We have defined the Furukawa Electric Group Vision 2030 (hereinafter, the “Vision 2030”) as the ideal state of the Group in 2030. In order to achieve the Vision 2030, we are promoting ESG management, which aims sustainable growth of Furukawa Electric Group and medium- to long-term growth of corporate value and have established the “Furukawa Electric Group Basic Policy on Sustainability” as the basic approach to this goal.
In line with the establishment of the Furukawa Electric Group Purpose, the “Furukawa Electric Group Basic Policy on Sustainability” was partially revised in April 2024.
The Furukawa Electric Group will:
Sustainability Committee was established to consolidate discussions on sustainability within Furukawa Electric Group and further enhance the quality and speed of implementation thereof. Sustainability Committee, chaired by the President, vice-chaired by the General Manager of Strategy Division, and composed of members of top management, deliberates on issues on sustainability within Furukawa Electric Group, including sustainability-related basic policy, basic matters on material issues related to revenue opportunities and risks, and disclosure of basic information related to sustainability; checks on progress on such matters; and submits proposals and reports to the Board of Directors. Corporate Sustainability Office serves as the organizer, and the committee will generally meet twice a year. As risk-related material issues are closely related to management strategy risks of Furukawa Electric Group, they are therefore handled in collaboration with Risk Management Committee.
The status of operations related to sustainability, including climate change, human capital, and intellectual property, is reported and shared to the Board of Directors on a quarterly basis. The agenda for the Sustainability Committee and the Management Committee is set based on, amongst other things, the results of the evaluation of the effectiveness of the Board of Directors and feedback from shareholders and institutional investors.
＜Key Discussion Items for the Sustainability Committee＞
＜Key Discussions on Sustainability within Furukawa Electric Group (FEG)＞
| Board of Directors | November 2018 | Formulated the FEG Vision 2030 |
|---|---|---|
| November 2018 | Formulated the FEG People Vision; medium-term measures of HR Management Dept. | |
| Nov. 2018–Dec. 2019 | Identified material issues | |
| April 2019 | Revised the FEG CSR Code of Conduct | |
| February 2021 | Formulated the FEG Environmental Vision 2050 | |
| July 2021–Aug. 2021 | Established the FEG Basic Policy on Sustainability | |
| May 2022 | Set sustainability indicators and targets; reviewed the material issues, added Human Rights and Labor Practices to material issues | |
| December 2022 | Status and direction of personnel measures in the 2025 Medium-term Management Plan | |
| Mar. 2023–Mar. 2024 | Established FEG Purpose | |
| Management Committee | October 2018 | Medium-term measures of HR Management Dept.; formulated the FEG People Vision |
| Nov. 2018–May 2019 | Formulated the FEG Vision 2030 | |
| Nov. 2018–Sept. 2020 | Identified material issues and disclosed them | |
| January 2019 | Set the Environmental Targets 2030; applied for an SBT (2℃ Targets) initiative certification | |
| April 2019 | Revised the FEG CSR Code of Conduct | |
| January 2020 | Signed the United Nations Global Compact; Formulated the FEG Human Rights Policy; Expressed support for the recommendations of TCFD | |
| Dec. 2020–Feb. 2021 | Formulated the FEG Environmental Vision 2050 | |
| July.–Aug. 2021 | Established the FEG Basic Policy on Sustainability | |
| Nov. 2021–Feb. 2022 | Revised the Environmental Targets 2030; applied for an SBT (WB 2℃ Targets) initiative certification | |
| November 2022 | Direction of personnel measures based on the concept of human capital management | |
| Nov.–Dec. 2022 | Revised the Environmental Targets 2030; applied for an SBT (1.5℃ Targets) initiative certification; purchased renewable energy certificates | |
| February 2023 | Activities to reinforce human capital and organizational execution abilities; disclosed human capital indicators | |
| Sustainability Committee | March 2022 | Set sustainability indicators and targets; reviewed the material issues; added Human Rights and Labor Practices to material issues |
| September 2022 | Established the FEG Responsible Minerals Sourcing Policy | |
| Sept. 2022–Mar. 2024 | Established the FEG Purpose |
For the sustainability-related opportunities and risk management, in the 2025 Medium-term Plan, we have set sustainability indicators (KPIs) and sustainability targets for FY2025 to realize our ideal state in FY2025 in each material issue.
The handling status of material issues on revenue opportunities and risks and the progress on sustainability indicators are reported and shared to the Board of Directors and Sustainability Committee semiannually. In addition, the General Manager of Corporate Sustainability Office regularly (twice a year in principle) holds a dialogue on the progress of material issues and sustainability indicators, the validity of sustainability indicators and targets, and other issues with each division in charge, and encourages a division that is not expected to meet the target to set and implement handling measures and improvement measures.
We are also making steady progress in integrating sustainability-related opportunities and risk management into our company-wide management strategy (2025 Medium-term Plan) and company-wide risk management.
To strengthen and create businesses through a focus on capital efficiency, we have established the Business Portfolio Review Committee since FY2022 with the aim of promoting business portfolio transformation with an emphasis on capital efficiency. The Business Portfolio Review Committee, composed of the General Manager of the Strategy Division as chair, the General Manager of the Finance & Accounting Division as vice chair and the General Manager of Global Marketing Sales Division, deliberates on important matters related to business portfolio transformation, such as the positioning of each business in the Medium-term Management Plan, makes proposals and reports to the Management Committee. The General Manager of the Corporate Planning Department is in charge of the secretariat, and it is held three times a year in principle. In FY2023, we started examining our desired business portfolio to achieve the Vision 2030, and we continue to work to materialize the Vision 2030.
In order to promote management that emphasizes capital efficiency, we have introduced return on invested capital (ROIC) and Furukawa Value Added (FVA)* as management indicators to evaluate each business. Toward optimizing the business portfolio, taking into account our current position made visible from the viewpoint of growth (average sales growth rate) and profitability (ROIC spread), our potential for future growth, our competitive status among competitors, and our carbon efficiency (GHG emissions per unit of sales), we will swiftly take necessary actions, such as exploring growth opportunities (including M&A) and determining whether or not to withdraw from certain businesses. Furthermore, to calculate the cost of capital in FVA for each business, we have also incorporated ESG factors such as “Climate change” and “Human rights and Labor practice” in addition to financial factors. FVA of each business are reflected and reviewed every year and reported to the Management Committee, where it is utilized for business portfolio optimization and allocation of management resources.
* Furukawa Value Added (FVA): EVA was customized for our company and introduced as an internal management indicator in FY2022.
Furukawa Electric Group Medium-term Management Plan 2022–2025