Basic Philosophy

We improve corporate value through contributions working towards the realization of a sustainable society.
To achieve this, after accurately grasping social issues, we believe it is important to define priority issues (materiality) in each area of ESG (Environmental, Social, and Governance), and set medium- to long-term goals to work towards them.

The Process of Defining Priority Issues

Priority Issues

We have identified eight priority issues.
The CSR and Sustainability Committee receives reports from the Sustainability Division on the progress of these issues and monitors them.
In addition, taking global standards, social trends and the opinions of outside experts into consideration, the issues are reviewed annually, and any revisions are approved by the Board of Directors.

	Item	Contribution to SDGs	Reasons for Identification as a Priority Issue	Major Initiatives	Goals and Outputs (FY2029)	Progress in FY2023
Environment	Responding to Climate Change		The impact of climate change, including the increased severity of natural disasters, hinders the sustainable development of society. For this reason, the world faces the common challenge of reducing CO2 and other greenhouse gas emissions that cause climate change, while aiming to realize a decarbonized society. The Group also recognizes that reducing CO2 emissions from business activities and supply chains is an important issue.	Reduction of CO2 emissions	CO2 Emissions: 30% Reduction [compared to that of 2018]	31.7％ reduction（190,945 tons）
	Providing Environmentally Friendly Products		The earth’s resources are limited. To preserve the earth’s limited resources for future generations, we must minimize the environmental impact of the products and services used by the current generation. The Group has a bird’s-eye view of the entire lifecycle, from when products and services are used to when they are disposed of. We will use that position to contribute to the sustainable development of society by providing products and services with lower environmental impact.	Dissemination and expansion of environmentally friendly products	Sales ratio of precious metal plugs: not less than 50%	47%
					Sales ratio of wide range oxygen sensor: not less than 50%	40%
Society	Development of Technology, Products, and Businesses for Contributing to the Resolution of Social Issues		The Group is committed to taking on the challenges of the world. We will cocreate and provide new value to help solve these challenges, so that we can contribute to realizing a better society. The world faces various challenges from climate change to food shortages. We continue to use our technology and our accumulated experience to offer new value to people around the world.	Development of fuel cells	CO2 dissemination of high-efficiency distributed power supplies with a view to use free hydrogen	Established a mass production system of SOFC cell stacks and delay in additional production increase
				Development of applications for lead-free piezoelectric materials	Alternative promotion from lead piezoelectric materials	Mass production specifications were finalized for some products for the application of lead-free piezoelectric materials
				Development of sensing IoT business	Improve business efficiency through automation, optimization, and generalization	Development of aquaculture system (water quality control system, water tank, filtration tank, etc.) for land-based shrimp farming underway
				Carbon Neutrality as a service	Establish and introduction of synthetic fuel (methane) production system	In the regional demonstration, a system for collection, transportation, and utilization of CO2 was established, and CO2 collection and recycling were demonstrated
	Global Human Resource Management		The Group acknowledges that employees are the most important management resources. We believe that respecting the diversity and individuality of our more than16,000 employees around the world and creating an environment in which each and every employee can play active roles will lead to the development of the Group.	Promotion of employment of women, foreign nationals, and careers	Ratio of women, foreign nationals, and career recruits in managerial positions: 25%	24.9%（Up 5.0 points from the previous year）
				Examination of a New Personnel System	Improved results of employee satisfaction surveys	3.46（Up 0.13 points from the previous year）
Governance	Corporate Governance		To achieve sustained growth and improve medium- and long-term corporate value, we believe that it is important to structure the Board of Directors with a team of people from different backgrounds with a variety of expertise and experience. We also focus on enhancing the supervisory function of the Board of Directors and ensuring transparency in decision-making by improving the percentage of outside directors on the Board of Directors.	Increasing the ratio of female and foreign nationals to directors	Ratio of female directors and foreign nationals: not less than 30%	45％ （5 out of 11）
				Increasing the ratio of external directors	Ratio of external directors: not less than 1/3	64％（7 out of 11）
	Risk Management		In the modern era of dramatic changes in the environment surrounding business, the risks that companies face are also diversifying. Responding to risks the wrong way could put a company’s survival at risk. The Group strives to carry out risk management from day to day, so that it can enhance its corporate value.	Management of serious incidents signs and prevention of their occurrence	Establishment of risk management system that contributes to management decision-making	●Promoted measures for priority risks ●Update risk map and periodically review priority risks ●Selection of global priority risks and formulation of response policies
	Compliance		To develop the business of our Group, we must continue to be a company that is trusted by society. With recognition that our Group is a member of society, we aim to be a company that is trusted by all our stakeholders by appropriately meeting social demand.	Survey of employees' awareness and continuous education	Implementation of compliance questionnaires and disclosure of results	●Implemented of improvement measures based on compliance questionnaire results ●Expansion of compliance education
	Information Security		Information technology is becoming more sophisticated every day, and we handle a variety of information assets in our business. Meanwhile, as cyberattacks and other risks increase, bolstering information security is key. The Group will also enhance information security by positioning information assets as one of its management resources. We will make effective use of them while protecting them appropriately	Maintaining and strengthening incident response organizations and building preventive systems	Establishment of information security management system	● Strengthen security monitoring (Establishment of log correlation analysis platform, establishment of global 24/7/365 monitoring system) ● Promote global ISMS (create and deploy ISMS standards) ● Conduct IT security audits (at all domestic and overseas sites)）