P.20 Material Issues

20 01. Value Creation Stories for the Future

Material Issues

Initiatives

Rather than recognizing Material Issues as mere challenges, the Group seeks to realize sustainable value creation by setting medium- to long-term goals that are closely tied to its business activities. These goals embody our commitment to addressing social issues and serve as important guidelines for allocating management resources and developing our business portfolio. For each Material Issue, we formulate a long-term vision and a medium-term action plan, and we manage progress through the PDCA cycle. Each business identifies priority Material Issues on which it will focus and visualizes the added value and outcomes of individual projects, with the aim of accelerating the integration of sustainability and business. These initiatives serve as the foundation for achieving our vision of becoming “No. 1 in Each Field” and embody our stance as a company committed to growing in step with society.

Material Issues	Long-term goals	Initiatives through FY2025	Future initiatives
Build resilient and prosperous society	Contribute to the development of local communities and economies; Develop human resources who will drive the future by providing quality education	Continued to support the development of local communities and economies through the activities of each business group; Promoted “100SEED,” an employee-participatory social contribution initiative focused on education	In addition to continuing these initiatives, further instill the Groupʼs values of creating economic value through socially impactful businesses
Overcome climate change	Aim for carbon neutrality of the Groupʼs businesses by 2050; Contribute to the carbon neutrality of society	Disclosed performance data for Scope 1, 2 and 3, and updated our carbon neutrality targets; Started monitoring climate-related initiatives at the business group level, covering emission reductions and business opportunity creation; Calculated the avoided emissions and disclosed performance data from our renewable energy business	Identify and disclose financial impacts of climate-related risks and opportunities; Promote emission reduction across the entire supply chain through our businesses; Expand initiatives to promote green transformation (GX) through public-private partnerships
Preserve and regenerate natural capital	Achieve a world living in harmony with nature through initiatives including the building of a circular economy and supply chain management	Identified priority (high-risk) businesses and disclosed them based on the TNFD recommendations; Participated in circular economy initiatives	Continue risk assessments, initiatives, and disclosures for priority businesses, including those across the supply chain; Continue to participate in circular economy initiatives
Respect human rights	Respect the human rights of all stakeholders in all businesses and supply chains	Identified and disclosed information on priority (high-risk) businesses; Promoted employee education through workshops and training programs	Continue risk assessments, initiatives, and disclosures for priority businesses, including those across the supply chain; Continue providing human rights education while raising awareness and strengthening operation of grievance mechanisms
Develop talent and promote DE&I	Create workplaces that allow diverse employees to apply their capabilities with passion in their own ways	To attract and develop professional talent, implemented the WILL recruitment selection process (which guarantees initial job placement), expanded the internal job posting system, and prepared to introduce an internal certification program for digital skills; To develop future management talent, identified next-generation leaders and implemented a strategic cross-organizational talent rotation cycle; Strengthened and enhanced the succession pipeline of diverse talent for key positions	Place the right talent in the right positions on a global basis and improve talent visibility to support this effort; Develop and implement initiatives to cultivate professional talent and future management talent
Maintain and strengthen governance	Develop a robust governance system to enhance the corporate value	Transitioned to a company with an Audit & Supervisory Committee while redefining the role of the Board of Directors to provide strategic direction to ensure proper supervision of management execution and make important decisions affecting company-wide management from broad and diverse perspectives; Made Outside Directors the majority of the Board to strengthen its oversight function	Further enhance the effectiveness of the Board of Directors as a monitoring body by refining its operations, including the selection of agenda items; Strengthen support systems to enable deeper and more sophisticated discussions by the Board of Directors