We have identified four materiality issues that we need to resolve, so that we can create a safe, secure, and gentle society in which people, cars, and the environment exist in harmony, as a company that is recognized as being professional and friendly. We identified these issues by considering international frameworks such as the SDGs, ISO 26000, and GRI standards, as well as exchanging opinions with external experts and obtaining the approval of the Board of Directors.

1. Creation of businesses that solve social issues

With the aim of solving important social issues that we need to proactively address through our business, we will develop businesses that contribute to the SDGs, such as response to EVs and create our business structures using an open innovation model.

 

2. Enhancing efforts that consider the environment and society

We will enhance our efforts to proactively solve social issues through means other than our business. Specifically, we are striving to reduce CO₂ emissions through energy conservation and other means, reduce
our environmental impact, and coexist with local communities.

 

3. Development of organization and personnel

To solve social issues through corporate management, it is important that the organizations and human resources that will be the main solution providers engage in their work in a sustainable, healthy, and
prosperous condition and continue to grow. To this end, we are working to develop the next generation of human resources and mechanics, to reform the way we work, to promote health management, and to achieve diversity and inclusion.

 

4. Sustainable and strong management base

To drive a creation of “a safe, secure, and gentle society in which people, cars, and the environment exist in harmony” as a “professional and friendly organization”, we will promote management reform through digital transformation and build a solid management foundation by practicing ESG-centered management.

Step 1 Understanding social issues

We created a list of social issues gathered from the SDGs, ISO 26000, GRI standards, etc. Based on the list, the ESG & SDGs Project members discussed and held workshops to select the social issues to be addressed.

 

Important social issues that we should proactively solve

Step 2 Assessing the importance of social issues

We analyzed the risks and opportunities associated with the social issues we identified and assessed their importance to our company.

Excerpt from the risks and opportunities discussed in step 2

Risk

Opportunity

Environmental -Environmental destruction such as river and soil pollution by industrial waste -Decrease in demand for winter goods due to global warming -Accelerated shake-out of the maintenance industry with the development of advanced technology for vehicles -Decline in sales of engine-related parts due to increase in EV, delay in response to EV maintenance -Decline in personally owned vehicles due to increase in car sharing and subscription services -Restrictions on business activities and higher costs due to climate change regulations, etc.   Regional  -Super-aging society in Japan -A trend towards young people turning away from driving   Human resources -Shortage of automobile mechanics -Human rights violations -Decreasing birthrate and aging population in Japan Others -Cyber risks -Risks related to demographic change (fewer people using cars)

Environmental -Development of new materials and recycled products -Recycling of waste materials as a resource due to increased demand for recycling -Increasing need for secure and safe products -Increase in new vehicle sales and maintenance opportunities due to the rise of emerging EV manufacturers -Cooperation in the maintenance industry accelerating with the development of advanced technology for vehicles -Expansion of BtoB Business due to increase in car sharing and subscription services -Reduction of environmental impact and costs by reviewing logistics Regional -Provision of new services for people lacking access to transportation -Community support through the provision of vehicles during times of disaster -Creation of businesses that solve social issues in the region -Increase in the number of people in the middle-class seeking access to services and accessories for their cars due to economic growth in emerging countries Human resources -Fostering the next generation of human resources and attracting outstanding human resources -Improvement of corporate strength and creation of new ideas through the activities of a diverse human workforce -Improvement of employee health and creation of employment opportunities for people with disabilities by promoting work style reforms Others -Promotion of digital transformation -Creation of e-motorsports

Step 4 Evaluating the validity of the materiality proposals
We invited outside experts to exchange opinions on the materiality proposals with Chief Executive Officer, Directors and General Managers to verify its appropriateness. Based on the results, we scrutinized the materiality.

Step 5 Identifying materiality
After discussion and approval by our Board of Directors, we identified four material issues.

The Company established task forces for each of four material issues, repeatedly discussed specific efforts and targets toward resolution of issues, and set non-financial targets in May 2022. Then, in October 2022, KPIs were set.

By clarifying the direction the Group should move in and accurately managing progress, the Group will steadily implement initiatives.Progress made on each metric is monitored via meetings and the level of achievement is reflected in the evaluation of General Managers who do not concurrently serve as Directors.