Shareholders drive increased transparency on lobbying at Nippon Steel Corporation

The Australasian Centre for Corporate Responsibility (ACCR) is commenting on Nippon Steel Corporation’s recent publication of new disclosures relating to its lobbying, which include:

• the company’s first-ever Industry Association Review
• a set of policy positions, including a commitment to positive lobbying in Japan for policies relating to climate change and energy in light of the Paris Agreement.

Earlier this year, Nippon Steel also published a systematic disclosure of its direct lobbying for the first time.

The increased transparency comes after investors in the world’s fourth largest steelmaker delivered the largest ever vote in support of a climate lobbying resolution in Japan at the company’s 2024 Annual General Meeting. 28% of shareholders voted in support of a proposal filed by Legal & General Investment Management (L&G) and ACCR, asking Nippon Steel for improved disclosure of its climate-related lobbying activities.

Commenting on the disclosures, Martin Norman, Investor Engagement Lead, ACCR, said:

“We welcome Nippon Steel’s increased lobbying reporting, which shows it has responded to investor expectations for the company to show greater transparency around its policy engagement.

“This is an important first step in Nippon Steel’s journey to enhance its lobbying transparency and integrate positive lobbying into its long-term strategy and decarbonisation efforts. While there is room for improvement, investors should be encouraged by the company’s move towards greater transparency.

“Investors still need a clearer commitment and plan from Nippon Steel so they can have confidence the company will continue improving, integrating and enhancing its lobbying disclosures. The company will also need to more clearly demonstrate how its lobbying serves its strategic and decarbonisation goals.

“It is good to see Nippon Steel publish its first Industry Association Review. For improvement, future reviews should include all material associations. We note, as just one example, that this review does not include JCOAL, an association with highly negative climate and energy policy engagement, despite the company holding leading roles at JCOAL. Future reviews should also note how much Nippon Steel spends on associations and provide a clear framework for assessing lobbying and addressing misalignments.

“We look forward to working with the company to further align its lobbying disclosures and governance with the Global Standard on Responsible Climate Lobbying and other best practice approaches.”

Aina Fukuda, Head of Japan Investment Stewardship, Asset Management at L&G, said:

“We welcome Nippon Steel’s improved disclosure, which reflects its willingness to respond to calls for greater transparency and accountability in policy advocacy, as expressed by investors through ongoing dialogue and last year’s annual general meeting.

“While this marks a meaningful step towards aligning the company’s advocacy efforts with its long-term strategy and decarbonisation objectives, we will continue our engagement with Nippon Steel, aiming to further strengthen investor confidence and support the integration of transparent and strategic advocacy efforts.”

Background

Nippon Steel Corporation’s Policy Positions and its first-ever Industry Association Review.