Sustainable Development Organization and Management
Sustainable Development Committee
We already established its Sustainable Development Committee (SDC) with five working groups in 2019, with the chairman being the committee chair, the general manager the vice committee chair, and managers and above officers the committee members. The Committee holds the Sustainable Strategy Meeting in October each year to establish targets based on material issues of disclosure, with each group launching a corresponding course of action. The Committee also meets quarterly to report on the implementation for various objectives.
Analysis of material issues for disclosure
Each year we periodically implement materiality analysis and continuously include the analysis results as the important considerations of operational strategies and short-, medium-, and long-term targets. In 2023 we adopted the five-stage identification process to evaluate the social, environmental, and operational impacts of individual sustainability issues based on GRI 3: Material Topics 2021 of the GRI Standard 2021 and the double materiality of the European Sustainability Reporting Standards (ESRS).
We also gathered related sustainability issues based on our operational activities, business relationships, and stakeholder status with reference to the global sustainability reporting standards (GRI, SEASB, TCFD Recommendations) and international sustainability rating metrics. The SDC and related chief officers then analyzed the significance of the actual or potential and positive or negative impacts on the economy, environment, and people, including impacts on their human rights, of each issues in our operational activities and business relationships; and quantified the level of impact of such impacts on our operations. Through further discussion, they prioritized issues by materiality. After the final discussion of SDC, material sustainability issues, targets prioritized for disclosure, and management effectiveness were validated.
PHASE 01
Understand the organization’s context
●Identify key stakeholders (4 groups)
●Gather sustainability issues (19 topics)
PHASE 02
Identify actual and potential impacts
●The significant actual or potential and positive or negative impacts of each issue in individual value chains was identified in consideration of the effectiveness of the existing management approaches and the focus of stakeholder engagement.
PHASE 03
Assess the significance of the impacts
●Significance of impacts: The external seriousness (i.e., severity) of impacts and the time proximity to occurrence (i.e., “likelihood”) were accessed.
※Significance of negative impact: Severity (scale, scope, irremediable character) x Likelihood
※Significance of positive impact: Severity (scale, scope) x Likelihood
●Financial materiality: After identifying the impacts of each issue, the influences on own operations of impacts and measure influences in terms of the percentage in revenues, i.e., “level of operational impact” and the time proximity to occurrence (i.e., “likelihood”) were identified.
※Finance materiality: Severity x Likelihood
PHASE 04
Prioritize impacts by significance
●To identify the materiality of each issue, after consolidating the significance of the positive and negative impacts of each issue and prioritizing impacts by significance, issues meeting the criteria of “high impact materiality” and “high financial materiality” were listed as comparatively significant material issues.
PHASE 05
Determine material sustainability issues
●SDC determined the material issues prioritized for reporting (9 material issues were validated)
●Aligned with GRI topics/disclosure indicators (corresponding to 11 GRI topic standards and 3 self-defined topics)
●Aligned with SASB industry metrics: Resource Transformation-Industrial Machinery and Goods
