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Materiality

Materiality

Furukawa Electric Group, Vision 2030 and Important Management Issues

The Group defined “materiality” as important management issues that the Group should address in order to achieve Vision 2030, and we determined materiality in terms of both revenue opportunities and risks, in accordance with the process of identifying important management issues.

In order to solve various social issues through the business activities of the Group, we changed the conventional product-out way of thinking and adopted the “creation of businesses that solve social issues” based on outside-in thinking in SDGs as materiality. In addition, we also defined materiality as “Open, Agile, Innovative,” which reflects the aspiration included in Vision 2030, namely, the desire to become a company that actively transforms itself, and the “Building partnerships with various stakeholders,” focusing on breaking away from self-reliance and building partnerships with outside parties to create friends. We are currently carrying out initiatives to materialize businesses that solve social issues. These include “creating businesses that support next-generation infrastructure,” which will be the foundation of the integrated society, and “creating environment-friendly businesses” that contribute to a decarbonized society and a sound material-cycle society.

On the other hand, from a risk perspective, in order to achieve sustainable growth, it is essential that companies develop business activities that consider climate change, and we see this as materiality. In addition, in order to become a company that actively transforms itself, we will strengthen the foundation of ESG management by focusing on the materiality of “strengthening human capital management and organizational execution abilities” and “building a governance system for strengthening risk management” including corporate governance.

Process of Identifying Important Management Issues

We determined materiality in the following steps 1-3.

Step 1:Understanding and organizing social issues

In identifying materiality, we identified social issues by referring to “external factors” and“internal factors,” adjusted duplicate items, and created a list of 29 items.

External factors

  • 17 SDG goals and 169 targets
  • FTSE, MSCI and DJSI ESG evaluation items, etc.

Internal factors

  • Important measures of Furukawa G Plan 2020
  • Values of the Furukawa Electric Group
  • Important Companywide risks, etc.

Step 2:Materiality map evaluation

The two axes of “importance to shareholders and investors” and “importance to achieving Vision 2030” are evaluated for importance (high, medium, low) and prioritized.

Importance to shareholders and investors

  • Interviews with institutional investors
  • Impact on ESG rating assessment

Importance to achieving Vision 2030

  • Management and executive officers gather together regularly to discuss materialization of Vision 2030
  • Discussions of CSR and Risk Management Committee reflected

Step 3:Identification of materiality

High-priority items are categorized by revenue opportunity and risk aspects and identified as materiality items.

The identified materiality items are categorized and rearranged as important issues for achieving Vision 2030, and expressed as the materiality of three revenue opportunities and the materiality of the E, S, and G risks.

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