HOMESustainability

Identification of Materiality

Identification of Materiality

Background of identification
We are currently surrounded by drastic changes in the social environment in which we operate, such as the impact of accelerating climate change since the industrial
revolution, digitalization through technological innovation, and diversification of values and lifestyles of people.
In the midst of such social upheaval, we have depicted our ideal society of 2030 as “a resilient society where humans live in harmony with nature,” “a society thatfeels safe, prosperous, and exciting,” and “a society where different communities and people can coexist,” by combining Meidensha’s initial DNA of “integrity,”“responsibility,” and “social contribution,” which are our strengths, with the DNA that we must not lose of “innovative spirit” and “taking-initiative mind.” With such amindset, the Meiden Group has set its ideal state of being for 2030, which is “sustainability partnerships that work to build a new society through integrity to theearth, society, and people, and through the power of co-creation.”In these circumstances, in FY2021, we developed Medium-term Management Plan 2024, and identified major issues (materiality) in the plan by backcasting from our2030 ideal state of being.
The Meiden Group will embrace the challenge of creating a new society and work toward the realization of a sustainable global environment and happiness for all
people by solving materiality that has been identified.

Major Issue (Materiality) Identification Process
STEP 1

Management of Major Opportunities and Risks for the Meiden Group・We arranged societal changes by 2030 and impact on business management and identified
constituent factors through PEST analysis.

・We drafted a longlist (369 societal changes and issues in total), including the aforementioned
constituent factors using metrics of international standard-setting organizations and items set by
ESG evaluation institutions, to avoid omissions.

・We listed 369 societal changes and issues in total, and arranged them according to opportunities
and risks from the perspective of the Meiden Group’s ideal state of being.

Referenced Frameworks and Guidelines, etc.

・SDGs

・

GRI standards

・

SASB standards

・

ISO26000

・

ESG evaluation items required by ESG evaluation organizations

・The Ten Principles of the UN Global Compact

13Meiden Group Sustainability 2023

STEP 2Evaluation of Importance・We conducted an overall evaluation of the importance of major risks and opportunities according to
the two axes of the Meiden Group and Stakeholders.
Evaluating department

Meiden Group

Corporate Policy Planning Group, etc.

Stakeholders

Business units that deal with stakeholders

Evaluation items
FY2030 impact on operating income, likelihood ofoccurrence, and level of response
To what extent do stakeholders consider the issue tobe important

Evaluation of Importance to the Meiden Group and Stakeholders

STEP 3

Identification and Determination of Materiality

・We have gathered and designated items that we have deemed are very important opportunities orrisks as six material issues.

・Designated materiality are discussed and determined by the Sustainability Management StrategyCommittee, the Executive Officers’ Meeting, and the Board of Directors.

14Meiden Group Sustainability 2023

Gathering and Identification of Six Material Issues

Materiality Relating to Value Creation
Materiality that has been identified
Contribution to carbon neutrality

Reasons for Identification as aOutlookMateriality
The Meiden Group operates many

・ Climate change is accelerating,and the movement to reach theParis agreement target (1.5°C) isgaining momentum.

decarbonization businesses, but there
is also an environmental impact frommanufacturing.
It is essential to launch a response toRelated SDGs

・ Markets relating to

the significant impact on operations.

decarbonization are expanding,and it is essential to respond tolegal restrictions relating tocarbon taxes, etc., and prepare forincreasing large-scale disasters.

Realization of a safe, secure, andThe Meiden Group operates manyconvenient society

relevant businesses. On another front,

・ Review of the state of local

infrastructure will proceed due tothe declining birthrate and aging

it is essential to respond as businesspopulation, difficulties with local
government finances, and aging
facilities in Japan.

continuity risks may arise.

・ Digitalization is expected toproceed, leading to increased
semiconductor-related demandand increased demand for
reduced manpower andautomation in the industrial
sector.

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Meiden Group Sustainability 2023

Materiality that has been identified
Innovation through co-creation

Reasons for Identification as aOutlook

Materiality
It is extremely important to embrace

Related SDGs

・ Existing social systems havereached the end of theirusefulness, and global-scalesocial issues have arisen,

the challenge of developing nextgeneration technology, and create andfurnish social value along withincluding climate change issues.

partners that share the same・ These issues cannot be solved byany individual organization, so itconviction.

is necessary to enter partnerships
to embrace the challenge ofsolving them.

Materiality Relating to Our Business BaseMateriality that has been identified

Reasons for Identification as aOutlook

Materiality

Creating corporate culture that gives

Human resources are the source of・ Values will diversify and work-

lively workplace and growth for

the Meiden Group’s strength. Drawing

diverse human resources

out and combining the abilities ofstyles will change. There is ademand for a corporate
atmosphere that allows

each individual is essential for value

Related SDGs

individuals to display theirabilities and work withcreation.

enthusiasm.
・ As a precursor to this, it isessential for the workplaceenvironment to allow employees

to be physically andpsychologically healthy.
High-quality Manufacturing and Value

The Meiden Group’s strength ofprovisioninsistence on quality is essential not

・ The Meiden Group’s businessfields relate to infrastructure andindustrial underpinnings, and it isessential that we deliver high-only to deliver products and systems,
but also provide subsequent services.

quality products and systems
without defects.
・ As society changes, the value ofinfrastructure and equipment that“will not shut down” under any
circumstances will remain
constant.
Sincere and responsible business

It is important to respond to theoperation

changing requirements of society andpromote management that we can be・ We have an obligation to society
to always conduct corporate
management with sincerity, as we

receive capital from society,provide value to society inconjunction with ourproud of, with the core of the Meiden
Group’s strengths of sincerity andresponsibility.

stakeholders.

16Meiden Group Sustainability 2023

STEP 4

Establishment of Targets and KPIs

・

Based on our materiality, we are developing strategies and implementing measures under Medium-・With regard to implementation of measures, we establish KPIs to the extent possible and conduct

term Management Plan 2024.*1

internal progress management.
・We will regularly review materiality and KPIs.

★★★ Result surpassed FY2024 target★★

Good progress toward FY2024 target*★

Progress toward FY2024 target needs more effort（* Means that score on progress since March 31, 2021, was at least 50%）
Major KPIs andMaterialities

Major opportunities
and risksMedium-termtargets

Externally disclosed

Management Plan( ) are externallytargets for FY2025

2024

disclosed targets foronwards

Progress in FY2022

AssessmentFY2024

Contribution tocarbon neutrality

quality growth・ EV business net
sales (47.0billion yen)

1. Expansion of・ GHG reduction[Opportunities][Basic Policy 1]・ Expansion ofmarkets forbusinesses that

Realization of high-contribute tothegrowth businesses

environment[Risks]・ Increased costs
due to carbon
taxes, etc.
・ Risks fromExpansion of EVrelated, renewableenergy business,and environmentallyfriendly products,
and high profitability・ EV business net
sales (100.0billion yen inFY2028)

contribution byEnvironment
Contributing

・ Scope 3
reduction rate
(15% reduction

Businesses*2(10.00 million

compared to
FY2019 intons)

FY2030)・ EV business net
sales (38.2 billionyen)★★

・ GHG reduction

contribution(13.54 million tCO2 )★★★

・ Scope 3

reduction rate
(10% reduction)

・ Scope 3
reduction rate
(6% reduction★★★

compared toFY2019)

frequent storms
and floods

・ Proportion of・ Decline ingreen products

competitiveness due to late
response・ Number ofsuper green
products[Basic Policy 2]
Promotion ofsustainability
management

・ Promotion of

・ Scope 1,2・ Scope 1 and 2

・ Scope 1 and 2

reduction rate
(6% reduction
compared toreduction rate
(30% reduction
compared toreduction rate
(7% reduction)

FY2019)FY2019 inFY2030)

decarbonizatio
n within theCompany★★★

・ Achievement ofRE100(FY2040)
・ Achievement ofcarbon

neutrality(FY2050)

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Meiden Group Sustainability 2023

Major KPIs andMaterialities

Major opportunities
and risksMedium-termtargets

Externally disclosed

Management Plan( ) are externallytargets for FY2025

2024

disclosed targets foronwards

Progress in FY2022

Assessment

FY2024

Realization of a

[Opportunities][Basic Policy 1]

secure, safe, and・ Growing needRealization of high-convenient society

for replacement
andmaintenance ofinfrastructure
・ Rebuilding local
infrastructure
・ Growing needforquality growth
1. Expansion ofgrowth businesses

・ Expansion of
motor drive andsemiconductorrelated
businesses

semiconductors due to2. Enhancement ofdigitalization

earnings-based

・ Expansion ofoverseas
markets
・ Creation ofadded value
through digitaltransformation（DX）・ Growing needfor labor

reduction andautomation[Risks]・ Decline incompetitiveness due to late
response

competitiveness ofbusinesses

・ Motor Drive
business net

・ Field Service
Engineering―sales★★

Business Groupnet sales (39.7・ Semiconductorrelatedbillion yen)・ Overseas net
sales (74.2 billionyen)businesses netsales
・ Maintenancebusiness net★★★

sales (\41.6billion)
・ Overseas net

sales (\73.0billion)

・ Expansion ofthemaintenancebusiness
・ Promotion of
public private
partnerships

and provision ofdesignsolutions
3. Improvement of
profitability ofoverseasbusinesses

・ Rebuilding andimproving
profitability ofoverseasbusinesses

Innovation through[Opportunities][Basic Policy 3]

co-creation

・ Growing newneeds due toPromotion ofsustainability
and ESG trends
・ Advancementof new
technologie[Risks]・ Decline incompetitiveness due to late
response

Ambidexterity
Management

・ Creation of newbusinessthemes andpromotion ofcommercializati
on through cocreation

・ Newbusinesses net

・ New businesses
net sales (400―sales (\5.0billion)★

million yen)・ Number ofinnovation

themes・ Number ofinnovation

personnel

・ Development ofand furnishingsociety with
next-generation
technology

Creating corporate[Opportunities][Basic Policy 2]

culture that gives

Improvement ofPromotion of

lively workplace andproductivity throughsustainability

growth for diverse

high engagement ofmanagementhuman resources

employees

・ Implementationof measures toimprove

・ Generation of
innovation byleveraging

diversity[Risks]engagement
・ Expansion ofdiversity and・ Improvement
rate ofemployee

・ Female officerclass: numberof inside・ Improvement rateof employee
engagement

engagement
metrics (10%officers (atleast 3, of

metrics (1.4%worse)

improvementcompared to
FY2021)

which 1 is an
executive
officer, in・ Female officerclass: numberof inside

inclusion
measures

FY2030)・ Number of nonJapanesepresidents of18★

・ Female officerclass (number ofinside officers)(0)★★

・ Number of non-Japanesepresidents of

Meiden Group Sustainability 2023

Major KPIs andMaterialities

Major opportunities
and risksMedium-termtargets

Externally disclosed

Management Plan( ) are externallytargets for FY2025

2024

disclosed targets foronwards

・ Expansion andfulfillment ofofficers (atleast 1)

Progress in FY2022

Assessment

FY2024・ Outflow of
personnel orinsufficientpersonnel due
to low
engagement
・ Worse
employeehealth due tofactors
includingoccurrence ofindustrialaccidents andprofessional
development
programs
・ Enhancementof occupational
health andsafety
・ Promotion ofhealthmanagement

pandemics[Opportunities][Basic Policy 2]

manufacturing andCreating safe andPromotion ofvalue creation

securesustainability

infrastructure andmanagement

industrial

・ Establishmentof the Meiden
Monozukuri(Ma[Risks]

・ Loss ofcustomer trustor orders byreason of lower
quality

Sincere andresponsible
business operationnufacturing)Standards toimprove QCDSE・ Enhancementof quality
assurance (QR

officer, inFY2030)

subsidiaries (atleast 3)
・ Total educationand training

expenses・ Number ofindustrial

・ Manufacturing
process metrics(producthuman rights by
the Meiden

sustainabilityGroup orsuppliers

・ Enhancement

managementof stakeholder
engagement
・ Introduction ofrespect forhuman rights
and humanrights due
diligence・ Number ofdefects and costof dealing with★★★

defects (reducedby 51%)

production time
per unit, units
produced perperson,production/manufacturing
lead time)・ Number ofdefects andhalf comparedto FY2020)

・ Infringement of―productiontime,Customer
Center, etc.)

Promotion ofcompliancemeasures

Japanesepresidents of
local

cost of dealingwith defects(reduced by[Basic Policy 2]・ Insufficient★★

least 5, of
which 1 is an
executive

・ Number of non-map,reconstructionof the Meiden[Risks]・ Information
security risks

local subsidiaries(1)

accidents

High-quality

underpinnings

local
subsidiaries (at・ Stakeholder―――

engagement
improvementrate
・ Human rights

training
attendance rate・ Information

security training
attendance rate・ Compliancetraining

attendance rate

・ Enhancementof information

security andinternal training
・ Enhancementof compliance
・ Enhancementof corporate
governance*1KPIs include some items that are still not set or are not disclosed. We will continue to consider and scrutinize the selection of measures and specific KPI figures going forward.

*2

We replaced the “environmental contribution” with “GHG reduction contribution” starting with FY2022.

19Meiden Group Sustainability 2023