a result of our systematic
undertaking, we have already reached the targets for all three pollutants andhave been maintaining the target levels.

Emission of VOC

Benzene(t/year)(t/year)

2,000

400

363
1,500

1,579

300

Target:500

1,106
624 573627 639524 545396

0Target:

200

100

172
106 9995
83 88 7580

02000 2016 2017 2018 2019 2020 2021 2022

1999 2016 2017 2018 2019 2020 2021 2022

(FY)

(FY)

1 An abbreviation of the Act on Confirmation, etc. of Release Amounts of Specific Chemical Substances in theEnvironment and Promotion of Improvements to the Management Thereof (Law concerning Pollutant Release andTransfer Register/PRTR)
2 An abbreviation of the Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.
3 Volatile organic compounds (VOC): Organic chemical compounds emitted into the atmosphere in the form of gases,
which are considered to be the source of undesirable airborne particles and photochemical oxidants, which became
subject to control under the Air Pollution Control Act of 2004, as amended.

Appropriate treatment of industrial waste
In order to appropriately handle industrial waste generated in our businessactivities, we thoroughly carry out (1) management by sorting industrial waste
depending on the status of its occurrence, (2) appropriate selection andcontinuous management of collectors, transporters, and disposal contractors,and (3) appropriate management of Manifests (industrial waste management
documentation). In order to enhance compliance in waste treatment byappropriately managing the Manifests, all Nippon Steel steelworks and offices
have adopted the e-Manifest system and fully utilize it for waste management.
We also evaluate collectors, transporters, and disposal contractors basedon our internal rules and conduct on-site inspections at predetermined frequency, so as to continuously and appropriately ensure proper management.

Sustainability report 2023

43

Respect for Human Rights

44
4

Respect for Human Rights

Human rights awareness education
Nippon Steel respects human rights and strives to create the working environment which allows diverse human resources to be
more empowered.

Basic policy
In compliance with the Universal Declaration of Human Rights and otherinternational norms on human rights, the Nippon Steel Group is in the businessof creating and delivering valuable and attractive products and ideas, byrespecting our employees’ diverse views and individualities and utilizing themfor the good of all. Based on the United Nations Guiding Principles on Businessand Human Rights, the Nippon Steel Group Conduct Code has been set. By
adhering to its nine principles, Nippon Steel conducts business ethically, while
paying full heed to human rights issues arising with the increasing globalization of the economy. Nippon Steel gives due attention to the rights of workers,
and staunchly opposes the use of forced or child labor. These are prerequisitesof our corporate activities. We have also prohibited as unjust the discriminatory
treatment of workers based on nationality, race, belief, creed, gender, age,sexual orientation, and disability. In addition, we give careful consideration
to the traditions and culture, business practice, and labor practice of eachcountry or region as we accelerate overseas business development.
Based on these basic ideas concerning respect for human rights, we
strive to create a workplace environment where employees can share diverse

values and maximize their abilities. We thereby seek to improve productivity,
work conditions, benefits, and the working environment, with the aim to enrich
the life of employees and achieve the corporate development.

From the viewpoint of promoting human rights awareness activities byassigning human rights awareness advocates at each steelworks and each
office, and of implementing corporate-wide human rights awareness activities,
we hold a “corporate-wide forum of human rights awareness advocates” inMarch each year to exchange views on human rights awareness educationand new human rights risks, and to consider the related action policy for the
next fiscal year. Based on this, we hold a “corporate-wide forum of humanrights anti-discrimination promotion” at the beginning of the fiscal year,
chaired by the Executive Officer in charge of Human Resources, with thehuman resources managers of each steelworks and each office as members.
At this forum, the fiscal year’s policy for promoting human rights development
is determined.
In addition to implementing human rights awareness activities inaccordance with the policies decided at the forum, each steelworks and each
office are actively engaged in employee awareness-raising activities, including
holding workshops on a specific issue of the steelworks or office. We also
participate in enlightenment organizations and activities hosted by public
entities and others in each community. We do this as concerted efforts forhuman rights enlightenment with the communities.
Along with the group-wide expansion of our efforts to Group companies
in Japan and overseas, monitoring surveys on the status of compliance withlabor-related laws and regulations, the establishment of consultation contacts,
and other issues are regularly conducted via a checklist on internal controls.

NIPPON STEEL CORPORATION

to overseas business in the context of preventing human rights abuses (i.e.,
consideration for each country’s unique traditions, culture, business practices,and labor-management practices).
The number of recipients of training courses by rank on human rights (FY2022 results)

5,541

Training on human rights

Mechanism of corrective actions

Informal gathering of employees dispatched from Nippon Steel and local employees of our overseas operating companies

Efforts to prevent human rights abuses
Addressing human rights risks

Based on the policy decided at the “corporate-wide forum of human rights
anti-discrimination promotion,” information on human rights awareness isincorporated in training courses for all ranks, from new employees to experienced ones. We also provide education on a variety of subjects, including theissues of harassment and anti-discrimination, understanding of LGBTQ, andhuman rights issues in the conduct of our business.
Two-way communication with employees based on good labormanagement relations is important in order to prevent human rights abuses.
We therefore incorporate education toward building sound labor-management
relationships in training of executives of the Company and the Group companies.
In addition to general education that contributes to the prevention ofhuman rights abuses in workplaces, we also address specific human rights
abuse risks in formulating and oversight of specific work assignments.
Examples include education on fair recruitment selection by employees
assigned to the tasks of hiring in order to prevent job discrimination, and education on cross-cultural understanding and communication for those assigned

Through these efforts, we are continuously and systematically promoting
activities to prevent human rights abuses. This includes the understandingof human rights risks that change with the times and the development of asystem and a strategy to reduce the risks.

We have clarified whom to contact for consultation on various complianceissues including human rights. This is a part of efforts to establish a groupwide
claim handling mechanism that makes it easy for employees and related
personnel to ask for consultation, and that enables the Company to understandand identify incidents of discrimination.
Specifically, a Compliance Consultation Room has been established toaccept inquiries and reports and give counseling regarding human rights
abuses such as harassment, from employees of the Company and Group
companies and their families, as well as from employees of business partners.
Reports and consultations from various stakeholders are accepted throughthe Inquiry Form accessible on the website. Regarding the response to these
individual incidents, such as internal reports and consultations, we investigate
the facts and, if necessary, seek advice from outside parties, including lawyers
and outside professional organizations, to protect the privacy of the persons

and to ensure that they do not receive unfavorable treatment. We then provide
guidance and education to those involved, and strive to appropriately resolve
the incidents.
Furthermore, since labor-management relations play an important role inpreventing human rights abuses and resolving related incidents, in the eventof disputes concerning the interpretation of collective agreements, labormanagement agreements or other rules directly related to them, a grievancecommittee is established to resolve the dispute, based on the agreement
concerning complaint-handling procedures that has been concluded with thelabor union. The committee comprises members from both the management
and the labor side.

Prevention of forced or child labor
Adhering to international norms concerning forced or child labor, Nippon Steelhas the policy of prevention and eradication of both types of labor. We comply
with applicable regulations and conduct regular monitoring surveys of ourGroup companies to prevent such violations in our business activities.

Compliance concerning salaries
In compliance with laws and regulation concerning salary and wages payment,
Nippon Steel has set up pay at a higher level than minimum wage stipulatedby the country, region, and type of work where we do business. With regard
to bonuses, we regularly survey related matters, including the status of eachcountry, region, and type of work, hold serious meetings with the labor union ineach time, to appropriately reward employees with due consideration given tobusiness conditions and financial performance.

Communicating with stakeholders
Adhering to laws and the group-company labor agreements, and respecting
the rights to organize and to bargain, Nippon Steel strives to maintain soundlabor-management relationships. With a focus on mutual understanding
through two-way dialogue, we have a place for discussion with labor unions
for the entire Company as well as for each steelworks and each office.
We discuss the operating and financial performance, safety, health, andproduction management issues, working conditions such as salaries andbonus payments, balancing of work and personal life, and other issues. Close
labor-management communication is also maintained, particularly concerning the actual work cases for which the labor unions received reports fromtheir members. The minutes of these discussions are recorded and sharedthrough the Intranet and other means broadly, from senior management towork union members.

Labor-management discussions(FY2022)59 times for the 926 times atentire Company

steelworks and offices

Number of union members andunionized rate (March 31, 2023)

25,115(100% unionized)

In-house magazines for the entire Company as well as each steelworks
and each office are regularly published as a means to send various messages
to employees. PR magazines are also published to convey our business andother information outside. Our steelworks and offices also regularly set up
a place for dialogue with the nearby residents’ associations to ask for theirunderstanding of our business operations and listen to opinions and requests
from them; this is part of what we do to realize better communication with thelocal community.

Sustainability report 2023

45

Diversity & Inclusion

46
4

Diversity & Inclusion

Plan of action as a general employer, based on the Act on the Promotion of Female Participation and Career Advancement in the Workplace in Japan

Through our efforts in promotion of diversity and inclusion, we are committed to creating a company where diverse employees are
empowered and feel proud and fulfilled.

In order to develop an employment environment where female employees can perform at their best, an action plan is formulated as follows:1Plan period: 5 years (April 1, 2021–March 31, 2026)

2

Goals, details of efforts, and implementation schedule

Target 1

Basic policy
From the perspective of creating a company where diverse employees areproductive, perform at their best, be empowered, and feel proud and fulfilled,
we are reinforcing our diversity & inclusion efforts with a focus on the following
five areas, as one of important management issues.

The Diversity & Inclusion Department has been established as a dedicatedunit to promote these efforts.

Promote female employee's participation and career advancement2

 ealize work life balance so as to enable employees with various
Rbackgrounds and circumstances to perform at their best

Number of employees (March 31, 2023)

Men

Women

Total

25,504

2,827

28,331

Number of new hires (April 2023)

762

86

848

 evelop health management in order for employees to perform at theirDbest until the retirement age of 65

Average years of service (March 31, 2023)

17.7

12.9

17.2

Average age (March 31, 2023)

39.8

34.8

39.3

4

Prevent harassment

Turnover rate1 (FY2022)

2.0%

4.3%

2.2%

5

Promote empowerment of the elderly and the disabled

1 The rate of voluntary retirees to all employees

3

ber of female employees in management positions

Aim at 75% or higher utilization rate of paid leave days.

Target 2

in 2025 from 36 in 2020, and to increase by at least

From FY2021

four times and possibly seven times by 2030.

• Prepare a pamphlet on the vacation and leave program, distribute it to employees, and develop educational activities.

From FY2021• Hire more women.
• Confirm the individual circumstances and intentions of female employees andconsider placement and development measures based on their circumstances inorder to enable them to continue to work and actively perform.

Status of employees (non-consolidated basis)

1

Aim to at least double and possibly triple the num-

• Invest in the working environment so as to expand the placement of women,
mainly at steelworks (improvement in work infrastructure, work content, etc.)•C onsider and implement work support measures for employees in the childcare
status period, such as measures for childcare centers that offer night-time service.

• E ncourage taking paid leave days by setting with the labor union some specific days
recommended for paid leaves and by conducting a campaign to do so in the summer.
• Managers to take the initiative in taking off on paid leave days.
• Managers to support each employee to take paid leaves as scheduled.
2021

2022

Number of female employees inmanagement positions (As of April)

45

2023
55

65

• In light of the enhancement of the programs related to childbirth and childcare,
prepare a brochure to introduce the relevant programs, distribute it to employees,
and revise related programs as needed.

Utilization rate of paid leave days

• Provide career education that will contribute to the further promotion of female
employees’ performance.

2 Including the effects of temporarily suspended operation to reduce production in response to a major drop
in steel demand

FY2020

FY2021

60.0%2

FY2022

77.8%2

82.9%• P rovide education on diversity to managers who supervise female employees.

Promotion of women’s participation and career advancement

Improved hiring and retention

What we have done so far
We have endeavored to establish a comfortable working environment for
female employees. Specific programs include: 1) a childcare leave benefit
which is more generous than legally required; 2) a program for employees
who rejoin the Company after having left it because of childcare or nursing
care and other reasons; 3) a leave option to assist overseas relocation of a
spouse; and 4) a temporary exemption program for employees who havedifficulty in relocation because of childcare or nursing care and other reasons.
We have also been opening 24-hour childcare centers in steelworks andprovide maternity work clothes for use by steelwork employees who are in thechildbirth/childcare phase, in order to help them continue their shift work withconfidence. We are also working to improve the workplace infrastructure suchas showers, toilets, and dressing rooms at manufacturing sites, and to improve
the work content.

In-house childcare center(East Nippon Works Kashima Area)

Number of in-housechildcare centers

Number of users of in-housechildcare centers(April 2023)(April 2023)

7 centers

147

Toward further promoting women’s participation in the workplace
Based on the various programs and work environments that we have established, we have developed the following action plan to support female employees tocontinue to demonstrate their abilities through career development, and to promote their empowerment in all workplaces and levels, including enhancement ofpromotion to managerial positions.

We have been working to hire a greater number of women to promote their
participation and career advancement. We are encouraging remote working tofacilitate a shift to a flexible workstyle and to reduce long work hours so thatthose with a constraint on the workplace or work time due to childcare or otherconditions can continue to work. Career assessments for female employees
have been conducted to facilitate flexible placement and development based on
the understanding of individual circumstances and to improve retention rates.
At the same time, we will continue to make changes to enhance theworking environment, including improvement of the environment for expanding

work placement for women especially in steel mills, and the operation ofchildcare centers that can also be used during the nighttime.

The ratio of women in overall hiring (Average ratio for 2021–2023)
Office staff and engineers

Operators and maintenance personnel

Overall hiring

22%

8%

11%

Support for employees’ career development and work-life balance
We facilitate the development of female employees by providing them with
opportunities for growth through proactive efforts in anticipation of theirvarious life events, and by actively promoting their advancement to managerial
positions. As a development policy for the appointment of employees to managerial positions, we have established new respective career training programsfor young and middle-class employees respectively since fiscal 2022. These
programs motivate participants through conversations with senior female
employees and foster exchanges among participants, in addition to helping
them develop career aspirations based on lectures and group work. For
operators and maintenance staff, we started exchange meetings for female
team leaders from different steelworks/areas in fiscal 2021. This provides anopportunity for female team leaders to share their workplace challenges andconcerns and find clues to the resolution.
We are creating a workplace culture where work and home life are
comfortably balanced by supporting employees in various ways, including
improving and disseminating brochures explaining the relevant programs andguides for employees facing life events as well as for their managers.

We also provide to managers training concerning unconscious bias anddiversity management.
With the aim of encouraging male employees with young children to
actively participate in childcare, since the second half of fiscal 2021 we havebeen encouraging them to take childcare and related leave.
Utilization of childcare support program (FY2022)
Childcare leave users andacquisition rate

612

146

Return ratio of female
Number of users of theemployees after childcare short-work hour program
leave
for childcaremen (56%) women (100%)

97.3%
FY2020124
FY2021

FY2022Childcare leave acquisition rate
among eligible male employees

8%

25%

56%

(a combined rate of male employees taking
childcare leave and those taking childcarepurpose paid holidays3)

(–)

(81%)

(100%)

3 Started calculation in FY2021

NIPPON STEEL CORPORATION

Sustainability report 2023

47

Diversity & Inclusion

48

Realizing the work life balance as a means to enable people with diverse situations perform well in the workplace
Restraint on long-work hours
As a precondition for an environment in which diverse human resources canperform at their best, we are committed to reducing long work hours basedon appropriate work time management. Prior to the revision of the Labor
Standards Act, starting in fiscal 2018, we set up work time capping rules forall employees, including managers, to promote improved work management
and work practices that lead to more efficient, higher-value-added output. In

Basic policy
We aim at ensuring that all employee work at their best from the time ofjoining the Company to retirement, which has been extended to the age of
65. To accomplish this, we assist them to maintain and enhance both mental
and physical health. We conduct health promotion measures focusing on
disease prevention as well as early detection and treatment. We are committed
to providing advanced health checkups including cancer or mental disorderscreening and encouraging employees to get regular checkups and provide
consultation or counseling about lifestyle or stress coping by health care

addition, we had set a goal of less than 2,000 hours on average for the total
annual actual working hours, and have achieved it.
We will continue to pursue workstyles that achieve maximum results
within a limited amount of time, while incorporating the effects of businessreform and DX measures.

Enabling flexible ways of working
All human resources with their diverse attributes and circumstances, suchas age, gender, and restrictions on work time and workplace due to childcare
and nursing care, ideally should make the most of their finite time available
and perform at their best. From this viewpoint, we are expanding our work
system to move away from traditionally-set ways of working and pursue more
flexible and diverse ways of working in accordance with the nature of work at
any given time and fluctuation in workload flow of operations needed at that

Health management aimed for employees to work at their best up to the age of 65

time, and the circumstances of each individual. Specifically, we are utilizing
the telework system and expanding workplaces that use the “coreless flexible
system,” which eliminated the core time — an essential time period to be in
the office. Based on these systems, we aim to achieve improved productivity
and employees’ work-life balance, while pursuing ways in which individuals
can perform at their best.

Nippon Steel Corporation Group Code of Conduct
5 Create a healthy, safe, and comfortable work environment, and respect the character and diversity of our employees.

Nippon Steel’s Basic Policy on Safety and HealthRealization of a flexible way to take time off from work
established a leave system for obtaining a degree at a university or anothereducational institution.
To promote the use of these programs, we distributed a brochure that summarizes each type of work and vacation program applicable for each life stage.
We try to make the programs better known through various training programs.

NIPPON STEEL CORPORATION

2

E nsuring and maintaining the safety and health of employees of the Nippon
Steel Group is the Group’s most important, top-priority values and the basisthat supports business development.
U nder the Management Principles of “developing and bringing out the best in
our people,” the Nippon Steel Group makes continuous efforts to abide by thisphilosophy and continues to contribute to society through their safety and health.

Specific Guidelines

procedures and work environments.
4

We ensure the observance of rules and engage in hazard prediction, and proactively implement workplace activities to enhance the level of safety and health.

5 We provide the education and training needed to ensure the safety and healthof people working in the Nippon Steel Group.
6We continuously develop and improve safety and health efforts through thesafety and health management system.

1 We observe applicable laws and regulations, and give top priority in all

business decisions to ensuring safety and health.
2

Performance of ways of working and taking time off (FY2022)
Average overtime hours per worker per month22.2 hours

Utilization of paid leave days

82.9%

Average paid leaves taken

16.6 days

Childcare leave users and utilization rates
Nursing care leave and vacation program users

13

Users of the short-work hour system for nursing care

2

April 1, 2019
Eiji Hashimoto
President of Nippon Steel CorporationW e maintain awareness and understanding of actual workplace conditions,provide the guidance needed to ensure safety and health, and remove factorsthat might lead to accidents.

Commitment to the health of both the Company and its employees

612 men (56%)
146 women (100%)
Employee

Get the regular healthcheckups and thecancer screening

Check the resultsof the healthcheckups

Provide the advanced
health checkup menu

Company

Make efforts at improvement• Lifestyle• Extensive testing and treatment

Post-checkup
measures

Health checkup

Confirm at the next
health checkup

Workplace (Managers)
Support the health of employees, becognizant their health status, and adjust
work assignment

Give health guidance andconsultation for medical
examination or treatment

Employees areproductive andfully exercise
their capabilities

Occupational healthcare professional

Organization for health promotion
Federation of Nippon Steel
Workers’ Unions

Nippon SteelLabor-management council
Human Resources Div.

Health promotion planning department
for the whole company (corporate physicians,
nurses, and industrial health staff)

Nippon Steel Corp. Health
Insurance Society
Committee of healthinsurance

Steelworks

Committee of healthpromotion

Health promotion department in steelworks(corporate physicians, nurses, and industrial
health staff)

Promoting physical wellness

Benefit programs
In order to support the various life stages of employees and enable them toachieve a good work-life balance, we are also focusing on welfare measures.
We support employees’ personal life with various programs: provision of

3 We follow plans to implement measures to realize safer, healthier work

Basic Philosophy
1

We have been establishing the environment for our employees so that it
facilitates a flexibility in the ways to take time off from work, tailored to thecircumstances of individual employees and their life stage.
Annual paid holidays can be taken on a half-day basis to meet employees’ needs. Each of our steelworks and offices designates dates on which
employees are encouraged to take holidays. The head office, for example, sets
mainly Fridays in August, as “Eco-paid leave days” and recommends making
it easier for employees there not needing to attend meetings and other eventson those days to take off.
Concerning childcare leave, in addition to providing a longer period than
the statutory limit, the expired annual leave days accrued by each individual
can be recovered to paid off-days for parental leave. In addition, from theviewpoint of encouraging child-rearing male employees to actively participate
in childcare, we are focusing on clarifying the corporate policies, fostering
a workplace culture that encourages employees’ use of the system, andpromoting the use of childcare leave and childcare-related leave benefits by all
male employees whose spouses have given birth to take childcare leave andchildcare-related leave on an individual basis.
Matched to the ongoing aging of Japanese society, programs for nursing
care leave and time off for nursing care have been established to help
employees continue working while attending to nursing care. The expired leavedays that have been accrued can be used for nursing care purposes, as part ofour efforts to provide an environment in which employees can work with peaceof mind while providing care.
The expired annual leave days can also be utilized for such purposes as
prenatal checkups and recurrent (relearning) education, in addition to childcare
and nursing care, sick leave, care of elementary to junior high school children,
volunteer work, and infertility treatment. For recurrent education, we haveprofessionals, as needed. Employees are expected to also be committed to
implementing measures for their own health maintenance, such as getting
various checkups and improve their daily lifestyle. We believe that such
efforts by both the Nippon Steel Group and its employees become a source of
motivation for work. They are encouraged to balance their work and health andthey try not to get sick and, in case they get sick, they continue working while
undergoing treatment.

housing, including dormitories and company housing, and a cafeteria plan
(work-life support program).

Cerebral cardiovascular disease control
We have established a unique company-wide system that enables us toassess and manage the risk of diseases based on the results of healthcheckups. We provide health guidance according to risk factors or control thefrequency of health checkups.
It is important that workers with high risk of cardiovascular disease
improve their lifestyle. We will improve the implementation rate of specified
health guidance, which aimed at improving the dietary and exercise habits ofworkers, by setting a target rate and promoting medical visits. We cooperatewith the Health Insurance Union for achieving the goal.
Specified Health Guidance (2021)
Actual implementation
rate

81.2%

Target for
2025

Target implementation rate

70%
Sustainability report 2023

49

Diversity & Inclusion

50

Promoting physical wellness
Cancer disease control
Various cancer screening (including non-statutory exams) based on age andgender are incorporated in our health checkups.
In particular, regarding exams for gastric and colon cancer, which
are high risk diseases, we set the evidence-based priority target age andType of examination

Priority target (target age and test frequency)

Gastric cancer examination (gastric fluoroscopy)

Once every 2 years, 50-years old or older

Colorectal cancer test (fecal occult blood)

Once a year, 40-years old or older

Prostate cancer test (PSA)

Once every 3 years, 50-years old or older

Breast cancer screening (mammography)

Once every 2 years, 40-years old or older

Cervical carcinoma of the uterus (uterine cytology)

Once every 2 years, 20-years old or older

Gastric cancer risk test (pylori)

When joined the company and at 40

Liver cancer risk test (hepatitis virus)

When joined the company and at 40

Preventing harassment
screening frequency for the examination. We also set our target rate ofexam-taking and encourage employees to take exams for early detection andtreatment of cancer.

Actual rates of taking cancer examination (2022)
Gastric cancer
screening

78.0%

Target for
2025

70%

Colorectal cancer
screening

83.5%

Target for
2025

90%

Promoting mental wellness
Aiming for each employee in the Nippon Steel Group to enjoy a vigorous life
on and off the job, we provide a consulting service for prevention and early
detection in the area of mental health. We have incorporated the issue ofmental health in various in-house seminars and offer education on how to beaware of one’s own stress and to deal with it. For managers, we additionallyoffer education on how to care for their subordinates and manage their teams,
and how to coordinate with the corporate health care professionals (occupational physicians, health nurses, and other staff). Moreover, we provide stresschecks through a workplace stress survey every fall. Occupational healthcare professionals give guidance for improvement by teams and individuals
based on the result of the stress check. In contributing to a vigorous work
environment, managers implement necessary measures according to theissues of a team or an individual, coordinating with the personnel department
and the health department. Because early detection and early response areimportant in the treatment of mental illness, we identify those who are at risk
at the Health Consulting Contact by various measures in association with theCompany’s mental health e-learning and questionnaire event conducted every
June. Occupational health care professionals swiftly respond to the findings ofthe events to foster mental wellbeing.

Classification(Self-care)(Care by management supervisors)(Care by occupational health care
professionals)

Details
S tress check for awareness of their stress
Training for new hires and young employees
Workplace analysis of stress check to help employees
become aware of their stressSupport from supervisors or colleagues
Training for managers
Providing mental health education program by occupational health care professionals

Early detectionS creening of those in poor conditions in the interview
during a regular health checkup
Screening of highly-stressed people via stress checkups
e-learning to extract those who wish to be consulted
Establishment of a health counseling contact

Support for employees’ return tojobs and prevention of recurrenceS upport for employees’ return to jobs based on the
return-to-work programRe-designing of work assignments for a smooth return to
the workplace
Regular interviews after return by occupational health care
professionals

Support to employees who work overseas
To enable employees who have been assigned to work overseas to be free of
undue worries, a seminar for the employees and their family is held before
the overseas assignment, and information on mandatory vaccination, the local
medical system, and other matters are provided. Under the policy of providing
continuous health management support during overseas assignments,
interviews with occupational health care professionals are regularly conducted
counseling via online and at the time of a temporary return to Japan, in
addition to aftercare checkups of the regular medical exams. Moreover, oneof the Company’s physicians periodically visits overseas offices, researches

Health-wellbeing activities
In addition to the above-stated health measures,
we collaborate with the Health Insurance Unionand labor unions in a variety of health-wellbeing
activities, such as the “Health Challenge
Campaign” living habits, “Health e-learning”
for improving employee health awareness, andpassive smoking preventive measures.

NIPPON STEEL CORPORATION

In addition, a guide on harassment prevention and appropriate guidance
was issued for managers in fiscal 2022 to help them create a sound workplace.
Dedicated consultation and reporting points of contact have been established so that employees who face a harassment issue can consult with otherpeople, in addition to someone close to themselves, such as their supervisor
or co-worker. We are striving to create an environment wherein a harassment
issue can be resolved without the employee concerned taking it on all alone.
Each of the contact points takes individual actions and makes sure not
to disbenefit anyone for reporting or cooperating. After investigating andconfirming the existence of a problem, we take strict measures in accordancewith employment rules and other regulations.

Empowerment of the elderly and the disabled

Our mental health initiatives

Proactive action

We are strengthening efforts to prevent harassment in order to create anenvironment where diverse human resources can work diligently with peaceof mind.
In the past, we have clarified our internal policies, created, anddisseminated leaflets to inform and enlighten all employees, and repeatedly
provided education on harassment in training at milestones, from new
employees to managers. From fiscal 2020, in addition to the above initiatives,
we are conducting a “Harassment Prevention Campaign” every December.
In the campaign, we offer e-learning and self-checks for all the employees andboard members, and workplace dialogue specifying themes such as creating
an open workplace.

local medical institutions and the daily-life environment, and meets with theemployees who work overseas to offer advice. We have contracted with a
medical service company to provide the medical care locally, in preparation for
the employees possibly becoming ill overseas.
In the event of another pandemic, necessary infection prevention
measures, including evacuation measures, based on what we have learned
from responses to COVID-19, have been implemented in consideration of thelocal infection situation and the state of medical care, with the first priority on
the safety and health of the employees who work overseas and their families.

Classification

Details

Health Challenge
Campaign

A company-wide measure in which employees challenge for two months to improve their own life habits
Provide courses that are effective in improving health checkup results and lifestyle.
Ex. Take 8,000 steps a day/Have good breakfast

Health e-learningT wice a year for all employees
The themes for FY2022: “Mental health: Mental signal and recommendation of early consultation(Part 2)” and “Cancer prevention and cancer screening”

Passive smoking
preventive measuresand non-smoking
guidance

S ince April 2020, smoking in Company buildings has been prohibited (excluding designated smoking rooms).
Implementation of guidance on how to quit smoking at the on-site clinic or other clinics or via website
For employees who wish to stop smoking, an occupational health care professional will provide
individual guidance.

Employment for the elderly
With regard to the promotion of the empowerment of the elderly, we extended
the retirement age to 65 from 60 in fiscal 2021, after consultation with labor
unions, and taking into account the declining working population, the responseto the extended starting age of the pension system, and the maintenance andimprovement of initiative at our workplaces.
Assuming that the same work will be carried out, even after the age of60, the employment scheme as well as the salary and bonus scheme willremain the same up to the age of 65.

Under this new system, hopefully, all generations, up to 65 years of age,
will continue to perform at their best at the front lines of our workplaces, while
also invigorating the skill transfer process and communication within theworkplace between generations, thereby creating a vibrant company.

Employment for the disadvantaged

Employment rate of the disabled (as of June 2023)

Recognizing employment of the disabled as an important social challenge, we
are implementing an action plan for their employment and providing a friendly
working environment.
Since 2007, we have established special-purpose companies to expand
employment opportunities. As of July 2023, at our five special subsidiaries,
over 100 people are actively engaged mainly in outsourced work from Nippon
Steel. The various work includes data input and printing of written documents,
cleaning of the steelworks premises, cleaning and management of the welfare
facilities, and cleaning of work clothes.

2.45%

Work scenery at one of the special-purpose subsidiaries

To secure human resources and promote active participation
In the middle of major environmental changes such as intensifying recruitmentcompetition due to population decline in recent years, diversification ofindividual career views, and fluidity in the labor market, in order to realize ourmanagement strategy, it is extremely important to secure human resources
and to promote the further active participation of employees. As one of ourmost important management issues, we will implement various personnel andpublic relations measures mor e than ever before.
In order to secure human resources, in addition to the stable recruitmentof new graduates and the recruitment of postdoctoral researchers such as
highly specialized doctoral personnel, etc., we will actively recruit experienced

personnel, including the alumni recruitment. We will also develop public
relations measures to raise awareness of our company among a wide range
of generations, on top of students who are seeking job. We will also raise thelevel of compensation for employees, including starting salaries.
In order to promote active participation of human resources, we will
strengthen measures to improve employee engagement by fostering internal
dialogue and communication and providing opportunities for challenge andgrowth, such as sending mid-career and young employees overseas.
By promptly putting these current measures into action, we will examine
and implement more initiatives to secure and empower human resources.

Sustainability report 2023

Human Resources Development

52
4

Based on the belief that “the development of excellent personnel is a prerequisite for the development of excellent technologies andthe production of excellent products,” Nippon Steel is striving to enhance “initiative at workplaces” and “technological advancement”
and to improve its overall manufacturing capabilities.

Human resources development
Basic Policy for Human Resource Development
Recognizing that the source of competitiveness is the power of people,
Nippon Steel’s Management Principles state that “we develop and bring out
the best in our people to make our Group rich with energy and enthusiasm,”
positioning human resource (HR) development as a priority theme. A goal of
HR development is to create people who can understand and implement our
Corporate Philosophy and our Employee Action Guidelines. With this in mind,
each employee shares in taking the lead in HR development.
Nippon Steel’s basic approach to HR development is for supervisors totransfer to their subordinates, through daily dialogues on the job, understanding and knowledge of criteria for judgment and of operational skills. In orderfor this mindset to be shared by all employees, the following Basic Policy for
Human Resource Development has been adopted.
Unit
Number of training/ hours/year per employee
learning hours[million hours/year]

FY20201

FY20211

FY202262[1.82]

32[0.90]228[0.80]3

1 Some corrections to the data reported in Sustainability Report 2022 and other materials due to data scrutiny andrecalculation corrected, and the training/learning during operation with reduced production in FY2020 and FY2021
included.
2 FY2021 data affected by partially suspended or postponed training and reduced new hires during the COVID-19
pandemic.
3 Unlike in FY2020 and FY2021, training/learning not provided during operation with reduced production in FY2022
due to recovery in production.

Off-the-job training (OFF-JT), which complements OJT, is used throughout
the Company by organizing the minimum skills and knowledge requiredby each rank of employees of Nippon Steel into a company-wide standard
system. Through this, we work at education of workplace leaders to further
increase their ability to add to and improve our knowledge base from the field(“field technology”) and at measures to maintain and improve motivation of theelderly to continue working with health and motivation.
We are also actively promoting cooperation in HR development withpartner companies, which play an important role in our steelmaking, fromthe perspective of deepening and expanding our partnerships. Specifically, in
addition to the training of each partner company, we also conduct training forthe employees of our cooperative companies. Level-specific training to impartand improve knowledge and skills needed for partner companies’ employees
in different ranks, such as newcomers, young staff, team leaders, job leaders,
and line managers, is available, with Nippon Steel’s employees serving as
instructors. Through these efforts, we support the HR development of ourpartner companies, encourage exchanges between our on-site employees andtheir employees, and establish a foundation for smooth business execution.

Another area we focus on is to diversify recruitment sources (especiallyfor female employees and mid-career recruitment), and we strive to create aworkplace climate in which diverse personnel can be motivated and collaborate
with each other through human rights awareness and harassment prevention.
Development of operators and maintenance staff
OFF-JT
Training by role and position

Safety training

Training for veterans(Technical transfer, life plan, etc.)

Ever Smile Training
Taikan Program(an experiencebased safety
education program)Training for team leaders

Leaders

Human Resources Development(Management, leadership, etc.)

Training for re-appointed team leaders

Follow-up training for team leaders
Training for newly-appointed team leaders
Training for team leader candidates

Basic Policy for Human Resource Development

Training for young staff (Nippon Steel School)1

HR development is the job itself, and supervisors play an important role in HR development.

2

OJT training is a basis of HR development and is complemented by off-the-job training.

3Supervisors share objectives and outcomes of HR development clearly with their subordinates.

4Each individual strives for continual personal improvement for further growth.

(Manners and discipline, basic skills, communication,
mental health, etc.)

General staff

51

Training for young leaders
Third-year training

Safety training
by rank
Safety and healthmanagement
training for
10 years

Second-year training
Training for newcomers

Personnel development of operators andmaintenance staff
The operators and maintenance staff relentlessly build
up their skills in steelmaking and maintenance, startingfrom joining the Company, on the assumption of continued
long-term employment to retirement. They thus fundamentallysupport the Company’s initiative at our worksites. Smoothtransmission of technology and skills from veterans toyounger workers is essential and a system that facilitates
this is needed. Therefore, after identifying, through asupervisor-subordinate dialogue, the skill or skills to beacquired, a skill development plan is developed and carriedout. Training is conducted mainly through On-the-Job Training(OJT), and the HR Development PDCA is kept up to date foruse by repeatedly revising and implementing the development
plan based on the progress of individuals.

Human resource development PDCA (conceptual rendering)

Note: In addition to the above, training to impart and improve knowledge and skills needed for partner companies’
employees by rank (newcomers, young staff, team leaders, job leaders, and line managers) with Nippon Steel’s
employees as instructors is available.

Corporate Philosophy and Employee Action Guidelines
Heads of plant/mill and managers

Planning staff placement
and structure
Individual placement plan

Indicate a pair for
development
Trainer

and
A Act
amend

C Check
BaseDevelopment
process

Personnel development of office staff and engineers
Skill map
Base that supports the HR
development PDCA

HR development plan

Dialogue

Conduct annually

Operation managementon the supervisor
P basedsubordinate dialogue
 perational themeOSkill enhancement of
individuals
Subordinate development

Plan based on
the dialogue

D Do
Individual OJT as a baseTrainee

and
A Act
amend

C Check
Base
Skill growth
Training

Following the Basic Policy for HR Development, Nippon Steel uses a HR
Development PDCA for office staff and engineers, who implement OJT-based
HR development plans. Specifically, development plans are formulated for each
person based on the Corporate Philosophy, Employee Action Guidelines, andorganizational strategies. Based on a concrete one-year plan, a supervisor anda subordinate have an extended dialogue throughout the OJT period, review
the development situation at year-end, and formulate the next year’s plan.
The OFF-JT is also being enhanced to complement the OJT. Various
training programs are aimed at acquiring the knowledge and skills required
for each qualification and position. An employee’s period of time from joining
the Company to becoming a manager is divided into three steps: “Discipline,”“Creation” and “Independence.” Work reporting sessions and training byrank are carried out at the milestones of the 2nd, 3rd, or 5th anniversariesof the start of employment. In addition, selective training to improve theskills needed for work, and technical education programs to systematicallylearn the knowledge needed for our engineers are available. These can betaken based on individual development needs upon the dialogue between
supervisor and subordinate.

Fifth-year training

OFF-JT complements OJTGroup discussion during a seminar for newly appointed managers

NIPPON STEEL CORPORATION

Sustainability report 2023

Human Resources Development

54

Global personnel development

Development of office staff and engineers“Creation”

Second-year training
Training for newcomers“Discipline”

For all employees“Discipline”: In the initial few years, new hires learn the basics in each of ourfields of expertise, and acquire the manners and basic patterns
for work as a social person through each practice.
“Creation”: The employees in this step are assigned to perform a certain task
from start to finish, develop their execution ability, identify their own
field of expertise, and acquire a firm basic foothold in it.

Training for the needs of department

Technical skill lecture of steelmaking technology

General technical skill training

Marketing, etc.

Coaching, facilitation

Logical thinking, presentation

Training for expert scientists

Advanced financial training

For selected employees

Management program in the training for senior management in ASEAN and India

Development of staff who drive DX
We are developing human resources in both data science and digital management. As for data science education, our goal is to develop DX skills training toenable all office staff to become data science users “who can effectively use
data” by 2030, and to grow at least 20% of our office staff and engineers into
citizen data scientists “who can make advanced use of data.”

As for digital management education, we have been conducting training
all managers to understand their role in the promotion of DX and encouragethem to change their mindset, so that they can facilitate operational process
reform using digital technology. Through the education from these two
aspects, we intend to accelerate our production and business process reform,
using data and digital technology.

Data Science Training

Digital Management Training

Selective type“Independence”: Through experience of working according to their own
responsibility, the employees develop their leadership skills.
Together with development of skills, when they reach thisphase they must also pay close attention to the developmentof their subordinates or junior colleagues.

AI development

Development of managers

Development of staff who support technological advancement

The training courses are provided to managers to match the managers’
qualification and position so that they can acquire proper understanding of
their responsibilities and authority as managers and knowledge, skills, andmindset that contribute to enhancing their management as supervisors andgroup management capabilities. In recent years, we have given increased
attention to management education. We added new courses including one
for line manager candidates to enhance line management skills on the
manufacturing field, and one for new managers to ensure they have a correctunderstanding of their roles and responsibilities as managers and acquire therisk management and job and organizational management skills. In addition tothese, we enhance education on dialogue skills as a supervisor.

In order to train human resources that achieve world-leading technologies
and manufacturing capabilities, courses to learn the essential knowledge
and technologies for steelmaking engineers are prepared. In particular, thecontent of courses classified as steelmaking process-specific technologies isat the core of Nippon Steel’s technology. We have developed an environment
in which we can learn from basic technologies to advanced technologies, withexcellent in-house engineers as instructors.

Data science knowledge

Expertdata scientists

NIPPON STEEL CORPORATION

Participants in the training for senior management in ASEAN and India, in front of the head office building in TokyoManagement

Third-year work reporting session“Independence”

For our employees to effectively work in any country where we are active, we
provide pre-assignment training aimed for them to acquire basic knowledge
to do business in the country and understand cultural differences. We havealso set standards for English language skills to be reached by each level,
and are working to raise the overall level of our group. For those whose job
requires English skills, there is a program aimed at raising their proficiency
level in English so that they can perform their jobs overseas without need fortranslators or interpreters.
Further, to train future players of our domestic and overseas businesses,
middle-management seminars are designed for young managers to acquire
the knowledge, skills, and mindset necessary for business management.
Concerning development of overseas local staff, we make efforts to transfer to them Nippon Steel’s operational skills, mainly through OJT, according
to the Company’s Basic Policy for HR Development. In the ASEAN countries
and India, where our overseas Group companies are concentrated, training
courses by rank, as well as OFF-JT courses for specific skill learning and othersubjects are conducted.

DX training for managers
Executives andgeneral managers

Use of digital and otheradvanced technologies

Develop strategies(vision, business reform)

Senior managers
Citizendata scientists

Datascienceusers

Approx.

20%

Approx.

80%

Advanced useof data

Manage operational reforms,
projects, etc.
Managers

Effective useof data

General staff

Fifth-year training

Legal and intellectual property seminar

Three steps for growth

Fifth-year work reporting session

Technical
education

Business skills

Introductory financial training

Training for supervisor candidates

Female self-leadership college

Development of general staff
 nderstanding of role and mind setting by the year of joining the Company
ULogical thinking and problem-solving ability
Communication (ability to speak out, listen, and make others get engaged)

Training for data science users

Seminar for newly-appointed
managers

DX skills

Training for citizen data scientists

Seminar for newly-appointed
senior managers

Selective training for the needsof departments and individuals

DX training for managers

Seminar for middle management

DX training for practitioners

Seminar for executives

Follow-up seminar for supervisors

English advanced course

Seminar for manager candidates(Head of Plant/ Mill Section)

Overseas study

Seminar for senior executives

Training for English and local languages

Seminar for Group company executives

Seminar for newly-appointed
managers (Head of Section)DX
promotion

GlobalTraining for those to relocate overseas and for their family members

Seminar for newly-appointed
managers (Head of Dept./Plant/Mill)

D&I

Overseas top training

Development of management personnel
Corporate and organization
management
Business management skills(financial, business strategy)Global management, etc.

Training for administration staff

Development of managers
Understanding of role andresponsibility of managers
Management oforganization and operation
Risk management, etc.

Education efforts for advancing
priority issues

Female management design college

Managers

Training by role and position

General staff

53

General staff

DX training
for practitioners

Learn anduse technology

Sustainability report 2023

55

Safety and Disaster Prevention

56
1

SafetyIn keeping with the basic philosophy that “safety and health of employees of the Nippon Steel Group is the Group’s most important,
top-priority values and the basis that supports business development,” the Nippon Steel Group has firmly adhered to its manufacturing
values, which include observing the principles of prioritizing safety, protecting the environment, and preventing disasters. We are working
on all of the related activities to improve the level of our Occupational Safety and Health Management System (OSHMS) while creating asafe and secure workplace. Our safety and health policy applies not only to our company but also to our affiliated partner companies.

Reducing disaster risks to zero, and group-wide sharing of effective measures

Zero

Accident frequency rate

TargetFor our company, trust and coexistence with our customers, local communities, and society are of the utmost importance, and it is important for the continuity of our company that we do not cause disaster-related accidents that damage our trust. For this reason, our disasterprevention promotion activities aim to improve disaster prevention management while building mechanisms and systems for autonomousand continuous activities, taking measures to reduce risks of disaster-related accident, and preventing disaster-related accidents.

Initiatives to reduce disaster risks(including zero fatal accident for Nippon Steel and one in subcontracting
companies) The accident frequency rate was 0.11 (compared to Japan’s steel
industry average of 0.98) and the accident severity rate was 0.04 (vs. 0.26).
We will continue to strive for a safe work environment with the safety wellness
targets for fiscal 2023 that are zero fatalities/severe accidents and less than
0.10 as the accident frequency rate.

We make a risk assessment when planning a new project and regularly
conduct safety and risk assessment for existing projects, to prevent accidents
and reduce risks. We also seek for greater safety of equipment even whensuch equipment is essentially safe, and take countermeasures against
human error. We also actively promote use of IT in safety measures, suchas checking worker location data via GPS, safety surveillance cameras,
and helmet-mounted cameras. We conduct analysis of actual accidents
for prevention of similar accidents and make known effective examples ofaccident-preventive measures. As a result of continuous execution of thesemeasures, safety improved in fiscal 2022. There were 5 accidents for Nippon
Steel’s employees1 and 16 for employees of subcontracting companies

0.10 or lessfatalities accidents

Nippon Steel’s Plant Safety Division is promoting initiatives for risk reduction
in disaster prevention by working in three areas of focus: 1) corporate-wide
implementation of measures against risks that emerge from instances ofdisaster, to prevent recurrence; 2) identification of disaster occurrence
risks based on risk assessment plant by plant and by each of their process
technology divisions; and implementation of tangible/intangible measures toreduce risks and control residual risks; and 3) voluntary monitoring (auditing)concerning appropriate implementation of 1) and 2), by persons in charge ofAccident frequency rate
2.5

Target: 0.10
Nippon Steel
Domestic all industries2
Domestic manufacturing industries2
Domestic steel industries2
Domestic steel industries (JISF members)2World steel industries (WSA members)31.5

Prevention of disaster recurrence (mitigating risks exposed by disaster)

0.5

Nippon Steel

Target:

0

0.11

0.10
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

(FY)

Accident
frequency rate

Number of accidents andrecordable incidents, accompanied
by lost work time
Total number of hours
worked by all employees

× 1,000,000

Nippon Steel’s 12 steelworks and offices acquired the ISO (JIS Q) 45001
Health and Safety certification (published in March 2018) as of April 2023.
We target to acquire the certification for all our steelworks and offices.

Acquisition of ISO (JIS Q) 45001 certificates
FY2019Kansai Works Wakayama Area

FY2020Amagasaki Area and Osaka Area of Kansai
Works; Nagoya Works; Kyushu Works Oita
Area; East Nippon Works Kashima Area

FY2021

Naoetsu Area and Kimitsu Area of East
Nippon Works, North Nippon Works MuroranArea, Setouchi Works Hirohata Area

FY2022

North Nippon Works Kamaishi Area, Kyushu
Works Yawata Area

Kashima Area’s ISO (JIS Q) 45001 Health and Safety certification

NIPPON STEEL CORPORATION

We make efforts to improve training for accident prevention. The safety
training programs are attended by all newly-appointed managers of
manufacturing worksites (81 managers in fiscal 2020, 80 in fiscal 2021 and
65 in fiscal 2022). Our Taikan Program (an experience-based safety education
program) allows employees to experience worksite risk through simulation,
so as to better prepare them in anticipating and managing risk. In addition,
we regularly hold safety and health education programs (74 participants infiscal 2022) for the safety and health staff of our Group companies and majorcooperative companies, striving to enhance information sharing about oursafety and health management approaches and activities and the acquisitionof knowledge about laws and regulations related safety and health.

A uditing concerning disaster preventionR egular check-up and corrective action on the implementation status of disasterprevention management of each steelworks based on the hearings in the head officeP revent forgetting past incidents and accidents (panel presentations in training
facilities; session to learn about past incidents during training)

5Identify and assess risks in manufacturing sites based on the corporate-wide
guidelines; manage residual risks; and develop and promote permanent measuresIdentify accident risks related to operating processes and facility design andpromote the drafting of permanent measures by outside experts and the process
technology division in the head officeS trengthen disaster prevention management in the facility measures of theMedium to Long-Term Management Plan

(measures for disaster prevention equipment)

Safety training

4Improve fire-fighting capacity of the in-house fire defense function, in cooperation
with experts (joint fire drilling with public fire fighters; training for leaders, etc.)

3 M
 easures to mitigate existing risks

Acquisition of third-party certification

Zero
serious disaster-related accidentsV oluntary monitoring by disaster prevention organization at each steelworks forregular check-ups and corrective action on the status of disaster prevention
activities at the manufacturing work front(identification of new potential disaster risk)
1.0

TargetE nhance drills for initial response (drills at all plants in all steelworks; enhanced
drill programs; use of dedicated training facilities, improvement of hazard
sensitivity by use of CG, etc.)

2 Disaster prevention risk assessment

1 Nippon Steel’s employees include seconded employees as well as
temporary and part-time workers, and those dispatched to Nippon Steel.
2 JISF “Safety Management Overview, 2023”
3 World Steel Association, Safety and health 2022 metrics reportdisaster prevention in each works; understanding of the control status throughsessions with managers at the head office; and implementation of corrections,
if needed. Targeting zero serious disaster-related accidents, we promoteessential disaster prevention improvement measures in manufacturing sites.

Specific disaster prevention initiatives
1

2.0

1

Disaster Prevention

Prevent disaster recurrence; investment in measures for compliance and risk assessment

Activities

Third-party monitoring toward enhancing safety competency in steelworks

Assessment of steelworks by an NPO, the Japan Safety Competence Center
6

Measures against earthquakes and tsunami and measures fornatural disaster mitigationP romote measures against earthquakes in the order of 1) human injury
prevention, 2) area damage prevention, and 3) production measuresP repare procedures, carry out practical training, and devise measures for disaster mitigation to the nine categories of natural disasters (earthquakes, tsunamis, typhoons,heavy rains, floods, lightning, landslide disasters, blizzards, volcanic eruptions)7G roup companies disaster prevention management

 eetings to enhance coordination for disaster prevention management; individualM
visits to a workplace where a disaster or accident happened or which has risks
related to disaster prevention

Efforts to prevent occurrence and recurrence of accidents

As part of disaster prevention efforts, we conduct activities to prevent occurrence
and recurrence of accidents.
For occurrence prevention (initial response training), we have identified
approximately 800 high-risk facilities and operations across the Company andconduct training to deal with them. This makes our training more practical. There
are 90 best practices of initial response training developed by different workshops,
which are shared across the Company to upgrade the training in each workplace.
For recurrence prevention, in addition to the corporate-wide disaster risk
assessment guidelines, we have established and standardized disaster risk
assessment guidelines that particularly address the launch of new facilities and thetemporary/permanent removal of production lines as part of our ongoing actions tomanage emerging risks from changes in the production status.
Since the formation of the Plant Safety Division in 2014, our infrastructure forcompany-wide safety management (standardization) has been strengthened, as
demonstrated by the fact that no serious disaster-related accidents have occurredsince 2019. In addition to building such infrastructure (standardization), we will
implement initiatives to support manufacturing sites disaster prevention activities,
including those conducted by managers, to make our disaster prevention activities
sustainable through the spread and enhancement of safety culture.

Efforts Toward Safety and Health Management
https://www.nipponsteel.com/en/csr/safety/index.html

Sustainability report 2023

57

Quality58
2

Quality Management

Quality management is one of the most important aspects in obtaining the trust and satisfaction of customers in the provision of
products and services. At the Nippon Steel Group, all employees engaged in manufacturing and services are responsible for thoroughquality management to improve quality.

Nippon Steel Group’s basic quality management policy
In line with the Japan Iron and Steel Federation’s Guideline toward
the enhancement of quality assurance system, we are promoting theenhancement of education on quality compliance (compliance with laws andregulations) and activities to reduce quality risks and implementing a basic
policy of identifying quality risks through quality audits throughout the Group.

Quality management issues are shared by the Quality Management
Committee, chaired by the Executive Vice President. By having the Committee
review actions to take for resolving the issues, we strive to maintain andimprove our quality management system.

Guide to the Five Basic Rules of Quality
Behavior

Quality auditing by the Quality Management Division

breakthrough steelmaking process through industry-academia-government
cooperation (see p. 23), and developing CO2 capture, use, and storage
technologies (see p. 24).

R&D expenses (FY2022, consolidated)¥

70.5 billion/year

Examples of our high-value added products include corrosion-resistantplated steel sheets, alloyed galvanized sheets (GA), hot-dip aluminum-plated
steel sheets, nickel-plated steel sheets, grain-oriented electrical steel sheets(GO), non-oriented electrical steel sheets (NO), laminated steel sheets,
H-beams with constant external dimensions, and high-alloy seamless steel
pipes. We focus on R&D in these areas to support a sustainable society.

In process development, we utilize various kinds of large-scale laboratory
equipment that can accurately simulate the operation of actual production
facilities for each process of ironmaking, steelmaking, and rolling, as well as
computerized simulation technology. Thus, we are promoting R&D to create
highly efficient steelmaking processes that help conserve natural resources
and the global environment.

Intellectual Property Management
The Nippon Steel Group has produced intellectual property items, such as new products and technologies, that contribute to asustainable society. In addition to leveraging them to grow our business, we positively use them for broader purposes such as external
licensing, promotion of cooperation with external organizations, and the formation of new market rules through standards development.

Education on quality compliance

Employees of the Company and the Group companies receive quality compliance education. It covers such topics as the importance of compliance with laws and regulations,the impact that our products and work have on society, quality risk management, and internal rules and standards. This education takes the form of training that effectively uses
quality e-learning and digital tools.
2 Activities to reduce behavioral risks

Based on the analysis of the causes of past quality issues, we have established the basic principles that employee involved in quality management should follow and areworking to disseminate them as the Five Basic Rules of Quality Behavior. To improve reliability of testing and inspection, we also work to eliminate risks from human intervention
by automating data retrieval and introducing systems for product identification and product quality judgment before shipment.
3

In addition to being diverse in characteristics, steel is highly recyclable andthus has a relatively low impact on the environment throughout its lifecycle.
By engaging in R&D to advance the way this attractive and abundantresource is used, we contribute to the sustainable development of society
as we implement our management plan. Specifically, our R&D challenges
include further strengthening the development of products with high added
value and efficient processes, developing product/solution technologies that
contribute to CO2 emissions reduction to move toward a carbon neutral (CN)society (see p. 26), which is a top-priority management issue, developing aStrengthening the development of high-value added product and process development

Specific activities
1

Our R&D resources are one of the largest in scale in the global steel industry. Our diverse researchers with wide-ranging expertiseplay active roles internally and externally. We will continue the challenge of maximizing the potential of steel as a material, that is,achieving our goal of “mastering steel.”

R&D activities for a sustainable future

Activities aimed at strengthening the quality assurance system
Nippon Steel’s quality assurance system is based on autonomous quality
management activities at individual steelworks, product units, and Group
companies in Japan and abroad.
The Quality Management Division, in cooperation with the steelworks
and Product Units, promotes quality compliance education, behavioral risk
reduction activities, and the identification and mitigation of quality risks
through quality audits. The code of conduct for quality, called the five basic
rules of quality behavior, has been made known to all employees, with a focus
on improving the awareness in quality compliance and preventing quality
problems to occur. Information on quality-related events is promptly sharedacross the Group and at appropriate times measures are launched to resolve
issues through standardization, systemization, and automatization. These
measures are then implemented to enhance identification management of
actual products to improve reliability of testing and inspection.

Research & Development

Quality audits

The Quality Management Division performs periodic quality audits of the Company and the Group to enhance customer confidence. Audits include a review of compliance with
the Japan Iron and Steel Federation’s Guideline, conformity with standards and specifications, and quality-related behavioral risks. We are nurturing auditors at steelworks andGroup companies to strengthen the autonomous audit system. We also receive external reviews, such as those for ISO 9001 and JIS certifications, to raise the credibility of ourquality management system.

Nippon Steel’s intellectual property policy
We perform intellectual property activities under the company-wideslogan, “Intellectual property is the source of our corporate activities.
Maximize corporate value through enhanced protection management andactive utilization.” We are strengthening our awareness of directly linking
intellectual property created from short-term and medium- to long-term R&D
implemented based on business strategies to maximizing business earnings
and corporate value. Based on a specific business strategy and this slogan,we will formulate and act on a flexible and effective intellectual property
strategy that responds to all aspects (offense and defense) of individual

products and technologies and share the results throughout the Company tocontinuously strengthen the strategy.

Number of patents held (March 31, 2023)
Japan
Approx.

14,000Overseas
Approx.

16,000Quality management system and standardization activities
Quality management system (ISO 9001 certification)

Standardization activities

All steelworks of Nippon Steel are ISO 9001 certified. By implementing thequality management system, we ensure that the processes used to provide
products and services to customers are appropriately managed.
Following the reorganization of our manufacturing bases in Japan, we
are integrating the quality management systems, which have been individuallycertified at the steelworks or area level. Once completed, the integration will
enable each steelworks to clarify their quality policy and to accelerate theircontinuous quality improvement activities.

With regard to Japanese and international steel standards (JIS, ISO, andASTM), we promote the establishment and revision of standards by participating in the standardization activities led by the Japan Iron and Steel Federationand contribute to the standardization (rules development) of steel products
through public-private cooperation. Building systems for standardization also
helps us nurture human resources specialized in standardization.

NIPPON STEEL CORPORATION

Promotion system of intellectual property activities
Business divisions take the lead in making a trinity of management strategy,
R&D strategy, and intellectual property strategy, and then carry out specificintellectual property activities. These activities are supported by the Intellectual
Property Division.
However, the Intellectual Property Division is actively involved inmanagement from a traversing perspective regarding intellectual property
activities that span business divisions. After company-wide intellectual
property meetings to discuss the progress of these activities and determine

the direction of how to proceed with intellectual property activities, thefinal decision is made by the Corporate Policy Committee and the Boardof Directors. In addition, the results of discussion in the Corporate Policy
Committee and the Board of Directors are fed back to the business divisions
and people involved in the inventions to strengthen the daily intellectual
property activity. Further, through continuous information management andintellectual property training, we are improving the awareness and skills of all
the employees related to intellectual property.
Sustainability report 2023

Cloud system
Multi-site integrated
data collection
equipment

Steelworks

Production and Supply Chain Management

Small data
storage unit

Platform using wireless IoT sensors

NS-IoT

Sensor for A Sensor for B

Sustainable procurement efforts
In connection with procurement of equipment and materials from numerous suppliers, we hold a Material/Equipment Procurement Partners Meeting,to be held once every three years with an objective to share our purchasing
policy, in order to deepen dialogue and share procurement policies based on
management strategies.
In fiscal 2018, about 1,300 suppliers attended our first Partners Meeting,where we asked them to cooperate in strengthening partnerships to improve
manufacturing competitiveness and in promoting procurement activities toachieve the goals of the SDGs. In 2021, we held the second Partners Meeting,and, in addition to conveying the same message as in the first meeting, weshared our commitment to sustainable development of our entire supply chain
with the suppliers, who are our business partners.

Basic policy on equipment and materials procurement
1Compliance with laws2

Equal opportunities

3Building of a partnership4

Fair disclosure of information and quick transaction processing

5Consideration to resource protection and environmental preservation

6

Preservation of confidentiality

Innovation of steel business processes by making full use of DX
Nippon Steel will promote DX to innovate all steel businessprocesses. We are steadily making progress toward thegoal of 100 million tons in global crude steel capacity and¥1 trillion in consolidated business profit by strengthening
business competitiveness and tackling the challenge ofcarbon neutrality, as laid out in our Medium- to Long-Term
Management Plan, as well as by constructing a solid
integrated business framework spanning everything from raw
materials to manufacturing to distribution.
In these efforts, we use DX to swiftly implement various
measures to realize “innovative evolution of manufacturing
capabilities by developing smarter manufacturing,”“strengthening of customer relations by reinforcing the flexible
and optimal supply system,” and “global management support
through enhancement of business intelligence.”

DX-driven innovation of the supply chain and engineering chain
Acceleration and optimization of integrated production planning (integrated production planning platform)
Integrated efficiency improvements in all stages from the procurement andtransportation of raw materials to the manufacturing process

Development and design
OrderintakeProcurement

Manufacturing

Shipping

Distribution

Equipment maintenance

Security

Data governance

Skills for data utilization

DX Human Resources Development
Develop smarter
manufacturing

Strengthen optimal
supply system

Advanced utilization of operational and facility datausing wireless IoT sensors (NS-IoT)
We have built a wireless Internet of Things (IoT) sensor-utilization platform
NS-IoT for centralized management of data from each steelworks site by using
LPWA (low power wide area wireless communication) and cloud technology.
By centralizing the management of data from sensors and leveraging
integrated big data from multiple locations for facility status detection andtrend monitoring, the data-driven production process has been achieved.
The system will be extended to the entire company and Group companies,
starting with East Nippon Works Kimitsu Area and Kashima Area, with a view toexpanding the system as a package to other manufacturing industries, etc.
This platform will be used to stabilize production and further enhancequality by improving labor productivity through the use of automation andpredictive detection, and by advancing production technology.

Plan

Customer

To realize the production and supply of steel products required for a sustainable society, Nippon Steel is making various initiatives
and DX (digital transformation) for stable procurement, stable production and shipping in all aspects of the supply chain, from theprocurement of raw materials, fuel, equipment, and materials to customers.

Economic development of emerging countries is a major element of change in
the global purchasing environment, requiring Nippon Steel to make strategicpurchasing for enhancing manufacturing capabilities. At the same time, it
is becoming increasingly important for not merely our Company but also
our entire supply chain to fulfill social responsibilities in order to realize asustainable society. Against this background, we steadily and continuously
procure raw materials, other materials, and equipment to achieve a stablesupply of steel products for a sustainable society.
In terms of procurement of raw materials and fuels, we are sourcing fromsuppliers worldwide, including Australia, North America, South America, South
Africa, and China, for a stable supply of more than 100 million tons of raw
materials for the steelworks. The supply of materials is mainly iron ore andcoal. In the procurement of equipment and materials, we purchase around one
million product items of equipment and materials — from gigantic facilities
such as blast furnaces to electric and mechanical products as well as safety,
emergency, and office supplies — from about 3,000 suppliers.
In engaging in these procurement activities, we are committed to compliance with laws and regulations, consideration of environmental conservation,
elimination of racial discrimination and human rights abuses, confidentiality
and thorough information management as prerequisites. We then strive tomaintain and improve mutual understanding and trust with suppliers from along-term perspective. In July 2020, upon affirming agreement with efforts
made by the Ministry of Economy, Trade and Industry, we made a declaration
for the establishment of partnership relations with suppliers and otherbusiness partners to establish cooperative and co-existing relationships.

60

DB

3

Production and Supply Chain ManagementRawmaterials

Common base andtechnological development

Before adoption
C steelworks
B steelworks

Steelworks

A steelworks
Monitoring
system for A

North Nippon Works

Monitoring
system for B

East Nippon Works
Nagoya Works
Kansai Works
Setouchi Works
Kyushu Works

Sensor for A

Sensor for B

Cloud system
Multi-site integrated
data collection
equipment

Steelworks
Small data
storage unit

Multi-sitecommonengineers

Web screen

DB

Platform using wireless IoT sensors

NS-IoT

Sensor for A Sensor for B

Acceleration and optimization of integrated production planning

Based on the Life Cycle Assessment concept, Nippon Steel is taking
initiatives in reducing environmental impact at various points along the
supply chain. In keeping with rising demand for tighter management ofchemical substances, we have created management standards for 16 toxic
chemical substances, including cadmium, jointly with customers and suppliers.
We then established a system to manage substances of concern contained inpurchasing products, including packaging materials.
In addition, as stipulated in the Charter of Corporate Behavior by
Keidanren, we have set up internal rules, including an appropriate purchasing
policy, which puts us on record as fully considering resource protection andenvironmental preservation. Moreover, we have participated in the GreenNIPPON STEEL CORPORATION

Purchasing Network (GPN) since 1996, when the network was founded, inorder to promote green purchasing activities. Jointly with businesses, governments, academia, local governments, and NGOs, we have taken the initiative indeveloping a framework to prioritize the purchasing of products and services
that represent less environmental load.

Toxic material management concerning quality assurance
https://www.nipponsteel.com/en/csr/customer/support.html

The steel industry uses a variety of raw materials, such as iron ore, coal,and scrap metal, to produce diverse steel products for automobiles, ships,
bridges, and household appliances. Of these, approximately 70,000 different
sheet steel products are produced, and approximately 40,000 orders arehandled each month. The production plan is a complex combination of multiple
processes, ranging from crude steel production to rolling to surface treatment.
Based on the latest sales information and big data collected by eachsteel mill on the manufacturing process efficiency and detailed orderspecifications, we quickly create optimized integrated production plans andbuild an “integrated production planning platform” that is shared throughout
the Company. We will use this platform to unify company-wide informationand introduce an integrated production planning simulator that can accurately
respond to customer orders and changes in the raw material procurement
environment. By applying advanced mathematical optimization technology, thisproduction planning simulator enables rapid selection of the optimal plan froma large number of planning patterns consisting of a huge amount of data. With
this initiative, we aim to significantly reduce the workload at each steelworks
through the sophistication of production planning operations and strengthen
optimal production control throughout the Company.

Acceleration and optimization of integrated production planning (integrated production planning platform)

Integrated
planningplatform
platform
Integratedproduction
production planning

Integrated efficiency improvements in all stages from the procurement andtransportation of raw materials to the manufacturing process

Manufacturing instructions

Development and design

OrderintakeProcurement

Plan

Manufacturing
results

Big
data

Manufacturing

Shipping

Distribution

Order specs

Equipment maintenance

Quality Security
Data governanceIntegrated common data
designSkills for data utilization

Sales info

DX Human Resources Development
Equipment
maintenanceConstruction
work plans

Strengthen optimal
supply system

Develop smarter
manufacturing

AI and machine learning

Common base andtechnological development

Integrated production planning simulator

Sustainability report 2023

Customer

Consideration to reducing environmental impact in procurement activities

Rawmaterials

59

Multi-sitecommonengineers

Web screen

61

Together with Local Communities

62
5

Together with Local Communities

Together with government and public institutions — Involvement in public policies and legal compliance
Nippon Steel has many manufacturing bases all over Japan and are engaged in business activities rooted in local communities.
In accordance with our attitude of maintaining harmony with local communities and society, we are promoting a wide range of activities,
including promotion of environmental preservation, support in education and sports, mecenat (in French, mécénat, meaning sponsorship or patronage) of art and culture, holding dialogues with shareholders and investors, and coordinating with government bodies.

Suggestions on public policies, opinions as the industry, and cooperation with government
Over the years, Nippon Steel has provided personnel to key positions of the Japan Business Federation (Keidanren) and the Japan Iron and Steel Federation(JISF), and through the activities of these organizations, has expressed opinions and urged them to take action on deregulation matters and the implementation of
institutional reforms aimed at improving the Japanese economy.
In the local communities, we also strive to cooperate with various organizations such as the local government and the local chamber of commerce and industry.
Voicing opinions on deregulation and institutional reform aimed at maintaining and improving the vitality of the Japanese economy

Environment preservation activities, jointly with local communities
In our Basic Environmental Policy, we are committed to conducting business activities that take into account the perspective of environmental conservation in thecommunity. We are promoting environmental risk management, by means such as detailed responses to different environmental risks at each steelworks, andenvironmental protection activities in partnership with the local communities.

 ontribution to standards development activities in Japan and abroad, including those for JIS and ISO standards, that are aimed at smoothly facilitating global economic development andChelping to resolve social issues
P articipation in public policy studies, such as infrastructure development, revision of the Corporate Governance Code, Sustainability Standards Board of Japan (SSBJ), tax reform, Digital
Transformation (DX), workstyle reform and regional revitalizationR ecommendations on national strategy to achieve a “virtuous cycle of environmental sustainability and economic growth,” the need for policies that will strengthen the international
competitiveness of industries, and energy policy
Promotion of voluntary initiatives by industry to achieve Japan’s medium- to long-term targets based on the Paris Agreement (Carbon Neutral Action Plan)Involvement in the formulation of “Towards Green Transformation” by Keidanren (Japan Business Federation), etc.

Kashima City coastal clean-up

Participation in activities of the “Mori wa Umi no Koibito” NPO

In the East Nippon Works Kashima Area, we are conducting coastal cleaning
activities in cooperation with Kashima City, Kashima City Tourism Association,
Kashima Coast Protection Association, Kashima Junior Chamber, Kashima City
Construction Cooperative Association, Ibaraki Prefecture Itako Civil Engineering
Office, and Kashima Port Office. Since the start of this activity in 1984, thecleaning area has been gradually expanded. In 2023, approximately 1,600
people participated and collected about 8 tons of trash. This continued activity
with residents in the community has received numerous awards. In April 2021,
Nippon Steel’s East Nippon Works Kashima Area received a Medal with Green
Ribbon as an Environmental Beautification Association.

We are also a regular corporate member of the NPO, Mori wa Umi no Koibito,
represented by Mr. Shigeatsu Hatakeyama, a fisherman raising oysters andscallops in Kesennuma City, Miyagi Prefecture, who received the Forest Heroes
award from the United Nations in 2012. The NPO’s activities are based ona scientific mechanism according to which the ecological linkage of forests,
villages, and sea nurtures the blessings of the sea forest. In other words, theforestation leads to an increase in iron-humic acid that flows down rivers, andwhich enriches growth of oysters and scallops near the river mouth. Since2012 we participated in the NPO’s tree planting activity at Murone Mountainin Iwate Prefecture, which began in 1989. In 2023, 30 people, consisting of
employees of Nippon steel and Group companies, as well as their families,
participated in the 35th round of tree planting activity.

Monodzukuri and environmental education

NIPPON STEEL CORPORATION

Based on the Nippon Steel Group’s Corporate Philosophy and Codeof Conduct, we have developed company rules and guidelines for theprevention of bribery of domestic and foreign public officials, compliance with
anti-monopoly law and environmental regulations, and protection of personal
information. We make sure that our officers and employees are aware of andadhere to laws and regulations and other rules.

Fair tax payment
We comply with relevant laws and regulations, and pay tax appropriately
in all countries in which we operate. We maintain transparent, constructive
communication with tax authorities, eliminate action that could be construed to
be for evasion of taxes and bear fair tax burden.

Efforts to enhance dialog with shareholders and investors
To achieve sustained growth and improve corporate value over the medium
to long term the Company has adopted the Basic Policy for Information
Disclosure and Dialogue with Shareholders and Investors. We strive toproactively provide information and cooperatively respond to questions raisedby shareholders at the General Meetings of Shareholders. In addition, we
regularly hold management overview briefings and plant tours in various
locations, and issue interim reports. (In fiscal 2022, we did not conduct plant
tours, to prevent the spread of COVID-19 infections.)
For institutional investors we host, among other events, briefings on quarterly results, the Medium- to Long-Term Management Plan, the Carbon Neutral
Vision, and our DX strategy; visits to our steelworks and research centers;
small meetings with investors; various conferences; and visits to overseas
institutional investors. These are opportunities to discuss our management
strategies, businesses, operating performance, and sustainability issues withrepresentatives of institutional investors in relevant fields.

Support for educational activities
With the aim of showing the joy of product-manufacturing, Nippon Steel holds
demonstrations on “tatara ironmaking” — Japan’s indigenous ironmaking
technique. Every year we are host to approximately 130,000 people at ourplant visits in order to make Nippon Steel as well as the steel industry to bebetter understood. In fiscal 2022, the COVID-19 pandemic made it difficult
to undertake these programs. As part of our efforts to the extent possible,
in addition to “on-site classes” in which people are dispatched from eachsteelworks or branch office in response to local requests, we are providing
online learning sessions in the East Nippon Works Kashima Area. We havealso resumed accepting training from private companies for the first time in
two years.

Adherence to relevant laws and regulations, and buildingof an appropriate relationship with government andpublic institutions

The opinions of shareholders and investors obtained through these
initiatives are promptly shared by the management team and each inhousesector and reported and fed back periodically to the Board of Directors.

Visit to steelworks

Activities in the support of art, music, and sports as social contribution
Class with a lecturer from Nippon Steel (Nagoya)Internship programs and the endowment of auniversity course
For many years, Nippon Steel has been internship opportunities to students to
help them learn our business and gain some work experience. We also endow
university courses, which are related to technological innovation (one of ourbusiness strategies) and “carbon neutrality in 2050” objective.

Activities in the support of music

Activities in the support of sports as a social contribution

Nippon Steel is active in corporate philanthropy activities in the support ofmusic, particularly through the work of the Nippon Steel Arts Foundation. The
Foundation manages Kioi Hall in Tokyo, organizing performances of its resident
chamber orchestra and promoting Japanese traditional music. We also givethe annual Nippon Steel Music Awards, established in 1990, to young classicalmusic performers and to those who have contributed to the development ofclassical music.

Nippon Steel manages or supports sports teams in the local communities of its
steelworks. These include a judo club, which has produced Olympic medalists;baseball teams, which have sent many of its players to the professional
leagues; a football team, a rugby team, and a volleyball team. All of theseteams also contribute to their local community through such various activities
as sports classes for children, coaching of junior teams, and making ourathletic facilities available to local residents for games and training. Together
with local residents who support our teams, we strive to provide renewed vigor
to our local communities, and at the same time to support their healthy lifestyle.
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Corporate Governance64
7Corporate Governance1

The Nippon Steel Group is engaged in business activities based on its Corporate Philosophy — that we will pursue world-leading
technologies and manufacturing capabilities, and contribute to society by providing excellent products and services. Heeding that
Philosophy, the Nippon Steel Group has established a corporate governance system suited to the businesses of the Nippon SteelGroup in order to achieve the sound and sustainable growth of the Nippon Steel Group and increase its corporate value over the
medium to long term, in response to the delegation of responsibilities by and trust of all stakeholders, including its shareholders andbusiness partners.

Basic policy of corporate governanceNippon Steel has adopted a company structure with an Audit & Supervisory Committee. This is because Nippon Steel strives to speed up management decisionmaking, enhance discussions on the formulation of management policies and management strategies at the Board of Directors by prioritizing items to be discussed,
and strengthen the supervisory function of the Board of Directors.

General Meeting of Shareholders
Election/Dismissal

Proposing/Reporting

2

Election/Dismissal

Election/Dismissal

Reporting

Reporting, etc.
Audit/Supervision

Nomination andCompensation Advisory
Committee

Evaluation

Board of Directors

Audit & Supervisory Committee

Deliberation/
Review
Selection/Dismissal ofRepresentative Directors,
etc./Supervision

Reporting

Cooperation(information
sharing)

Reporting

Cooperation(information
sharing)Examination/
Response

Corporate Policy Committee

Representative Director and Chairman
Representative Director and President

Accounting audit

ReportingCompanywide Committees

Directors, Executive Officers,
and General Managers in Charge

Risk Management Committee

Accounting Auditors (Auditing Company)

Delegation of part of thedecisions regarding executionof important operations

Discussion/Reporting

Audit(Autonomous Internal Control)(Responsible Divisions)

Cooperation(information
sharing)

Giving guidance
and advice

ReportingInternal Control &Audit DivisionInternal control system

Nippon Steel has established internal control and risk management systems,
based on autonomous activities by internal divisions and group companies,
according to the Basic Policy on Internal Control System, which was resolvedby the Board of Directors, and the Internal Control Basic Rules.
The Internal Control & Audit Division cooperates closely with each area’sfunctional division in charge of risk management, develops annual plansconcerning internal control and risk management, prepares a scheme forcheck and review, regularly ascertains the status of internal control across theentire Group, and works at continual improvement.
3

regarding the election, compensation, etc. of Directors, excluding directors
who are Audit & Supervisory Committee Members. This structure strengthens
the supervisory function of the Board of Directors over management. The
execution of important matters concerning the management of Nippon
Steel and the Nippon Steel Group is determined at Board of Directors’
meetings after deliberations in the Corporate Policy Committee (once aweek, in principle) comprised of the Representative Director and Chairman,
Representative Director and President, Representative Directors and Executive
Vice Presidents, and other members, pursuant to Nippon Steel’s rules.
As a deliberative body prior to the Corporate Policy Committee and theBoard of Directors, we have established company-wide committees chairedby the Executive Vice President for each purpose and field. (As of April 1,
2023, there are a total of 23 committees, including the Ordinary Budget
Committee, Equipment Budget Committee, Investment and Loan Committee,
Risk Management Committee, Green Transformation Promotion Committee,
and Environmental Planning Committee)

As a whistleblower system, the Compliance Consulting Room wasestablished to receive information relating to the risks associated with
operation not only from officers and employees of Nippon Steel and the Group
companies, but also from their families and others. It is also positioned as oneof the bodies that monitor the status of internal control activities, in addition toits functions on compliance and optimization of operations, such as to prevent
accidents and violation of laws, and to improve operations.

Risk management

The status of risk management initiatives is reported to the Corporate Policy
Committee and the Board of Directors after deliberations by company-widecommittees chaired by the Executive Vice President for each purpose and field.
In addition, the vice president in charge of internal control serves as the chairperson for overall internal control, including matters related to risk managementin each field (labor safety, harassment, environment, disaster prevention, quality

assurance, financial reporting, information security, etc.). The Risk Management
Committee, which is held every quarter, deliberates and approves the status
of initiatives, and reports important matters to the Corporate Policy Committee
and the Board of Directors. Through these mechanisms, our Board of Directors
supervises important managerial risk control.

Director skills matrix
We believe that our Board of Directors, as a whole, must have the necessary skills and experience based on our Group corporate philosophy, medium- to long-term management
plan, etc. The main skills and experience possessed by each Director are as presented in the table below.

Name

Position

Corporate
Planning /Business
Strategy

Finance /Governance /Personnel /Technology /Accounting,Labor Affairs / Risk Management /R&D
Monetary /HR Development Legal / Compliance
EconomySales /
Purchas /MarketingGlobalPublicEnvironment /Administration /Sustainability
Public Policy

Directors (Excluding Directors who are Audit & Supervisory Committee Members)

Employees ofsuppliers andothersWhistleblower System

Employees

Corporate governance system

The Board of Directors of Nippon Steel is comprised of 15 members, of whom
ten are Directors (excluding Directors who are Audit & Supervisory Committee
Members) and five are Directors who are Audit & Supervisory Committee
Members, and is chaired by the Representative Director and President.
Independent Outside Directors account for one-third (five out of 15, including
one female Director) of all members of the Company’s Board of Directors.
By all Directors appropriately fulfilling their respective roles andresponsibilities, prompt decision-making is achieved corresponding to changes
in the management environment, and multifaceted deliberations and objective
and transparent decision-making are secured. In addition, Directors who are
Audit & Supervisory Committee Members have the voting rights on the Boardof Directors regarding decisions on proposals for the election and dismissal of
Directors as well as on election and dismissal of Representative Director, andother decisions in general regarding business execution (excluding decisions
that have been delegated to directors). The Audit & Supervisory Committee
has the authority to give its opinions at the General Meeting of Shareholders

Givingguidance
and advice

ReportingKosei Shindo

Representative Director and Chairman

Eiji Hashimoto

Representative Director and President

Naoki Sato

Representative Director and Executive Vice President

Takahiro Mori

Representative Director and Executive Vice President

Takashi Hirose

Representative Director and Executive Vice President

Kazuhisa Fukuda Representative Director and Executive Vice President
Tadashi Imai

Representative Director and Executive Vice President

Hirofumi Funakoshi Representative Director and Executive Vice PresidentGroup companies (Autonomous Internal Control)

Employees

Tetsuro Tomita

Director (Outside Director)

Kuniko Urano

Director (Outside Director)

Directors who are Audit & Supervisory Committee Members

Shozo Furumoto

Senior Audit & Supervisory Committee Member (full-time)

Masayoshi Murase Audit & Supervisory Committee Member (full-time)
Seiichiro Azuma

More information on corporate governanceCorporate Governance Reporthttps://www.nipponsteel.com/en/ir/management/disclosure.html

NIPPON STEEL CORPORATION

Audit & Supervisory Committee Member (Outside Director)

Hiroshi Yoshikawa Audit & Supervisory Committee Member (Outside Director)
Annual Securities Reporthttps://www.nipponsteel.com/en/ir/library/pdf/securitiesreport_2021.pdf

Masato Kitera

Audit & Supervisory Committee Member (Outside Director)

Note: The check mark indicates the main skills and experience (up to four in principle) possessed by each Director, based on their career history and experience.

Sustainability report 2023

65

Independent Assurance ReportAwards Received
Awards Received in FY20221

Independent Assurance ReportAward nameSponsor

DetailBest Quality Supplier Award, Zero Defect Supplies
Award, Best Target Achieved Supplier in Delivery(three awards)

Toyota Industries Engine India Pvt. Ltd.

In addition to receiving the Delivery award for six consecutive years, the company also
received Best Quality and Zero-Defect awards for the first time in recognition of its stable,
continuous supply of high-quality products, along with contribution to further improvement
and enhancement of quality for global models. (SMI Amtek Crankshaft)

2022 Award for Excellence in Corporate Disclosurein Steel/Non Ferrous Metal Industry Category,ranked first for three consecutive years

Securities Analysts Association of JapanThe Company appreciated that the top management is actively engaged in sending out
information; communication with investors is well established and the direction of theCompany is clearly indicated; substantial resources are allocated to the IR department,
and high-level discussions can be conducted regarding the direction of the Company concerning management, ESG, and other matters; as for ESG-related matters, the Company
makes efforts to disseminate information on such topics as decarbonization and DX,
ahead of other companies, and as a large influential company, it has presented concrete
action plans by identifying problems from a multifaceted perspective. (Nippon Steel)

67th Shibusawa Award

The Japan Electric Association, Commemorative
Project Committee for Dr. Motoji Shibusawa for His
Receiving of the Person of Cultural Merit Award

Commercialization of quake-resistant slip-joint structure utility poles coated with
hot-dip zinc-aluminum alloy to provide excellent corrosion resistance, for practical use
on overhead line poles of new Shinkansen lines (Hokuriku and Hokkaido Shinkansen).
(Nippon Steel)IEC 1906 AwardInternational Electrotechnical Commission (IEC)

Contribution to the creation of international standards for magnetic materials and theirmeasurement methods (Nippon Steel)

The 9th Monodzukuri Nippon Grand Award“Excellence Prize”

METI, MEXT, Ministry of Health, Labour andWelfare, and Ministry of Land, Infrastructure,
Transport and Tourism

Development of coating cycle extension steel CORSPACETM, which contributes to reducing
the lifecycle cost of steel bridges and port facilities (Nippon Steel)The 69th Okochi Prize “Production Prize”

Okochi Memorial Foundation

Development of new manufacturing process of titanium sheets by direct slab casting
system and surface structure control (Toho Titanium Co., Ltd., Nippon Steel)2023 Data Management Awards “DataManagement Grand Prize”(first recipient in the steel industry)

Japan Data Management Consortium

The Company certified as having achieved noteworthy efforts and results in data management activities, and whose efforts will serve as a model for others now and in the future.

The 55th Ichimura Prize in Industry for
Distinguished Achievement

Ichimura Foundation for New Technology

Development of painting cycle extension steel CORSPACE, which contributes to extending
the life of steel bridges and port facilities (Nippon Steel)2023 The Commendation for Science andTechnology by the Minister of MEXT
(Development Category)

Ministry of Education, Culture, Sports, Scienceand Technology (MEXT)

Development of new brake pads for Shinkansen (Central Japan Railway Company,
Nippon Steel)2023 World Steel Sustainability Champion(received for the third time)

World Steel Association

Sustainability activities such as measures demonstrating strong environmental commitment,
and measurement and disclosure of various data based on environmental policies; andpublication of Sustainability Reports to stakeholders (Nippon Steel)

Independent Assurance Report
To the Representative Director and President of Nippon Steel Corporation

We were engaged by Nippon Steel Corporation (the “Company”) to undertake a limited assurance engagement of the environmental performanceindicators marked with(the “Indicators”) for the period from April 1, 2022 to March 31, 2023 included in its Nippon Steel Sustainability Report
2023 (the “Report”) for the fiscal year ended March 31, 2023.

The Company’s Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s reporting criteria”),
as described in the Report.

Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We conducted our
engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements other than Audits or
Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance Engagements on Greenhouse Gas Statements’ issued by the International
Auditing and Assurance Standards Board. The limited assurance engagement consisted of making inquiries, primarily of persons responsible forthe preparation of information presented in the Report, and applying analytical and other procedures, and the procedures performed vary in nature
from, and are less in extent than for, a reasonable assurance engagement. The level of assurance provided is thus not as high as that provided by areasonable assurance engagement. Our assurance procedures included:Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report and reviewing the Company’s
reporting criteria.
Inquiring about the design of the systems and methods used to collect and process the Indicators.
Performing analytical procedures on the Indicators.
Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with the Company’s
reporting criteria, and recalculating the Indicators.
Visiting the Company’s North Nippon Works Muroran Area selected on the basis of a risk analysis.
Evaluating the overall presentation of the Indicators.

Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that the Indicators in the Report
are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described in the Report.

Our Independence and Quality Management
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which
includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care,confidentiality and professional behavior. In accordance with International Standard on Quality Management 1, we design, implement and operatea system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards andapplicable legal and regulatory requirements.

/s/ Kazuhiko Saito
Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
October 24, 2023

Notes to the Reader of Independent Assurance Report:
This is a copy of the Independent Assurance Report and the original copies are kept separately by the Company and KPMG AZSA Sustainability Co., Ltd.

1 Includes some awards received in April–June 2023

Corporate profile (as of March 31, 2023)
Name

Nippon Steel Corporation

Head office2-6-1 Marunouchi, Chiyoda-ku,
Tokyo 100-8071, Japan

Establishment

April 1, 1950

President

Eiji Hashimoto

Capital419,524 million yen(426,024 shareholders)

Stock listings

Tokyo, Nagoya, Fukuoka, Sapporo

Number of
employees

106,068 (consolidated)Group
companies

360 consolidated subsidiaries
97 equity-method affiliates

External evaluation
Nippon Steel Corporation has been selected as a constituent of many indexes including the MSCI Japan ESG
Select Leaders Index, FTSE Blossom Japan Index, FTSE Blossom Japan Sector Relative Index, and S&P/JPX Carbon
Efficient Index (adopted by the Government Pension Investment Fund, GPIF) as well as the FTSE4Good Index Series,
which is a widely used stock index.

FTSE Blossom
Japan Sector
Relative Index

FTSE Blossom
Japan Index

FTSE4Good
Index Series
FTSE Blossom Japan
Sector Relative Index

FTSE

FTSE4GoodMSCI Japan ESG
Select Leaders Index
THE INCLUSION OF NIPPON STEEL CORPORATION IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMESHEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF NIPPON STEEL CORPORATION BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF
MSCI OR ITS AFFILIATES.

Contact
Inquiries on the Sustainability Report 2023
Nippon Steel Corporation
Contact: Environment Division
TEL: +81-3-6867-2566 FAX: +81-3-6867-4999
Or go to the “Contact Us” page of Nippon Steel’s website: https://www.nipponsteel.com/en/contact

Publication date
October 2023
Copyright 2023 NIPPON STEEL CORPORATION. All rights reserved.

This report is available for download in PDF format.

NIPPON STEEL CORPORATION

Sustainability report 2023

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