PROCESS FOR IDENTIFYING MATERIAL ISSUES IN 2020

Step 1 Identify ESG issues

First, we identified 34 potential environmental, social, and governance issues by referring to the SDGs and to data from MSCI Inc. and the Sustainability Accounting Standards Board (SASB).

	Perspective	Was a survey conducted?	Was desk research (secondary research) conducted?
Stakeholders	Consumers	Yes	No
	Key clients	Yes	No
	Investors (MSCI, SASB)	No	Yes
	National and local governments (growth strategy)	No	Yes
Our businesses	SDG contribution from products, services, and CSR items	No	No
	Development divisions	Yes	No
	Senior management	No, but a discussion was held	No

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  SDGs: Sustainable Development Goals　MSCI: Morgan Stanley Capital International
  SASB: Sustainability Accounting Standards Board　CSR: Corporate Social Responsibility

Step 2 Analyze each issue’s impact on stakeholders

Having identified potential issues, we then rated each issue in terms of how much it matters to stakeholders and how much it impacts our business. Issues that had a high score on both metrics were defined as material.

Materiality matrix

Step 3 Submit to management for review

The issues rated as material were then reviewed by the management to determine whether the materiality designation was valid.

Step 4 Define material issues and goals

Finally, in regard to the material issues, we set goals/targets for 2030.

Material issue		2030 goal
Material issue 1 Pitch ideas for new workstyles	Pitch ideas for ways of working in the new normal, support work-life balance	Employees act on their initiative and solve problems through teamwork
Material issue 2 Promote diversity and inclusion	Build a diverse, innovative workplace that is inclusive of gender, disability, and nationality	Workforce is diverse, individual differences are respected, and employees feel empowered
Material issue 3 Respond to the climate crisis	Reduce CO2 emissions through energy efficiency and renewable energy. Use forests to offset emissions.	Carbon absorption: At least 6,000 t-CO2 absorbed a year
		Reduce CO2 emissions: Emissions down by 26% from 2013 level in 2030
Material issue 4 Contribute toward a circular economy	Promote human rights and resource conservation / waste reduction in the entire supply chain	100% of waste (office, buildout services, inventory) recycled
		Procurement guidelines applied throughout corporate group
Material issue 5 Contribute toward a society that coexists with nature	Protect biodiversity and reduce use of hazardous chemicals to minimize environmental impacts	Promote use of legal timber
		Forest conservation: Forests thinned at 150 hectares a year
		Reedbed conservation: Reeds trimmed at 1.5 hectares a year

As of 2020

• Sustainable Management