HITACHI RAIL

ESG Report 2024 – FY23

Think Responsibly, Ac t Sustainably

H I TA C H I R A I L . C O MIndex

Methodological
Note

Letter to Stakeholders

Chapter 3/ Governance

38

Group Chief Executive Officer of Hitachi Rail

3.1 Corporate Governance		
3.1.1 ESG Governance		
3.1.2 ESG Management System and Certifications

39
43
45

3.2 Business Ethics, Transparency, and Integrity		
3.2.1 Code of Ethics and ESG Policies		
3.2.2 Organisational, Management and Control Model		
3.2.3 Anticorruption
		
3.2.4 Competition Law
		
3.2.5. Export and Trade Compliance		
3.2.6 Data Protection and Cybersecurity		
3.2.7 Fiscal Transparency		
3.2.8 Internal Audit & J-SOX
		
3.2.9 Whistleblowing Management

48
49
50
50
51
51
52
53
53
54

11

3.3 Risk Management Process and Internal Control System

55

12
13
14
17
19

3.4 Towards a Sustainable Value Chain

61

Chapter 4/ Social Impact

66

20

4.1 Our People		
4.1.1 Human Capital		
4.1.2 Industrial Relations Managementfrom Giuseppe Marino,

Methodological Note
Highlights for Fiscal Year 2023
Chapter 1/ Context and Identity
1.1	The Global Sustainability Scenario andthe Transport Sector Challenges and Trends
1.2 Introduction to Hitachi Rail		
1.2.1 Mission, Vision and Values		
1.2.2 Business, Products and Solutions		
1.2.3 Group Structure and Business		
1.2.4 Economic Performance
H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Letter to
Stakeholders

Chapter 2/ ESG Framework and Roadmap
2.1 ESG Strategy and Roadmap

3
6
8
10

21

2.2 Stakeholder Engagement		
2.2.1 Our Dialogue with Stakeholders
and their Involvement Process		
2.2.2 Our Customers and their Engagement		
2.2.3 Industry Associations

26

2.3 Materiality Analysis
		
2.3.1 Our Contribution to SDGs

33
36

27
29
31

4.2 Diversity, Equity, and Inclusion

Chapter 5/ Environmental Impact
5.1 Environmental Policy

Highlights Fiscal
Year 2023

99
100

Chapter 1
Context and
Identity

5.2 Environmental Goals and Decarbonisation Path		
5.2.1 Energy Efficiency and Consumption Trends		
5.2.2 GHG Emission and Air Quality		
5.2.3 Sustainable Mobility

101
104
105
108

5.3 Circularity, Innovation and Resource Management		
5.3.1 Product Innovation and Eco-Design		
5.3.2 Circular Economy: Materials, and Waste
		
5.3.3 Water and Effluents

109
110
117
121

Voluntary Disclosure on EU Taxonomy

124

Chapter 5
Environmental
ImpactAnnexes127

Significant Events occurred after the closingof the Fiscal Year covered by the ESG Report

Voluntary
Disclosure on
EU Taxonomy

131

Methodological Note on Consumption and Emissions

132

67
68
73

TCFD Reference Table134

GRI Content Index

136

76

Glossary and Main Acronyms contained in the ESG Report142

4.3 People Development and Care		
4.3.1 Talent Acquisition		
4.3.2 Learning, Career Development
and Performance Management		
4.3.3 Employee Engagement		
4.3.4 Compensation and Benefits

7882

4.4 Occupational Health and Safety91

4.5 Human Rights

96

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

85
88
89

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report2Letter to Stakeholders

Letter to
Stakeholders
MethodologicalNotefrom Giuseppe Marino, Group Chief Executive Officer of Hitachi Rail“Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Valued Stakeholders,“Dear
I am pleased to present to you

Chapter 3
Governancethe Environmental, Social, andGovernance (ESG) Report for
the fiscal year 2023

Chapter 4
Social Impact
Chapter 5
Environmental
Impact

“

r
o
f
g
n
i
t
i
o
a
t
w
o
h
p
w
e
n
e
th

Chapter 2
ESG Framework
and Roadmap

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

This report reflects Hitachi Rail's commitment to sustainablebusiness practices, transparency, and our dedication to making a
positive impact on society.
As a rail business, our central mission is to grow the use of
seamless, innovative and sustainable transport around the world.
Yet we are also firmly focused on ensuring that we deliver thissustainably, with commitments to achieving carbon neutrality
across our key sites by 2030 and net-zero CO2 emissions by 2050.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report3Delivering this mission
relies on our most valuable
resource, our people; and webelieve that by promoting
inclusion and valuing
diversity we will be bestplaced to succeed.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

It is inevitably hard to simplify
into a few lines the efforts
that our colleagues have put
in, to make this company and its impacts - increasingly
sustainable. I would however
like to highlight some aspects
that may encourage a morein-depth reading of the entire
report.
Every action described in thisdocument was only possible
thanks to our stakeholders
and to the people who work for
Hitachi Rail and who aim to
make our company a Climate
Change Innovator.

Our planet, our onlyhomesources and more specifically throughthe purchase of Renewable Energy
Certificates (RECs).

As I always like to remind myself firstand foremost, in today’s world, facedwith multiple challenges including climatechange, the pursuit of sustainability isn’t
just a choice – it’s a responsibility. We
strive to honor this responsibility every
year, through the meticulous work of
our team to improve our performance inthis field. In this fiscal year, Hitachi Railhas made further efforts to reduce theenvironmental impact.

We are also working at pace to continuously
improve our energy efficiency, harnessing
the power of digital to reduce our energy
consumption.

Our target was to reduce our overall
Scope 1 and Scope 2 emissions by 5%during FY23 compared to FY22. I am
proud to report that we significantly
exceeded this target, achieving an overall
decrease of 14%.

14%

Our people: our best
resource
Working in a safe environment is not a goal,
it is a prerequisite. And without safety, there
is no quality, there is no delivery, there is nobusiness.
In FY23, 94% of our employees werecovered by the ISO 45001 certificationthat aims to reduce occupational injuries
and diseases, including promoting andprotecting physical and mental health.

overall decrease of
Scope 1 and Scope 2 emissions

But safety alone is no longer enough. We
want to provide our employees with ahealthy workplace.

We achieved this remarkable result thanks
to the use of energy from renewableThis is also reflected in our effort toward amore equitable and inclusive company. Our
workforce continues to grow and diversify.

Letter to
Stakeholders+9%

MethodologicalNotefemalesin middle management

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

In FY23, we hired 1,508 new employees, andachieved an increase in female representationin senior positions, with 9% increase in middle
management.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

In FY23 we also obtained the ISO 30415
Certification on Diversity, Equity andInclusion. In addition, we are committed
to contributing to our colleagues’ lifelong
learning.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

We increased training hours in almost
all countries by 21% overall, deploying
global, regional, and specific initiatives.
This included an overall 9.9% of hours of
training dedicated to human rights.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

+21%

TCFD
Reference
Table

training hours

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report4Our strong
commitment toinnovation
Our pioneering spirit is essential to our
success as a business. To be effective
we give our innovation work efficient
frameworks and processes for delivering. In
this context, certification is a crucial process
when it comes to measurable results in thefield of sustainability. It is why we continue
to pay this aspect particular attention.
In FY23, we achieved significant milestones
in our commitment to innovation andsustainability.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

first ever
BSI PAS 2080
certification
We obtained the first ever BSI PAS 2080
certification for the HS2 train, whichattests to our commitment to productdecarbonization from the design phase toconstruction and operation.
This certification guides the management ofcarbon across the life cycle of buildings andinfrastructure and recognizes the work weare doing to ensure the use of low carbon

materials, for example requiring suppliers
to provide aluminium made with renewableenergy. It also underlines our commitment tothe circular economy as we build a very highlevel of recyclability into all of our trains.
We also developed the industry's first
Sustainable Product Declaration (SPD) for
the Masaccio Train, demonstrating ourcommitment to sustainable production andconsumption.
Hitachi Rail has become the first rolling stock
manufacturer that can track the ethical life
cycle of a product.
The pioneering system, that Hitachi Rail has
developed with EPD International, records
all the work done by the company andits suppliers across the entire value chain– and evaluates their social performanceand adherence to modern, ethical working
practices, including employee safety, fairsalaries, gender equality, labour laws andrule of law.

6,944
suppliers

204

industries

55

countries

Our suppliers: a value
chain that grows with us
For sustainable growth and development, itis crucial to partner and work closely with
our value chain.
In FY23, Hitachi Rail screened 6,944
suppliers across 204 industries and 55
countries, registering 142 suppliers morethan the previous year.
Hitachi Rail ended FY23 with 954 suppliers
fully registered in the EcoVadis Ratings
platform.

954
suppliers fully registered in the
EcoVadis Ratings platform
EcoVadis is an assessment platform that
rates businesses’ sustainability holisticallyin four categories: environmental impact,labour and human rights standards, ethics
and procurement practices.
And this helps to guide us and our suppliers
toward more sustainable practices.

forward, our future has already begun
by welcoming more than 9,000 new
colleagues to Hitachi Rail, following themerger with Thales GTS early this year.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Acquisition ofChapter 1
Context and
Identity

Thales GTS

Chapter 2
ESG Framework
and Roadmap

Hitachi Rail is embarking on a new chapter
in its history, driven by a renewed impetus
for innovation through digitalization andsustainability. It’s not merely an opportunity
but a reality as we position ourselves as
the global leader in sustainable mobility,
leveraging our skills and expertise to deliversocial innovation on a larger scale.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Thank you for your ongoing trust andsupport.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Giuseppe Marino
Chief Executive Officer of Hitachi Rail

TCFD
Reference
Table
GRI
Content
Index

FY23 was a year of significant progressin our sustainability initiatives and looking

Glossary andMain Acronyms
contained in the
ESG Report5Methodological Note

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

The following document constitutes the fifth annual
Sustainability Report of the companies belonging to the
Hitachi Rail Business Unit of Hitachi Ltd. (hereinafter referred
to as “Hitachi Rail” and “Organisation”) consisting of
Hitachi Rail Ltd. and its fully consolidated subsidiaries andthe Rail division of Hitachi Ltd. in Japan. Its purpose is toreport on the Environmental, Social, and Governance (ESG)
performances, impacts and ambitions of Hitachi Rail.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The consolidation perimeter remains substantially unchanged
compared to the past fiscal year. It should be noted
the addition of the new company established in France
named Hitachi Rail Systems France S.A.S., which is wholly
controlled directly by Hitachi Rail STS S.p.A..
There are no boundary restrictions for the human resources
and health and safety data. The scope of environmental
data encompasses the performance of 46 sites. Excluded
from the reporting scope to date are the Mito site andall construction sites since the data collection system atthese sites is currently under implementation. For more
information, please refer to “Chapter 1: Context and
Identity” Section “1.2.3 Group Structure and Business”.
The ESG Report - published annually - is the instrument withwhich Hitachi Rail communicates to internal and external

stakeholders the commitments, strategy, management
methods and results of the organisation’s sustainability
activities, declined in their economic, environmental andsocial aspects. The objective is to enhance ESG awarenessand consistently establish and implement effective actions
and strategies. The document is structured to provide an
overview of the context in which Hitachi Rail operates
and its identity and values (Chapter 1), to illustrate to thereader its approach to sustainability topics through its ESG
Framework and Roadmap (Chapter 2), and then to focus
on its performance and impacts on the three sustainability
dimensions: Governance (Chapter 3), Social Impact (Chapter
4) and Environmental Impact (Chapter 5). This years’ ESG
Report also includes Hitachi Rail’s first “Voluntary Disclosure
on EU Taxonomy”, (for details please see “Regulation (EU)852/2020” in Glossary section), focusing on the eligibility
analysis as an element of anticipation of the regulatorychanges implied by the future mandatory compliance with the
Corporate Sustainability Reporting Directive (CSRD).
Following last year’s disclosure improvements, the ESG
Report 2024 (data and information in this document referto the fiscal year 2023 - 1st April 2023 to 31 March 2024)
also reports a wide range of Annexes at the end of thisdocument, namely the section of “Significant events occurred
after the closing of the Fiscal Year covered by the ESG
Report”, the “Methodological Note on Consumption andEmissions”, the “TCFD Reference Table”, the “GRI Content
Index”, and the “Glossary and Main Acronyms contained in
the ESG Report”.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceThis ESG Report has been prepared in compliance with
the GRI Sustainability Reporting Standards, published by
the Global Reporting Initiative (GRI), based on the “inaccordance with” option. Hitachi Rail is committed tocontinuous improvement, guaranteeing data consistency
through comparative analysis with the previous fiscal year
- where possible - and expanding the scope of reporting
to provide a comprehensive view of the most significant
impacts for the Organisation and to enhance accuracy,comparability and verifiability - essential elements for highquality reporting. This year, Hitachi Rail's ESG Report has
been prepared with the aim to start meeting the future ESRS
Reporting Standards.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

For a correct representation of performance and to ensure
the reliability of the data, the use of estimates has been
limited as much as possible, which, if present, are basedon the best available methodologies and are appropriately
reported. In addition, any restatements of previously
published comparative data are clearly indicated in the
document. For further details please consult the “GRI Content
Index” at the end of the document.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report6Furthermore, for FY23 Hitachi Rail has confirmed theresults of the Materiality Analysis conducted in the previous
reporting year. Hitachi Rail has developed a new approach
to Materiality Analysis that looks to the future of Corporate
Sustainability Reporting from a perspective on the impacts
the Organisation has on economy, people, environmentand human rights. In terms of stakeholder engagement, theresults of the process carried out for FY22 were reconfirmed.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The activity consisted of an engagement through surveys,
addressed to different categories of internal and external
stakeholders with dedicated questionnaires whose
statistical significance was ensured through sharing withrepresentative samples of respondents, and an engagement
to the most relevant referents of the main structures of theOrganisation through a dedicated workshop, with a live
vote and brainstorming on the long list of individual impacts
preliminarily identified.
The outcome of the Materiality Analysis has been presented
to Hitachi Rail’s Sustainability Committee. The Organisationemphasises the intrinsic correlation between its material
topics, the United Nations Sustainable Development Goals(SDGs) and the associated targets to which it contributes inline with Hitachi Group’s Business Strategy. For an in-depth
understanding of their connections and interdependencies,
please refer to the section titled “2.3.1 Our Contribution to
SDGs”.
An important new focus was given to the processof integration of ESG risks into the Enterprise Risk
Management (ERM) framework, with a particular focus
on climate related risks. Hitachi Rail is gradually aligning

to Task Force on Climate-Related Financial Disclosures(TCFD) recommendations and has started from its path totransparently disclose upon those recommendations. For
more details, please consult the “TCFD Reference Table” atthe end of this document.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Finally, in this document, Hitachi Rail introduces somevaluable examples of its concrete action towards increased
sustainability in the management of its operations. Byhighlighting these practices Hitachi Rail represents themeasured and proven results of concrete projects which
aim at:Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance• ESG Strategy: Hitachi Rail has an environmental, social,and governance (ESG) strategy and roadmap that guides
it towards its ambition of being a leader in sustainability
and corporate social responsibility;

Chapter 4
Social Impact
Chapter 5
Environmental
Impact• strategic priorities: health and safety at work, ethics,
integrity and transparency, customer focus, emissions
reduction and climate change mitigation are the strategic
priorities established;

Voluntary
Disclosure on
EU Taxonomy• decarbonisation: Hitachi Rail is committed to achieving
Carbon Neutrality in its main sites by 2030 and Net-Zeroemissions by 2050;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• sustainable innovation: at the heart of Hitachi Rail’s
business is sustainable mobility, which aims to inspire abetter, more sustainable future for cities and customers
around the world, with a high attention and collaboration
along the entire value chain.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

For any information on the ESG Report, please write to
csrs@hitachirail.com.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report7Highlights Fiscal Year 2023

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

14,775 employees

Environment Social

Governance

14% compared to FY22

Suppliers screening in EcoVadis IQ: over

Scope 1 and 2 (market-based):

Diverse workforce-• ISO 30415 Certification on Diversity,
Equity and Inclusion for Italy

Scope 3:10 categories reportedof which 2 new ones
H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Chapter 1
Context and
Identity-4% compared to FY22

Energy consumption:

62% from renewablesources (auto-produced and purchased from certified sources)• Employees with open-ended for contract:96%
9%• Female representation in middle management: +Incidents of corruption:

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
Impact6,900

Voluntary
Disclosure on
EU Taxonomy

86%0

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Health and Safety•

94% employee covered by ISO 45001

Training
Waste: 80% of total waste reused or recycled

Completion Code of Ethics training:

Chapter 2
ESG Framework
and Roadmap

Methodological
Note onConsumption
and Emissions

21%

TCFD
Reference
Table• Learning hours per capita: +GRIContent
Index
Glossary andMain Acronyms
contained in the
ESG Report8this report, you will find“In
concrete actions we havecompleted during FY23 andalso a clear roadmap of our
future priorities. Anotherstep forward has been
consolidated this year toward
our sustainability roadmap
for a greener future!

“

Ulderigo Zona
Executive Officer Safety, Health,Environmental & Quality

1

Context
and Identity

Chapter 1:

Letter to
Stakeholders

Context and Identity

Methodological
Note
Highlights Fiscal
Year 2023

1

Hitachi Rail’s contribution to the UN
Sustainable Development Goals (SDGs)
forms the basis for its idea of sustainability:
to offer an integrated and sustainablemobility ecosystem, capable of contributing
to the achievement of prosperity and qualityof life in balance with natural capital.

ChapterContext and
Identity

Hitachi Rail knows that the role of railtransport is crucial in achieving the goalsof decarbonisation and in bringing people,
territories, and relationships closer together
for social and economic wellbeing.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

The responsible communication of facts and areas for improvement is considered
fundamental for engaging all stakeholders within the Organisation. Hitachi Rail,in partnership with the Global Alliance, supports the initiative to include the 18th
Sustainable Development Goal, focused specifically on Responsible Communication.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

This aims to combat misinformation and enhance the culture of sustainability.
101.1 The Global Sustainability Scenario andthe Transport Sector Challenges and Trends

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Technological innovations are driving
the railway sector towards greater
sustainability. There continues to be a
growing emphasis on electrification andrenewable energy sources to power
trains. While hydrogen propulsion is also
emerging as a promising solution for nonelectrified lines, as they produce only
water vapour as emissions, its concrete
application is still a distant vision due toinfrastructure challenges for hydrogen
distribution.
Trains equipped with batteries are a solutionthat is already mature and allows operators
to overcome small non-electrified sections
and reduce pollution while approaching
the stations (see trimodal trains from HitachiRail). Traffic management systems andautonomous trains, can improve efficiency
and safety, reduce energy consumption,
optimise operations, and enhance thepassenger experience.
This shift aims to reduce greenhousegas (GHG) emissions and dependence
on fossil fuels. However, several
challenges persist. Upgrading existingrail infrastructure to accommodate
new technologies requires substantial
investments and coordination among

stakeholders. And more needs to bedone to ensure seamless integration withother modes of transport and improveaccessibility to remote areas. The effects ofextreme client events continue to highlightthe need for a notable shift in businesses’commitments to reduce their environmental
impacts.
As regulators react, an increasing numberof legislations require companies to havestronger sustainability commitments. The
European Union has introduced new
development plans and directives topromote sustainability, such as the "Green
Deal," which aims – among other things- for the decarbonisation of the transport
sector by 2050.

Integrated, inclusive, collective andenvironmentally low-impact mobility
Ensuring a continuous and sustainable
movement of people and goods within andbetween cities is fundamental to building asustainable future.
For Hitachi Rail and its customers andstakeholders, the challenge lies in aligning
traditional economic and financial
objectives with the principles of sustainable
development.

1

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap

The Hitachi Rail strategy is underpinned byexecuting continuous innovation processes
to strengthen its leadership position inreference sectors. Through innovation, it
offers high-quality and customised services
that meet the needs of travellers, clients, andother stakeholders, encompassing the entire
value chain: from design and construction
to maintenance, providing safe, integrated,
and tailormade transport services.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Many national governments areencouraging the use of trains over othermeans of transport through subsidies andinvestments in railway infrastructure.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

The new standards set by emerging
European regulations - including the
Corporate Sustainability Reporting Directive(CSRD) - are challenging for organisations,which must be prepared to develop andfind the tools and resources to meet the newrequirements.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report111.2 Introduction to Hitachi Rail

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

For over a hundred years, Hitachi’s mission
has been to contribute to society throughthe development of superior technology.
Today, Hitachi Rail is committed to driving
the sustainable mobility transition and has aclear focus on partnering with customers torethink mobility.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3With more than 14,500 employees inaround 40 countries, Hitachi Rail is atrusted partner to the world’s best transportorganisations. The company’s reach isglobal, but the business is local - withsuccess built on developing local talent andinvesting in people and communities.
Its international capabilities and expertisespan every part of the urban, suburban,
mainline and freight rail ecosystems – fromhigh quality manufacturing and maintenanceof rolling stock to secure digital signalling,
smart operations, and payment systems –through to a full turnkey solution projects.

Hitachi Rail is pioneering the digitaltransformation of transport and iscommitted to being a climate change
innovator by co-creating greener productswith its customers. With its new Smart
Mobility suite of technology, Hitachi Railhelps customers to predict, plan, manageand optimise mobility networks in realtime - improving how passengers use
the network and how operators manage
congestion, cost, and carbon. HitachiRail’s asset performance management
technology is helping operators toincrease safety and reduce maintenancecosts by predicting faults before they
happen. Hitachi Rail’s customers benefit
from additional value from the wider
Hitachi Group companies, including
digital transformation expertise from
GlobalLogic, energy infrastructure from
Hitachi Energy and innovative businessmodels and financing from Hitachi’s
corporate entity and partners.

1

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report121.2.1 Mission, Vision and Values

MethodologicalNote

The approach of Hitachi Rail is uniquein how its pioneering partnerships bring
together innovation and expertise from the
Hitachi Group and its wider stakeholders’ecosystem.

Mission

Hitachi Rail’s beliefs and actions are guided
by a clear mission, vision, and values as it
takes pride in holding itself and its projects
to the highest standards, and the values
provide benchmarks to evaluate successes
and opportunities for improvement.

Hitachi Rail’s Mission is tocontribute to society through thedevelopment of superior, originaltechnology that enables moreseamless, sustainable journeys.

Initially set by Hitachi founder Namihei
Odaira, the Hitachi Mission has been
carefully passed on to generations of
employees and Stakeholders throughout its
110-years history.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Letter to
Stakeholders

Highlights Fiscal
Year 2023

VisionThe Vision is that every passenger,
customer, and community aroundthe globe can enjoy the benefitsof more seamless, sustainable
journeys.

Values1

ChapterContext and
Identity

Wa (Harmony) – (和)The need to show respect to colleagues, suppliers,
clients, and stakeholders.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

Makoto (Sincerity) – (誠)To act with integrity in all words and actions, exemplifying
the fact that sincerity lies inholding to stated values.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactKaitakusha Seishin(Pioneering Spirit) – (開拓者精神)This means to lead with ambition, to seek new challenges;
and to be unafraid of flexibility and adaptability to thechanging needs of the business.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Hitachi Rail’s people around the globe choose to
put these values into practice by working together,
responsibly and with a collaborative approach withthe aim of contributing to the society with courageand knowledge.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report131.2.2 Business, Products and Solutions

Letter to
Stakeholders

Our Offering: Our focus market segments and solutions

Methodological
Note
Highlights Fiscal
Year 2023

1

ChapterContext and
Identity

Rolling Stock

Urban Rail

Mainline Rail

Freight Rail

Chapter 2
ESG Framework
and Roadmap

Ticketing & Payments

ERTMS

Chapter 3
Governance

Turnkey, (incl. Vehicles)

Chapter 4
Social Impact

CBTC
Rolling Stock

Chapter 5
Environmental
ImpactOperations

Voluntary
Disclosure on
EU Taxonomy

Passenger Information Systems
Integrated Operations Control Centre

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Passenger Mobility and Video & Security systems (including onboard)
Telecoms
Digital Asset Management

Methodological
Note onConsumption
and Emissions

Service & Maintenance
Cybersecurity

TCFD
Reference
Table

Ticketing & Payment

Ticketing & Payment
Interlockings

GRI
Content
Index

ERTMS / ETCS / TMSGlossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail is a global leader in the railway sector offering integrated rail solutions, including rolling stock, signalling systems, digital technology, operation and service & maintenance activities.
14

Rolling Stock

Digital Signalling & Systems

Smart Mobility

TurnkeyWith a remarkable century-long track recordof serving customers and passengers,
Hitachi Rail excels in engineering andembraces a dedication to innovation.
Through collaborative partnerships withcustomers, Hitachi Rail strives to enhance
the passenger experience across all HitachiRail’s rolling stock offerings. In terms of
train products and vehicles, the production
is oriented on: High speed trains (alsocalled “Very High Speed”), Main line trains(Intercity and Regional trains) and Masstransit trains (Tram, Monorail and Metro).

Hitachi Rail specialises in designing,producing, installing, and commissioning
advanced signalling systems, components
and comprehensive mobility solutions formodern and enhanced railway, transit,
and freight lines.

The Lumada Intelligent Mobility
Management suite represents a noveland distinctive proposition introduced
by Hitachi Rail, with a specific focus
on assisting public transport operators,
cities, and passengers in realising a moresustainable, cost-efficient, and congestionfree global landscape.

Hitachi Rail holds a prominent position as aleader in the global design and constructionof entire railways, whether undertaken
independently or in collaboration withconsortium partners. Their transportation
systems are carefully crafted, with a primary
focus on whole life cost considerations. As
a result, these solutions exhibit exceptional
performance, enhanced capacity, elevatedsafety levels, improved service availability,and heightened passenger satisfaction. Withversatile capabilities, Hitachi Rail has thecapacity to act as a specialised contractor
or assume a leadership role in joint ventures
alongside civil work companies and otherrolling stock manufacturers.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Among the most important and globally
recognised Hitachi Rail’s train models,
which demonstrate Hitachi Rail’s
commitment to sustainability and to the
reduction of products’ environmental impact,
there are:• ETR 1000 provided with a recyclability of
94.4% and the remarkable recoverability
rate of 95.8%;• Caravaggio Train, recyclable
as of 95.1% and presenting a highrecoverability of 96.3%;• HTR 412 Blues train, recyclable forits 93.3% and provided with a good
recoverability rate of 95.2%.

The extensive product and solution
portfolio includes state-of-the-art signalling
technologies, traffic management systems,
and an integrated control centre platformthat caters to diverse operational needs.
With dedicated teams worldwide,
Hitachi Rail provides a broad spectrumof innovative signalling solutions. HitachiRail’s offerings range from traditionalsignalling systems to cutting-edge digital
and automated solutions to enhance
railway operations' safety, cybersecurity,
reliability, and efficiency.
By leveraging a comprehensive approachon railway and transit operations,
Hitachi Rail enables its clients to achieve
superior performance and revenue
efficiencies, driving long-term success andsustainability in the transportation sector.

This suite comprises a collectionof intelligent mobility solutions,encompassing the multi-modal passenger
smartphone application, 360Pass, anda cutting-edge orchestrator tool named
360Motion, tailored for operators andmunicipalities.
With its capability to create a digital twinof an entire city's public transport network,
360Motion enables predictive analytics
and real-time responses, empoweringcities to optimise their transportation
systems and facilitate seamless movement
for their citizens.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

1

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Operation, Service &MaintenanceSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail offers pioneering solutions
across a diverse range of services,encompassing Service & Maintenancefor both rolling stock equipment andlegacy signalling installations including
full operation services for metro line
systems. By providing best-in class services,
Hitachi Rail aims to optimise product life
cycles, support customers’ operations, andelevate passenger experience through the
integration of innovative digital solutions.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report15

BEST PRACTICES

Next-Generation trains
for Naples Metro Line 6

Letter to
Stakeholders

Europe’s first battery train

Methodological
Note

The Metro Linea 6 in Naples - for which Hitachi Rail will deliver 22 metro vehicles - hasbeen recognised by Italy’s Campania Region as a best practice sustainability initiative.

In June, Hitachi Rail completed the first 20 trains of its ground-breaking ‘tri-brid’
Masaccio fleet, which can operate on battery, electric and diesel power.

Hitachi Rail made substantial progress using Building Information Modelling (BIM)
technology to enhance construction efficiency and accuracy.

The trains will run on routes between Calabria, Basilicata, and Puglia. The fleet isalready cutting carbon emissions by 50% on lines in Italy, with more to be delivered.

The line incorporates several sustainable features: energy-efficient systems like LED
lighting and regenerative braking reduce overall energy consumption, while solar
panels installed on station roofs generate renewable energy, decreasing relianceon non-renewable sources. The construction process uses recycled and low-impact
materials, such as eco-friendly concrete.

More than half of Europe’s railways still rely on diesel and our retrofittable battery
technology is now helping Trenitalia to deliver cleaner, quieter services forpassengers.

Advanced water management systems have been implemented to reduce water use
and manage runoff, contributing to the conservation of local water resources.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3BEST PRACTICES

Hitachi Rail incorporated
technology to minimise
noise and vibrations,improving the qualityof life for residents insurrounding areas andreducing environmental
noise pollution. The design
includes green spaces
and vegetation within
and around the stations,which improve air quality
and provide aesthetic andecological benefits to theurban environment.

Highlights Fiscal
Year 2023

1

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

The Masaccio train in Italy, the world’s first to obtain the SPD (Social ProductDeclaration), which assesses and communicates the environmental and social impacts
of products throughout their life cycle, focusing on aspects such as resource use,emissions, and social responsibility.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

The SPD was published
November 6th and assess
the train’s effect on avariety of factors, including
end-of-life care andrecycling, manufacturing,and the supply chain.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report16

1.2.3 Group Structure and Business

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

1

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

Main Sites

Glossary andMain Acronyms
contained in the
ESG Report

The ESG Report 2024 of the companies belonging to the Hitachi Rail Business Unit of Hitachi Ltd. consists of Hitachi Rail Ltd. and its fully consolidated subsidiaries, the Raildivision of Hitachi Ltd in Japan and some direct subsidiaries of Hitachi Ltd involved in Rail business.
17

The reporting scope of qualitative andquantitative environmental data andinformation in the ESG Report 2024
includes 46 main sites in which Hitachi
Rail operates as shown below:• 32 offices: Ankara, Baltimore,
Bangalore, Beijing (2 sites), Brisbane,
Copenhagen, Genova, Glasgow,
Karratha, Kolkata, Kuala Lumpur, Les
Ulis, Lima, Ludgate (Global Head
Office), Madrid, Makati City, Miami,
Munich, Noida, Perth, Piossasco,
Pittsburgh, Quezon City, Riyadh, Seoul,
Shanghai, Solna, Sydney, Taipei and
New Taipei, UAE sites, Zaragoza;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• 6 train maintenance centres:
Bounds Green, Craigentinny, Doncaster,
North Pole, Stoke Gifford, Swansea;• 8 manufacturing sites: Batesburg,
Kasado, Napoli, Newton Aycliffe,
Pistoia, Reggio Calabria, Riom, Tito
Scalo.

The correspondence between the Group's sites and related legal entities consolidated on a line-by-line basis as of 31 March 2024 isshown below:

Letter to
Stakeholders
Methodological
Note

HITACHI Ltd. 1

Highlights Fiscal
Year 2023

1

HITACHI RAIL Ltd. 9
HITACHI RAIL
TRANSPORTATIONSYSTEMS SPAIN S.A.
HITACHI ZEROCARBON
LIMITEDHITACHI ZEROCARBON
BATTERY HOLDING
LIMITED

ChapterContext and
Identity
Chapter 2
ESG Framework
and Roadmap

HITACHI RAIL STS S.p.A. 15

SECURE RAIL INDIA PRIVATE LIMITEDHITACHI RAIL STS USA INC

4

2

Hitachi Rail STS USA International Co.
Union Swiitch & Signal Inc.
Hitachi Rail STS Canada Inc.
Hitachi Rail Ontario O&M Inc.
Hitachi Baltimore Rail Partners, LLC
Hitachi Rail Washington LLC
Hitachi Rail Honolulu JVHITACHI RAIL ONTARIO HOLDINGS INC.

Chapter 3
Governance
Chapter 4
Social Impact

1
HITACHI RAIL STS FRANCE SAS 3
HITACHI RAIL STS SWEDEN AB

Chapter 5
Environmental
ImpactHitachi Rail STS Hong Kong LTD

HITACHI RAIL ESPANA S.L.U.

2

Voluntary
Disclosure on
EU Taxonomy

HITACHI RAIL STS DEUTSCHLAND GMBHHITACHI RAIL STS AUSTRALIA PTY LTD
Hitachi Rail STS Malaysia SDN BHD
Hitachi Rail STS India PVT LTD

1

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report5

Methodological
Note onConsumption
and Emissions

Hitachi Rail Ontario GP Inc.

HITACHI RAIL STS HURONTARIOHOLDINGS INC

HITACHI RAIL STS RAILWAY SIGNALINGTECHNOLOGY (BEIJING)

3

TCFD
Reference
Table

Hitachi Rail STS Mobilinx Hurontario GP Inc

GRI
Content
Index

Number of sites

Glossary andMain Acronyms
contained in the
ESG Report

For more details regarding the reporting boundary refer to the Methodological Note.
18

1.2.4 Economic Performance

Letter to
Stakeholders

Direct economic value generated and distributed

Methodological
Note
Highlights Fiscal
Year 2023

1

ChapterContext and
Identity

Through reliable transportation and sustainable practices,
Hitachi Rail fosters local growth and prosperity, ensuring a
positive impact on the community’s development.
Hitachi Rail is committed to generating value for its stakeholders
and to reporting its direct monetary value added to local
economies, as well as acknowledging the importance of beingtransparent by providing a clear picture of its economic profile.
The chart below shows the economic value generated anddistributed by Hitachi Rail referring to Hitachi Rail Ltd. and its
subsidiaries. The sites and offices in Japan are not included.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

In FY23 Hitachi Rail’s economic value generated is 658,438
million of JPY (520,027 in FY22).
Most of the value generated refers to the remuneration of
suppliers (72%; 470,752 million JPY and 72%; 375,673
million JPY in FY22), personnel remuneration accounts for 22%(147,682 million JPY and 24%; 126,518 million JPY in FY22),
company remuneration accounts for 3.2% (21,241 million JPY
and 1.9%; 9,678 million JPY in FY22), Public Administration
remuneration accounts for 1.7% (11,517 million JPY and 1.3%;
6,865 million JPY in FY22), financial system remuneration
1.1% (7,251 million JPY and 0.2%; 1,242 million JPY in
FY22), shareholder remuneration 0.003% (21 million JPY and
0.008%; 39 million JPY in FY22) and community remuneration
0.001% (9 million JPY and 0,002%; 10 million JPY in FY22).

Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceDirect economic value distributed (in million JPY %)Chapter 4
Social Impact

FY23

1.7 1.1 0.003
0.001
3.2

Chapter 5
Environmental
Impact

FY22
72

22

Voluntary
Disclosure on
EU Taxonomy

Supplier remuneration (470,752 million YPJ)

0,01
0,002

1,9
1,3
24
0,2

Personnel remuneration (147,682 million YPJ)

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG ReportCompany remuneration (21,241 million YPJ)

72

Public Administration remuneration (11,517 million YPJ)
Financial system remuneration (7,215 million YPJ)

Methodological
Note onConsumption
and Emissions

Shareholders remuneration (21 million YPJ)
Community remuneration (9 million YPJ)

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report19are proud to have
“ We
developed the industry’s

first Sustainable ProductDeclaration. HitachiRail’s commitment to the
Sustainable Development
Goals is demonstrated
by facts“

Michele Fracchiolla
Corporate Officer
Head of Global Environment Division
Hitachi Group2

Head of Rail Control System Lob
for Europe, Australia and Latin America
Hitachi Rail STS

ESG Framework
and Roadmap

Chapter 2

Letter to
Stakeholders

ESG Framework and Roadmap

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

2.1 ESG Strategy and Roadmap
Sustainability is at the core of Hitachi Rail’s
operations and vision. Its sustainability
strategy focuses on reducing the environmental
footprint, enhancing social responsibility, andensuring robust governance practices acrossall aspects of business. The Organisationis committed to developing energy-efficienttrains and advanced rail control systems that
contribute to a low-carbon transportation
future. Key commitments include achieving
Carbon Neutrality in its main sites by 2030
and Net-Zero emissions by 2050, increasing

2

Chapter
ESG Framework
and Roadmap

the use of renewable energy in manufacturing
processes, and continuously improving therecyclability of products.
Additionally, Hitachi Rail prioritises thewellbeing of its employees and communities
by fostering a diverse and inclusive workplace,

upholding the highest safety standards, andengaging in transparent and ethical businesspractices. Through these efforts, Hitachi Railaims to drive innovation, create value forstakeholders, and lead the way toward a moresustainable and connected world.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report21

Hitachi Rail's sustainability strategy is built upon five key pillars, each designed to drive the commitments to environmental stewardship, social responsibility, and economic growth.

1. Sustainable Supply Chain

2. Green & Digital Product Solutions

Hitachi Rail prioritises integrating sustainable practices throughout its
supply chain. By partnering with suppliers who share its values, thecompany ensures that materials and processes are both environmentally
responsible and ethically sound. This approach not only reduces theoverall environmental footprint but also supports the global movement
towards more sustainable industry practices.

Innovation is at the heart of product development. The focus is on creating green
and digital solutions that enhance energy efficiency and reduce emissions.
Hitachi Rail’s cutting-edge trains and rail control systems incorporate the latest
technologies to provide sustainable transportation options that meet the demandsof the modern world while minimising environmental impact.

5. Stakeholders' Partnership for Sustainable Growth
Collaboration is key to sustainability efforts. Hitachi Rail actively
engages with a wide range of stakeholders, including customers,
suppliers, industry partners, and local communities, to promotesustainable growth. By building strong partnerships, it can shareknowledge, leverage resources, and drive collective action towards
its sustainability goals.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

SUSTAINABILITYSTRATEGY

Chapter 3
Governance3. Employees Culture and Occupational Health & Safety
Hitachi Rail is dedicated to fostering a culture of sustainability among
employees. This includes comprehensive training programmes,
promoting a safe and healthy work environment, and encouraging
initiatives that contribute to the overall sustainability goals. With its
commitment to Occupational Health & Safety Hitachi Rail ensuresthat the workforce operates in a safe and supportive environment,
which is essential for achieving long-term success.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

CO2

These five pillars collectively form the foundation of
Hitachi Rail’s sustainability strategy, guiding thebusiness towards a future where innovation,
responsibility, and sustainability go hand in hand.
Through a comprehensive approach, it is committed
to making a positive impact on the environment andsociety, while delivering value to all stakeholders.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

4. Decarbonisation Pathway
The pathway to decarbonisation is a cornerstone of the sustainability strategy. Hitachi Rail set
ambitious targets to reduce carbon emissions, including transitioning to renewable energy
sources and improving the energy efficiency of operations. By doing so, it aims tosignificantly contribute to global efforts to combat climate change and promote a low-carbon
economy. The target is to reduce direct and indirect GHG emissions ensuring Carbon
Neutrality in its main sites by 2030 and Net-Zero emissions by 2050.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail is also committed to actively contributing to the United Nations Sustainable Development Goals (SDGs) through sustainable practices, innovative solutions, and community
engagement initiatives.
22

Delivering a Sustainable, Safe and High-Quality Railway Business
Hitachi Rail’s Environment, Social,
Governance and Sustainability strategy
and roadmap guide its ambitions as
a sustainability leader. It provides aframework for decision making and goal
setting that keeps Hitachi Rail on track to
become a Climate Change Innovator.
Hitachi Rail’s ESG roadmap sets
environmental targets and establishing
performance measurements and transparent
disclosures which drive its day-to-day
activities.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Digital Innovation
Within Hitachi Rail’s diverse range ofrolling stock, signalling, and turnkey
solutions, it harnesses digital technologies
effectively to deliver improved customer
experiences with reduced environmental
impacts. Hitachi Rail’s signalling solutions
team is leading the way in developing
innovative ‘Zero-Infrastructure’ train control
technologies. These advanced systems
replace traditional line-side equipment

Letter to
Stakeholders

with cloud-based solutions connected via
satellite communication.

promoting sustainable practices across its
supply chain.

• methodological developments, including
impact assessment methodologies type I
and II and interpretation phases;

Lifecycle Analysis, Material
Recovery and Waste Reduction

Carbon Management and the
Decarbonisation Pathway• recognition of a plurality of establishedapproaches, since social life cycle
impact assessment methodologies include
different approaches developed in theliterature;

Hitachi Rail places a strong emphasis onleveraging the latest advancements tominimise material and energy consumption
for its customers throughout the productlifecycle. By adopting lifecycle analysis,
Hitachi Rail integrates sustainable materials,
including recycled ones, and embraces
renewable energy sources such as battery
trains to achieve this objective.
Moreover, Hitachi Rail proactively
encourages its suppliers to participate
in energy efficiency initiatives and otherenvironmental programs aimed at reducing
emissions. This includes promoting the
adoption of material recovery, an innovativetechnological approach for recycling
electronic equipment and materials. Throughthese efforts, Hitachi Rail is committed toreducing its environmental footprint and

Hitachi Rail takes actions to reducegreenhouse gas emissions as part of
the Environmental Management Systemestablished at a global level, and defines its
Carbon Management Approach based on
the following principles:

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap• development of areas where minimum
guidance prevails;

Chapter 3
Governance
Chapter 4
Social Impact• integration of Social Organisational Life
Cycle Assessment (S-LCA).

Chapter 5
Environmental
Impact• global approach: mechanisms that
increase the commitment to sustainability
in all offices and production sites;

Voluntary
Disclosure on
EU Taxonomy• reasonable and feasible long-term
objectives: clear and realistic vision for
path to be followed;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• support for the development oftechnologies and advanced solutions;

Methodological
Note onConsumption
and Emissions• effort to train a broader base of
employees in the LCA analysis;

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report23BEST PRACTICES

Hitachi Rail’s
CBAM journey
In October 2023, Hitachi Rail’s committed to comply with the new European Carbon
Border Adjustment Mechanism (CBAM) Regulation.
The CBAM is a compensation mechanism for carbon emissions embedded in goods
imported from outside the borders of the European Union and it encourages cleaner
industrial production in third countries. During the transitional phase, which started on
October 1st 2023, Hitachi Rail began collecting quarterly data on goods subject to
the CBAM. Starting on January 1st 2026, it will annually report the amount of goods
subject to the CBAM imported in the previous calendar year and the carbon dioxide
emissions incorporated.
To address the challenges of the CBAM implementation, Hitachi Rail set up a CBAM
working group consisting of the Procurement, Customs and Transportation, Legal, Tradeand Compliance, and Finance functions and, with the support of the CSR & Sustainability team, in FY23 it implemented actions such as:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• the identification of materials and suppliers subject to the CBAM regulation;• the reporting of the information required for the transitional period;• the review of contractual terms with CBAM material suppliers.

Partnership for Sustainable Development
Through partnerships Hitachi Rail brings
together diverse stakeholders, including
governments, businesses, civil society
organisations, academy, and communities,
to collaborate and work towards achieving
the United Nations Sustainable Development
Goals (SDGs).
These partnerships recognise that no single
actor or sector can effectively tackle issues
such as poverty, climate change, inequality,and environmental degradation on theirown. By leveraging the strengths, expertise,and resources of each partner, thesecollaborations foster innovation, knowledge
sharing, and collective action towards
Sustainable Development.

Letter to
Stakeholders

Commitment to the UN
Global Compact

Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail is co-founder of the UN
Global Compact Network Italy (2010)a voluntary United Nations initiative that
supports global companies committed toresponsible business practices in the areasof human rights, labour, the environment,
and corruption. The Group’s membershipin the initiative reiterates its commitment to
the Global Compact and its principles as anintegral part of the Hitachi Rail’s strategies
and workplace culture.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactHitachi Rail regularly submits theCommunication on Progress (CoP)
Questionnaire, which focuses on five
disclosure areas (governance, human rights,
labour, environment, and anticorruption)and is designed to help participatingcompanies monitor performance across theTen Principles of the UN Global Compact.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

This new legislation gives Hitachi Rail the opportunity to make its value chain greener
by selecting suppliers who care about green operation in their production processes. Inview of the definitive period, which will start in 2026, Hitachi Rail will finalise a thorough procedure for the CBAM reporting process, including governance, responsibilities, and activity flow.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

24

Awards Recognition Fiscal Year 2023
Hitachi Wins Special Jury Prizeat Japan Industrial Technology
AwardsHitachi Ltd.’s project, Development of High-Speed
Trains (Class 800 Series) for the UK’s Intercity Express Programme (IEP), earned the Special Jury
Prize at the Japan Industrial Technology Awards.
Addressing the diverse needs of electrified andnon-electrified lines, Hitachi innovated by equipping trains with electric generators powered bymodern diesel engines. This solution enables seamless travel on both types of tracks while reducing
CO2 emissions.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The Japan Industrial Technology Awards celebrate
innovation and technological excellence in theJapanese industry, awarding companies and individuals that stand out for their significant contributions to technological development and industry
advancement.

Letter to
Stakeholders

Greening Urban Landscapes:
Hitachi's Environmental
Initiative

A Hitachi Rail safety campaign received the Best
Health and Safety Project award at this year’s
Health and Safety Excellence Awards in the UK,
on World Health and Safety Day. This award, organised by Western Business Media, identifies
exemplary initiatives aimed at enhancing workplace health and safety across industries.
Hitachi Rail's winning campaign Be Safe, Safety
Starts With Me, developed in collaboration with
BB&A, is designed to develop a proactive safety
culture within the organisation. It emphasises theimportance of individual accountability and collective effort in maintaining a secure work environment. The campaign extends beyond internal
initiatives, reaching out to stakeholders and communities to promote safety beyond the workplace.

Hitachi Rail Honolulu receives
Hitachi “Inspiration of theYear” Award

Hitachi Rail Honolulu won Hitachi’s
Inspiration of the Year 2023 – an award that
acknowledges initiatives that embody Hitachicore values and enhance brand value.
The Skyline rail project, delivered with the City
and County of Honolulu, is the first driverlessrail system in the U.S. and offers a green
transportation alternative to help limit the
40,000 car trips that people take each day on
the island of Hawaii.
Reflecting its commitment to societal
improvement, Hitachi Rail recognised thisproject for its innovation and its contribution tosocial infrastructure.

Hitachi Rail receives EMAS Award for Energy Autonomy Initiatives
at Tito Scalo Site

Hitachi Rail’s Tito Scalo site has been recognisedwith an EMAS (Eco-Management and Audit Scheme)
award in the category dedicated to energy autonomy projects. The award identifies site initiatives focused on ecological transition.
In efforts to improve environmental performance,
Hitachi Rail has modernised the electrical distribution network at Tito Scalo to minimise energy
losses and reduce energy consumption, upgrading
outdated equipment, replacing components, andadopting remote WiFi-enabled smart light fixtures.

SPACIA X Train Wins
Prestigious Design Awards

Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Ltd., in partnership with Tobu Railway Co.,
Ltd. (Tobu Railway), won the 2023 GOOD DESIGN AWARD for the design and manufacture of
the car body of the new Series N100 “SPACIA X”,
sponsored by the Japan Institute of Design Promotion.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

The Design Award recognises outstanding achievements in design across various industries, emphasising innovation, functionality, and aesthetics.

Chapter 3
Governance
Chapter 4
Social Impact

Under the concept of Connect & Updatable, SPACIA X has been manufactured with the aim of becoming a more advanced and high-quality flagshiplimited express train, while maintaining the tradition and brand image of the conventional Series
100 SPACIA. SPACIA X connects Asakusa with the
Nikko and Kinugawa Onsen areas.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi received the“Welcome. Working forrefugee integration” logo

Methodological
Note onConsumption
and Emissions

Hitachi Rail has also installed a photovoltaic system
for generating electricity from renewable sources
by deploying solar panels.
The Eco-Management and Audit Scheme (EMAS)
award is a prestigious recognition given to organisations that demonstrate excellence in environmental
management and internal audit.
Founded by the European Union, EMAS awards recognise organisations that demonstrate excellence inenvironmental management and internal audit.

TCFD
Reference
Table

UNHCR (United Nations High Commissioner for
Refugees) has awarded Hitachi Rail the Welcome.

GRI
Content
Index

Working for refugee integration logo for the year
2023, in recognition of its outstanding commitment
to promoting specific interventions for the labour
integration of refugees.

Glossary andMain Acronyms
contained in the
ESG Report25

2.2 Stakeholder Engagement

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Regulatory bodies
For Hitachi Rail, corporate social
responsibility translates into the daily focus
and constant care of its relations withstakeholders. It defines and implements
specific tools for dialogue and interaction toachieve greater understanding of their needs
and expectations.

Chapter 1
Context and
Identity

Customers

2

Chapter
ESG Framework
and Roadmap

Hitachi Group

Chapter 3
Governance

The stakeholder engagement process playsa central role in Hitachi Rail’s corporate
strategy, reflecting its unwavering dedication
to inclusive decision-making and transparent
communication.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactSuppliers andbusiness partners

Investors

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

HITACHI RAIL

Methodological
Note onConsumption
and Emissions

Banks

Employees

TCFD
Reference
Table
GRI
Content
Index

Local
communities

Glossary andMain Acronyms
contained in the
ESG Report

National and Local
Governments26

2.2.1 Our Dialogue with Stakeholders and their Involvement Process
Core to Hitachi Rail’s stakeholder
engagement strategy is the principle ofinclusivity and receptiveness, embracing
the needs and perspectives of workers,
customers, suppliers, and other stakeholders
to cultivate an environment where sharedvalues thrive.

Hitachi Rail seeks to identify common
priorities, pursuing them through three
distinct and transparent lines of action:• opportunities for information:
unidirectional communication from
Hitachi Rail to its Stakeholders, to provide
pertinent information, updates, andinsights, keeping stakeholders informed;

At the forefront of this effort is thedecarbonisation strategy, focused on
driving modal shift for better public
transport, accelerating the adoption

Letter to
Stakeholders
MethodologicalNoteof batteries to aid customers indecarbonisation, and reducing emissions
in Hitachi Rail’s own operations andsupply chain.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• consultation/dialogue: actively
seeking the invaluable opinions andperspectives of its Stakeholders, throughsurveys, polls, focus groups, and otherparticipatory mechanisms. This also
includes permanent discussion groups toallow for ongoing dialogue and exchangeof ideas;

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• partnerships: forging specific projects
in collaboration with Stakeholders towork jointly on goals of mutual interest,
strengthening relationships and cocreating value with its diverse partners.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report27

Letter to
Stakeholders

Hitachi Rail and local communities
Hitachi Rail Joins Dianova
in Italy's Most Inspiring Race

Methodological
Note

Hitachi's Earth Day Tree
Planting Initiative in Pittsburgh

In April, Hitachi Rail teams took part in an inspirational race with long time charity partner Dianova
in Milan, Italy, commemorating 40 years’ of service
to building inclusive and supportive communities.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Hitachi Rail once again joined the 2023 Hawaii
FIRST Tech Challenge Season, which attracts over
100 student competitors, volunteer robotics mentors,
and coaches.

Dianova is an organisation committed to social development, helping individuals and communities inneed through programs and initiatives in Italy.

Chapter
ESG Framework
and Roadmap
Chapter 3
Governance

Organised by Hawaii FIRST Robotics, a nonprofit
dedicated to promoting STEM education and careers, the event aims to inspire young people building their self-confidence, knowledge, and life skills
programme.

The event brought together colleagues and teams
across Hitachi Rail and Dianova to celebrate solidarity, teamwork and mutual support.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Empowering Tomorrow's
Leaders: Hitachi Rail's
Dedication to Youth Developmentin Honolulu

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Further demonstrating its commitment to community
engagement and talent development, in April Hitachi
Rail hosted engineering students from the Universityof Hawai’i Manoa for an exclusive tour of the Honolulu Operations and Service facility.
On this year’s Earth Day, Hitachi Rail colleagues andfamilies from Pittsburgh got together in a tree-planting
initiative. Over the weekend, they planted an impressive total of 100 trees throughout the city. This collective
initiative aimed to establish a new woodland, offering
benefits such as soil stabilisation, air purification, andcanopy restoration.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Project HSE Manager, Isaac gave students an inside
look at the facility that will maintain and operate Hawaii’s first autonomous metro fleet. The students also
learned real-world applications of construction safety
procedures. From classroom theory to on-site learning, Isaac and the HRH team are committed to inspiring the next generation of talent locally.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report28

2.2.2 Our Customers and their Engagement
Hitachi Rail’s breadth of rail experienceand research and development
programmes has created new, innovative
trains and infrastructure, meeting thedemand of passengers, operators, andgovernments all over the world for rollingstock, traffic management systems,
signalling and much more. Its global
expertise means that the Organisation canoffer to customers solutions to every aspectof a railway network.
And, as Hitachi Rail’s customers operate
multiple types of transport, it continues
to expand its capability to support thembeyond its traditional areas of operation.

Letter to
Stakeholders

Customer
Focus
Whether as a leader or part of consortia,
Hitachi Rail innovates and collaborates todeliver projects that meet customers’ needs,
providing advanced solutions in every
aspect of rail travel.
And, through collaboration with customers,
Hitachi Rail is innovating transportation
systems that contribute to CO2 emissions
reduction and environmental preservation.
Alongside project management, Hitachi
Rail actively engages with customers

Customer Complaint
Management
to ensure their awareness of business
news, updates, and developments
whether through virtual and face-to-faceconferences, trade shows, press releases,
editorial content, or through the groupwebsite. Customers also participate ina 360-degree feedback loop that helps
Hitachi Rail fully to understand customer
needs and requirements. These surveys
target new and existing customers –allowing communication plans and tactics
to be adjusted and customised based on
qualitative feedback.

Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail’s comprehensive customer
complaint strategy operates on a global
scale across both its Vehicles and RailControl Lines of Business through acentralised database system. This complaint
management initiative ensures that it canaddress and resolve customer grievances,aiming to reach mutually agreed-uponsolutions while consistently working tominimise valid complaints by conducting
thorough root cause analyses.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report29

A Key Performance Indicator (KPI) in
this domain is the timely resolution ofcomplaints, which monitors the percentage
of complaints handled and closed within athree-month timeframe.
By adhering to this timeline, Hitachi Rail
ensures efficient and effective customer
service, fostering trust and satisfaction
among its clientele while continually
striving for improvement in its products
and services.
In FY23 in all regions about 80% of
customer complaints were closed on time.

Customer Satisfaction
Survey FY23

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail conducts regular customer
satisfaction surveys, to understand and meetthe needs of its customers.
These surveys are conducted by ProjectManagers and/or Project Quality
Engineering teams, who engage in detailed
interviews to gather comprehensive customer

feedback. In FY23, more than 180 people
were involved in this activity either externallyor internally.
Through direct engagement, Hitachi Railgathered valuable information about
customers’ experiences and preferences,
allowing to tailor products, services, andprocesses to drive positive change andenhance overall satisfaction.
This holistic approach ensures that customer
feedback is not only collected but also
effectively used to drive positive change andenhance overall satisfaction with HitachiRail’s products and services.

The overall average satisfaction levelremains consistently positive – where green
signifies satisfactory performance – andthe satisfaction level by geography has
exceeded expectations in FY23.

Continuous improvement
processIn FY23 Hitachi Rail introduced a proactive
approach to anticipate potential customer
dissatisfaction, by implementing a newprocess called Customer Satisfaction
Perception.

This internal self-assessment is based on 8
dimensions across all major projects andserves as a valuable insight to identify areasof improvement and to implement necessary
measures.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

The assessment is visualised via
a Dashboard that allows for acomprehensive view of the project’s
performance across different dimensions,assessed by the project team, facilitating
informed decision-making and proactive
measures to anticipate potential
dissatisfaction.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
Impact

The results showed an overall weighted
global score of 7.5, including both RailControl and Vehicles Lines of Business, ofwhich the following scoring breakdown
resulted:

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Responsiveness – average score of 7.7;
• Effectiveness – average score of 7.1;
• Technology – average score of 7.4;

Methodological
Note onConsumption
and Emissions• Collaboration – average score of 7.9.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report30

2.2.3 Industry Associations

Letter to
Stakeholders

Hitachi Rail isa member of...

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

UNIFE (Association ofEuropean railway builders)

UITP (International Public
Transportation Association)

AICQ (Italian Association
for a Quality Culture)

RIA (Railway Industry
Association)

Chapter 3
Governance

APTA (American Public
Transportation Association)

RSSI (Railway Systems
Supplies, Inc.)

Chapter 4
Social Impact

CosilaH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

UNISIG (Association of European
Railway Signalling Companies)

Industry association
partnership: Spotlight on
Hitachi Rail in UNIFE
Within the scope of UNIFE, Hitachi Railcollaborates to promote the use of railway
transportation through the implementation oftechnological standards such as the ERTMS(European Traffic Management System)and the TSI (Technical Interoperability for
the Railway System). Hitachi Rail also

ANIE (National Federation ofElectro technical and Electronic
Companies)

The Italian partner of EFQM
(European Foundation for
Quality Management)

HSRG (High Speed
Rail Group)

ARA (Australasian
Railway Association)

Chapter 5
Environmental
ImpactCosila (consortium forsafety in the workplace)

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

participates in European research projects
aimed at improving safety, energy efficiency,
and environmental protection in the field ofrailway transportation.

Examples of collaboration
SHIFT2RAIL: Hitachi Rail participates in
SHIFT2RAIL, now known as Europe’s Rail,proposed as a Joint Undertaking in therailway sector to reduce emissions andpromote a modal shift in transportation,in line with the EU Commission White
Paper on the subject.
Sustainable Transport Committee:
aims to define a consistent and effective
consensus in the railway industry withrespect to environmental issues andenergy efficiency (reliable standards tomeasure energy consumption), life cycle

assessments in decision-making processes,
eco-procurement, and noise and emission
reduction.

Methodological
Note onConsumption
and Emissions

ERRAC (European Rail Research
Advisory Council): focuses on thecontribution of railways to sustainablemobility. Its primary objective is tocommunicate the railway sector’scommon Research & Innovation vision toEuropean institutions and other important
stakeholders.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report31

Hitachi Rail in UNIFE working group
Within its role on the UNIFE Sustainable Transport Committee, during FY23, Hitachi
Rail supported the development of a joint statement with other rail sector associations
and updated the working group’s position paper on the EU Taxonomy.
The focus this year is to successfully implement EU Taxonomy in the rail sector. In theLife Cycle Assessment Topical Group, Hitachi Rail concentrated on Eco-Design for Sustainable Products Regulation and Environmental Product Declarations, and took partin ISO Standardisation for circular economy guidelines and legislative discussions on
Eco-Design and Circular Economy Directives.

Letter to
Stakeholders

Flagship Project for Sustainable and Green Rail
System (FP4-Rail4Earth)

Methodological
Note
Highlights Fiscal
Year 2023

The scope of work of the four-year FP4-Rail4EARTH, under the HORIZON-ER-JU-2022FA4-01 call topic, is to improve the existing sustainability performance of railways,
to build a more attractive and resilient transport mode and to contribute towards theobjectives of a climate neutral Europe for 2050. The activities are covering Europe’s
covering the Europe’s Rail Flagship Project 4 Sustainable and Green Rail Systems, including rolling stock, infrastructure, stations, and all their related sub-systems Hitachi
Rail is one of the partners of this important European initiative.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap
Chapter 3
GovernanceIn the Chemical Risk Topical Group, the working group focused on the new proposal torestrict Per- and Polyfluoroalkyl Substances (PFAS), which will have implications for the rail
sector, as well as the management of dangerous substances, which relies on the REACh
Regulation, the SVHC, the SCIP Database, and the RISL (Railway Industry Substances List).

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail: Active participation in sector committees andprojects

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Round Table Rolling (RTR)

Methodological
Note onConsumption
and Emissions

RTR – Round Table Rolling Stock (RTR) is the European Initiative for Procurement of Rolling Stock which aims to respond to the ever-evolving ecosystem and market dynamics
and to collaborate and adopt new approaches to improve the efficiency of the procurement process. Railway operators, buyers, and suppliers have joined forces to facilitate
and improve the way of working together in rolling stock procurement. Since 2018,
RTR and its member firms have been working to move from a traditional project-oriented
approach with long lead times, towards a more efficient product-oriented procurement
approach.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report32

2.3 Materiality Analysis

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail is attentive and responsive to variations in stakeholder needs, and through ongoing dialogue, it directs its efforts and defines strategic sustainability priorities. This enables
a focused approach on the most relevant topics for business development in line with stakeholder expectations, considering the positive and negative impacts expected on the reference
business.

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Our approach to Materiality Analysis

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

According to the GRI Sustainability
Reporting Standards, materiality is theprinciple that identifies which topics
represent the most significant impacts ofan Organisation on the economy, theenvironment, and people, including impacts
on human rights.
The Materiality Analysis conducted in FY22
was confirmed for FY23. Hitachi Rail’s
approach for the 2023 materiality analysis
already integrated several elements, suchas the “Impact Materiality” process definedby GRI 3: Material Topic 2021 (according
to requirements set forth by the new GRI
Universal Standards 2021) in a processthat will gradually move towards a full
double-materiality1 assessment. Througha comprehensive and structured analysis
process, Hitachi Rail began with an extensive
1

desk analysis of the internal and externalreference context and subsequently identified
significant macro-topic for Hitachi Rail, whichtake into account the impact of Hitachi Rail's
activities on the environment and the impact of
ESG issues on the company.
The process involved engaging in extensive
stakeholder consultations and conducting arigorous analysis of environmental, social, andeconomic material aspects and related impacts
to identify the most relevant material topics to
be included in its sustainability reporting.
The approach to the Materiality Analysis has
focused on the concept of significant, actual,and potential impact on the economy,
people, and the environment, from an“inside-out” perspective, also including
elements from a financial impact dimension,

known as “outside-in” perspective. As
a result, Hitachi Rail has updated its
Materiality Analysis, considering the shift
from a focus on the relevance of material
topics for stakeholders and the Organisation
to a focus on the actual and potential
impacts, both positive and negative, arisingfrom its activities.
The process can be summarised as follows:• external context analysis andidentification of relevant macrothemes: the analysis started with theanalysis of the internal and external
context, implementing an in-depth
benchmarking exercise focused on
business activities, stakeholders,sustainability sector trends, industry ESG
priorities, reporting trends, and market

Chapter 3
Governance

KPIs. This resulted in the rationalisationof Hitachi Rail’s FY22 material topics
by identifying relevant “macro-themes,”
broader than the previous material topics;

Chapter 4
Social Impact
Chapter 5
Environmental
Impact• preliminary analysis andidentification of relevant impacts:
Hitachi Rail analysed its activities andthose of the sustainability context in which
it operates to identify possible impacts
related to the most relevant ESG macroareas. It drew of a list of impacts on
the main stakeholders, differentiated bypositive/negative, current/potential, andreversible/irreversible, evaluated by thearea of impact (economic, environmental,social, human rights) and by the momentof occurrence along the value chain(business operations – suppliers andpartners, end use).

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report ouble materiality is defined by the EU Commission in the context of the CSRD and is composed two dimensions: impact materiality and financial materiality. A sustainability matter is material if it meets theDdefinition of impact materiality, financial materiality, or both.
33	This analysis was based on multiple
elements, including:- internal procedures and analyses
that Hitachi Rail developed during its
experience in the field of sustainability;- the GRI Universal Standards andSustainability Accounting Standards
Board (SASB) Sector-Specific Standards
applicable to the railway transportationindustry and the machinery andindustrial goods industry;2

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3- a diverse characterisation of impacts,
such as positive or negative, short/medium/ long-term, actual, or potential,
systematic, or linked to individual
incidents, expected or unintended, andreversible or non-reversible.
	Through this analysis, Hitachi Railidentified 16 material topics and 32
impacts which were submitted for approval
to Hitachi Rail’s Sustainability Committee;• stakeholder engagement and theevaluation of material topics andimpacts: Hitachi Rail engaged the top
management and primary internal andexternal stakeholders to assess eachmaterial topic:

Letter to
Stakeholders- Internal and External Stakeholders: two
separate surveys on the relevance ofpotential impacts related to each of thematerial topics (inside out perspective);

Chapter 1
Context and
Identity

Methodological
Note
Highlights Fiscal
Year 2023

2

Chapter
ESG Framework
and Roadmap- Top Management: a dedicated survey
to assess the significance of the
expected financial impact of eachof the material topics (outside-in
perspective);

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
Impact- Impact Materiality Workshop:
inaugural workshop session with
relevant stakeholders from the middle
management of Hitachi Rail’s Functions.
The workshop focused on directly
assessing the severity and likelihood of
the identified impacts

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

2

Glossary andMain Acronyms
contained in the
ESG Report

For further details please consult: https://www.sasb.org/standards/archive/.
34

This engagement approach has allowed Hitachi Rail to involve and gather feedback from more than 550 stakeholders, marking a significant increase in the number of engaged
participants compared to the previous edition of the analysis. The results of the workshop are summarised in the figures below.

Letter to
Stakeholders
Methodological
Note

Materiality Matrix

Highlights Fiscal
Year 2023

X-asis: Relevancy from Internal stakeholders
Y-asis: Relevancy from External stakeholders

1

Occupational Health & Safety
Reduction of emission andmitigation of climate changeE

Air quality
Customer
focusing
Reduction of energy consumption
Data protection security

Eco - design
Supply chain
management

EmployeewelfareR&D and productR&D and productTraining and career development
Water consumption
optimisation

Diversity, equality and inclusion
Training and career development

Water consumption
optimisation

2

Chapter
ESG Framework
and Roadmap

1

S
Ethics, integrity
and transparency

2

Chapter 3
Governance

3E

Chapter 4
Social Impact

S

Chapter 5
Environmental
ImpactCustomer focusing
Data protection security

Waste management

External Stakeholders

External Stakeholders

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Supply chain
management

EmployeewelfareSquare width Relevancy from financial perspective from Top Management
Square color Significance of the main impacts connected to the material topic

Occupational Health & Safety

Ethics, integrity
Reduction of emission andandtransparency
mitigation of climatechangeReduction of energy consumption

Eco - design

3

Legend for the significance of the impacts

Air quality

Waste management

2

Chapter 1
Context and
Identity

Support for local community

Diversity, equality and inclusion
Internal Stakeholders

G

G

Voluntary
Disclosure on
EU Taxonomy

From the materiality analysis, the following findings emerge:

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Environmental (E): among the related topics, "Reductionof emissions and mitigation of climate change" emerges as
the most relevant;Methodological
Note onConsumption
and Emissions• Social (S): the priority topics are "Occupational Health &Safety" and "Customer focusing";

TCFD
ReferenceTable• Governance (G): the standout topic in this area is "Ethics,
integrity, and transparency."

Support for local community

Internal Stakeholders

GRI
Content
Index

Hitachi Rail is working to update its materiality analysis next
year to move closer and closer to the double materiality
concept and the requirements of the Corporate Sustainability
Reporting Directive (CSRD).

Glossary andMain Acronyms
contained in the
ESG Report35

2.3.1 Our Contribution to SDGs
In 2015, the 193 Member States of the United
Nations officially signed the Agenda 2030,
presenting 17 Sustainable Development Goals(SDGs), articulated in 169 specific targets,based on a set of fundamental and urgent
issues for the planet to be achieved by 2030.

Letter to
Stakeholders

Hitachi Rail’s contribution is basedon the broader framework of HitachiGroup’s commitment to contributing to the
SDGs through its Business Strategy. The
contribution to these objectives can besubstantiated in different ways, such as:• through the achievement of Hitachi Rail’s
mission to develop railway and masstransit systems and create increasingly
sophisticated products and solutions
that are safe, convenient, efficient, andenvironmentally sustainable;

MethodologicalNote• through management models whichenable the Organisation to follow a pathof sustainable growth and guarantee acohesive culture of responsibility which
promotes sustainable actions by individual
collaborators.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

SDGs to which Hitachi Group contributes through its Business Strategy and Corporate Commitment

Chapter 3
Governance
Chapter 4
Social Impact

Business Strategy

Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Corporate Commitment

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report36Letter to
Stakeholders

Among the UN Sustainable Development Goals (SDGs), Hitachi Rail has identified the ones to which it contributes the most through its business activities, and has drawn up the close link
between these topics and the SDGs.

MethodologicalNote

All details can be found in the following table:

Highlights Fiscal
Year 2023

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

TOPIC

TOPICS DESCRIPTION

SDGS

TOPIC

TOPICS DESCRIPTION

Employee welfare

Offer employees modern and flexible tools and working models
to meet specific personal needs and ensure work-life balance

Reduction ofemission andmitigation ofclimate change

Effectively manage the potential environmental impacts of
the Group's activities, contributing to the overall reduction of
atmospheric emissions

Reduction ofenergyconsumption

Manage operations with a holistic approach to reducing energy
consumption and the rational use of resources

Guarantee, through the creation of safe and healthy working
Occupational Health environments, the psychophysical health of all Group personnel& Safetyand of all those who access offices, maintenance centres andproduction centres

Air quality

Managing production processes by reducing emissions of
substances able to affect the natural composition of the air andimpact biodiversity, local communities, and employee health

Developing products and services according to criteria of honesty,
fairness, transparency, and collaboration to maintain a solid
relationship with customers and based on listening to their needs

Customer focusing

Ensure a responsible water supply by rationalising consumption
Water consumption
and carefully managing water discharges to minimise
optimisation
environmental impacts

Support for local
community

Ensure the social development of the territory and communities
in which the Organisation operates, through local stakeholder
engagement initiatives aimed at generating long-termsustainable value

Ensure proper waste management aimed at safeguarding theenvironment, favouring the reuse, and recycling of recoverable
Waste management
material, also through continuous training and updating ofinternal staff

Supply chain
management

Ensure that the Organisation's values are shared throughout the
supply chain, setting purchasing processes on monitoring thesocial and environmental performance of counterparts

R&D and productinnovation

Develop innovative and technologically advanced solutions totake advantage of digitisation and automation opportunities andoffer state-of-the-art products and services

Ethics, integrity,and transparency

Act in compliance with the regulations in force in the individual
countries in which the Organisation carries out its activities,
implementing controls to prevent and monitor corruption in all its
forms and to ensure ethical and transparent business conduct

Data protection
security

Ensuring professional management of sensitive and personal datawith state-of-the-art procedures, tools and technologies, ensuring
an effective IT security management system and efficient use of
information assets

Eco-design

Rethink production processes from a circular economy perspective
to make the finished product and its production/maintenanceprocess more efficient and less resource intensive

Training, valorisation and development of Hitachi Rail people,
Training and career through the development of dedicated activities and programmes
development
aimed at increasing professional skills and promoting growthpaths
Diversity, Equality,
and Inclusion

Promoting inclusion and valuing gender, generation, and cultural
diversity as factors for growth and innovation

SDGS

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report37

our company, governance“In
ensures accountability,
stability, transparency, andethical practices conduct
through structured policies
and our decision-making oradvisory committees“

Jaclyn Jewell
Chief Compliance Officer

3

GovernanceChapter 3:

Letter to
Stakeholders

Governance

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

3.1 Corporate Governance
Hitachi Rail’s Corporate Governance has
undergone continuous transformations inrecent years, most recently following theacquisition of Thales GTS.3

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Among the most significant changes is
the re-design of the Board of Directors of
the ultimate holding company of Hitachi
Rail: its composition has been enlarged
to 11 members, by considering elementsof diversity (both gender and possible

membership of underrepresented socialgroups). Additionally, two new committees
have been established - the Sustainability
Committee and the Remuneration, Talent &Diversity Committee.
With the implementation of these Corporate
Governance measures, Hitachi Rail has put
in place a structure designed to better face
the important challenges and opportunities
that are ahead.

Chapter 2
ESG Framework
and Roadmap

The Corporate Governance System adopted
by Hitachi Rail is based on the Legal
Division Directive (in this document
referred to as “Legal Directive”) of Hitachi
Corporate - as Hitachi, Ltd, the ultimate
parent company based in Tokyo, iscommonly called.
It consists of a set of rules and guidelinesthat govern Hitachi Group, including

Hitachi Rail. The Legal Directive, whichaims at providing high-level guidance on
Corporate Governance issues relevant to
the Group, provides for a delegation of
authority, with the purpose of achieving
highly transparent management, andsetting the criteria for the division and theappointment of powers between bodies/functions belonging to the Corporate or
the Business Unit (BU).

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

3

TCFD
Reference
Table

It should be noted that the representation is provided of the Governance System is for FY23. However, on 31 May 2024, Hitachi Rail announced the completion of the acquisition of Thales’ Ground
Transportation Systems (GTS) business. After the acquisition, the composition of the Hitachi Rail's Senior Executive Committee (the Hitachi Rail CEO's advisory committee Rail SEC), the advisory body to the
Hitachi Rail's CEO) was changed to make it more agile with a stronger focus on critical matters. It now comprises the CEO, a representative from the Green, Energy&Mobility Sector - of which Hitachi Rail is apart - the Chief Operating Officer, and the CEO of the Rail Control and GTS businesses. In addition, another Hitachi Rail governance committee, the Investment Strategy Committee (ISC), has been renamed to
Risk Management Committee that will be chaired by a member of the GEM sector and comprise an independent attendee, the Chief Financial Officer, the Group General Counsel, the Chief Strategy Officer,
and the Chief Risk Management Officer. The Audit Risk and Compliance Committee (ARCC) was renamed the Audit and Compliance Committee (ARCC) and all risk functions will be transferred to the Risk
Management Committee (Enterprise Risk Management and Project Review). For more details on the acquisition process of Thales GTS, please see section “Significant events occurred after the closing of the
Fiscal Year covered by the ESG Report”.
st

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

39

The following chart sets out the Governance structure of Hitachi Corporate and Hitachi Rail’s
governance bodies
GOVERNANCE STRUCTURE

1

Corporate
Senior Executive
Committee

2

EXECUTIVE VICEPRESIDENT
in charge of Sector

3

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail
Chief Executive Officer

4

Hitachi Rail
Senior Executive
Committee

5

Hitachi Rail LEGAL ENTITIES(Boards of Directors +Legal Entity Rules)

The Corporate Senior Executive
Committee (SEC) has an advisory roleto the President of Hitachi Ltd., whichmakes the ultimate decisions on mattersof particular importance to the Corporate
and the whole Hitachi Group. The SEC
meets regularly in order to ensure accurate
control and a lean and efficient decisionmaking process on crucial issues.
The issues addressed by the Corporate
SEC relate to Hitachi Group’s development
strategies, Corporate Risk Management,
and all relevant matters in the agenda
necessary to grant business continuity, theflourishing of the Organisation, its culture
and human capital.
Independence is ensured at the Corporate
level, as Hitachi, Ltd. has established asystem that facilitates the full exerciseof oversight functions by maintaining aseparation between management oversightand execution.
The Executive Officer in charge of
Sector (EOS or EVP) – represented
for Hitachi Rail by the Executive Officer
in charge of Green Energy & Mobility(GEM) has the role of assisting the
Hitachi, Ltd. President by providing
advice from the perspective of companywide management and improving thecooperation among different businesssector organisations.

Within the scope of governance, HitachiRail’s highest role in the Corporate
Governance structure is the Chief
Executive Officer (Group CEO,henceforth also “CEO”). Supported
by its advisory body, the Rail SEC, theCEO is the key managerial position of
Hitachi Rail, representing it to the outside
and responsible for making decisions that
influence every aspect of the business,
including the Management Plan, the budget
planning and achievement of Hitachi Rail's
performance targets.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Hitachi Rail Legal Entities’ Board of
Directors has an advisory and strategic
direction role within all the respective
Legal Entities belonging to the Group. It
defines the basic management policy andsupervises the execution of tasks of the
Executive Managers to sustainably improvethe value and the common interests of theorganisation’s shareholders.
All Legal Entity Boards must ensurecompliance with local law which are
additional to any approvals that Legal
Entities must follow under the Corporate
Governance rules. In principle, each
Board of Directors must be comprised of a
maximum of three Directors. Within each
Board an appropriate combination of skills,
experiences, and knowledge is required,depending on the nature of the legal entity(e.g., reliability, seniority requirement, being
employees of the Organisation or a legal

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report40

person, authorisation to act as directors
under local law etc.).

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The appointment of the Board of Directors
must comply with local law and for the
purpose of esuring control on and correct
implemenation of the corporate governanceand compliance rules is subject to the priorwritten approval of the Group GeneralCounsel or a delegate. They will consultin advance with the senior managers ofHitachi Rail and the Legal Entities. Any
disagreement regarding appointments to theBoard shall be decided by the Group CEO.
Appointments such as the Company
Secretary, the Supervisory Board, andthe Statutory Auditor, must comply withlocal law and be carried out by people andbodies with the appropriate qualifications andexpertise. Also, in order to further develop andstrengthen Hitachi Rail Corporate Governancesystem, Hitachi Rail has established the Talent,
Remuneration and Diversity Committee withspecific competences in the definition of
the appointments of the governing bodies,
remuneration and diversity strategy. For
further information on remuneration systems,
processes and policies see par. “4.3.4
Compensation and Benefits of this document”.

In order to prevent and mitigate potential
conflicts of interest, in principle, no director
has the right to receive any compensation
for the service provided to the Board of
Directors, or to the board of any otherlegal entity in which Hitachi Rail holds afinancial interest.

Regarding the performance evaluation
process of the Top Executives, Hitachi
Rail carries out a Global Performance
Management to improve performance,
through SMART goals, and to support
the improvement of the high-performance
culture based on the current Mid-Term
Plan (MTMP) and the business needs of
the Organisation.5 Additionally, there arededicated meetings with the Chief Human
Resources Officer (CHRO) and the General
Manager with each of the N-1 leaders,
where the N-1 leaders explain the rationale
used for the evaluation of their direct
reports. The review/evaluation process takes
place in two stages: at mid-year and at theend of the fiscal year.

There are specific procedures“Conflicts of Interest Policy”4 andthe “Hitachi Group Code of Ethics
and Business Conduct”, which assist
with the identification, management,
and mitigation of potential conflicts ofinterest and provide a crucial reference
tool in cases of situations that could
be considered a conflict of interest bydefining the decision-making procedures
and actions for all Hitachi Group
executives and employees.

Hitachi Rail regulates in principle thedelegation of authority system withwhich the regular activities and day-today operation of the Legal Entity are
guaranteed according to a specific policy.
Each Legal Entity must ensure that all
decisions are consistent with Corporate
Governance rules and that all mattersother than those reserved for the Boardof Directors are appropriately delegated.
Therefore, the Board of Directors provides
clear, comprehensive, and documented

Each Legal Entity has a predetermined
term of office for their respective Board of
Directors, as defined by each By-laws orrequired by local law. Committees do nothave a fixed term of office but remain inplace until dissolution or changes due to a
new organisational directive. This structure
ensures stability in decision-making andreporting processes.

rules, specifies the authorised persons andthe financial thresholds for the approvalsof financial commitments and defines theappropriate checks and balances, while the
Hitachi Rail CEO determines and executes
the decisions defined at the Management
Meetings and leads the management.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

In FY23, the Hitachi Rail CEO was
supported by the following committees:

3

Chapter
Governance
Chapter 4
Social Impact• the Rail Senior Executive
Committee (SEC);

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• the Rail Investment Strategy
Committee (ISC) and

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions• the Rail Audit Risk andCompliance Committee (ARCC).

TCFD
Reference
Table
GRI
Content
Index

	For more details, see the paragraph "3.2.1 Code of Ethics and ESG Policies".
5	For more details on the percentage of executives who received a regular performance management review in FY23, please refer to paragraph “4.3.2 Learning, Career Development and Performance
Management”.
4

Glossary andMain Acronyms
contained in the
ESG Report

41

Hitachi Rail’s highest governance body,the Senior Executive Committee(SEC) is the advisory body to the CEO
and is responsible for examining themanagement and financial status of
Hitachi Rail and making decisions on
matters that have a significant effecton it, on the MTMP or on Hitachi Railbudget, as well as making decisions on
appropriate measures against risks andproblems.
The Rail SEC, established in accordancewith Hitachi Corporate guidelines,
includes key Hitachi Rail global executives
such as the Chief Financial Officer, theChief Operating Officer, and other CEO
Advisers.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The Rail SEC also includes external
members, who provide additional
management skills and support in the risk
mitigation process.
Other attendees may be invited to join thecommittee to provide information or support
to the decision-making process.
The Rail SEC is convened by the CEO
twice a month to discuss issues related
to safety (once a month the HSE update
is a mandatory task, in compliance with
Hitachi Rail principle ‘Safety First’), quality,
budget and financial results, projects andstrategy, audit, risk & compliance and othertransactions.

The Investment Strategy Committee(ISC) is established with the aim of providing
independent and objective guidance andadvice to the CEO and the Rail SEC. The
ISC enhances the efficiency of Hitachi Rail's
assets and wealth, through the optimal
allocation of capital, and ensures the
profitability of individual projects. The ISC,
which is composed of members appointed
by the CEO, such as the Chairman, theDeputy CEO, the Chief Investment Officer,
the Chief Financial Officer and the GeneralCounsel, is responsible for reviewing
the contract scheme and the overall bid
in tenders before they are submitted
for approval to the CEO and Rail SEC,
verifying the consistency of investments, andmitigating transactional risks, particularly
in complex offer structures, partnerships,
and projects. In fulfilling its primary role,
the ISC carries out its activities by meeting
periodically and combining its meetings withthose of the other Hitachi Rail bodies.
Finally, the Audit Risk and Compliance
Committee (ARCC) is composed ofthree members appointed by the CEO: theChairman, who must be an independent
figure due to the nature of the role
performed, the Internal Audit Officer and theChief Financial Officer.
The members act through a consultative
vote and report to the SEC on the main
activities carried out by the committee on aquarterly basis.

Letter to
Stakeholders

The matters on which the ARCC provides advice to the CEO, or the SEC are as follows:• Enterprise Risk Management: theprocess involves the assessment andmanagement of the risks of Hitachi Railto ensure that the main risks relating to
the Organisation are correctly identified,measured, managed, and mitigated,
and in the independent assessmentof project risks and significant issues
on margins, losses, deliveries, costs,
customer relationships and complaints;• Project review: review andevaluation of overall project risk
exposure, which tracks all the key
ongoing projects across all Hitachi Railregions;• Internal Control System: periodic
assessment of the adequacy andeffectiveness of Hitachi Rail's Internal
Control System in relation to businesscharacteristics, costs, customer relations
and complaints;• Internal Audit: review and evaluationof the internal audit plan, to assess its
adequacy and effectiveness;

MethodologicalNote• Audit Plan of Corporate Auditors:
report of the GEM Sector Auditors in
relation to the audit plans for the fiscal
year;

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity• External Audit: review and sharingof progress and results of the external
audits performed;

Chapter 2
ESG Framework
and Roadmap• Compliance: analysis and evaluation,in compliance with Hitachi Rail’s Global
Compliance Program, with Hitachi Rail's
Code of Ethics and with the provisions
on whistleblowing and anticorruption.
The approval of specific policies isdelegated to the competent function,
under the strict coordination andsupervision of the central Compliancefunction;

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• J-Sox Committee Reports: reviewof the J-Sox Committee reports;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Cyber Security Risk: analysis
and evaluation of topics relating to
information security, as well as theactions identified to resolve any issues.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

All Committees are established in full accordance with the Corporate Governance systemestablished by Hitachi, Ltd., and deal with financial and non-financial matters.

GRI
Content
Index

In FY24 the structure and governance controls of Hitachi Rail will undergo significant changes
with the aim of strengthening and implementing its governance system and to continue achieving
sustainable growth in corporate value through sound and highly transparent management.

Glossary andMain Acronyms
contained in the
ESG Report423.1.1 ESG Governance

Letter to
Stakeholders
Methodological
Note

Since 2020, the Sustainability Committee oversees, approves, and provides input to Hitachi Rail on its policies, strategies and programs related to
Sustainability and Corporate Social Responsibility.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The Sustainability Committee, led by
the Group CEO and composed ofpermanent Executive members andother specific appointed figures,
manages Hitachi Rail’s vision and longterm ESG goals in pursuing continuous
improvement of governance througha global structure, effective decisionmaking, and implementation. The
Committee’s mission is to manage
Hitachi Rail’s vision and longterm environmental goals, while
respecting and protecting social
relations, in pursuing continuous
improvement of governance througha global structure, incorporating effective
decision-making and implementation.

In FY23, the Committee held three strategicand operational meetings with the following
main outcomes:•d evelop its mission of addressing,evaluating activities and correcting
strategies;• discuss leading CSR and Sustainability
topics, both from a strategic anddevelopment and implementation pointof view.

Hitachi Rail’s dedicated Corporate Social
Responsibility & Sustainability (CSR&S)
function plays a crucial role in promoting
practices that minimise the environmental
and social impacts of operations.
The function is responsible for developing
and implementing sustainability strategies
and interface with the lead managers ofHitachi Rail’s business Functions.

Highlights Fiscal
Year 2023

In FY23, Hitachi Rail established Regional
Committees with the objective of implementing
strategic plans and actions discussed in the
Corporate Senior Executive Committee for themain Hitachi Rail regions, including Australia,
America, and UK. The Regional Committees
will coordinate the local implementation of the
global strategy in coordination with the Hitachi
Rail Sustainability Committee, receiving overall
Strategy and Global Targets and reporting on
performance and achievements.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The Sustainability Committee is also
responsible for approving the results of
the Materiality Analysis and is the body
responsible for the final approval of the ESG
Report.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

43

ESG Ratings: EcoVadis
EcoVadis is a third-party provider ofbusiness sustainability ratings thatorganisations can use to better understandtheir sustainability performance and that of
their suppliers. Since its founding in 2007,
EcoVadis has rated globally over 130,000
companies on its platform in areas covering
environment, labour & human rights, ethics,
and sustainable procurement.
The EcoVadis Sustainability Rating, which
is based on Hitachi Rail’s Non-Financial
Reporting, is highly requested by the mostimportant clients.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

In 2024, EcoVadis awarded Hitachi Railthe Silver medal with a score of 71/100,
which covered only the signalling part ofthe business. This result places Hitachi Railamong the top 15% of companies assessedby EcoVadis in the past 12 months.

Letter to
Stakeholders
Methodological
Note

Hitachi Rail’s 'Preparation of the ESG Report' Procedureand ESG KPI Model

Highlights Fiscal
Year 2023
Chapter 1
Context and
IdentityAt the end of FY22, the CSR&S function drafted a specific procedure dedicated to the ‘Preparation of the ESG Report’ of Hitachi Rail.
This document discloses environmental and socio-economic performance information, measures and oversees ESG performance andimpacts, and tackles sustainability risks and opportunities, making it possible to define a clear governance model for the preparation of
the ESG Report, defining roles and responsibilities for each stage of reporting process.

Chapter 2
ESG Framework
and Roadmap

3This procedure describes the process of the ESG Report preparation including, among others, the reporting timeline, the reporting
boundaries, the description of the materiality analysis process, the data collection and consolidation process, and the finalisation, approval, and communication phases of the document.

Chapter
Governance
Chapter 4
Social Impact

Creating an ESG reporting procedure is essential for increasing transparency and accountability, improving operational efficiency, andengaging with stakeholders. It helps companies comply with emerging regulations and identify and mitigate environmental and social
risks.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Annually, the KPI Model - one of the Annexes to the procedure - is updated. Before the start of the annual reporting process for the ESG
Report, Hitachi Rail updates the repository of all relevant ESG KPIs to be collected and integrated as to guarantee the higher possiblelevel of granularity of information, the compliance with emerging regulations and the monitoring of all relevant ESG KPIs, also taking
into account the needs of the business and its customers.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

In doing so, all data owners are notified and know what kind of data to collect, the frequency of update needed and the standards towhich they need to refer. As such, the quality of data collection is increased, and regulatory updates and best practices are implemented
progressively in all areas of reporting.

Methodological
Note onConsumption
and Emissions

This report was developed following this procedure and the updated KPI model clearly identifies the relationship between the KPIs andthe data source and the responsible party.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report443.1.2 ESG Management System and Certifications

Letter to
Stakeholders

The Global Business Management System(“GBMS”) is the unique set of rules thatcombines all related components of abusiness into one single system to facilitate
management and monitoring in a continuous
improvement approach.
There are four GBMS sections:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• governance: high level manuals,
global objectives, and policies (strategy
execution);

Methodological
Note

Since its inception in April 2020,
the COSMO GBMS area has grownsignificantly: from the governance area
(manuals, global policies, strategy, andgovernance documents), through thesupport and customer processes clusters, tothe execution processes for both Vehicles
and Rail Control. This in addition to theOrganisational Area (lead by HR Functions)containing the Organisational Chart, Roles& Mandates, and the Project Organisation
Structure.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance• organisation: organisational structure,roles, and mandates (accountabilities foreach organisational role), project teamstructure;

Chapter 4
Social Impact• process excellence: complete sets ofoperating practices, procedures, rules,
forms, templates, and detailed instructions;

Voluntary
Disclosure on
EU Taxonomy

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• enterprise architecture: theOrganisation’s IT platforms and tools.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report45

As of March 2024 (end of FY23), Hitachi Rail holds the following certifications, listed by country and site.
COUNTRY

CITY

IRIS

ISO
9001

ISO
45001

ISO
14001

EMAS

SA
8000

ISO
50001

ISO
27001

ISO
30415

PRODUCTION SITESUSAFRANCE

Batesburg✔
✔

UNITED KINGDOM Newton Aycliffe
Tito Scalo

ITALY

NaplesPistoia
Reggio Calabria

JAPAN

KasadoMito Rail

✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔
✔
✔
✔

SAUDI ARABIA

Stoke Gifford
Doncaster

UNITED KINGDOM Landore Swansea
Edinburgh (Craigentinny)

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

London (North Pole)
London (Bounds Green)

FRANCESPAIN
DENMARKLes Ulis
MadridZaragoza
Copenhagen
Genoa
Roma

ITALY
MilanoPiossasco

ISO
14001

EMAS

SA
8000

ISO
50001

ISO
27001

Methodological
Note

ISO
30415

✔
✔
✔
✔

✔
✔
✔
✔

✔
✔
✔
✔
✔

✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔

Riyadh

✔
✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔

PERU

Lima

✔

✔

✔

TAIWAN

Taipei✔

✔

✔

Kuala Lumpur

✔

✔

✔

✔

✔

MALAYSIA

RawangPittsburgh PA

✔

✔

✔

Pearl city (Honolulu)

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

Perth (Belmont)

AUSTRALIA
SydneyKarratha(included in
the Italian
Certicate)(included in
the Italian
Certicate)(included in
the Italian
Certicate)

✔

✔

✔

✔

AS/ZNS
4801:01

AS/ZNS
4801:01✔

AS/ZNS
4801:01

✔

✔

✔

✔

✔

✔

AS/ZNS
4801:01

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Noida

✔

✔

✔

Mumbai✔

✔

✔

Bangalore✔

✔

✔

CANADA

Ontario

✔

✔

✔

TCFD
Reference
Table✔

GERMANY

Munich✔

✔

SWEDEN

Solna

✔

✔

✔

GRI
Content
Index

CHINA

Bejing

✔

✔

✔

INDIA

✔

✔
✔

Brisbane (Eagle Farm)✔

✔
✔

Kolkata

✔
✔
✔
✔
✔
✔
✔

✔
✔

USA

✔
✔
✔
✔
✔
✔
✔

Highlights Fiscal
Year 2023

Abu Dhabi

OFFICES AND SIGNALLING
UNITED KINGDOM London Head Office Ludgate

IRIS

ISO
45001

EMIRATESTRAIN MAINTENANCE
Ashford

CITY

ISO
9001

OFFICES AND SIGNALLING CONTINUED

Miami
Riom

COUNTRY

Letter to
Stakeholders(included in
the Italian
Certicate)(included in
the Italian
Certicate)(included in
the Italian
Certicate)✔

✔

PHILIPPINES

Makati

✔

✔

✔

✔

✔

TURKEY

AnkaraGlossary andMain Acronyms
contained in the
ESG Report46Key achievements

Letter to
Stakeholders
MethodologicalNote

All the Italian sites are certified SA8000: this Standard provides a framework fororganisations of all types, in any industry and in any country, to conduct business ina way that is fair and decent for workers and to demonstrate their adherence to thehighest social standards;

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

in February 2024 Hitachi Rail obtained the ISO 30415 Certification on Diversity,
Equity, and Inclusion;

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

all Vehicles Manufacturing plants in Europe have been certified according to the
ISO 50001 Certification, the International Standard promoting the sustainable
Energy Management System;

Chapter 4
Social Impact
Chapter 5
Environmental
Impactthe SHEQ (Safety, Health, Environment and Quality) Team has revised the procedurefor incident management to include a new Reporting Tool within a systematic
approach to incident reporting. Progressively, other procedures were issued related
to engineering controls for the management of critical risks like “Electrical Hazard”,“Working at Height”, “Train Movement”, “Contractor Management”, and “ConfinedSpace”. Furthermore, the Critical Risk Control Assessment, already introduced in
FY22, has proved to be an important element of integration with the campaign “OurLife Saving Rules”;

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

all Rail Control Organisational Units completed the Capability Maturity Model
Integration (“CMMI”) Level 2 Registration. This model consists of a proven set of bestpractices organised by critical business capabilities, whose objective is the overall
improvement of business performances;

TCFD
Reference
Table
GRI
Content
Index

Hitachi Rail conducted a CMMI probing activity to assess the increased maturity
level on some critical Practice Areas. Through this process it identified strengths andareas needing further improvement, providing a solid foundation for the ongoinggrowth and development of the Organisation toward CMMI 3.0 Maturity Level 3.

Glossary andMain Acronyms
contained in the
ESG Report47

3.2 Business Ethics, Transparency and Integrity

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail complied with laws andregulations and no fines nor non-monetary
sanctions were recorded in relation tobribery and corruption or personal dataprotection laws
In late February 2024, Hitachi Railbecame aware of lapses related to the reexport of controlled items from its projectsite in Australia to its Italian facilities
for after-market repair and maintenancework. These isolated instances of re-export
without the required licence were due toan administrative oversight. No fines nor
non-monetary sanctions are anticipatedfor Hitachi Rail and, while not required,it will submit a voluntary self-disclosure
to reiterate its proper business practiceand to remain in good standing with therelevant authorities. To guarantee fullcompliance, Hitachi Rail is also reviewing
all global re-export activities of controlled
items for after-market repair.

Letter to
Stakeholders
Methodological
Note

Legal
The Legal function supports the businesswith legal guidance and counsel acrossall operations globally, including among other - advising on contractual
matters, negotiations, bids, litigations,mergers and acquisitions, and insurance
coverage. During the reporting period, theLegal function-maintained Hitachi Rail’s
governance aligned to Hitachi Group
directives and requirements in accordancewith its governance manuals documented
in the internal Global Business
Management System (GBMS), including
Governance, Committees, Boards of
Directors, and Legal Entity Rules, as wellas Bid and Project Authorisation Rules.
During FY23, the Legal function focusedon finalising the publicly announced
merger and acquisition process for thepurchase of Thales Ground Transportation
Systems.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG ReportCompliance
Building on the successful launch of the
new Hitachi Group Code of Ethics andBusiness Conduct in March 2023, theCompliance function finalised HitachiRail’s Compliance Programme Manual as
documented in the internal GBMS in July
2023. The Manual provides information
on its architecture - how the Programmeis structured; its implementation - how
the Programme is deployed; and its
effectiveness - how the Programme works

in practice. This infrastructure provides
the necessary framework and tools tomanage, measure, and improve theCompliance Programme to identify andmitigate potential risks for Hitachi Rail andto support the ethical business conductof its workforce. The Manual follows the
U.S. Department of Justice’s requirements
for an effective ethics and complianceprogramme, aligned to Hitachi Group
Compliance efforts.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report48

3.2.1 Code of Ethics and ESG Policies
The Code of Ethics and Business Conduct
sets the requirements for the ethical conductof employees, executives, directors, and third
parties engaging in business with Hitachi Rail.
The same rules, values and principles in the
Code are also intended to assist officers andemployees in making business decisions andacting in alignment with Hitachi Group Identity.
The Code of Ethics and Business Conduct wasinternally communicated and disseminated toall employees, and publicly posted in March2023 on the Hitachi Group and Hitachi Railexternal websites. It sets the requirements forthe ethical conduct of all stakeholders engaged
with Hitachi Rail. The core policy commitments
related to business conduct include:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• being aware (making good decisions andreporting concerns);• protecting what is ours (safeguarding
assets, intellectual property, and nonpublic information);• demonstrating accountability (selecting
business partners carefully, maintaining
accurate financial records, and preventing
money laundering, exchanging businesscourtesies responsibly, identifying andmanaging conflicts of interest, andsafeguarding personal data);• dealing fairly with others (building
customer trust, competing fairly, preventing
bribery and corruption, complying withtrade compliance laws);

Letter to
Stakeholders
MethodologicalNote• c aring for Hitachi Rail’s communities (caring for the planet, respecting human rights, appreciating diversity, equity, and inclusion,
providing a workplace free of harassment, promoting health and safety, and investing in local communities).

Highlights Fiscal
Year 2023

Hitachi Rail has internal-facing compliance policies and procedures for its workforce to supplement the Code. The following global
compliance policies and procedures have been authorised in FY23:

Chapter 1
Context and
Identity

Anti-bribery & Anti-Corruption (ABAC) Policy:

Chapter 2
ESG Framework
and Roadmap

Business Courtesies Procedure;Donations & Sponsorships Procedure;

3

Chapter
GovernanceAnti-Money Laundering Policy;

Whistleblowing & Speak-Up Policy

Chapter 4
Social Impact€

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Books and Records Policy;

Respectful Workplace Policy;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Privacy Policy:
Data Protection Impact Assessment Procedure;
Personal Data Breach Incident Management Procedure;
Data Subject Acces Request Procedure;

Methodological
Note onConsumption
and Emissions

Conflicts of Interest Policy;

TCFD
Reference
Table

Modern Slavery Policy;

Intellectual Property Protection& Technical Information Transfer Policy;

Fraud Prevention Policy;

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Fair Competition Policy;
49Additionally, the Code and the compliance policies and procedures are supplemented by
the following ESG policies:

Quality Policy
Product
Safety Policy
Health& Safety Policy
Environmental
PolicyH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Business
Continuity Policy

During FY23, Hitachi Rail achieved
an 86% completion rate for its annual
Code of Ethics training package. The
Compliance team delivered numerous
facilitator-led training sessions to highrisk functions, including Sales andProcurement, on the new Business
Courtesies Procedure and rolled out thefirst global privacy e-learning training
package on International Privacy Day.

Information
Security Policy

Social Accountability
PolicyHuman
Rights Policy

Conflict Minerals
PolicyIn January 2024, Hitachi Rail launched a
dedicated Ethics & Compliance page on its
intranet site (COSMO), serving as a central
repository for employees on compliancerelated topics. Since the launch, the pagehas registered over 1,500 visitors andseen high engagement with employees oncompliance topics through additional Viva
Engage (‘Yammer’) posts and COSMO
global news articles.

3.2.2 Organisational, Management
and Control Model
Where applicable, Hitachi Rail has adopted
appropriate measures to prevent liability
in accordance with the Italian Legislative
Decree 231/01, through the implementationof specific protocols and supervisionsystems. These are designed to prevent
potential crimes committed by directors,
statutory auditors, executives, employees, or
any person that has a contractual, financial,or commercial relationship with Hitachi Rail.

Letter to
Stakeholders
MethodologicalNote

In accordance and with consideration ofnational specificities, other legal entities
within Hitachi Rail have adopted anorganisation, management, and control
model pursuant to the model set by theLegislative Decree no. 231/0, which isregularly updated following regulatory
and organisational changes.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact

3.2.3 Anticorruption
The Hitachi Rail ABAC Policy outlines its
commitment to ensuring compliance withapplicable anti-bribery and anticorruption
laws and regulations in effect wherever it
operates. In accordance with its Policy, Hitachi
Rail prohibits giving or accepting bribes toor from public officials or others to influence
any business decision. The policy prohibits
facilitation payments and political donations
and requires accurate and complete books
and records for all transactions. The Policy is
supported by the Business Courtesies Procedure
which provides compliance controls to ensurethat any business courtesies given or accepted
are transparently reported and recorded withthe required pre-approval documentation.
This year, the Compliance function launcheda digital solution to process pre-approvals forbusiness courtesies requests and processed

Chapter 5
Environmental
Impactaround 150 requests under the new procedure.
The Donations & Sponsorships Procedure
supports the ABAC Policy and facilitates thereview of all donations and sponsorships to
avoid the reception of bribery or corruption
and ensure that they are aligned to Hitachi Railstrategy and values. During FY23, it reviewed
30 donations and sponsorships.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Hitachi Rail conducted its annual Code training
package, which focuses on all elements of theCode of Ethics and Business Conduct, witha dedicated session covering anti-corruption
requirements. During the reporting period,
Hitachi Rail did not register any incident ofcorruption. Through speak-up channels, one
concern related to an alleged kickback froma supplier was received and duly investigatedconcluding that the allegation was notsubstantiated.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report50

3.2.4 Competition Law
Since the previous reporting period, Hitachi
Rail authorised its Fair Competition Policy,
which ensures that its workforce is aware of
the obligations under competition law andthat it acts in compliance with applicable
rules.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail engages in business acrossthe world in adherence with the local
laws of the regions in which it operates.
For example, in Europe it operates incompliance with EU competition laws that
set the basis for fair and open competition.
With the launch of the Fair Competition
Policy, Hitachi Rail will track contact withcompetitors and engagements at trade orindustry events and engagements.

3.2.5 Export and Trade
Compliance
Hitachi Rail is committed to complying
with regulations regarding export,
import, re-export or re-transfer of tangible
and intangible products, technologies,
information, and services (hereinafter“goods”) classified as “Dual-Use”. It does
not deal in military goods and shares theconcerns of the international community

Letter to
Stakeholders

on the proliferation of weapons of mass
destruction and is committed to complying
with all applicable export and tradecompliance laws and regulations.
Hitachi Rail’s Export and Trade Compliance
Manual sets requirements to prevent,manage, and monitor the risk of noncompliance with applicable legislation andregulations on export, import, re-export, or
re-transfer of goods classified as dual use.
The Manual complies with standard controls
required by the applicable Regulation
in force and is based on available bestpractices and the European Commission
Recommendation.

that no goods are provided, nor trade iscarried out in any country or with any entity
in violation of laws and regulations.
Hitachi Rail’s signalling business includes thedual-use encryption software that requires
export licences from the relevant authorities.
Hitachi Rail holds 11 active export licences:
two EU General Export Authorisation(EUGEA) licences and nine EU Individual
Export Authorisation licences (six issued in
FY22 and three in FY23) for export of goods
from Italy to projects in the United ArabEmirates, Turkey, Peru, and Panama.

Methodological
Note

During the reporting period, Hitachi Railbecame aware of re-export of goods from
Australia to Italy for after-market repair
without the locally required licence. No
fines nor non-monetary sanctions are
anticipated for Hitachi Rail and, while
not required, the Organisation will submit
a voluntary self-disclosure to reiterate its
proper business practice and to remain ingood standing with the relevant authorities.
To guarantee full compliance, Hitachi
Rail is also reviewing all global re-export
activities of controlled items for after-market
repair.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactAll Hitachi Rail employees are required tooperate in full compliance with the laws
and regulations in force, and training
opportunities to reinforce a culture ofcompliance are duly offered. The Compliancefunction, under its Export and Trade
Compliance programme, collaborates crossfunctionally with - among other - Engineering,
Industrialisation, and Operations to ensurethat all Hitachi Rail products are properly
assessed, reviewed, and classified.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
ReferenceTable

The Organisation conducts export and tradecompliance-related due diligence against
any possible illicit transaction and ensures

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report51

3.2.6 Data Protection and Cybersecurity
Hitachi Rail has developed distinct
approaches to IT security for data protection,
including for the GDPR, both at corporate
level and at project/customer level.

Privacy and GDPRH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail proactively manages personal
data lawfully and ethically in compliancewith local privacy laws and the best
available international practices, such as
the NIS Directive, Network and Information
Security Directive (EU 2016/1148) andthe EU Cybersecurity strategy. The privacy
policies and procedures across Hitachi Rail
entities and other customer agreements
clearly define how to process the data, fromthe reason why it is collected, to who canaccess it and for how long.
Hitachi Rail implements its Personal Data
Protection Governance Model - aligned toboth the EU and the UK GDPR principles
and the international best available
practices - in all countries in which it
operates, standardising personal dataprocessing and granting the highest level ofcompliance with local laws. When required,Hitachi Rail’s governance model provides
for the appointment of a Data Protection
Leader, Committee, and Data Protection
Officer. In the event of data transfer to third
parties or in the context of project execution,

Hitachi Rail data protection and privacy
specialists work closely with teams acrossthe organisation to maintain compliancewith data privacy standards and to ensurethat any data is used in an ethical manner.
The Customer Data Protection function
also introduced guidelines concerning thesecurity processes in place in businessareas. Critical Infrastructures (CIs) are thephysical and virtual assets essential forthe effective functioning of society and thenational economy.
Cybersecurity activities are aimed at
protecting systems and services andminimising risks related to misuse of data
and abuse of confidential information byauthorised/unauthorised personnel having
malicious intents potentially exposing
passengers and personnel to risk of harm
and/or impacting the continuity of customer
operations. These security activities aremanaged by Security Management Systems,
based on IEC 62443 standards. The
Security Process is implemented throughout
all phases of a project lifecycle, following
the general principles of Prevention,
Detection and Reaction.
The process evaluates and monitors the
Cybersecurity Risk Level by managing all
the cybersecurity activities, in accordancewith the contractual requirements, best

Letter to
Stakeholders

practices, standards and laws. The aimof the Cybersecurity Risk process consists
in protecting transportation system
information, minimising risks related to Data
Confidentiality, Integrity, and Availability.

Cyber Security Strategy
The Hitachi Rail Security and Control System(S&CS) Unit defines the cybersecurity
strategy, the level of detail of the Security
Risk Management activities, and any
learning needs. As a result of the strategy,
Hitachi Rail implements an annual
Cybersecurity Management Plan and carryout a Cybersecurity Risk.

Protection of Hitachi Rail's IT
assetsThe Cyber Security & IT Risks Unit (or Cyber
Security Unit) suggests Information Security
objectives and defines countermeasures toprotect data, systems, and product/service
in line with Hitachi Rail’s business strategies,
policies, standards, and guidelines
to implement the Information Security
framework, IT security risk management,
and training programmes. It also maintains
day-by-day operations to ensure thecontrol and the detection of threats, themanagement of risk mitigation with IT

MethodologicalNote

systems, and the implementation of security
incident responses when needed; finally,
the Unit coordinates all annual Information
Security and Cyber Security audits, technicalassessments, and mitigation reviews.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

The Cyber Security function uses theInformation Security Management System(ISMS) Documentation Framework to ensurethat all activities are conducted according
to well-defined criteria. It collaborates withother relevant internal functions (e.g., Legaland Compliance and Risk Management)
to ensure the implementation of HitachiRail’s IT security objectives. The Cyber
Security function handles compliance issues
separately, focusing primarily on security
incidents and vulnerabilities and records
these events in internal log to track each
incident and the corresponding corrective
actions taken. When events threaten thecontinuity of business operations, theEnterprise Risk Management function takes
control and works in synergy with the
Cyber Security function to ensure a prompt
response and the implementation of aneffective solution.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

During FY23, Hitachi Rail passed both the
Cyber Essentials Basics and Cyber Essentials
Plus assessments, renewed the certifications
and demonstrating the effectiveness of theprotection against the growing threat ofcyber-attacks.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report523.2.7 Fiscal Transparency

3.2.8 Internal Audit & J-SOX

Hitachi Rail follows rules for transfer pricing
management and manages transfer pricing
in accordance with the Organisation for
Economic Co-operation and Development(OECD) Transfer Pricing Guidelines andthe laws and regulations on transfer pricing
in each country or region where Group
companies are located.

A dedicated Internal Audit & J-SOX function6 with an onsite presence in Italy, UK, US, andJapan – oversees the proper implementationof the Internal Control System over financial
information and its continuous improvement
for the entire Organisation.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

For Intercompany projects, the margin
allocation between group companies,
decided at contract award, must comply
with Arm’s Length principle and othertransfer pricing principles provided byOECD.

The function, in line with the industry bestpractices, operates in accordance with theannual Audit Plan that is drafted with a riskbased approach and formally approvedby the ARCC (Audit, Risk, and Compliance
Committee) and the SEC (Senior Executive
Committee) at the beginning of each

Letter to
Stakeholders

financial year. This Plan is periodicallyreviewed and updated considering the stateof Hitachi Rail's risks and specific business
requirements.
During FY23, Internal Audit & J-SOX carriedout nearly 50 audits mostly relating tooperational matters, including key projects,
minor entities, branches, internal processes,
and compliance matters. The function also
oversees testing J-SOX controls in accordancewith Internal requirements. J-SOX requires theimplementation and operation of a large setof controls over financial reporting.

Methodological
Note

In FY23, Internal Audit & J-SOX tested
1,117 controls regarding the main financial
processes like closing the books, purchaseto pay, order to cash, and ITGC (IT General
Controls). Testing activities were performed
for legal entities located in Australia,
Canada, France, India, Italy, Japan, UK, US
and in the main STS branches.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

The results are periodically shared with the
ARCC, the SEC, and the J-SOX Committee
and the Board of Directors of Hitachi RailSTS S.p.A. The results are also shared with
Hitachi Rail’s third-party auditors.

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactEach Group Legal Entity involved inIntercompany projects is remunerated inaccordance with the functions performed,
assets used, and risks assumed in thetransaction. The “commercial route” forthe Projects is decided also taking into
consideration the tax implications. During
the contracts execution the monitoring is also
aimed at identifying possible adjustments,
where appropriate.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

6

Glossary andMain Acronyms
contained in the
ESG Report

A Japanese regulation based on international frameworks like SOX, Sarbanes, and Oxley Act, in the US.
53

3.2.9 Whistleblowing Management

Letter to
Stakeholders
MethodologicalNote

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail’s Whistleblowing & SpeakUp Policy provides numerous “speak-up”
channels through which anyone internalor external can report concerns. Thesechannels include managers, membersof the Human Resources and Legal &Compliance teams, and the Hitachi Global
Compliance Hotline. When required by
specific local laws and regulations, theOrganisation additionally uses supervisory
bodies and other eligible recipients. All
speak-up channels are publicly available
on Hitachi Rail’s external website andinternally on a dedicated Ethics &Compliance sub-page on the intranet site,
COSMO.
Hitachi Rail promotes a speak-up culture
whereby anyone can report, in goodfaith, actual or suspected violations or
breaches of laws, regulations, HitachiRail’s Code of Ethics and BusinessConduct, or any other applicable policy
with zero tolerance for retaliation on
who reports a concern or participates in
an investigation. Hitachi Rail allows andencourages any person wishing to reporta concern to choose the speak-up channel
that is most suitable to the circumstances
and/or through which they feel most
comfortable.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

The Compliance function promptly andeffectively evaluates concerns to determine
the appropriate course of action. If an
investigation is deemed necessary, it
appoints an independent investigatorwith the due competency, capacity,
and appropriate authority to manage
and follow up on the concerns. Hitachi
Rail applies strict confidentiality on theinvestigation details, the identity of theperson reporting the concern and of any
other individual involved to the maximum
extent reasonably possible.
During FY23, Hitachi Rail received andinvestigated 76 concerns through its
speak-up channels. This is a 76% yearon-year increase in volume, having

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

received 43 concerns during the priorfiscal year. This increase in volume,
coupled with a decrease in anonymity
rates, demonstrates increased trust in
the programme. Hitachi Rail completed
a poster campaign to ensure that
information on how to report concerns isreadily accessible to all employees at all
Hitachi Rail sites.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report543.3 Risk Management Process and Internal Control System

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail has a dedicated Enterprise Risk
Management function that collaborates
with the Compliance function on assessing
relevant risks.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The Enterprise Risk Management (ERM)
belongs to the Integrated Risk Management
Framework (IRM) and applies this common
framework7 to provide reasonable assurance
to the Hitachi Rail Senior Executive and
ARCC (Audit Risks and Control Committee)that an effective Risk Management system
is in place. This includes identifying andmanaging potential events that may affectthe enterprise’s objectives, projects, andprogrammes.
The ERM structure, comprising Lines ofBusiness, Regions, and Technical Risk Areas(Operational and Organisational Resilience),
ensures that enterprise risks and opportunities
are managed in an integrated way across theorganisation, covering key interdependencies.
ERM is a multidirectional, iterative process inwhich most components can and do influence
one another. Hitachi Rail’s ERM Process
observes the following steps:• landscape evaluation - update of
the Risk and Opportunity Portfolio andprioritisation of Key Risk Themes andTechnical Risk Areas;• risk assessment - risk identification
and risk analysis (before and after risk
response);• treatment - action plan identificationand planning.

During the landscape evaluation, the
ERM Function annually refreshes Hitachi
Rail Risk and Opportunity Portfolio
and prioritises the Key Risk Themes to
Deep Dive in line with the Mid-Term
Management Plan.
The main categories of the Hitachi Rail Risk
and Opportunity Portfolio are:• strategic - risks associated with decisions
and actions that impact the ability toachieve strategic objectives and targets;• financial - risks that pertain to potential
adverse impacts on financial stability andperformance;• monitoring - risks and actions progress
monitoring;• operational - risks related to the day-today business operations and processes;• reporting - periodical reporting of ERM
insights and summary to Senior Executives
and ARCC.

• regulatory - risks that arise from thefailure to adhere to laws, regulations,industry standards, and internal policies.

The Risk Assessment is the iterative processof Risk Identification and Risk Analysis,
undertaken to update the Risk Profile,using impact and likelihood scales set
by the ERM Unit. Risk Analysis involves
consideration of risks at both inherent andresidual level, and the assessment of theeffectiveness of the Current Risk Response.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact

Risk Treatment is determined based on the
Residual Risk and Risk Score (Residual Risk
+ Velocity), where Velocity is the time torespond to a risk when it materialises.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

7

GRI
Content
Index

All best practices and external applicable standards were taken into account and monitored by internal functions in designing, reviewing, and implementing policies and the GBMS, such as:• ISO 31000:2018 Risk Management Principles and Guidelines;• ISO 9001:2015 Quality Management System European Standard;• COSO (Committee of Sponsoring Organisations of Treadway Commission) 2004, updated in 2017.

Glossary andMain Acronyms
contained in the
ESG Report55

In July 2023 ERM provided, first to Senior
Executives and then to the ARCC, an
update on five Key Risk Themes:• production capacity;• supply chain resilience;• energy supply & inflation;• geopolitical evolution;• climate change & ESG.

Responding to
ESG Risks andOpportunities
ESG plays a key role in defining a renewed
perception of risks and opportunities in thecorporate environment. From a financial
and compliance perspective, Enterprise Risk

Management Processes have been turning
into a comprehensive framework.
Structured processes at both Hitachi Ltd
Corporate and Hitachi Rail levels integrate
ESG factors, by analysing sustainability
context, identifying priorities - for example
through materiality analysis - andimplementing specific actions in support ofsustainability goals and reporting.

At each stage of the process, Hitachi Railconsiders alignment on respect for humanrights a fundamental element in pursuingsustainable success.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

The CSR&S and the ERM functions work
together to identify and evaluate risks andopportunities by setting specific tools andtechniques.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

In February 2024 the ERM Risk Portfolio
was updated in line with Hitachi Rail MidTerm Management Plan.

3

Chapter
Governance
Chapter 4
Social Impact

The Key Risk Themes prioritised are:• macroeconomic and geopolitical;

Chapter 5
Environmental
Impact• GTS acquisition and integration;• supply chain resilience;

Voluntary
Disclosure on
EU Taxonomy• disruptive technology and AI;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• project delivery;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• talent management and shifting labour
expectations;• cyber security.

Methodological
Note onConsumption
and Emissions

The main technical risk areas underattention are:

TCFD
ReferenceTable• climate change & ESG;• quality assurance;

GRI
Content
Index• compliance;• health & safety;

Glossary andMain Acronyms
contained in the
ESG Report• information technology;• business continuity.
56

The main ESG risks for Hitachi Rail

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Compliance and Ethical Behaviour
Risk related to unethical employee behaviouror the disclosure of misleading informationand non-compliance with current legislation

Chapter 1
Context and
Identity

Noncompliance on ESG Disclosure
Risk related to non-compliance with newly
and continuously evolving ESG regulations
and standards (e.g., CSRD, EU Taxonomy)

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Data protection
Risk related to security policies to protect data
against sudden cyber attacks

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Climate change
Risk related to the potential impacts of climatechange on Hitachi operations, sustainability, andreputation (e.g., physical risks and transition risks)

Human Rights
Risk related to the violation of the human rightsof employees and collaborators, including thosealong the supply chain

ESG
RISKS

Supply Chain Management
Risk related to unethical behaviour of suppliers
and subcontractors with a focus on human rights
and climate change issues

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Human Capital
Risk related to human resource management inareas such as diversity and inclusion, fair labour
practices, and employee well-being

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Health and Safety
Risk related to the occupational health andsafety management for all workers, also withreference to unpredictable behaviour and lackof employee awareness of security procedures

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Already during FY22, Hitachi Rail had started to enhance and better detail in its ERM System ESG Risks, adopting a holistic approach that leverages on the sustainability context and thesustainability materiality analysis. In FY23, Hitachi Rail updated its overall Risk and Opportunity Portfolio with a more detailed identification, assessment, and treatment of specific risks.
57

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3Managing ESG Risks

Letter to
Stakeholders

ESG Risks are a priority for Hitachi Railand are highly relevant to the overall
exposure of the industry in which it
operates. Hitachi Rail monitors andreinforces its risk responses and mitigation
actions, and as a result has introduced thefollowing:• Sustainability Committee: regularmeeting of the Sustainability Committee,
comprising senior executives andsubject matter experts, to review ESG
performance, set strategic priorities,
and ensure compliance with industry
standards;• Risk Assessments: regular ESG risk
assessments to identify potential impacts
across the value chain. These assessments
inform decision-making processes andenable the implementation of targeted
mitigation measures;• Policies and Procedures:development of policies and proceduresthat govern ESG practices. These
include waste reduction strategies, water
conservation efforts, and initiatives
to enhance workplace diversity andinclusion;• Certified Management Systems:
adherence to internationally recognised
standards, including ISO 14001 forenvironmental management and ISO
50001 for energy management. Thesecertifications allow to systematically
identify, assess, and mitigate
environmental risks;• Stakeholder Engagement:
stakeholder engagement with stakeholders
to better plan and detail the ESG
strategy. The Organisation maintains
open dialogues with customers, suppliers,
employees, and local communities tounderstand their concerns and incorporate
their feedback into risk management
practices.
• Training and Awareness: ongoingtraining and awareness programsfor employees to ensure they areknowledgeable about ESG risks andsustainability goals. This empowers themto contribute actively to ESG initiatives.

Climate-related risks andopportunities

Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail considers climate related risks
and opportunities as a major commitment.
Hitachi Rail is preparing to implement
TCFD recommendations starting its path
to transparently disclose upon thoserecommendations (for further details please
read “TCFD Reference Table”).

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
GovernanceDuring FY23, Hitachi Rail assessed the
Climate Change & ESG Technical Risk Area
as a crucial element of the set strategy. This
comprehensive Risk Area encompasses
several risk sources and events related
to ESG targets and the related potential
financial, operational, and reputationalrisks.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

By integrating these elements into the ESG
risk management framework, Hitachi Rail
ensures that everyone is well-preparedto address challenges and capitalise onopportunities, fostering long-term resilienceand sustainability.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report58

Climate-related risks
Risk title

Risk type

Acute climate conditions

Chronic climate conditions

Climate-related Supply Chain

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Climate-related Vehicle
Technology

Climate-related Rail Control
Technology

Climate-related Policy
and CompliancePhysical Risk

Transition Risk

Emerging

Risk description

Time period

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact

Green-deal rush, increased demand and cost of raw materials and difficulties in scouting suppliers (sole source) combined with the lack ofawareness during suppliers’ selection on virtuous providers (impacting Scope III emissions) that may lead to decrease of competitiveness andweak supply chain sustainability resulting in increased production and operation costs

Transition Risk

Rapid advancements of low emission technology combined with delayed integration of sustainability requirements into Product Strategy
and R&D and lack of awareness on further emission reduction opportunities (Scope III) that may lead to delayed product and system green
transition and non-compliance with customers’ requirements resulting in the erosion of market share in favour of competitors with lower
emissions options and reduced capability to attract capital

Very highImpact type

Rising temperatures, frequency and intensity of heat waves, scarcity of water resources, change in precipitation patterns combined withphysical countermeasures in plants and premises 30/40 years old spread in different geographical areas that may lead to production,
construction, premises sites damages and personnel injuries resulting in increased operating costs, damages to facilities, and workforce
impacts

Transition Risk

Transition Risk

Magnitudeof the inherent
impact

Methodological
Note

Increased severity of extreme weather conditions, natural disasters (such as floods, fires, avalanches, extreme temperatures, and typhoon)
and rising temperatures combined with physical countermeasures in plants and premises 30/40 years old spread in different geographicalareas that may lead to production, construction, premises sites damages and personnel injuries resulting in operations or production
disruptions and workforce impacts

Rapid advancements of low emission technology (battery cell and materials obsolescence) combined with the lack of awareness on further
emission reduction opportunities (Scope III) that may lead to delayed train performance and consumptions improvements resulting in theerosion of the BU’s market share in favour of competitors with lower emissions options and reduced capability to attract capital

Transition Risk

Non-achievement of emission
reduction targets

Current

Physical Risk

Letter to
Stakeholders

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Newly and continuous evolving Regulatory ESG and Climate Change requirements and standards may lead to delayed compliance with thetightening regulation resulting in reputational damages, legal liabilities and financial penalties

TCFD
Reference
Table

Lack of detailed action plans and related investments to meet Scope 1,2 and 3 emission reduction targets (Carbon Neutrality in its mainsites by 2030 and Net-Zero emissions by 2050) may lead to delayed achievement of emission reduction targets resulting in reputational
damages and loss of market opportunities

Medium-highMediumOperational

Financial

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Reputational

59

Climate-related opportunities

Letter to
Stakeholders
Methodological
Note

Hitachi Rail has thoroughly evaluated the opportunities associated with climate change. By identifying and leveraging these opportunities, it aims to enhance its sustainability efforts byinnovating product offerings and improving operational efficiencies. This proactive approach not only helps to mitigate potential risks but also positions the Organisation as a leader in thetransition to a low-carbon economy.

Opportunity title

Opportunity type

Increase corporate value fromlow-emission products and services

Opportunity description

Time period

Magnitudeof the impact

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Impact type

Chapter 2
ESG Framework
and Roadmap

Enhanced corporate value and increased revenue may be attained through the enlarged sales of products and services
that incorporate low-emission technological innovations, contributing to both climate change mitigation and adaptation

Products and Services

3

Chapter
GovernanceImprove processes from energy-efficientsolutions

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Current -Emerging -High -

Improving resource efficiency across production and distribution processes by implementing measures such asenergy-efficient infrastructure, materials optimisation, electrification using renewable energy sources, and innovativetechnologies may create the potential for significant cost savings for organisations in the medium to long term, while also
contributing to global efforts aimed at reducing emissions.

Resource Efficiency

Medium -Financial -Chapter 5
Environmental
ImpactOperational

Hitachi Rail has taken specific actions bothat global and local level to mitigate risks
and enhance opportunities:

headway (flexible operations in response
to passenger demand) and new mobility
services like MaaS;• developing and marketing more energysaving railcars and battery powered
railcars for non-electrified sections;• ensuring the competitiveness of thebusiness by focusing on sustainable
activities carried out in accordancewith international standards (i.e., EU
Taxonomy). This also increases theability to access capital and ESG driven• strengthening railway services throughdigital utilisation such as dynamic

Chapter 4
Social Impact

Voluntary
Disclosure on
EU Taxonomy

investments, for both internal and externalbusiness projects;• responding with an integrated view ofbusiness management that includes the
management of production sites and thedecarbonisation of plants and offices;

layout of a new plant given the increasing
frequency of natural disasters, take;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• monitoring the supply chain to strengthen
the ability to respond to businessdisruption risks.

Methodological
Note onConsumption
and Emissions
TCFD
ReferenceTable• taking risk aversion into account when
deciding the location and equipment

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report60

3.4 Towards a Sustainable Value Chain

Letter to
Stakeholders
Methodological
Note

Hitachi Rail is continuously supporting
its programme to transform SupplierManagement capabilities as part of abroader Procurement improvement agenda.
As part of its continuing efforts to transform
Supplier Management capabilities, Hitachi
Rail is striving to:• implement and operate a global supplierqualification process for rail to qualify
supply base against a defined set ofcriteria, improve visibility of key risks(including Sustainability), and enable theongoing tracking and management of
suppliers against these criteria and risks;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• support the improvement of quality andrisk management of the supply base;• drive more effective performance
management with suppliers with aparticular focus on tracking performanceagainst key sustainability metrics;• work collaboratively with suppliers todefine and implement innovative solutions
that support sustainability.
These support a broader Hitachi Rail’s
Procurement agenda which is designed to
improve visibility and monitoring and define
improvement actions on key risks in the
Supply Chain, with a particular focus on
CSR and Sustainability and decarbonisation.

Highlights Fiscal
Year 2023

Supplier Governance and Guidelines
Hitachi Rail Supply Chain & Procurement
teams work within the framework of theCode of Ethics and Supplier Code of
Conduct to responsibly and effectively
source, procure and contract with suppliers
based on the Procurement Strategy and inline with its Supplier Quality procedures.
Code of Ethics and Supplier
Code of Conduct
The Code of Ethics is fully deployed acrossall areas of Hitachi Rail, while the Supplier
Code of Conduct is in place for the UK,
Italy and Japan business areas. For HitachiRail’s business, the Code also reflects thecommitment to become a climate change
innovator. Hitachi Rail is committed tohaving all its suppliers conform to Hitachi
Rail standards, as well as to the agreed
business conditions.
This contributes to ensuring customer trustand confidence with Hitachi Rail products
and services and demonstrates how
suppliers are valued partners in this process.
The document clearly explains humanrights, health and safety, environmental

management, ethics, supplier commitment,
product quality and data protection policies
and expectations.
Hitachi Rail calls on all suppliers to act
as ethical and responsible companies,
to commit to the sustainability of their
supply chains, and to promote innovationand excellence for the rail industry.
Following the publication of the Codeof Conduct, Hitachi Rail, in partnershipwith its suppliers, is committed to doing
its part to provide the best for the millionsof passengers who travel the world’s rail
networks every day for the benefit of amore sustainable society.
Hitachi Rail’s Speak-Up channel is madeavailable to report any suspected violations of
the Group Code of Ethics or any violation oflaws and regulations during the procurement
process. Hitachi Rail ensures whistleblower
protection within in the supply chain andassures that no individual among suppliers
is subject to any direct or indirect retaliation,illegal conditioning and/or discrimination ofChapter 1
Context and
Identitytreatment of any kind for having reported aviolation in good faith.

Chapter 2
ESG Framework
and Roadmap

In late March 2024 Hitachi Group
Corporate Compliance issued the Hitachi’s
new ‘Expectations of Business Partners’
document that will substitute the Supplier
Code of Conduct and will apply to all Hitachi
Rail. Primarily intended for suppliers, theExpectations may be used with any of ourbusiness partners, or may consider having, abusiness transaction or relationship with. The
document serves as a guideline for the ethicalconduct and fair business practices that are
expected of business partners.

3

Chapter
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Supplier Audits
Hitachi Rail conducts regular audits on
suppliers under a specific procedure which
covers all audits, both internal and external.
Hitachi conducts second party audits aimed
at verifying External Providers’ processes
and activities. External Providers audits canbe general (including qualification audits) or
relevant to one project only.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report61

Business Partner Due Diligence and Management

This audit scope can include:•E xternal Provider Monitoring Audits: audits aimed at verifying the External Providers’processes;•E xternal Provider Qualification Audits: audits performed to qualify an External Provider;•P roject External Provider Audits: audits aimed at verifying the External Providers’processes and activities on specific projects;

During FY23, the Compliance team used
the integrated platform, Jaggaer, tomaintain business partner due diligencescreening for suppliers and processedsome 600 compliance reviews assessing
red flags for entities, owners, andmanagement associated with matters suchas sanctions and watchlists, regulatory

Letter to
Stakeholders
MethodologicalNoteactions, negative news, corruption, humanrights, and reputational risks. Following
this assessment, Hitachi Rail deployed
an appropriate risk model, embedded
in a single platform, for due diligenceduring supplier qualification, specificallyscreening against any red flags for
Hitachi Rail.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

Each audit can encompass one or more of the following areas:3

Chapter
Governance

Quality

Chapter 4
Social Impact

Social
Accountability

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Business
Continuity

AUDIT
AREAS

Health & Safety
and Environment

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Technical capabilities &Product Safety

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Information Security

Methodological
Note onConsumption
and Emissions

Hitachi Rail selects the suppliers and subcontractors to be included in the yearly audit
programme based on various risk-based decision criteria such as spend, material group risk
(risk of what is being supplied to the business), impact on the overall project performance,
impact on safety, time since last audit, results from internal stakeholder assessments on supplierperformance, product quality (SQC) statistics or specific cases of request from operations.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

It determines the frequency of audits based on the material group provided, with high-risk
categories prioritised according to the above criteria.
62

Sustainable Supply Chain

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Sustainability sits at the heart of HitachiRail’s supply chain strategy to address theclimate crisis and transition to a regenerative
economic model. Most of the business socialand environmental impact occurs in the
supply chain. Through its Sustainable Supply
Chain Strategy, Hitachi Rail drives positive
intentions, delivers sustainable change, andultimately empowers the achievement of its
Sustainable Development Goals promises.
During FY22 Hitachi Rail introduced themodel of Sustainable Procurement Strategy
based on externally recognised frameworks
i.e., the Organisation for Economic Cooperation and Development, or the United
Nations Guiding Principles on Business andHuman Rights. This model will be aligned
to deliver the Hitachi Corporate Sustainable
Procurement Policy and wider Sustainable
Development Goals and Agenda 2030
commitments.
Hitachi Rail continues to improve the digital
carbon accounting engine which uses
the Greenhouse Gas (GHG) Protocol toestimate total carbon footprint through aspend-based methodology for the Scope 3
categories of purchased goods and services

Letter to
Stakeholders

and capital goods. This is an innovative andtailored approach for Hitachi Rail to solve
the challenge of understanding the volumeof the Scope 3 emissions of its suppliers
without having direct access to the Scope
1 and 2 emissions data for these suppliers.
While most of the Scope 3 calculation
remains spend-based, in FY23, theOrganisation started a process to improve
supplier estimations using supplier data tobetter reflect real emissions.
Hitachi Rail has also been able to determine
the categories of spend with the highest
levels of carbon intensity. This gives aclear opportunity to focus on efforts ofcollaboration with top supply chain partners
to address their emissions as well to
track and monitor their progress towards
carbon neutrality over time. Meanwhile,
all suppliers are encouraged to register inthe EcoVadis Ratings platform and Hitachi
Rail is using the EcoVadis Carbon Action
Module functionality to engage suppliers inclimate action, build capability and collectprimary data. This will provide a better
understanding of suppliers’ sustainability
and decarbonisation practices, strengths,
and areas of improvement.

Methodological
Note

Hitachi Rail supplier mapping through EcoVadis is composed of thefollowing main steps:

1

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Screening of Hitachi Rail’s risk distribution per theme- EcoVadis IQ:
Screening of suppliers using the EcoVadis IQ platform which profiles
and maps the supply base for environmental, social and ethical risk
using inherent industry & country sustainability risk profiles.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact

23

Chapter 5
Environmental
ImpactAssessment of the sustainability performance of
suppliers – EcoVadis Rating:
Actual assessment of suppliers based on risk and suppliermateriality through registration in the EcoVadis ratings platform.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

Assessment of the carbon performance of suppliers Carbon Scorecard:
Monitoring of the carbon performance of rated suppliers eligible
for the Carbon Scorecard.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report63

Screening of Hitachi Rail’s risk
distribution per theme – EcoVadis IQ
Hitachi Rail screened over 6,900
suppliers using the EcoVadis platform.
This screening provides critical insights
on the inherent risk profile of suppliers interms of the industries they work in andthe countries in which they operate, andit allows Hitachi Rail to have a holistic
CSR & Sustainability risk profile to focus
resources and prioritise the highest
potential risks. In FY24 Hitachi Rail will
upgrade to the latest EcoVadis IQ plus
solution. This screening solution includes
DocScan with contactless AI data mining
and AI powered document review.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

For FY23 Hitachi Rail uploaded andscreened 6,944 suppliers from 204
industries and 55 countries, registering an
increase of 142 suppliers with respect to last
year.

204
55

Through a defined implementation plan
based on risk and supplier materiality,
Hitachi Rail ended 2023 with 954 suppliers
fully registered in the EcoVadis Ratings
platform, providing detailed visibility of their
CSR & Sustainability performance.
This marks an increase of 195 (25%increase) in new suppliers screened forenvironmental, social, and ethical criteria.
Currently, nearly 55% of in-scope annualised
Procurement spend at Hitachi Rail is coveredby rated suppliers, an increase with respect
to the 50% covered the previous year.
Over the year, Hitachi Rail will continue toexpand the number of suppliers invited to join
the platform, providing essential informationon the performance of the supply base andforming a basis for a broader Sustainable
Procurement Strategy.

Letter to
Stakeholders
MethodologicalNote

As shown below, the reassessment process has registered significant improvements in thescore of the suppliers involved, showing a shared commitment and the development trend
towards a common path.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance
Chapter 4
Social Impact

13.4
19.9

20

523

Chapter 5
Environmental
Impact	Suppliers had a reassessment
between 04-2023 and 03-2024

19

Voluntary
Disclosure on
EU Taxonomy

3.9pts+	
58 -> 62 change in the overall
average score compared to theprevious assessment

349

61

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report uppliers improved in overall
S
score (67%)

Methodological
Note onConsumption
and Emissions

66.7
Stayed the same

Countries

Chapter 1
Context and
Identity

FY23
FY22

Suppliers

Industries

Highlights Fiscal
Year 2023

Evolution of reevaluated suppliers in FY23 (%)

It should be noted that the figure “In progress”
also includes suppliers being re-assessed.

OVERVIEW

6,944

Assessment of suppliersustainability performance –EcoVadis Rating

Rated

954

Improved

TCFD
Reference
Table

Regressed

In progress

GRI
Content
Index

280

Glossary andMain Acronyms
contained in the
ESG Report64Around 8/10 of Hitachi Rail’s supplierson EcoVadis are eligible for the Carbon
Scorecard and of those 60.1% (an increaseof 8.7% compared to the last reportingyear) are rated as intermediate or above.
Supplier assessment integration in businesspractices:• EcoVadis was formalised in a GroupIndirect Sourcing procedure and
EcoVadis Rating was incorporated
in the UK Supplier Selection Board(SSB). Therefore, where applicable,
the EcoVadis rating is included in the
supplier selection decision-making
alongside other selection criteria;•a specific training session on EcoVadis
was held covering the corrective actions
plan feature, involving procurement staff
from around the globe.
Given the nature of Hitachi Rail’s global
business presence, the Organisation
manages a large and diverse supply
base covering multiple areas of spend
including:•m aterials – purchase of circuit boards,
mechanical and plastic parts, waysideequipment, cables, racks, cabinets,
industrial PCs, on-board equipment, andelectromechanical components, all kind ofother rolling stock components (from semifinished aluminium/still parts to interior
components);• services – facility management and HSE,
payroll services, professional, and ICT
services, logistics services and travel;• business services – engineering anddevelopment services and RAMS activities
together with Operation, Service andMaintenance Services

systems, equipment for depots, signallingsystems, rails and civil works.

Letter to
Stakeholders
MethodologicalNote

An overview of the regional distribution of
supplier base can be found below:

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

SUPPLIER DISTRIBUTION
BASED ON SPENDING (%)

Chapter 2
ESG Framework
and Roadmap

GRI 204-1• turnkey projects and subcontracts – suchas installation and commissioning systems,
telecommunications systems, power supply
and systems, supervision and control

2.6

10.6

1.1

FY23
FY22

0.1

3

Chapter
Governance

69.7

16.0

Chapter 4
Social Impact

1.4 0.1
11.5
69.0

Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

18.0

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

EuropeOceania

Asia

AmericasMethodological
Note onConsumption
and Emissions

Middle East

AfricaTCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report65equity and“Promoting
lifelong learning, Hitachi

Rail commits itself tocontinuously foster a cultureof inclusivity and growth“

Lyn Amor Raymundo
Deputy Chief Human Resources Officer

4SocialImpactChapter 4:

Letter to
Stakeholders

Social Impact

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

4.1 Our People
Hitachi Rail’s workforce is managed
by the Human Resources function,
guided by a set of HR policies and astrong governance structure, defined inalignment with Hitachi Ltd. policies andguidelines as well as with regional andlocal requirements.

Chapter 2
ESG Framework
and Roadmap

All Hitachi Rail’s employees arerecorded into the Organisational Chart,
which provides a clear description of
the mandates of each role, ensuringconsistency with the Mid-Term StrategicPlan, and encouraging collaboration
across functions and regions by building

an equitable and inclusive organisation
where diverse talents to play an activerole.
The structure allows Hitachi Rail toactively engaging in regular dialogue
with employees regarding opportunities,

training, and career development throughits Global Performance Management(GPM) process, as well as throughregular dialogue between managers andemployees.

Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report674.1.1 Human Capital
Below are the tables representing the Hitachi
Rail workforce. Employees are divided bygender, geographical location, professional
categories, education, age, seniority, andtypes of contracts.
All quantitative human resources data refers
to headcount as of March 31 and is not
expressed in full-time equivalents (FTEs).

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Unless otherwise specified, HR data isdisaggregated by region to obtain a moredetailed and understandable view of thedata. It should be noted that the workforce
figures for FY22 have undergone a revisioncompared to those published within theprevious ESG Report.
This is related to a review of the internal
process of consolidation of personnel data
to make it consistent with the perimetersof the ESG Report and to refine themethodologies in view of future regulatory
obligations.

Letter to
Stakeholders
Methodological
Note

Number of employees by Region
8

The Hitachi Rail workforce is grouped infive different Regions around the world,with 30% of the workforce concentrated
in Italy – constituting a Region itself due
to the concentration of workforce - 28%

in the EMEA (Europe, Middle East, andAfrica) Region and 25% in Japan. This
year confirms the trend of a growing
workforce in the EMEA, with an increaseof 196 employees.

The remaining workforce is in the US andCanada (10%) and in the APAC (Asia
Pacific) Region representing 8% of thetotal workforce.

FY22
TOTAL

%W

MEN WOMEN

TOTAL

7.7

%W

9.6
Italy

3,651

636

4,287 14.8%

3,729

680

4,409 15.4%

Japan

3,539

296

3,835

3,411

291

3,702

7.7%

3,300

611

3,911 15.6%

3,438

669

4,107 16.3%

Americas

1,063

347

1,410 24.6%

1,049

367

1,416 25.9%

186

1,095 17.0%

926

215

Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
Impact29.8
7.4

Voluntary
Disclosure on
EU Taxonomy

9.4

7.9%

EMEA

909

Chapter 2
ESG Framework
and Roadmap

FY23
FY22

FY23

N. of employees9

APAC

Chapter 1
Context and
Identity

Employees by Region (%)

EMPLOYEES BY REGION GRI 2-7

MEN WOMEN

Highlights Fiscal
Year 2023

36.3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

26.1

Methodological
Note onConsumption
and Emissions

20.9

1,141 18.8%

27.8
Total

12,462

2,076

14,538 14.3%

12,553

2,222

14,775 15.0%

TCFD
Reference
Table

25.1
Italy

Japan

EMEA

Americas

APAC
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Please note this document refers to employees as with a employment contract with Hitachi Rail.
9
Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
868

Employee composition

Letter to
Stakeholders

According to data for FY23, 52% of HitachiRail’s employees fall into the "Other White
collars" category of which women represent
21%, compared with 15% at an overalllevel. The number of women in the Executive
category has been increasing over theyears, recording an increase of one person
this year compared to the previous fiscal

year (7% increase). The number of womenin middle management positions increased
by 9% from the previous year, recording
proportionately more female hires. Whenlooking at the age distribution, 62% of
employees is aged between 30 and 50;
28% over 50, while the remaining 10% areemployees under 30 years old.

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

EMPLOYEES BY AGE AND GENDER GRI 405-1

Chapter 3
Governance

TOTAL
N. of employees

FY22

FY23

MEN

WOMEN

Total

MEN

WOMEN

Total

165

15

180

165

16

181

<30

-

-

-

-

-

-

30-50

58

4

62

57

6

63

>50

107

11

118

108

10

118

1,607

188

1,795

1,611

204

1,815

<30

2

-

2

2

-

2

30-50

809

129

938

807

134

941

>50

796

59

855

802

70

872

6,020

1,451

7,471

6,146

1,589

7,735

<30

739

202

941

679

216

895

30-50

3,853

906

4,759

4,027

1,010

5,037

>50

1,428

343

1,771

1,440

363

1,803

4,670

422

5,092

4,631

413

5,044

<30

606

50

656

611

36

647

30-50

2,863

244

3,107

2,825

243

3,068

>50

1,201

128

1,329

1,195

134

1,329

2,076 14,538

12,553

Executives

Middle management
H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

4

ChapterSocial Impact

Other White collars

Blue collar

Total

12,462

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

2,222 14,775

<30

1,347

252

1,599

1,292

252

1,544

30-50

7,583

1,283

8,866

7,716

1,393

9,109

>50

3,532

541

4,073

3,545

577

4,122

Glossary andMain Acronyms
contained in the
ESG Report69

By considering the distribution over generations, Hitachi Rail's workforce consists of amajority of Generation X employees.

EMPLOYEES BY GENERATION
N. of employees

MEN WOMEN

FY23
Total

%

MEN WOMEN

Total

%W

N. of employees10

FY22

Chapter 1
Context and
Identity

FY23

MEN WOMEN

TOTAL

%

MEN WOMEN

TOTAL

%

1

4

0.03%

2

1

3

0.02%

<5

3,804

767

4,571

31.4%

3,410

769

4,179

28.3%

Baby Boomers (1946-1965)

1,591

248

1,839

12.6%

1,387

227

1,614

10.9%

5-10

2,776

537

3,313

22.8%

2,932

542

3,474

23.5%

Generation X (1966-1985)

7,320

1,197

8,517

58.6%

7,337

1,239

8,576

58.0%

11-15

1,761

233

1,994

13.7%

1,822

285

2,107

14.3%

Generation Y (1986-1995)

2,768

507

3,275

22.5%

2,920

595

3,515

23.8%

16-20

1,453

236

1,689

11.6%

1,493

272

1,765

11.9%

Generation Z (1996-2005)

780

123

903

6.2%

907

160

1,067

7.2%

21-25

782

98

880

6.1%

973

139

1,112

7.5%

> 25

1,886

205

2,091

14.4%

1,923

215

2,138

14.5%

12,462

2,076

14,538100%

12,553

2,222

14,775

100%

Total

12,462

2,076

14,538100%

12,553

2,222

14,775

100%

Total

Methodological
Note
Highlights Fiscal
Year 2023

3

Traditionals (1926-1945)

Letter to
Stakeholders

EMPLOYEES BY SENIORITY

FY22

10

Hitachi Rail monitors its ability to retain talent by tracking the years of seniority of its
employees, i.e., the number of years they spent within the Organisation. Roughly 48% of theworkforce has been employed by more than 10 years.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

10

Glossary andMain Acronyms
contained in the
ESG Report

Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
70

Hitachi Rail aims to build long-term
relationships with each of its employees. The
share of employees with open-ended contract

reached 96% in FY23. The overall number of
employees globally recorded a slight increase
compared to last year, with 99% of employees

EMPLOYEES BY TYPE OF CONTRACT (open-ended, temporary) GRI 2-7

now employed on full-time contracts. The
trend by region (see table) shows an increasein permanent contract hires for the Italy and

EMEA regions. For the regions of Italy, EMEA
and Americas, open-ended contract for thefemale population have increased.

FY22

N. of employees

FY23

WOMEN

Total

MEN

WOMEN

Total

Employees with open-ended contracts

11,936

1,990

13,926

12,066

2,132

14,198

Employees with temporary contracts

526

86

612

487

90

577

2,076 14,538

12,553

12,462

2,222 14,775

Employees by employment
contract (%)
FY23
FY22

4

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

TOTAL

MEN

Total

Methodological
Note

EMPLOYEES BY TYPE OF CONTRACT (full-time, part-time) GRI 2-7

TOTAL
N. of employees

Letter to
Stakeholders

4

FY22
MEN

WOMEN

Total

MEN

WOMEN

Total

Number of full-time employees

12,4091,944

14,353

12,493

2,083

14,576

Number of part-time employees

53

132

185

60

139

199

2,076 14,538

12,553

Total

12,462

Chapter 2
ESG Framework
and Roadmap

FY23

Chapter 3
Governance

4ChapterSocial Impact

2,222 14,775

Chapter 5
Environmental
ImpactEmployees by employment
hours (%)

Voluntary
Disclosure on
EU Taxonomy

FY23
FY22

1

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report1

Methodological
Note onConsumption
and Emissions

96

TCFD
Reference
Table

99

GRI
Content
Index

96

99

Employees with open-ended contracts

Number of full-time employees

Employees with temporary contracts

Number of part-time employees

Glossary andMain Acronyms
contained in the
ESG Report71Workers who are not
employees

Letter to
Stakeholders

Hitachi Rail also tracks information on
workers who are not employees but perform
work for the Organisation whilst not being
in an employment relationship with Hitachi
Rail. The number of workers who are not
employees are presented in headcount at
the end of the reporting period.

MethodologicalNote

The number of the workers who are not
employees in Hitachi Rail is 1,698 during
FY23, a slight increase compared to FY22
when non-employee workers were 1,691.
53% of non-employee workers belong
to the temporary workers category, afigure that remained consistent with thepercentage of FY22 (54%).

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceWORKERS WHO ARE NOT EMPLOYEES GRI 2-8

4

ChapterSocial Impact

TOTAL
N. of non-employees11

FY22
MEN

FY23

WOMEN

Total

MEN

WOMEN

Total

794

282

1,076

919

166

1,085

Trainees13

37

23

60

57

30

87

Contractors14

487

68

555

469

57

526

1,318

373

1,691

1,445

253

1,698

Temporary workers

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Chapter 5
Environmental
ImpactTotal

12Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
ReferenceTable ata regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
D
12
Also defined as ”Contingent worker“ or ”contingent labour“ people engaged by the company where Hitachi Rail is not the payroll owner, usually to cover a certain (temporary) workloads. Usually thiscategory has three sub-categories: production labour, general/office labour, project labour.
13Term that refers to students, interns or apprentices: individuals working at Hitachi Rail, for the main purpose to acquire skills, training or education.
14
Independent contractors are self-employed individuals who provides a scope of work/service, sometimes for one companies, sometimes for multiple companies at the same time. Concerning this category, in
Hitachi Rail line managers cannot supervise, control, train or manage work time in order to avoid co-employment risks.
11

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report724.1.2 Industrial Relations Management
Industrial Relations Management includes
the management of interactions andnegotiations between a company, its
employees, and their representatives (suchas Works Councils and/or unions). The
aim of Industrial Relations is to manage
and balance the interests of all parties toensure a productive, equitable and fairwork environment. Hitachi Rail fosters
collaboration with its social partners byhaving constructive dialogues and fruitfulexchanges/ conversations. Its objective
is to create and assure a stable andcooperative workplace, minimising conflicts
and enhance overall productivity, job
satisfaction, opportunities for career growthand professional development. Hitachi Railmanages employment relationships with its
employees and their representative bodies
according to the local labour laws andcollective bargaining agreements in place inthe specific countries where it operates.

Industrial Relations in Italy

Letter to
Stakeholders

The percentage of total employees coveredby collective bargaining agreements changes
according to the country; for example, in
Italy and in France, collective bargaining
agreements cover 100% of the workforce,
while for the United Kingdom it accounts foraround 70%. In general, the percentage of
employees covered by collective bargaining
agreements within Hitachi Rail stands at
63%.
Where employees are not covered bycollective bargaining agreements, Hitachi

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

Below are some examples of industrial
relation frameworks from a few of thedifferent territories in which Hitachi Rail
operates.

Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
Impact

In Italy Industrial Relations are focused on creating an inclusive and diverse work environment that empowers employees through active listening practices, such as surveys
and focus groups to gather employees’ feedback and promoting ongoing communication to raise awareness among workers.

Industrial Relations in France

Voluntary
Disclosure on
EU Taxonomy

In France, the bargaining system does not require one to be unionised to benefit froma collective agreement. At national and company level, all collective agreements areautomatically binding on the entire population. The French national metal and steel
sector has gone through a period of major reforms, resulting in significant changes ingrading systems, working hours and health plans.

FY23 was marked by negotiations for the renewal of the Second-Level Company Contract. Among the main points included: Welfare FORyou, a welfare bonus for all employees focused on “self-training”; the Long-Term Care Insurance ensuring a lifetime annuity in the event of loss of self-sufficiency; the Banca Ore Solidale ensuring the transfer
of vacation hours to colleagues who are in situation of personal or family difficulty, as
well as the Banca del tempo giving the option to set aside vacation hours to use in caseof need. Also, FY23 saw the Manufacturing Knowledge and Transfer (MKT), a project
aimed at enhancing manufacturing skills and the Company Support given to employees’ families in case of death.
The negotiation phase was successfully concluded with the signing of an agreement oneach topic in March 2023 and the final ratification of the entire Second Level Platform
in April 2024.

Methodological
Note

Rail determines working conditions andterms of employment by identifying
roles in line with business requirements,
levels of responsibility, and externalbenchmarking against relevant market
rates. Benefits are determined based on
existing similar internal roles and industry
trends.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions

In addition, according to French law, all companies with more than 300 employees
are required to publish annual data on equal pay for men and women, based on age,seniority, and category, using a scoring system. Aware of the importance of genderequality and equal pay, Hitachi Rail STS France achieved a score of 85/100 (samescore as the previous year) according to the Equality Index 202315.

TCFD
Reference
Table
GRI
Content
Index

15

Glossary andMain Acronyms
contained in the
ESG Report ef. Index égalité entre les femmes et les hommes en France en 2023.
R
https://www.hitachirail.com/media/wk0fuwia/information-internet-intranet_-equality-index-2023.pdf
73Industrial Relations in Australia
The Australian Industrial Relations system includes the Fair Work Act (2009), the National Employment Standards, registered agreements, and awards. The system applies
to both employees and employers but - as not mandatory - union membership amounts
to around 12.5% across Australia.
The Fair Work Commission, national workplace relations tribunal in Australia, has
control over minimum wages, bonuses, agreements, and industrial action, can help
resolve disputes involving employers, employees, and unions that fall under national
workplace relation systems. Recent changes to the Industrial Relations legislation aim
to introduce additional flexibility, implement new safeguards, and make collective bargaining more accessible and straightforward.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Industrial Relations in the UK
The UK has a complex Industrial Relations structure. Industries, such as rail, that were
historically nationalised, have long-standing union agreements, to which Hitachi Railhas signed additional agreements to cover additional sites or roles, resulting in a multiple tiered and layered framework influenced by different factors such as location,
start date, and job role.
Employees do not have to be a member of the trade union to be covered by the collective bargaining agreement in place. It is job roles and grades that determine whether anindividual’s contract of employment will be considered within the scope of a collective
agreement. At present about 70% of roles in Hitachi Rail UK are covered by a collective agreement. Industrial relations are managed through a framework of agreed-uponmeetings, at company, regional, and local levels. Meetings will be planned in FY24 toestablish a new framework agreement on industrial relations and new entities, such as apolicy review committee to further improve engagement and joint work.

Letter to
Stakeholders

Industrial Relations in Japan

Methodological
Note

Hitachi Rail labour-management relations in Japan are those of Hitachi, Ltd. (There isno labour union at HIK, an affiliated company, and an employee representative council
is established to carry out labour-management efforts.).

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Hitachi Ltd., and the Hitachi Workers Union have concluded collective agreement.
The collective agreement applies a closed shop system. (Although labour law in Japan allows an employee to join more than one union).

Chapter 2
ESG Framework
and Roadmap

The Hitachi Workers Union establishes a branch at each site and engages in its activities with business entities related to the site. Agreements are concluded between
business and branches as necessary.

Chapter 3
Governance

4ChapterSocial Impact

Employees in managerial positions are non-union members. In addition, only a small
number of employees join labour unions when they reach the retirement age of 60 andenter into new employment contracts.

Chapter 5
Environmental
ImpactApproximately 75% of employees are union members.

Voluntary
Disclosure on
EU Taxonomy

Hitachi Ltd. has built an enduring relationship of trust with the unions by holding
regular meetings of the Management Council, spring negotiations, and various
committees (safety, etc.) at Hitachi Ltd. level, Hitachi Rail level, and site level todiscuss and negotiate improvements in the workplace environment and working
conditions, and by explaining and sharing management information. In addition,
through Survey 2023 and town hall meetings by senior management, the opinionsof employees are directly collected and incorporated into management measuresand improvements in the workplace environment.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

In addition, labour and management have built a good relationship by incorporating the opinions of employees into management measures and improvements in theworkplace environment. The management status of various systems is also checked
regularly.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report74Letter to
Stakeholders

Industrial Relations in the United States

Methodological
Note

During FY22 and FY23, Hitachi Rail in North America finalised three collective bargaining agreements with organisations representing Train Controllers, Station Operators, and Technician workers in Honolulu, Hawaii.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

These agreements cover working conditions, wages and benefits, career progression,and other matters to protect the rights and interests of covered employees. The organisations represented include the Hawaii Teamsters and Allied Workers Local 996 andthe Hawaii International Brotherhood of Electrical Workers Local 1186.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

The ratio of US employees belonging to labour unions is roughly 9.4% across the United States (53.5% of the Hawaii workforce.) Hitachi Rail maintains an open dialogue
with union representatives addressing employee concerns as they arise.

4

ChapterSocial Impact
Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Minimum Notice Period Regarding Operational
Changes

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Where there are collective bargaining agreements in place, notice periods and theprovision for consultation and negotiation are specified in the collective bargaining
agreements.

Methodological
Note onConsumption
and Emissions

The number of weeks’ notice provided to employees where there are significant
operational changes is determined by the contract and employment law.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report75

4.2 Diversity, Equity, and Inclusion
We at Hitachi Ltd. are committed to fostering a diverse, inclusive and innovative workplace within our groupcompanies. Hitachi Rail stands out for its initiatives aiming to secure a safe, inclusive and sustainable work
environment for all, including obtaining the ISO 30415 certification and the execution of Human Rights Due Diligence.

Hitachi Rail adopts an inclusive culture,embracing and celebrating diversity in
its workforce by valuing differences inbackgrounds, age, gender, sexuality, family
status, disability, race, nationality, ethnicity,and religion. Aligned with broader HitachiGroup initiatives, Hitachi Rail pursues
several key objectives to enhance DEI:
• cultivating a truly global workforce withdiverse talents from around the world;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• enhancing capabilities to better serve
global customers, improve operations,and explore new markets;• harnessing diversity to foster innovationand creativity;• attracting and retaining top talents
through a supportive and inclusive work
environment;• ensuring employee engagement andalignment with the Group’s strategic
vision.
During FY23, Hitachi Rail has
achieved notable progress in its
pursuit of DEI objectives, in line with
the DEI targets of the Organisation

to increase gender balance andrepresentation in Hitachi Rail andto communicate diversity inside andoutside the Organisation:• the ratio of female employees stands at
15%;• the ratio of female managers increased to11%;• the internal communication and dialogue
on DEI to address biases was intensified;• the diversity of “ambassadors” for ExternalCommunications was fostered throughdiverse People Stories.
By fostering a culture of inclusion andempowering employees from diverse
backgrounds, Hitachi Rail strives to createa vibrant and dynamic workplace, driving
innovation, and delivering wide social
value. FY23 showed key improvements in
Hitachi Rail DEI strategy. The Organisation
carried out the first DEI analysis at country
level, covering legal requirements, maturity,
available training, and actions. This
overview allowed Hitachi Rail to gain adetailed overall picture.

Methodological
Note

“

“

Letter to
Stakeholders

This led to the constitution of a DEI Global
Committee, which was launched in
January 2024, and allowed contents andbest practices to be shared among DEI
representatives from different HR/Businessareas, leaving the space for each country toshare their experiences.
During the reporting period, Hitachi Railalso designed the DEI Global Policy and
the Global Implementation Policy, which
are part of GBMS. Since the kick-off phaseof the DEI Global Committee, it has seen
the first Employer Resource Groups (ERGs),
starting from the UK. Hitachi Rail started
to collect all necessary information anddocumentation for the preparatory phase to
obtain the ISO 30415: 2021 - Diversity &Inclusion, with Italy as the pilot country. The
certification was obtained at the beginningof FY24. For additional information on ISO
30415: 2021 journey, please refer to bebox reported below.
Lastly, to support the development andimplementation of the global Hitachi Rail DEI
strategy, together with the HSE department,
the Wellbeing Global Framework andCommittee was developed.

Mitsuru Suzuki

Highlights Fiscal
Year 2023

Global Diversity Equity and Inclusion
Assistant Manager, Hitachi Ltd.

Chapter 1
Context and
Identity

Additional learning resources on DEI for
employees’ benefit were provided, such as:

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance• D&I Leaders conferences for ERG
leads;

4

ChapterSocial Impact• Women’s Network workshops
focusing on ‘preventing burnout’,‘allyship’ & ‘stepping into your power’;

Chapter 5
Environmental
Impact• inspirational speakers for the
Women’s Network;

Voluntary
Disclosure on
EU Taxonomy• Right Track Learning to support
Disability & Impairment ERG –skills for line managers to support
Neurodivergent employees;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions• unconscious bias and culture
dimensions​;

TCFD
Reference
Table• Respect @ Work​;• Inclusive behaviours, leadershipand hiring​;

GRI
Content
Index• gender identity​.

Glossary andMain Acronyms
contained in the
ESG Report76Employer Resource Groups (ERGs)
Hitachi Rail recently made some great
progress launching and reinvigorating
several ERGs (Employee Resource
Group). This year saw the launch of two
new ERGs: the Ethnic Diversity & Multi
Faith ERG, whose mission is to cultivate aworkplace that celebrates and embraces

Letter to
Stakeholders

the richness of ethnic and religious diversity,and the Disability & Impairment Network,
which is committed to fostering inclusivity byempowering the abilities of individuals.

particularly in the UK – where there is also
new leadership in place – and the UK Pride
network (LGBTQ+) refreshed their mission,
announcing a series of new activities.

The Women’s Network recorded boosted
membership by both men and women,

In the UK, too, a Hitachi Rail team launched
the Disability & Impairment Network which

MethodologicalNoteis committed to fostering inclusivity byempowering individuals of all abilities,
championing accessibility, changing needs
throughout careers and valuing the uniquecontribution that anyone can bring to theworkplace.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

People with disabilities
Hitachi Rail’s diversity principles are deeply
ingrained in operational procedures andworking practices, with systems, policies,
and practices to enable everyone to accessthe same opportunities and to help themrealise their potential. Talent Acquisition
projects reflect these principles. The HighSpeed Talent Diversity for Inclusion project,
dedicated to people with disabilities,
aims at promoting inclusive and enrichingcollaborations, following Hitachi’s values,
mission, and the basic principles of the
DE&I Policy.

4

where successful matches are made byanalysing positions, forms of support,
positive actions, and the possible solutions
to issues related to the work environment,
tools, and interpersonal relations that aperson would experience in the role. In
Japan, the law mandates that a certain
percentage of the workforce must

represent people with disabilities. In
the United States, it is common practicefor customers to require the mandatory
allocation of a percentage of the contract
to DBEs (Disadvantaged BusinessEnterprises), which are regulated byfederal and state departments.

ChapterSocial Impact

Hitachi Rail provides opportunities andpositions both in office-based roles and in
production roles. The table below shows
the total number and percentage of theworkforce represented by people withdisabilities by region.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

EMPLOYEES WITH DISABILITIES GRI 405-1
Italy
FY22

In Italy, Law no. 68/99 introduced the
key concept of “targeted” employment% of total workforce

Japan
FY23

FY22

EMEA
FY23

FY22

Americas
FY23

FY22

Methodological
Note onConsumption
and Emissions

APAC

FY23

FY22

FY23

M

W

M

W

M

W

M

W

M

W

M

W

M

W

M

W

M

W

M

W

3.6%

4.7%

4.0%

5.1%

0.9%

4.4%

1.0%

4.5%

0.2%

1.3%

0.1%

1.5%

0.0%

0.3%

0.0%

0.3%

0.0%

0.0%

0.0%

0.0%

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report77BEST PRACTICESISO 30415 Certification
for Diversity & Inclusion – Italy
Hitachi Rail is actively pursuing the ISO 30415 International Standard for Diversity &Inclusion (D&I) in Italy, which aims to foster internal change in organisations, guidingthem both in defining more socially sustainable strategic goals and in building a different relationship with their stakeholders, in line with the core principles of the D&I Policy.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3During FY23, Hitachi Rail began the preparatory phase to obtain ISO 30415:2021- Diversity & Inclusion with Italy as a pilot country. Hitachi Rail developed the Global
Wellbeing Framework to support the development and implementation of the global
Hitachi Rail DEI strategy, equality of opportunity between women and men in economic
development, the elimination of all forms of abuse against women, and equal rights at
all levels of participation. Hitachi Rail obtained certification at the beginning of FY24.

4.3 People Development and Care

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

In synergy with its Global Wellbeing
Framework, Hitachi Rail’s People Strategy
aims to provide Hitachi Rail employees witha work-life balance, whilst giving them the
support and resources to thrive inside andoutside of work.
This “People Care” concept aims to provide
Hitachi Rail employees with a work-lifebalance, whilst giving them the supportand resources to thrive inside and outsideof work. People Care is linked to HitachiRail’s “Total Reward” strategy, based ontangible and intangible measures to create aworking environment where employees cancontinuously gain experience, develop skills,
forge relationships, and find motivation. The
programme actively supports relationships
between managers, employees, andcolleagues.

The “People Care” initiatives andapproach collectively exemplify HitachiRail’s dedication to nurturing a thriving
and supportive work environment,
ensuring that its employees flourish both
personally and professionally enhancing
their overall wellbeing.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

Hitachi Rail offers support services,such as flexible work schedule, special
arrangements with local entertainmentand sports centres, benefits such as healthinsurance, accident insurance, companycar, employee scholarships, corporate
welfare, canteen and breakfast areas,and celebrations of successful projects tofull-time and part-time employees acrossregions.

4

ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report78The Employee Assistance Programme
The Employee Assistance Programme
provides employees and their families aselection of services and products with acomprehensive support system, offering
psychological assistance on various aspectsof life, as well as legal and medical
information, from experts in the relevant
fields. An example of some of the initiatives
carried out are:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• remote and face-to-face listening
and support: anonymous andconfidential psychological support
provided by listening professionals, both
remotely and face-to-face, on various
topics, including managing life changes,
self-esteem, relationships, inclusion anddiversity, personal wellbeing;

In Italy, for example, employees receive
contractual and company welfare through adigital platform that offers a wide choice of
products and services and benefits such as:• health insurance, accident insurance,company-car, canteen, and breakfast areas;• bonus upon completion of certain
seniority (as the Italian “Premio
fedeltà”): Hitachi Rail provides an
economic amount to all employees, with30, 35 and 40 years of Group seniority;• access to an app and portal: which
includes a variety of health and wellbeing
articles and webinars, sports activities,
podcasts, and a wide range of discounts.

Letter to
Stakeholders

Hitachi Rails offers a comprehensive
benefits package and a wide range ofresources and education, some of which
are also available to family members.
Many support service packages include
discounted gym membership, benefits
such as private medical insurance, an
income protection scheme, counselling
service, access to a physiotherapist or
illness.
Concerning specific aspects in the UK,
in terms of policies, a flexible working
policy is in place, enabling employees
to request amended working patterns or
reduced hours to fit in with their family andMethodologicalNotepersonal life. Hitachi Rail is also provided
with policies relating to employee welfare
including several topics such as suicide
awareness, mental health and physicalhealth awareness and stress management,
abuse in the workplace and occupational
health.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

The HR Department reviews and updates
procedures every three years and these
are approved via the Head of HR Business
Partnering.

Chapter 3
Governance

4ChapterSocial Impact

Hitachi Rail ensures new joiners are
made aware of where to find policies andprocedures during their onboarding process.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• legal, fiscal, and social welfare
support: this information service isprovided by experts in the social welfare
sector and by lawyers and accountants
enrolled in the relevant professional
registers;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions• agile working method and flexible
work schedule continues to gain
satisfaction and engagement in Italy withthe participation of the staff of all sites.
Smart working and flexible work schedule
continue to favour the need to reconcile
work-life in full compliance with businessactivities and objectives;

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report79Healthcare

BeWell: the global program to build and promote a strong wellbeing culture at Hitachi Rail

Hitachi Rail health benefits cover HealthCare to supplement social security, andoccupational and non-occupational accident
policies.

Wellbeing is crucial to benefit Hitachi Rail’s
people and business. Hitachi Rail’s Global
Wellbeing Program was formed according
to five pillars:

The Corporate Welfare Plan increases
the purchasing power of families
without increasing their taxable income
by incorporating sustainable mobility,
supplementary healthcare, and smart
working into the benefits programme.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The comprehensive benefits packages covera range of health care products, an income
protection schemes and other benefits suchas critical illness for employees and theirfamilies.
Onsite and remote occupational health andphysiotherapy clinics are also provided tosupport employees who may not be able tofulfil their role due to a medical condition or
are absent from work.

• F eel physically well;• F eel mentally well;• F eel valued and included;• F eel financially well;• F eel able to learn and grow.
With a focus on actions and bestpractices to improve retention and talentattraction, Hitachi Rail's reputation
as a great place to work has grownsignificantly, motivating, and encouraging
people to work at their best, reinforcing
the business.

In FY23 Hitachi Rail launched a
global “BeWell” Stakeholders
Framework and the Global BeWell
Committee, composed of BeWell referentsof all countries, both from the HR and the
HSE departments to foster local wellbeing
activities with a consistent global Hitachi
Rail approach.
Hitachi Rail also engaged in the organisationof the first Global Wellbeing initiative startingfrom the first pillar of the Global Wellbeing
Program – “physically well” – with theinitiative “EatWell”, a global collection ofrecipes from around the Hitachi Rail world.
FY23 local highlights:• Teams in Australia recognised “R U

OK Day”, aimed at responding to the“mentally well” pillar providing activities
to raise awareness of mental health;• Teams held wellness communications andwebinars in Canada;•A podcast covering mental health issues
in Denmark;• In the Emirates, Hitachi Rail employees

participated for free in sport activities
such as the Abu Dhabi Marathon and theDubai Marathon;

Letter to
Stakeholders
MethodologicalNote• In Pittsburgh and Batesburg in the US,

Hitachi Rail saw the implementationof on-site fitness centres amongst otherinitiatives;

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity•H itachi Rail in Italy received anhonourable mention as Wellbeing
Ambassador for this year’s “Safety
Factory Challenge”;

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance•A team of wellbeing champions

across the UK, lead initiatives such as“Movember” – a month of solidarity anddemonstration regarding prostate andtesticular cancer – World Menopause
Day- raising awareness of menopause,
symptoms, and adjustments one can maketo support affected people and Stress
Awareness Month.

4

ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail also has an onsite and remote
Occupational Health Service which isaccessible to all employees via their manager.
The service provides support for those whoare not able to fulfil their role due to a medical
condition or are absent from work, offeringexpert advice and recommended adjustment
to support the employee to stay in workor return to work. The service also offers
physiotherapy to employees and a bi-annual
health check programme where employees
receive tailor advice to help improve thehealth and wellbeing.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report80BEST PRACTICES

Hitachi's Global EatWell Initiative:
Cultivating Well-being Through Healthy Eating
In January, Hitachi Rail launched
a new Global Wellbeing initiative under the first pillar of the
Global Wellbeing Program –“physically well”.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The “EatWell” initiative recognises the profound impact ofnutritious food on overall wellness and aims to highlight thebenefits of balanced meals toincrease energy, enhance cognitive function, and reduce risk
to health conditions like diabetes, heart disease, anxiety, anddepression.
Colleagues worldwide submitted recipes to a comprehensive
Hitachi Rail EatWell recipe book.
Hitachi Rail then published acurated selection of these recipes, showcasing the variety ofnutritious and delicious meals
enjoyed by employees.

Parents at Hitachi Rail
Hitachi Rail guarantees and grants parental
leave in accordance with legislation,collective agreements, and internal policy,
and in line with Sustainable Development
Goals 5 (Gender Equality) and SDG 8

Letter to
Stakeholders
Methodological
Note(Decent work and Economic growth).
At the Organisation level, a total of 631
employees took family-related leave in thereporting period, marking a 22% increase
compared to last year.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

FAMILY-RELATED LEAVE GRI 401-3

Chapter 2
ESG Framework
and Roadmap

FY22
N. of employees16
Number of employees entitled to take family-related leave(parental leave, maternity leave, and paternity leave)
Number of employees that took family-related leave (parental leave,maternity leave, and paternity leave)MEN
12,105
358

FY23

WOMEN
2,015

MEN
12,584160

Chapter 3
Governance

WOMEN

4

ChapterSocial Impact

2,190

444

Chapter 5
Environmental
Impact187

Voluntary
Disclosure on
EU Taxonomy

Hitachi Rail, as part of the continuous improvement of its reporting systems, has started anin-depth methodology for the representation of family-related leave metrics.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Parents at Hitachi Rail access a range of goods and services, as well as recreational
activities and children’s camps, to support a healthy work-life balance.

Methodological
Note onConsumption
and Emissions

The establishment of Workers’ Company Recreational Clubs adds to the enrichment ofboth Hitachi Rail’s people and the community through local recreational and cultural
initiatives.

TCFD
Reference
Table
GRI
Content
Index

16

Glossary andMain Acronyms
contained in the
ESG Report

Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
81

Focus on: APAC Region• In April 2024, Hitachi Rail Australia

implemented paid parental leave for
either parent, enabling the primary carer
to access up to 12 weeks leave at full pay
and the secondary carer to access up to
two weeks leave at full pay;•H
 itachi Rail China provides parents with

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

five days’ leave at full pay before theirchild reaches the age of three;• In the Philippines, the government has

three types of parental leave: a maternity
leave of 105 days, a paternity leaveof seven days with full pay; and a soloparent leave, regardless of employment
status, of seven working days with pay(minimum six months’ service).

• T he Malaysian government has increased

the maternity leave for married womenfrom 60 consecutive days to 98 days
and implemented paternity leave of sevenconsecutive days.

4.3.1 Talent Acquisition

Letter to
Stakeholders
Methodological
Note

In FY23, Hitachi Rail strengthened its Employment Strategy, ensuring the attraction
and retention of the best talents while fostering a positive and inclusive working
environment.

Recruitment Marketing
Hitachi Rail proactively engaged ininitiatives aimed at presenting theOrganisation as an outstanding and reliable
employer in the industry, an “Employer
of Choice”. One of the key aspects ofthis effort is to develop and showcase
captivating content that brings to life theessence of Hitachi Rail and its workforce.
The Talent Acquisition Team makes strategic
use of various channels including HitachiRail’s Careers Site (www.hitachirail.com/
careers) and other third-party recruitment
platforms such as LinkedIn and Glassdoor toprovide up-to-date and relevant information
to potential candidates.
Hitachi Rail also values and actively seeks
feedback from potential candidates,
believing that genuine conversations
contribute to continuous improvement. This
open and responsive approach has led to anincreased social engagement, a surge in job
applications, and positive ratings, reinforcing
Hitachi Rail’s Employer Brand and making ita preferred destination for top talent.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Employee Value Proposition(EVP) and Employer Branding

Chapter 2
ESG Framework
and Roadmap

Employee Value Proposition (EVP) andemployer branding play a crucial role inattracting and retaining talent.

Chapter 3
Governance

4ChapterSocial Impact

The Employee Value Proposition (“EVP”)
process is the guiding foundation forhighlighting topics and values that resonate
with all employees, fostering a sense of
belonging and pride in being part of Hitachi
Rail.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

In its quest to become an ‘Employer
of Choice’, to attract the best quality
candidates and diverse talent, Hitachi Railpresents the Company Employer Brand ina clear, concise, attractive, and authentic
manner, to potential and current employees.
It conducted research in FY23, whichconcluded that Hitachi Rail’s employees areproud of their work and its alignment withsustainability values.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

Hitachi Rail launched its Employer Brand
during this period, underpinned by thepillars of innovation and multiculturalism.

Glossary andMain Acronyms
contained in the
ESG Report82

The team created a toolkit to simplify
sourcing and - by publishing recruitment
content, using employee photoshoots
and redesigning the career website Hitachi Rail emphasised its inclusivity,
leading to increased traffic and candidate
applications. It integrated Diversity, Equity& Inclusion content into the Employer Brand,
highlighting the talent and experiencesof employees and resulting in the 'People
Stories' campaign, which showcases
employees from various backgrounds androles. Hitachi Rail also enhanced its internal
mobility opportunities this year, promoting
career development within Hitachi Railand other Hitachi companies. Below isreported the information on the number of
employees hired and terminated during theyear and the related rates. A total of 1,508
employees were hired during the year.

NEW HIRES GRI 401-1
N. and rate of employees17
< 30
30-50
> 50
Total

Italy

Japan

MEN WOMEN

EMEAAmericas

APAC

MEN WOMENMEN WOMENMEN WOMEN

Methodological
Note

TOTAL

MEN WOMENMEN WOMEN

65

25

60

4

111

18

48

12

29

19

313

78

1.8

3.8

1.7

1.4

3.3

2.8

4.6

3.4

3.2

9.5

2.5

3.6

127

30

51

2

342

104

95

47

101

28

716

211

3.4

4.6

1.5

0.7

10.2

16.3

9.0

13.2

11.01

13.9

5.7

9.8

15

1

50

2

53

11

20

5

29

4

167

23

0.4

0.2

1.4

0.7

1.6

1.7

1.9

1.4

3.2

2.0

1.3

1.1

207

56

161

8

506

133

163

64

159

51

1,196

312

5.6

8.5

4.6

2.7

15.0

20.8

15.4

17.9

17.3

25.4

9.6

14.5

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact

TERMINATIONS GRI 401-1
N. and rate of employees

18

< 30
H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Letter to
Stakeholders

30-50
> 50
Total

Chapter 5
Environmental
Impact

Italy

Japan

EMEA

Americas

APAC

TOTAL

MEN WOMENMEN WOMENMEN WOMENMEN WOMENMEN WOMEN

12

2

23

4

55

11

29

8

14

2

133

27

0.3

0.3

0.7

1.4

1.6

1.7

2.7

2.2

1.5

1.0

1.0

1.3

56

7

172

3

204

45

91

25

63

12

586

92

1.5

1.1

4.9

1.0

6.1

7.0

8.6

7.0

6.9

6.0

4.7

4.3

61

3

94

6

109

19

57

11

65

8

386

47

1.6

0.5

2.7

2.0

3.2

3.0

5.4

3.1

7.1

4.0

3.1

2.2

129

12

289

13

368

75

177

44

142

22

1,105

166

3.5

1.8

8.3

4.4

10.9

11.7

16.8

12.3

15.5

11.0

8.8

7.7

Voluntary
Disclosure on
EU Taxonomy

MEN WOMEN

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

T he rate is calculated as the ratio of new hires to the average number of employees at 31.03.2023 and at 31.03.2024 by region, gender, and age group. The purpose of the rate is to represent thepercentage of new hires with respect to the average number of employees over the last two years.
18
The rate is calculated as the ratio of termination to the average number of employees at 31.03.2023 and at 31.03.2024 by region, gender and age group. The purpose of the rate is to represent thepercentage of terminations with respect to the average number of employees over the last two years.
17

Glossary andMain Acronyms
contained in the
ESG Report83A breakdown of hires and leavers bygeneration is also shown below, consistent
with the representation required by theStandard ISO 30415: 2021.

HIRES BY GENERATION

Letter to
Stakeholders

Italy

Japan

EMEA

Americas

APAC

Methodological
Note

TOTAL

N. of employees
MEN WOMENMEN WOMENMEN WOMENMEN WOMENMEN WOMEN

Traditionals (1926-1945)

-

-

-

-

-

-

-

-

-

-

-

-

Baby Boomers (1946-1965)

3

-

76

2

16

1

8

1

11

-

114

4

Generation X (1966-1985)

71

6

15

1

175

55

67

26

76

17

404

105

Generation Y (1986-1995)

91

33

15

2

227

63

45

30

53

21

431

149

Generation Z (1996-2005)

42

17

55

3

88

14

43

7

19

13

247

54

Total

207

56

161

8

506

133

163

64

159

51

Highlights Fiscal
Year 2023

MEN WOMEN

1,196

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact

312

Chapter 5
Environmental
ImpactTURNOVER BY GENERATION

Voluntary
Disclosure on
EU Taxonomy

Italy

Japan

EMEA

Americas

APAC

TOTAL

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

N. of employees
MEN WOMEN
Traditionals (1926-1945)--

MEN WOMEN--MEN WOMEN--MEN WOMEN
1-MEN WOMEN--MEN WOMEN
1-Baby Boomers (1946-1965)

55

2

78

4

68

10

34

8

17

1

252

25

Generation X (1966-1985)

42

3

173

2

146

36

75

19

65

8

501

68

Generation Y (1986-1995)

22

6

18

2

125

22

48

10

53

12

266

52

Generation Z (1996-2005)

10

1

20

5

29

7

19

7

7

1

85

21

129

12

289

13

368

75

177

44

142

22

1,105

166

Total

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report844.3.2 Learning, Career Development and Performance Management

Letter to
Stakeholders
Methodological
Note

During FY23, Hitachi Rail has maintained an integrated framework of learning processes, building. Building upon on the efforts of the previous years, it defined a three-year learning planwith the aim of strengthening and further developing the necessary competences while keeping gathering inputs and feedback to improve it continuously.

Highlights Fiscal
Year 2023

Learning
In the last year Hitachi Rail increased
training hours in almost all countries (+21%
overall) by deploying global, regional,
and specific initiatives as a result of the
Global Learning Needs Analysis process
and interactions with Hitachi Rail internal
stakeholders in the Organisation.
The analysis helped drive Hitachi Rail’s
global and regional learning plans
and highlighted the competences to be
developed in the coming months and years.

Chapter 1
Context and
Identity

TRAINING BY GENDER AND REGION GRI 404-1
ITALY

JAPAN

EMEA

AMERICAS

APAC

Chapter 2
ESG Framework
and Roadmap

TOT

Average hoursof training per
employee19

MEN WOMENMEN WOMENMEN WOMENMEN WOMENMEN WOMEN

MEN

WOMEN

TOTAL

FY23

22.9

25.7

26.2

26.6

19.5

13.9

14.5

14.6

21.1

19.7

22.0

19.9

21.7

FY22

19.5

24.1

24.6

34.5

14.0

10.4

6.5

7.2

17.8

17.0

18.3

18.1

18.2

Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

TRAINING BY GENDER AND PROFESSIONAL CATEGORY GRI 404-1
Average hours of training per employee

FY22

19

19

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

FY23

MEN

WOMEN

TOTAL

MEN

WOMEN

TOTAL

Executives

11.8

19.5

12.5

17.9

21.2

18.2

Middle managers

33.5

20.8

32.2

48.6

73.5

51.4

Other White Collars

30.9

22.5

29.3

25.4

16.6

23.6

Blue collars

5.5

3.7

5.3

8.5

5.8

8.3

Total

18.3

18.1

18.3

22.0

19.8

21.7

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG ReportData regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
85

Hitachi Rail provides its employees with awide range of training activities coveringvarious topics and business areas.
In FY23, compared to FY22, Hitachi Railcarried out a different breakdown of the
topics and business areas covered bytraining to provide a more granular anddetailed view, the main areas coveredby training were Technical-Specialist
Training (32.3%) and Health & Safety(18.2%). Hitachi Rail also delivered
courses specifically dedicated to the topic of
human rights (9.9% of the total).

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail continues to invest in technicaland professional upskilling, including rolespecific training for engineers with power ofattorney, certifications in safety-critical skills,
special processes in vehicle manufacturing,and non-destructive testing.
In FY23, it launched a programme focusedon Building Information Modelling (BIM), tofoster the community around BIM skills andits implementation.
The course derives from the belief thatexpertise and know-how sharing is a
strategic leverage to improve related
business skills through a practical andeffective approach, by sharing internal
experience and expertise.

TRAINING PER CONTENT
Hours

FY23

Technical specialist

104,037

32.3%

Language

32,12910.0%

Managerial

16,908

5.3%

Environment

1,674

0.5%

Health and Safety

58,62918.2%

Quality

18,918

5.9%

Human Rights

31,9609.9%

Business Ethics\Ethical Aspects

18,1905.7%

Anti-corruption

334

0.1%

Sustainability

1,802

0.6%

Other

37,089

11.5%

Total

321,671 100.0%

In FY23 Hitachi Rail’s management
development initiatives focused on training
to enhance leadership and organisational
effectiveness. These initiatives include:• LEAD – Leadership Enhancement
and Development Programme:
this programme, launched in FY22 andcontinued throughout FY23, supports a
global leadership culture based on both
Hitachi and managers’ core values andcompetencies in areas such as effective
communication, feedback & difficult
conversation, and development culture. The
goal is to equip managers with concrete
tools for effective people management;• Quality UP - The Quality UP
Program: this programme is aimed
at enhancing quality and excellenceby focusing on creating a new cultureof quality, with a significant numberof team members participating in theinitiative. With a dedicated training
path, over 1,300 colleagues fromseveral project teams have alreadyparticipated;• Business Continuity: Business Continuity(BC) training supports Hitachi Rail’s ability
to continue its operations in the face
adverse events. To ensure organisational
resilience and responsiveness, several

remote workshops were organised involving
resources assigned to support BC, such as
the Regional Emergency Boards (REB), andsimulating critical situations for effective
management;

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023• Building Information Modelling(BIM): it is a programme focused on
Building Information Modelling (BIM), tofoster the community around BIM skills andits implementation. The course derives fromthe belief that expertise and know-how
sharing is a strategic leverage to improve
related business skills through a practicaland effective approach, by sharing internal
experience and expertise.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactThink responsibly, act sustainably

Voluntary
Disclosure on
EU Taxonomy

Hitachi Rail considers sustainability to be a core part of its heritage and mission,and offers a course on Sustainability, SDGs, and CSR, available in four languages forall employees. The course takes an engaging approach to encourage understanding
and commitment to real change in thinking and living. As part of a Learning and Development (L&D) strategy that focuses on increasing learning opportunities, fostering
a culture where employees actively seek growth in their competences and contribute
their knowledge to the company. Hitachi Rail has launched several projects to train employees in transferring knowledge through a train-the-trainer approach, empowering a
sense of belonging and reducing training costs while investing in upskilling people withnew competences. Employees also have the opportunity to gain awareness of environmental matters, including e-learning modules on SA8000 and Climate Change,
as well as face-to-face courses on environmental topics like waste management. In
early 2024, Hitachi Rail deployed six awareness sessions on sustainability topics,
involving over 250 managers worldwide, to support the development of a cultureof sustainability amongst leadership.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report86H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Performance

Letter to
Stakeholders

The Global Performance Management
process is performed for employees and line
managers, facilitated by the HR department,as part of the “People Development
Cycle”. The aim of the Global Performance
Management process is to improve people’s
performance through SMART goals withclearly defined and shared performance
expectations, continuous feedback, andcoaching to support the improvement of
the High-Performance culture based on thecurrent Mid-term plan and the organisational
business needs.

A common and integrated Hitachi Rail
Global Performance Management processrepresents one of the main pillars of the
new Talent Management Framework, as
does the launch of the Group Talent Review
Process. Both processes aim to align thecharacteristics, behaviours, and aspirationsof everyone with business goals andbusiness challenges. The Talent Review
Process aims to:

From FY23, Hitachi Rail introduced a new
set of group core competency, undertaking
several initiatives to drive awareness ofthe new competencies amongst leaders,managers, and individual contributors.
It introduced pilot processes on talent
discussion during the annual review phase,to strengthen the discussion on talentpools. Last year Hitachi Rail introduced
regional calibration and has since madeimprovements to ensure more consistentand strong data, enabling alignment acrossthe evaluation process whilst observing
cultural differences. To support this,regional managers participated in regional
calibrations to review the performance
ratings of their own teams, supported bytheir regional HR operations representative.

• identify suitable actions that will enhance
employees’ talents and growth also
through Development Plans;20•p romote potential, performance, anda development-oriented culture in the
Organisation;•e nsure a pipeline of talented people at allorganisational levels;• retain talents, ensure continuous
improvement of skills, and support
individual needs;

Furthemore, at a highest governance body level, in Hitachi Rail the performance of the SEC
Members and Body is assessed and reviewed through the Global Performance Management(GPM) process.

Methodological
Note
Highlights Fiscal
Year 2023

The following table shows the percentage of employees by gender and professional category
who received a regular performance management review during the reporting period.

Chapter 1
Context and
Identity

EMPLOYEES RECEIVING REGULAR PERFORMANCE REVIEWS GRI 404-3

Chapter 2
ESG Framework
and Roadmap% of employees

FY22

20

Chapter 3
Governance

FY23

MEN

WOMEN

TOTAL

MEN

WOMEN

TOTAL

Executives

95%

100%

97%

98%

100%

98%

Middle Management

100%

98%

100%

99%

97%

99%

Other White Collars

97%

96%

95%

94%

91%

93%

Blue Collar

79%

88%

71%

79%

83%

79%

Total

91%

95%

90%

89%

90%

89%

4

ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions• c alibrate the rating distribution to bebalanced at global level. This process,known as Talent Review, provides
managers with the opportunity to focus
and discuss the accomplishments,
strengths, and development needs of theircollaborators and teams.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG ReportData regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
874.3.3 Employee Engagement
The Hitachi Rail internal communication
strategy, which is linked directly to theglobal strategic objectives, connects
employees with their shared direction andpurpose and keeps them up to date withbusiness achievements. Hitachi Rail provides
several communication channels available
in up to five languages, recognising thediversity of Hitachi Rail’s people:• COSMO: a global intranet accessible to all
Rail employees which is updated regularly;• Viva Engage: an employee engagement
platform accessible to all Rail employees,
including via a mobile application;• screens at production sites for employees
without regular access to PCs;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• large scale video conferences led bysenior leaders.
Employees accessed COSMO more than
8 million times, keeping up to date withCOSMO news daily. In April 2023,
Hitachi Rail launched a new channel- Viva Engage - enabling colleagues
to react, comment on, and engage on
different topics in real time. At the end of
the reporting period, this channel counted
over 12,400 users across Hitachi Rail andsaw colleagues create more than 160
posts, resulting in over 550,000 views,
and more than 3,100 reactions and 330
comments.

Employees discussed wellbeing (including
safety and the Be Safe Campaign),
mental and physical health (including the
BeWell campaign and Diversity, Equity,and Inclusion), employees’ voice, theHitachi Insights Survey, rewards, andrecognition (including awards programmes),
Sustainability, CSR and environment, andquality improvements (including the Quality
Up campaign).

Measuring engagement
through Hitachi Insights
SurveyThe Hitachi Insights Survey is available
for all Hitachi Rail employees in manydifferent languages and individual
responses are anonymous. Some of
the crucial focus areas are “manager
effectiveness, “empowerment”, “diversity
and inclusion”, “professional growth”,“communication”, “engagement” and“growth mindset”. The aim is to identify
key strengths and opportunities, toimprove productivity and help leaders
to analyse and communicate results. The
survey is managed across the full lifecycle,
including preparation phase, launch,survey management, post survey phase,action plan management, KPIs setting andaction plan communication.

Letter to
Stakeholders
Methodological
Note

In FY23, 13,780 Hitachi Rail employees were invited to participate across all Legal Entities
with an overall response rate of 84% achieved, +11 percentage points in comparison to
FY 22. Among the top five strengths, the results indicated:

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

Teamwork

70.4%

Pride in
Hitachi Rail

70.5%

Chapter 3
GovernanceManager
effectiveness

4

ChapterSocial Impact

71.4%

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Enviromental
sustainability

71.5%

Methodological
Note onConsumption
and Emissions

Engagement

70.4%

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Following the analysis of results, managers across Hitachi Group will continuously work on
action planning at team-level.
88

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

4.3.4 Compensation and Benefits
Hitachi Rail’s total reward framework
strategy includes the design,
standardisation, implementation, andcommunication of remuneration andbenefits to ensure it is embedded in its ways
of working and organisational culture.
Furthermore, through the contribution of
specialist companies in the field, Hitachi Railperiodically evaluates its position comparing
its remuneration policies with those of thereference market.

At the Hitachi Rail level, the Remuneration,
Talent & Diversity Committee will enter into
force in FY24.

For its remuneration policies andprocess, Hitachi Rail is provided witha robust process following Hitachi Ltd.
schemes and structures. The Hitachi Ltd.
Compensation Committee has the authority
to determine remuneration policies for
directors and executive officers andremuneration for individuals (including
amounts of remuneration). The Committee
ensures transparency and fairness in
the remuneration determination process,verifies and reviews details of the processused for determining remuneration
for individuals, including assessments
concerning basic remuneration amounts,
evaluations of progress made toward
individual targets, and performanceappraisals that are tied to short-term
incentive compensation.

•B ase Salary

When determining remuneration, Hitachi
Rail engages external consultants to
support and carry out the external market
benchmarking analysis for executive
compensation. The data can also be refined
to match industry data trends, basing on thescheme:• T arget Total Cash Compensation (BaseSalary plus variable bonus – Short term
incentive/MBO)• T otal Direct Compensation (Target Total
Cash plus long-term incentives)
In terms of Remuneration policies, variable
compensation (short term incentive
bonus plan) is linked to clear personal
objectives set, which are approved andaligned to the Business Strategy. Hitachi
Ltd. has implemented a framework whereindividual targets are connected to thecompany’s overall targets and the payoutof the short-term incentive/MBO payout
is determined by the achievement of thepersonal objectives aligned to overall goals.

Letter to
Stakeholders

The management targets outlined in MidTerm Management Plan 2024 are usedas evaluation criteria when determining
compensation for individual employees.
Short-term incentive compensation at Top
Executives level also depends on Companywide performance, individual performances,and Sustainability-linked evaluations.
The determination of remuneration, also
concerning that of the highest governancebodies, is proposed by Hitachi Railfollowing the external benchmarking
analysis, while the approval process,internal equity and market analysis
checks are managed by Hitachi Ltd. Total
remuneration is set according to the relevant
position, the market analysis, internal equity,and the company financial results. Top
executives-level remuneration is determinedby the Hitachi Global Grade (HGG). For
HGG A positions, remuneration is managed
under executive compensation, while forpositions graded HGG X, such as the CEO,a joint approval is needed between GEM
Sector Executive and Hitachi Ltd. (CHRO).
As part of Hitachi Group Companies, theapproval process for Executive compensation(changes/promotions) for those graded as
HGG A is submitted to the person in charge

MethodologicalNoteof Human Capital Group. There is a standard
group submission form and deadline date aspart of the approval process. As part of theinternal Hitachi Rail process, this is managed
by the Head of Compensation & Benefits andapproved by the CHRO and CEO prior to thesubmission to Hitachi Ltd.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

The CEO compensation is managed
directly by the person in charge of Human
Capital Group at Hitachi Ltd. level. It is only
on receipt of this standardised stringent
approval process, that Rail applies the
proposed executive compensation changes
on an annual basis.

Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactHitachi Rail, though its Rewards Strategy
aims to deliver outstanding businessperformance and superior capabilities
through an engaged and motivatedworkforce. It aims to attract people byclearly differentiating its employment
offering, at affordable and sustainable
costs, in line with business goals andHitachi Rail’s long-term objectives. This
year, Hitachi Rail has also been working todigitalise all compensation processes suchas salary review and bonuses, improving
the governance and freeing up time for the
HR teams to focus on more value-added
activities.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report89Hitachi Rail monitors the ratio of basic
salary between men and women. The
reported data show different trends forregions and seniority levels and areby their nature conditioned by multiple
factors over time, such as the structure andapplication of collective agreements, local
compliance, and statistical significance of
employee numbers.
In order to provide a figure that better takes
into account possible contextual distortionsof the data, Hitachi Rail applied a different
calculation methodology for the following
indicators as of this year.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The figures below only take into accountthe basic salary and total remuneration of
employees if employees of both genders arepresent.

BASIC SALARY GRI 405-2

Letter to
Stakeholders

Italy
Ratio of basic salary of women to men21, 22

FY22

Japan
FY23

FY22

W/M

EMEA

FY23

FY22

W/M

Americas
FY23

FY22

W/M

FY23

Methodological
Note

APAC
FY22

W/M

FY23
Highlights Fiscal
Year 2023

W/M

Executives

0.91

0.78

1.02

0.97

-

-

0.95

0.90

0.85

0.96

Middle management

0.98

0.99

0.93

0.92

1.06

0.94

0.93

0.85

-

0.55

Other White Collars

0.96

0.97

0.85

0.86

0.90

0.89

0.80

0.81

0.85

0.83

Blue collar

1.03

1.02

0.97

0.98

0.89

0.89

0.87

0.84

0.94

0.96

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

This ESG Report also reports data on the ratio of remuneration of women to men, which takes into account not only the basic salary, but also
additional amounts, such as MBOs, bonuses and overtime working.​

Chapter 3
Governance

REMUNERATION GRI 405-2

4ChapterSocial Impact

Italy
Ratio of remuneration of women to men22, 23

FY22

Japan
FY23

FY22

W/M

EMEA

FY23

FY22

W/M

Americas
FY23

FY22

W/M

FY23

APAC
FY22

W/M

Chapter 5
Environmental
Impact

FY23
W/M

Executives

0.90

0.61

1.02

0.96

-

-

1.00

1.17

0.85

0.96

Middle management

0.98

0.99

0.92

0.92

1.04

0.93

0.95

0.87

-

0.55

Other White Collars

0.96

0.97

0.79

0.79

0.89

0.88

0.80

0.81

0.84

0.82

Blue collar

1.03

1.02

0.94

0.93

0.84

0.84

0.87

0.84

0.94

0.96

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Looking ahead to the future, the function intends to digitalise all the compensation processes by standardising different practices acrosscountries, bringing efficiency and more transparency to employees when feasible. The pay transparency legislation is changing quickly, andHitachi Rail is committed to respond to employees’ requests about how their compensation is determined and what benefits are available.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

The data is calculated as the ratio of female to male basic salary.
22
Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement indata collection and processing.
23
The data is calculated as the ratio of female to male remuneration.
21

Glossary andMain Acronyms
contained in the
ESG Report904.4 Occupational Health and Safety

Letter to
Stakeholders
MethodologicalNote

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3Highlights Fiscal
Year 2023

The Health and Safety conditions of
employees, partners, and contractors canhave severe consequences both insideand outside the Organisation. Hitachi
Rail monitors its impacts every year, reevaluating the context of its operations
and its interactions with interested parties,
as relates to the economic and social costs
and to the affected communities and theenvironment. While the first are easy toidentify as they represent the costs paid
by Hitachi Rail and individuals in assets
such as medical treatments, turnover,and personnel replacement, the latterinclude the subjective pain, fear, and lossof trust suffered by victims, families, andcommunities. Hitachi Rail performs thiskind of assessment and context analysis
regularly and its review activities havebeen further triggered by a change inmanagement.

Based on the clear distribution of
accountabilities in the legal entities thatis cascaded to sites and projects, theresponsible function determines the internaland external impacts that can affect the
Health and Safety of all interested parties
and then evaluates them in terms of risk andopportunities. This leads to the definitionof action plans, applying principles andmonitoring, through targeted audits along
the entire chain of stakeholders andinspections, which are monitored throughout
the whole fiscal year. In FY23, Hitachi
Rail conducted 21 context analyses thathave resulted in the identification of a few
corrective actions which will be monitored
and verified quarterly against defined
criteria and SMART indicators to verify thestatus of their implementation. The resulting
deviation and trend analysis drive decision
making and support the review and updateof Health and Safety Policies each year toensure focus on strategic objectives, targets,and mitigation actions.

Occupational Health, Safety
and Environment (QHSE)Management System
Hitachi Rail’s integrated HSE Management
System (embedded in the Global Business
Management System - GBMS) ensures thatprocesses and procedures are properly
implemented and maintained. Hitachi RailHSE management system includes a setof global documented procedures andtemplates, constituting the backbone of thesystem.
Hitachi Rail uses an integrated approachto Health, Safety, and the Environment toensure that all work practices are carriedout in a manner that mitigates the risk of
injury or harm to the personnel and theenvironment. The system is implemented inall Hitachi Rail permanent and project sites
and covers Health and Safety hazards aswell as environmental aspects in all activities
undertaken by Hitachi Rail or by third-party
performing activities under its control andmanagement. The procedure covers all
Lines of Business (LoB), including routine
activities within LoB Scope of Work (suchas production, installation, and periodic
maintenance), non-routine activities (suchas mobilisation/, emergency conditions,and extraordinary maintenance), indirectly
related activities, such as employees’
mobility, customer premises, canteens, andvisitors.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

In FY23, the percentage of Hitachi Railemployees covered by a certified ISO
45001 occupational health and safety
management system reached 94%.

4

ChapterSocial Impact
Chapter 5
Environmental
ImpactHitachi Rail’s HSE Management System is
globally applicable, and it is composed ofboth internal policies, processes and thirdparty assessments and certifications.

Voluntary
Disclosure on
EU Taxonomy

Additionally, each Country/Legal Entity/
Branch and Site/Project can develop,
according to specific legal, and regulatory
requirements, customer contractual
specifications and operational control processneeds, local instruction or project documents.
As consequence, all sites and projects
are covered by a dedicated management
system. Hitachi Rail has identified employee
representatives in each Legal Entity inline with the legal requirements for their
participation in the decision-making process.
The employee representatives, together withaccountable managers and their delegates
meet at least on a quarterly basis to discuss

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report91HSE changes to the management system,
the performance trends, and the actions anddecisions to be taken. The participation andconsultation in this forum are moderated by
HSE professionals that guide the discussion
ensuring all relevant HSE topics are taken
into consideration.
One of the main tasks where management
and employee representatives collaborate
is Risk Management. The Healthand Safety Risk Assessment andEnvironmental Aspect Evaluation
follows the ISO 31000 Risk
Management, considering the “Plan,
Do, Check, Act” cycle, as follows:

STEP 1CO

Identify hazards

UL
TA

Know

nr

is k

STEP 2
Assess
risks

s

N

NS

NS

O

UL
T

N

TI

IO
T
A

CO

dc

S

T IO

T IO

CO
N

STEP 3Control risks

U
L
TA

N

In addition to HSE Committees, there areinformal initiatives which aim to encourage
the employees to participate and provide
feedback on HSE matters related to theirwork activities, including meaningful
safety conversations between workers
and management built on trust without thepossibility for retaliation, risk workshops
and reward & recognition frameworks thatencourage best practice and participation.

The Global Multi Site Certificate
for the ISO 14001 and the ISO
45001 demonstrates the constantefforts to build a safety culture
and promote health and safety
activities. During FY23, the main OHSEManagement System review included
the introduction of Critical Risk Control(CRCs) Procedures to standardise theapproach to assessment and control
measures for those risks that have thepotential to cause serious injuries, illness
or fatalities. Hitachi Rail performed over
600 assessments (distributed according
to the relevance of the risks) in all sites
for the whole range of critical risks
identified, and periodically monitors andre-evaluates changes.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

CRC Assessements FY23
160
140
120

138

Chapter 3
Governance

135

4

108

80
60

ChapterSocial Impact

Electricity Safety
Working at Height

100
73

68

Chapter 5
Environmental
ImpactConfined Space

60

58

Rail Vehicle Movements

40

Materials Handling(Lifting Operations andLifting Equipment)

20

Contractor Management

0

ol

STEP 4
Review control
measures

o ntr

N

CO
N

S

U
L
TA

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3anManagement
commitment

This policy is shared with all Hitachi Railpersonnel and all stakeholders online andvia Hitachi Rail’s intranet. The initiatives
adopted by Hitachi Rail to promote
employee welfare in the workplace are
adequate for the proper performance ofthe risk assessment (e.g., analysis andmonitoring of working activities, including
the nature of the work, equipment,
workspaces, personal and collective
protective measures, technical infrastructure,and contractual issues, both for internal andcontracted tasks).

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Vehicle and Plant Movements

Methodological
Note onConsumption
and Emissions

In FY23 Hitachi Rail developed extensive training material for Risk Assessment preparation,
targeting leaders and supervisors responsible for these activities. The campaign, whichstarted through a pilot in Australia and will be further globally deployed during FY24,
aims to ensure that accountable managers are aware of the hazard identification process,provided with sufficient tools to develop risk assessments and able to involve HSE
professionals whenever needed. The training strengthens awareness on the importance ofcontrols, their hierarchy, and their ownership in the implementation of mitigation measures.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report92Hazard and Close Calls
reporting
Digitalisation of HSE reporting played a
key role in FY23 in increasing reporting
capabilities and providing easy accessto all employees, contractors, and clientsto a platform to notify hazards andnear misses. The number of close calls
reported increased by 32.17% since theprevious reporting year, reaching up to760 near misses identified, reported, andaddressed.

Incident Investigation byqualified HSE leaders

Close calls by severity (%)
FY232

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

12

25

61
Insignificant

Minor

Moderate

Workforce on all sites have access to
QR codes for immediate reporting which
are used to notify HSE advisors andsupervisors of the identified hazards.
These codes were used 1,952 times
on projects and sites by employees,
contractors, and visitors and ensured an
immediate reaction and mitigation of
the potential risks identified. The use of
the QR code is periodically monitored
by HSE staff through targeted meetingsand information activities for the staff
employed on the sites and projects.

Serious

Hitachi Rail approaches incidents using the
Kelvin Topset methodology ensuring root
causes, and specific actions are uncovered
to prevent reoccurrence. The qualified HSE
professionals and operational leaders adopt
this investigation technique for each relevant
incident, and they establish the appropriate
actions to avoid recurrences. They sharelessons learned across the business,
including the close calls learnings, andparticipate in governance meetings acrossregions and in HSE committee meetings
within each legal entity. Management
teams analyse trends on a quarterly basis
to ensure the proper reaction to emerging
risks and the improvement area actions
implemented, based on live data captured
via the EcOnline database.

HSE Training
Hitachi Rail has developed a dedicatedtraining and learning process to
implement HSE principle in collaboration
with functional managers and the HR
department, ensuring that each country
has a training matrix describing HSE
competencies for each specific role. This
includes standard HSE training elements
as well as specific ones required by local
regulation or specific projects.
In FY23 Hitachi Rail provided global
standard HSE training on Life Saving
Rules which it rolled out to employees inrelation to their involvement in high-risk
activities, such as working at height orworking with electricity. It developed afull package of training and conversation
tools which are being delivered toleaders to increase their knowledge andcompetences on risk assessment. The
training includes information related
to the process of the risk assessment,
the evaluation criteria of the risks, andthe hierarchy of controls. It has beendelivered globally to supervisors andmanagers with responsibility for people orcontractors.
For FY24, Hitachi Rail will invest in training
and awareness programmes for contractor
management, a cornerstone of Health and
Safety.

Compliance with laws andregulations

Letter to
Stakeholders
Methodological
Note

Hitachi Rail ensures legal compliancewith the systematic management of theapplicable legal framework. To complete its
HSE Compliance Obligation, it considers thefollowing main steps:

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity• identification of the applicable HSE
requirements;

Chapter 2
ESG Framework
and Roadmap• tracking of any update of these requirements;

Chapter 3
Governance• notification of these requirements to allinternal and external stakeholders;

4

ChapterSocial Impact• monitoring of the compliance;• correction of the eventual discrepancies.

Chapter 5
Environmental
ImpactThe HSE advisor is responsible for updating
the legal register and related checklists forthe verification of the compliance, based onmatters such as law changes, organisationalchanges, client contractual requirements
and management system changes. HSE
professionals also manage internal andexternal communication for the identified
updates and lead the annual compliance
control for the aforementioned checklist.
They monitor deviations quarterly and verify
the effectiveness of the corrective actions
ensured as soon as they are implemented.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

In FY23 there were no significant instancesof reported violations, fines, or sanctions inrelation to health, safety or environmental
issues.

Glossary andMain Acronyms
contained in the
ESG Report93HSE Performance
Hitachi Rail has increased the level of detailof the data collection with regards to healthand safety incidents. For the first time, it
reports the number of recordable workrelated injuries with higher granularity forboth employees and non-employees.
Likewise, it points out four different rates: therecordable work-related injuries rate (which
accounts for all the injuries registered during
the reporting year regardless of their nature),

the lost time injury frequency rate (which
accounts for all injuries registered during thereporting period except for those resulting
in medical treatment and restricted workcase), the fatalities as a result of work-related
injury rate (which accounts for all fatalities
during the reporting period), and the highconsequence work-related injuries (excluding
fatalities) rate (which accounts for all workrelated injuries excluding fatalities during
the reporting period) The records show thefollowing trends:

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

HEALTH AND SAFETY - EMPLOYEES24 GRI 403-9
FY22

FY23

26,950,498

27,324,369

82

96

of which fatalities as a result of work-related injury--

of which high-consequence work-related injuries (excluding fatalities)--of which lost time work-related injury

61

61

of which Medical Treatment e Restricted Work Case

21

35

Total hours worked
Number of recordable work-related injuries

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

4

ChapterSocial Impact

0.61

0.70

Lost time injury frequency rate26

0.45

0.45

Fatalities as a result of work-related injury rate27

0.00

0.00

High-consequence work-related injuries (excluding fatalities) rate28

0.00

0.00

Recordable work-related injuries rate25

 ata regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following aDmethodological refinement in data collection and processing.
25
N. Recordable work-related injuries/h. worked x 200,000.
26
N. Recordable work-related injuries with lost days/h. worked x 200,000.
27
N. Fatalities/h. worked x 200,000.
28
N. High-consequence work-related injuries (excluding fatalities)/h. worked x 200,000.
24

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

OTHER RELATED KPIs – EMPLOYEES25 GRI 403-10
FY22

FY23

Number of near misses

575

760

Number of first aid

120

147

Number of cases of recordable work-related ill health2-

Number of fatalities as a result of work-related ill health--

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

The FY23 HSE trend analysis shows an increase of incident reporting including close calls,
hazard reporting, and first aid cases.
94

This is linked to the increased capability and attention to reporting, but also highlights aneed to place additional focus on the management of risks.

 . Recordable work-related injuries/h. worked x 200,000.
NN. Recordable work-related injuries with lost days/h. worked x 200,000.
31
N. Fatalities/h. worked x 200,000.
32
N. High-consequence work-related injuries (excluding fatalities)/h. worked x 200,000.
29• number of leadership HSE activities;

Methodological
Note

FY22
3,264,363
18
1
10
7
1.10
0.67
0.00
0.06

FY23
3,244,130
42
1
31
10
2.59
1.97
0.00
0.12

Highlights Fiscal
Year 2023

Leaders have conducted a total of 1,479 inspections, conversations, toolbox talks, andsafety moments around the globe increasing the focus on health and safety and theengagement of managerial roles in these initiatives.

Chapter 1
Context and
Identity

In FY24, the HSE objectives include strengthening Hitachi Rail’s contractor management
and control processes. This will include an extensive programme to deploy Leadership
Workshops on the global principles and toolkits on HSE management of contractors andinclude packages of inductions and awareness tools for workers from external companies
working under the control of Hitachi Rail. The goal is to improve the safety culture incompanies working for Hitachi Rail by influencing partners and contractors and to generate
a positive impact in the Hitachi Rail community.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactSites across all countries have launched a total of 94 wellbeing initiatives with theparticipation and involvement of employees and contributed with 51 local environmental
plans to reduce energy consumption and waste production. These include collaboration withlocal canteens to remove plastic in the packaging and providing employees with reusable
lunch boxes or water bottles.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 330

Letter to
Stakeholders• number of local wellbeing initiatives.

HEALTH AND SAFETY - NON-EMPLOYEES GRI 403-9

Total hours worked
Number of recordable work-related injuriesof which fatalities as a result of work-related injury
of which high-consequence work-related injuries (excluding fatalities)of which lost time work-related injury
of which Medical Treatment e Restricted Work Case
Recordable work-related injuries rate29
Lost time injury frequency rate30
Fatalities as a result of work-related injury rate31
High-consequence work-related injuries (excluding fatalities) rate32

Hitachi Rail monitors the following key performance indicators:

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report95

4.5 Human Rights

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

In pursuing its vision to meet its responsibility
to respect human rights in all its activities,
operations and value chain, Hitachi Railfollows the relevant regulatory standards
generally shared by the international
community, such as the UN Guiding
Principles on Business and Human Rights(Human Rights Due Diligence “HRDD”).
The Hitachi Rail Human Rights Policy,
as well as its Social Accountability
Policy, is communicated internallyand made available to all membersof the workforce on Hitachi Rail’s
Global Business Management
System.
The policy commits to develop andimplement ongoing human rights due
diligence by identifying and assessing
potential and actual impacts and taking
appropriate action to prevent or mitigate
risks. If Hitachi Rail is linked to an event
impacting human rights, it will use its
leverage with the relevant third parties toaddress and will provide for or cooperate
in legitimate remediation. Hitachi Rail’s
Social Accountability Policy provides thebasis for the SA8000 certification extended
to its Hitachi Rail STS S.p.A. Legal Entity(Italy). This policy applies to all officers

and employees across the consolidated
subsidiaries, and it requires compliancefrom business partners and other relevant
parties, as well. The Group also reiterated
its commitment in the Hitachi Group Codeof Ethics and Business Conduct which wasrevised in 2023.

• respect freedom of association andcollective bargaining: support workers’
rights to join labour organisations andpromote collective bargaining;

political and trade union views,
religion, sexual orientation, gender
identity, disabilities, and other personal
characteristics;•e nsure fair wages and working hours:
adhere to laws on working hours, rest,and holidays, ensuring decent wages;• provide grievance mechanisms: establish
effective channels for reporting andresolving human rights concerns;

As part of its unwavering commitment toprotecting human rights, Hitachi Rail isdedicated to ensuring that its businesspractices uphold the highest ethicalstandards. Hitachi Rail recognises its
responsibility to respect human rights
across all aspects of operations and within
supply chain. Also in line with the SA8000
Standard, Hitachi Rail is committed to:•u phold dignity, equality, and nondiscrimination: prohibit discrimination
based on age, ethnicity, nationality,• conduct training and awarenessprograms: educate employees about theirrights and human rights policies;• reject the use of child labour: comply
with legislation, ILO Conventions, and theInternational Convention on the Rights of
the Child;• reject forced and compulsory labour:
condemn modern slavery and prohibit
non-voluntary labour;• protect workers’ health, safety, andwelfare: ensure a healthy and safe
workplace, preventing accidents andhealth issues;

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactImplementing the responsibility to respect human rights in Hitachi Rail
Policycommitment& embedding
In 2013, the Group establishedthe “Hitachi Group Human
Rights Policy“ and declared theimplementation of human rights
risk management based on the
UN Guiding Principles on Businessand Human Rights.
The Group also represented its
commitment to business activities
that respect human rights in the
Hitachi Group Code of Ethics
and Business Conduct which wasrevised in 2023.

Human rights
due diligence
In 2021 the Group issued the
Human Rights Risk Management
Implementation Manual, whichsets out the entire process for use
in the practical operation of eachBusiness Unit.
Since 2022, Group has worked
with Shift (leading centre ofexpertise on UNGPs) to build
capacity across the BUs on
human rights and to begin
implementing HRDD.

Voluntary
Disclosure on
EU Taxonomy

Remedy &grievancemechanisms

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail encourages everyone
to speak-up when they see
something that they believe may
constitute actual or suspected
misconduct. Actual or suspectedviolations can be reported to thefollowing speak-up channels madeavailable to all stakeholders:

Methodological
Note onConsumption
and Emissions
TCFD
ReferenceTable•H itachi Group Compliance

Hotline (hotline) available in 21
languages

GRI
Content
Index

odv@hitachirail.com*

Glossary andMain Acronyms
contained in the
ESG Report• to the supervisory body at*Hitachi Rail STS SpA related concerns (including all its branches and subsidiaries)

96

The Hitachi Group Human Rights policy applies to all officers and employees of Hitachi andits consolidated subsidiaries, and it requires its business partners and other relevant parties
to respect human rights.
Hitachi Rail has established dedicated channels - available to all stakeholders - to enable
reporting any suspected breaches of the Group’s Code of Ethics or any violation of laws andregulations related to Corporate Social Responsibility, with a focus on maintaining high ethicalstandards and compliance with applicable laws and regulations.

SA8000H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

In 2021, Hitachi Rail achieved the SA8000 certification, a globally recognised standard
for social accountability, for its Italian sites. This certification underscores Hitachi Rail’s
unwavering commitment to maintaining the highest standards of workplace conditions
and ensuring the ethical treatment of employees. The SA8000 certification is crucial
because it verifies the adherence to stringent criteria in areas such as fair wages, safeand healthy working environments, reasonable working hours, and the prohibition ofchild and forced labour.
By obtaining the SA8000 certification, Hitachi Rail not only demonstrate its dedication
to social responsibility but also build trust with stakeholders, including customers, investors, and the communities in which Hitachi Rail operates. This certification positions
Hitachi Rail as a leader in ethical business practices, fostering a positive impact on
workforce and contributing to a more sustainable and equitable value chain.

Human Rights Due Diligence
In FY23, Hitachi Rail initiated theimplementation of a Human Rights Due
Diligence process, marking a significant
step forward in its commitment to social
responsibility. This initial effort represents
the first phase in Hitachi Rail’s endeavour
to identify, prevent, and mitigate humanrights risks within operations and supply
chain. Hitachi Rail is committed to buildingon this foundation by implementing
improvements year after year, whilst
acknowledging the complexity andimportance of this task.
As part of its commitment to Human Rights
Due Diligence, Hitachi Rail has conducteda thorough assessment to identify the mostsignificant human rights risks associatedwith its business operations. The analysis
revealed that the majority of theserisks, particularly those with thehighest severity and likelihood,
are concentrated within the supply
chain. This is largely due to the complexity
and the multitude of stakeholders involved,
and the nature and severity of the risks topeople involved. These risks include labour
rights violations, unsafe working conditions,and inadequate wages, among others.
In contrast, the risks identified within its own
operations are fewer and generally easier
to manage, given the direct oversight andestablished internal controls. Nonetheless,
Hitachi Rail takes these risks seriously
and is committed to addressing themcomprehensively.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

To effectively manage and mitigate theidentified risks, Hitachi Rail has mapped
all existing safeguards and has developed
a detailed action plan. This plan outlines
specific measures tailored to address theunique challenges within the supply chain
and its own operations. For the supply
chain, these measures include enhancing
supplier due diligence, implementing
stricter contract requirements, conducting
regular audits, and engaging in continuous
dialogue with suppliers to promote bestpractices. Within its own operations, Hitachi
Rail is strengthening its internal policies,
providing ongoing training for employees,
and ensuring rigorous enforcement of thehuman rights standards.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Human rights due diligence is a processof continuous improvement, and Hitachi
Rail is determined to consistently strengthen
its practices to ensure the respect andprotection of human rights in all activities.
As part of this commitment, next year
Hitachi Rail will focus on creating a cultureof awareness and engagement aroundhuman rights across the Organisation,
alongside comprehensive communication
initiatives to ensure all employees
understand and support its efforts.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report97Modern Slavery
Hitachi Rail’s commitment to the abolitionof slavery and all forms of forced orcompulsory labour is detailed in the HitachiGroup Code of Ethics and Business Conduct
and the Hitachi Rail Modern Slavery Policy.
Hitachi Rail condemns and rejects modern
slavery in accordance with local laws andregulations. In FY23, it published statementsthat set out the steps taken to address
modern slavery and human trafficking in thebusiness in compliance with Section 54 of
the UK Modern Slavery Act 2015 and theAustralian Modern Slavery Act 2018. In
FY23, Hitachi Rail:H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• developed bespoke modern slavery
training and delivered it to its global
workforce;• deployed training to internal buyers
and category managers regarding theregistration with and use of EcoVadis, thetool that allows Hitachi Rail to benchmark
and risk score suppliers against a rangeof sustainability and human rights criteria,
between November 2022 and January2023;• invited over 1,600 suppliers to attend
engagement sessions on the expectations
on supplier behaviour and the encouraged
use of EcoVadis; and• launched an online platform called
Jaggaer for supplier onboarding in
February 2023, which includes a risk
model for compliance due diligence
checks whereby country and industry
human rights risks, including labourrelated scores from EcoVadis, areassessed. Jaggaer is integrated withinvoicing and payment systems andincludes the documented acceptance ofHitachi Rail Supplier Code of Conduct
by suppliers as part of the onboarding
process.

Conflict Minerals
The technologies that are required tofacilitate the shift towards a green andlow-carbon economy often require
minerals and metals; the majority of which
are found in hotspot states perceived tobe conflict affected and high-risk areas(CAHRAs). These minerals are referred
to as conflict minerals and encompass,
but are not limited to, cobalt, copper,
gold, graphite, iron, lead, lithium, nickel,
silicon, silver, tantalum, tungsten, tin,and zinc. These minerals are essential toproduce various components and their
extraction and trade have the potential toaggregate grievances and tensions andoften fund armed groups and perpetuate
violence, contributing to human rights
violations.

Letter to
Stakeholders
Methodological
Note

Tracing the origin of minerals throughout
complex global supply chains is a significant
challenge. The train manufacturing industry
relies on a vast network of suppliers,
making it difficult to verify the ethicalsourcing of every mineral used. Hitachi
Rail is implementing responsible sourcing
programmes that establish criteria for
suppliers, and where necessary, adopting
enhanced human rights due diligence per
guidance for conflict affected and high-riskareas (CAHRAs).

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

4ChapterSocial Impact
Chapter 5
Environmental
ImpactHitachi Rail has adopted a policy toensure that the procurement/sourcing ofmaterials containing conflict minerals does
not encourage activities of armed groups,
human rights violations, including childlabour, corruption, and environmental
destruction in the conflict and high-risk
regions.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail will enhance human rights
due diligence processes in conflict-affected
and high-risk areas by implementing acomprehensive risk assessment frameworkthat is aligned to and upholds the UN
Guiding Principles (UNGPs) and OECD Due
Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected
and High-Risk Area frameworks.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report98

proud to share that our“I’menvironmental initiatives,
fostered thanks to ourmanagement, employees
and business partners,
led to a 14% reduction inemissions, emphasizing
sustainable mobility andresource efficiency“

Deborah Forzato
Senior HSE Manager

5

Environmental
ImpactChapter 5:

Letter to
Stakeholders

Environmental Impact

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

5.1 Environmental Policy

Chapter 2
ESG Framework
and Roadmap

Hitachi Rail uses a systematic framework for integrating environmental management practices by supporting environmental protection, pollution prevention, waste minimisation, as well as
energy and materials consumption reduction.
Hitachi Rail applies environmental management systems, such as ISO 14001 and ISO 50001, reporting to all stakeholders and promoting sustainable environmental practices to suppliers,
contractors, and customers.
Hitachi Rail’s Environmental Policy places safeguarding the environment at the heart of its management and development strategies, with a constant and targeted commitment to preventing
pollution and pursuing continuous improvements in its environmental services. The policy is shared with all Hitachi Rail personnel through the Hitachi Rail intranet.

Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The key principles of Hitachi Rail’s commitment are:to identify
significant
environmental
impacts of its activities,
products and services
in order to control
and monitor impacts
on the environments
as appropriate to its
purpose and context

to prevent
environmental
pollution and to
the protection of theenvironment relevant to
its context

to improve
environmental
performance throughthe achievement of
increasingly ambitious
targets and objectives,
consistently with thetechnological progressof the sector and withthe budgeted expenses

to improve its activities
also for the purposeof reducing its
overall impact
in terms of climate
altering emissions in
the atmosphereto involve staff,
suppliers andcontractors in theenvironmental issues,raising their awarenesson this subject

to define indicatorsfor straightforward
performance monitoring

Methodological
Note onConsumption
and Emissions

to start an open
dialogue with the
Public Authorities, thecommunities and the
public, aimed at raisingawareness of the realenvironmental impacts
and cooperating to
update environmental
regulations.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1005.2 Environmental Goals and Decarbonisation Path

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail’s commitment to environmental
sustainability is at the forefront of thebusiness strategy, reflected in ambitious
environmental goals and comprehensive
decarbonisation pathway.
Recognising the urgent need to address
climate change, it has set clear andmeasurable targets to significantly reduce its
carbon footprint, with the ultimate goal ofachieving

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Carbon Neutrality in its main sites by2030 and

Net-Zero emissions by 2050.

The environmental strategy encompasses
several key initiatives:• Transition to Renewable Energy:
shifting energy sources to renewables,
including solar and other sustainableoptions. This transition not only reducescarbon emissions but also aligns
operations with the global movement
towards cleaner energy.
• Energy Efficiency Enhancements:
continuously improving the energy
efficiency of manufacturing processes
and products. This includes adopting ofadvanced technologies and practices
that minimise energy consumption andoptimise resource use.
• Innovative Green Technologies andEco-design: developing and integrating
cutting-edge green technologies into trains
and rail control systems through R&D
efforts. These innovations are designed toenhance performance while significantly
reducing environmental impact. As
pioneers in the rolling stock and digitalsystems, Hitachi Rail aims to accelerate
the decarbonisation of rail by creating
new electrified railways or powering
trains with batteries. By accelerating
the electrification and central role oftechnological innovation, Hitachi Rail ismaking rail transport an environmental
frontrunner. As of today, the global nonelectrified rail transport relying on diesel
amounts to no more than 25%.
• Waste Reduction and Water
Conservation: minimising waste
generation and enhancing water
conservation across all operations. By
implementing circular economy principles,
Hitachi Rail aims to reduce, reuse, andrecycle materials, thereby minimising
the environmental footprint. As such, it
sets ambitious targets for water - 50%
improvement of efficiency in use of waterby 2050 (compared to 2010) - andwaste - 50% improvement in Waste andValuables Generation per unit by 2050
(compared to 2016) and Zero Landfill by
2030 in main sites.

• Biodiversity Protection: extending
environmental stewardship to protecting
and enhancing biodiversity. Hitachi Railtakes proactive measures to preserve
natural habitats and support ecosystems inand around operational sites.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance• Sustainable Supply Chain:collaborating closely with suppliers toensure that they adhere to sustainable
practices while reducing the overall
environmental impact and drive industrywide change.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• Stakeholder Engagement andTransparency: engaging withstakeholders is crucial to environmental
strategy. As such, Hitachi Rail maintains
an open dialogue with customers,
suppliers, regulators, and local
communities to gather insights, foster
collaboration, and ensure that practices
meet their expectations. Transparency iskey, and the commitment is to regularly
report progress and challenges in meeting
environmental goals.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report101Letter to
Stakeholders

Hitachi commitment to SBTi

Methodological
Note

In December 2020, Hitachi Ltd. received validation of its emission reduction targets from the Science Based Targets initiative (SBTi), the international organisation that supports thosecompanies setting emission reduction targets that are in line with the Paris Agreement goals of keeping mean global temperature to well below 2°C and preferably limit the increase
to 1.5°C above pre-industrial levels. Hitachi Ltd. Corporate made a commitment to reduce its absolute Scope 1 and 2 GHG emissions by 100% by 2030 and absolute Scope 3 GHG
emissions by 40% by 2030, considering a 2010 baseline. In FY23 Hitachi Ltd increased the SBT target ambition with commitment to Net-zero to 2050.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

To be able to reach these targets, Hitachi Rail sets specific targets every year. For FY23, Hitachi Rail aimed to reduce overall Scope 1 and 2 emissions by at least 5% compared theprevious period. Hitachi Rail has defined this target based on the forecasts and decarbonisation plans available to date. The actual outcome is described in paragraph “5.2.2 GHG
Emission and Air Quality”.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report102Approaching the climate related scenario analysis

Letter to
Stakeholders

Aligning with the Hitachi Ltd.’s endorsement of the recommendations and, on a local level, to the path towards UK MCD compliance, Hitachi Rail has structured a scenario analysis that
identifies its main climate risks and opportunities areas with regard two different climate scenarios:

MethodologicalNote1) Business environment and major risks and opportunities
under the 1.5°C scenario:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 32) Business environment and major risks and opportunities
under the 4°C scenario:

Risks

Opportunities

Risks

Opportunities• compliance with EU Legislations andtimely response with effective andsustainable products which are crucial tostay in the market;• increase in demand for railways, whichemit less CO2 per distance covered
compared to every other transportation
mode. There will be a shift fromconventional models to energy saving
railcars, the efficiency of railway services
will be improved through digital utilisationand through the provision of sustainablemobility systems based on alternative multimodal energy vehicles. Data usage will also
boost demand for new mobility services;• increase in demand for electric poweredtransport without tighter energy
regulations, causing high exposure andcosts;• development of increased resilience oftransport systems to natural disasters.
Competitiveness can be enhanced byproviding added value, such as energysaving railcars and new technologies;• reduction in competitiveness due to delaysin the development of innovative emissionreducing technologies, such as dynamic
headway, flexible operations in response
to passenger demand, and new mobility
services like MaaS

• increase in demand for long-distancepublic transport for less impactful modesof transport. For example, in 2018, in
EU rail accounted for only 0.4% of bothgreenhouse gas (GHG) and CO2 transport
emissions and for only 2% of transportenergy consumption.

Highlights Fiscal
Year 2023• sharp increase in damage from typhoons,floods, and other natural disasters causedby climate change;• exacerbation of damage to facilities,
deteriorating working environments, anddisruption of supply chains leading todelays in deliveries and the procurementof components due to high frequency ofnatural disasters.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5• achievement of increased control overthe supply chain, including organisations
and their physical locations, for better
monitoring activities.

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

By becoming a Climate Change Innovator, Hitachi Rail aims to develop innovative technologies and solutions that mark an alternative path to sustainable mobility and to help cities,
governments, and customers to cut carbon in the mobility sector. By integrating sustainability into core business operations, it strives to create long-term value for stakeholders and contributeto the global effort to mitigate climate change. By continuously monitoring, evaluating, and reporting, Hitachi Rail ensures that it stays on track with its commitments, driving towards a
decarbonised and environmentally responsible future.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1035.2.1 Energy Efficiency and Consumption Trends
Hitachi Rail works with customers and society tocontribute to the more efficient use of resources.

Energy Consumption
Hitachi Rail mainly uses electricity for lighting,plant operation and building temperature
control, but in some cases relies on fossil
fuels, such as natural gas and district heating,to heat workplaces and for some production
activities. The Organisation is constantly
working on improving its real estate assets to
reduce electricity consumption, also through:• the installation of LED lighting systems;• geothermal systems to support eating andcooling;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• the construction of envelopes and theinstallation of thermal insulation for
windows/doors;• the direct expansion of heating/coolingsystems, such as the installation of heatpumps;• the installation of presence detectors orclocks/timers to control the activation
and/or deactivation of powered systems;• monitor consumption with enanced Energy
Management Systems;• the improvement of the energy efficiencyof data centres;
35

Letter to
Stakeholders• the promotion of energy saving practises byreminding personnel to turn off production
equipments, lights, their laptops and anyother device that might consume energy;

ENERGY BY SOURCE GRI 302-1• the implementation of power purchaseagreements (PPAs) for self energy
production from solar in several site suchas Pistoia, Reggio Calabria and Naples in
Italy and Hagerstown in US.

Giga Joules [GJ]35

Through different contractual agreement andimplementation frameworks installations,
Hitachi Rail runs a solar panel installations
at various facilities in Italy (Tito Scalo),
Australia (Perth), and the United Kingdom(Newton Aycliffe, Doncaster and Stoke
Gifford). It encourages low carbon
transportation though its electric car sharing
schemes for its employees and use of electricvehicles at all Hitachi Rail sites including
the installation of EV Charger in the main
premises around the world.
In FY23, its total energy consumption- electricity, diesel, natural gas, district
heating, gasoline, kerosene, LPG, LNG
amounted to 582,121 GJ, in line with theprevious year. The percentage of electricity
derived from renewable sources, bothpurchased from certified sources from thegrid and self-produced, reached 62%,
increasing by about 20 percentage points
with respect to the previous period.

Methodological
Note
Highlights Fiscal
Year 2023

PRODUCTION SITES AND TRAIN
MAINTENANCE CENTRESOFFICES

TOTAL

FY22

FY23

FY22

FY23

FY22

FY23

Electricity consumption

272,555

273,476

61,66564,582334,220

338,058

Consumption of electricity
purchased from the
National Power Grid

271,050

269,660

60,82663,426331,876

333,086

from renewable sources(Renewable Energy
Certificates)

172,707from nuclear source (fillin only if all electricity
purchased is nuclear)

4,659

Auto produced and selfconsumed electricity fromrenewable sources

1,505

Fuel consumption for
production activities
and building heating

222,358

205,231

1,271

896

173,978

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

206,128

Chapter 4
Social Impact

5,058

8,797

8,744

13,456

13,802

5

3,816

214,756

839

19,155

1,156

29,307

2,345

241,513

Chapter
Environmental
Impact4,972

Voluntary
Disclosure on
EU Taxonomy

244,062

Diesel Consumption
for energy or power
production

13,93918,591

4,780

7,058

18,71925,649Natural gas

140,140

133,727

13,994

21,904

154,134

155,631

-

-

178

141

178

141

Diesel consumption forcompany forklifts

3,170

3,568

2

1

3,172

3,569

Gasoline consumption forcompany forklifts

616

322

-

-

616

322

Kerosene

172

92

-

-

172

92

LPG

64,32158,456202

202

64,52358,658

LNG

-

-

-

-

-

-

Total

494,913488,232

80,82093,889575,734

582,121

District heating

Chapter 1
Context and
Identity

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
104During FY23, Hitachi Rail registereddecreases in the consumption of district
heating (-21%), gasoline (-48%), Kerosene(-47%) and LPG (-9%), as a result ofgood practices, and the energy efficiency
investments made in several regions. Theenergy consumption trends of the two-year
period are illustrated in the graphic below.
Again, the overall consumption of energy
shows a constant trend over the years.

Energy consumption (GJ)

241,513244,062

338,058

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3334,220FY22Electricity consumption

FY23
Fuel consumption for
production activities
and building heating

5.2.2 GHG Emission and Air Quality
Regarding CO2 emissions, Hitachi Railregistered a decreasing trend for Scopes
1 and 2, notwithstanding the slightly
increasing consumption trends due toincrease of production. This is due to theincreased amount of certified renewableelectricity purchased from the grid for FY23.
The decrease in total Scope 1 and 2 marketbased emissions amounted to 14%. For the
first time in FY23, Hitachi Rail calculated
Scope 2 location-based emissions.
This additional data representation does
not yet include comparative figures with theprevious reporting period, but it allows foran additional depiction of the status quo
and more in-depth reasoning for the futureof Hitachi Rail’s sustainability strategy.
Moreover Scope 3 emissions decreased
notwithstanding the increase of vehicles
delivey (+ 10% in terms of numbers ofcars) and this is due to a product mix moresustainable al with lower emission put into
revenue service.
Moreover Scope 3 emissions notwithstanding
the increase of vehicles delivey (+ 10% in
terms of numbers of cars) and this is due to a

Letter to
Stakeholders

product mix more sustainable al with lower emission put into revenue service. and underwent
a significant change during the year as Hitachi Rail refined its calculation of indirect emissions
by adding the results of additional emission categories as defined by the GHG Protocol.

Methodological
Note

Scope 1, 2 and 3 emissions are shown in the table below, along with relevant details.

Chapter 1
Context and
Identity

Highlights Fiscal
Year 2023

TOTAL DIRECT SCOPE 1 [TCO2e], INDIRECT SCOPE 2 [TCO2] AND
INDIRECT SCOPE 3 [TCO2e] EMISSIONS36,37,38 GRI 305-1; 305-2; 305-3
FY22

FY23

Emissions due to energy production (Natural Gas)

8,726

8,766

Emissions due to energy production (Diesel)

1,423

1,971

Emissions from air conditioning systems (Fugitive emissions)

1,878

1,138

Emissions due to internal handling (Lorries and Forklifts)

281

289

Emissions due to other activities (Kerosene, LPG, LNG)

4,141

3,758

Total Scope 1 Emissions (-3%)

16,44915,921

Emissions due to electricity consumption (market-based)

18,93914,46087

Total Scope 2 Emissions Market-Based (-24%)

18,947

14,467

Emissions due to electricity consumption (location-based)-

28,687

Emissions due to district heating (location-based)-

7

Total Scope 2 Emissions Location-Based-

28,69435,39730,388-44,6155,280,015

5,072,473

Emissions due to district heating (market-based)

Total Scope 1&2 Emissions – Market Based (-14%)
Total Scope 1&2 Emissions – Location Based
Total Scope 3 Emissions (-4%)

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
37
Scope 1 emissions are calculated using the factors provided in their most up-to-date publicly available version by the UK government's Department for Environment, Food and Rural Affairs (DEFRA). The Scope 2
Market-Based emission factors adopted are the IEA (International Energy Agency) factors provided by Hitachi Ltd. The Scope 2 Location-Based emission factors are a combination of EU AIB (Associations of Issuing
Bodies) factors, direct energy providers’ factors, and, where necessary, IEA factors. For what concerns Scope 3 emission calculation methodologies, further details are provided in the methodological note.
38
Additional details can be found in the Methodological Note. The total amount of Scope 3 emissions for FY23 reported in the table differs from that published in last year's Report.
36

105

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG ReportIn FY23, Hitachi Rail extended the scope ofthe calculation of Scope 3 by including two
additional emission categories: category
3 (Fuel-and energy-related activities) andcategory 15 (Investments).

Hitachi Rail has also recorded further
progress in category 4 (Upstream
transportation and distribution), by adopting
a distance-based approach in calculating
emissions.

This demonstrates Hitachi Rail’s constantcommitment to refine Scope 3 emission
analysis by including all applicable emission
categories.

Where possible, Hitachi Rail applied
methodological refinements to both FY2023
and FY2022. For this reason, the values for
Scope 3 differ from those published in theprevious ESG Report and are in line withthose calculated for FY2023.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail has made methodologicalrefinements for all categories, in order toachieve greater consistency and accuracyof data. Its actual data collection process
is continuously improving through theimplementation of specific product related
data collection.
In a significant step forward with respect
to the data published in the previous
ESG Report, in category 11 (Use of soldproducts), Hitachi Rail now includes
information on products related to the RailControl segment of the business.
By expanding this category, it has improved
accuracy and reliability of the emissions
assessment, consequently becoming themost impactful category in the calculation of
Scope 3 emissions, equating to 84.49% of
the total.

Hitachi Rail aims to adopt an approachbased on actual data, transitioning from aspend-based calculation to an activity-based
calculation methodology, with the goal ofachieving a more complete and accurate
view of Scope 3 emissions, and develop
increasingly effective mitigation strategies.
In addition to the CO2e emissions reported
above, Hitachi Rail also monitors thepollutant emissions related to the production
processes that emit volatile organic andinorganic compounds.
Volatile organic compounds are compounds
that have a high vapor pressure and low
water solubility, and - with reference toHitachi Rail - they are mainly connected withthe use of paints in the production process.

Compared to FY22, total air emissions decreased by 17.05%, thanks to the improvement
plans executed globally.

Letter to
Stakeholders
Methodological
Note

AIR EMISSIONS GRI 305-7
Tonnes [t]39, 40

Highlights Fiscal
Year 2023

FY22

FY23

NOx

19

22

SOx

1

2

CO

5

6

Volatile Organic Compounds

232

192

Volatile Inorganic Compounds

01

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceBEST PRACTICES

Chapter 4
Social Impact

Hitachi Rail’s Solar Initiativewith A2A

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Hitachi Rail, in partnership with A2A, is leading decarbonisation efforts through a
25-year Virtual PPA agreement, which aims to reduce CO2 emissions by 7,000 tons
annually, equivalent to planting 42,000 trees a year.
At the sites of Reggio Calabria, Naples, and Pistoia in Italy, Hitachi Rail installed
next-generation photovoltaic panels aimed at actively reducing emissions and investingin renewable energy. By using rooftop installation, it optimises resource and minimises
the use of land, benefiting local communities both economically and environmentally.
Over the next two years, around 15,000 photovoltaic panels will be installed on the
grounds of the Reggio Calabria site and on the rooftops of production sites in Naples
and Pistoia. These installations will cover over 60,000 square meters, showcasing Hitachi Rail’s commitment to sustainable practices and environmental responsibility.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
ContentIndex

 Ox, NOx and CO values were estimated from the consumption of natural gas and diesel for energy production using EEA emission factors. The emission factors used were those of "Commercial/institutional plants"
S(1.A.4 Small combustion 2019) for offices and those of "Manufacturing industries and construction" (1.A.2 Combustion in manufacturing industries and construction) for production sites and maintenance centers.
Volatile Organic Compounds and Volatile Inorganic Compounds values were aggregated from direct measurements.
40
Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
39

Glossary andMain Acronyms
contained in the
ESG Report106BEST PRACTICES

Letter to
Stakeholders

Achieving the GoGreen
Plus Certificate 2023:
logistics optimisation 82tons of CO2 saved

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

By orchestrating diverse transportation methods, Hitachi Rail is working to reduce approximately 3,500 tons of CO2 emissions from 2023 to 2025 through green shipment management. This year Hitachi Rail achieved the GoGreen Plus Certificate 2023,
which underscores its commitment to environmental responsibility while demonstratinga proactive approach to mitigating climate change.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

The impact of these initiatives speaks volumes: with over €53 million in total shipments
arranged, Hitachi Rail has showcased its capability to manage logistics efficiently andsustainably. By orchestrating diverse transportation methods, the Organisation continues to serve the Middle East and Africa, Europe, and Latin America.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactBy pioneering innovative solutions and fostering collaborative partnerships, Hitachi
Rail continues to drive positive change within the logistics landscape, one shipment at
a time.

Voluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1075.2.3 Sustainable Mobility
FY23 saw a significant resurgence intravel for business following the impactof the COVID-19 pandemic. Hitachi Railhas reintroduced business travel through a
global gradual recovery of national andinternational trips, placing great importanceon safety and security guidelines, while
prioritising the environment and monitoring
the environmental impacts of all businesstravels.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Mobility(Travel for Business)
Hitachi Rail relies on business agreementswith major airline companies reputed forenvironmental performance, it promotes
stays in green and sustainable hotels,
and in FY23, it joined Hitachi Group’s
hotel procurement programme, giving
all travellers access to a larger list ofsustainable accommodation options.
During the reporting period, Hitachi Rail lay
the foundation for a global travel policy toprovide global guidelines to its employees
to book and organise business travels withgreater awareness of safety, security, andsustainability criteria, using a self-service
booking tool. The policy went into effect at
the end of the fiscal year.

Letter to
Stakeholders

Sustainable mobility(home-to-work) - Italian sites
During FY23, Hitachi Rail updated its Hometo-Work Commuting Plans (PSCL) in Italy,
by collecting updated employee residence/
domicile information, in order to better
provide alternative mobility solutions basedon employee mobility habits.
The updated data also allowed Hitachi
Rail to estimate the CO2, Nox, PM10 and
VOC emissions linked to employee homework-home travel. It used the COPERT
method (Computer Programme to Calculate
Emissions from Road Transport) to estimate
the amount of pollutants released into theatmosphere:

AIR EMISSIONS GRI 305-7
Tonnes [t]FY23

Emissions CO2

3,960.8

Emissions CO

61.1

Emissions VOC

7.37

Emissions NOx

11.78

Emissions PM10

1.01

Methodological
Note

The CO2 data gives an emission ratio for the surveyed Italian employees of 0.99 t CO2e/year
per capita. The main actions identified to reduce the above-mentioned emissions are:Highlights Fiscal
Year 2023• contacts with individual local mobility companies (LPT);

Chapter 1
Context and
Identity• car-pooling apps;• if applicable, possible structural improvements to encourage the use of bicycles, such asincreasing the number of bikes racks;

Chapter 2
ESG Framework
and Roadmap• gamification, such as virtual competition between employees regarding mobility habits.

Chapter 3
Governance

The Naples plant started a Car Sharing pilot project last year for employees’ business travel, which
extended to the Genoa plant in FY23. Hitachi Rail also continue to promote and enable remote
working, to support the reduction of pollution by employees’ travelling to work and back to theirhomes in all Hitachi Rail sites around the world.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactBEST PRACTICES

Voluntary
Disclosure on
EU Taxonomy

High Speed Talent Women ReStart:
Bridging Gender Gaps in Sustainable Mobility

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG ReportHigh Speed Talent Women ReStart is a new inclusion programme launched in collaboration with Experis, a global leader in professional resourcing and part of ManpowerGroup. The project aims to provide an opportunity for talented women with strong technical and managerial skills who, for different reasons, have found themselves outside thelabour market and are currently unemployed, providing them with permanent contracts
at Hitachi Rail offices in Genoa, Turin, Pistoia, and Naples.
The initiative aims to address gender imbalances by offering roles as Project Planners or
Project Manager Support, complemented by comprehensive training on methodologies,
tools, and business processes. Participants will work on sustainable mobility projects, enhancing their careers while promoting gender diversity and economic empowerment.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1085.3 Circularity, Innovation and Resource Management

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

Hitachi Rail is working towards a circularbusiness model that fosters material
conservation, product longevity throughrepair and reuse, and eventual recycling are
no longer optional choices but imperativenecessities.
Embarking on a circular business model
demands a radical shift, innovative thinking,substantial investment, and meticulous
research.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Governance of natural
resources
Hitachi Group has established targets tominimise its impact on natural capital aspart of its long-term environmental targets.
Hitachi Rail is working directly withcustomers and society to create higher

economic value, designing and promoting
use of less and pursuing products andsolutions, as well internal processes andactivities, with a reduced environmental
burden.
The enabler for achieving this is technology:
Hitachi Rail prioritises knowledge transfer
between research and business to ensure
responsible resource management thatbalances the use of traditional andalternative sources according to theiravailability, renewability, affordability,
sustainability, and environmental impact.

Circular Economy Project
Hitachi Rail incorporates the concept of
Circular Economy within its Environment
and Quality Management Systems at
the production sites in which relevant
certifications are managed.

The Circular Economy Project allows
Hitachi Rail to evaluate the opportunity
cost of alternative business models interms of socio-economic (Life Cycle
Cost, Social Life Cycle Assessment) andenvironmental impacts (Environmental Life
Cycle Assessment).
In recent years, the market dynamics inthe sector have shifted towards increased
customer demand for turnkey transportation
solutions that efficiently meet the needs of
local and national institutions.
This demand requires comprehensive support
throughout the project’s entire life cycle,
as customers are increasingly regarded as
partners rather than mere buyers.

It publishes several Environmental ProductDeclarations (EPDs) and Carbon Footprint
Disclosures, showcasing progress towards
product recyclability, recovery, and otherenvironmental impacts.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceDuring FY24, the Circular Economy
Transition Project will continue by:

Chapter 4
Social Impact• defining the Circular Economy Strategy;• designing the Circularity Approach;5

Chapter
Environmental
Impact• reporting the economic, social, andenvironmental benefits generated by each
Circular Economy activity undertaken​.

Voluntary
Disclosure on
EU Taxonomy

Many of these activities will be developed in
the near future, with a transition planned forcompletion during FY27.

Hitachi Rail records detailed information on
the material content of each component tofacilitate recovery and recycling operations
by asset owners41.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

41

In some cases, suppliers request the return of resulting materials in their contracts, such as aluminium from window cuts, which are then reused in their production processes. Other instances involve selecting
disposal partners through tender procedures, negotiating the purchase price of resulting materials, particularly in maintenance processes, where valuable materials from spare parts are retained at the end of
their regenerative cycles.

Glossary andMain Acronyms
contained in the
ESG Report1095.3.1 Product Innovation and Eco-Design
Through an open innovation approach,
Hitachi Rail develops and tests new solutions
and technologies to demonstrate theireffectiveness while ensuring positive impact
on business and communities.

• the development of Eco-Design solutions:through the collaboration of thedefined governance, the engineering,development, and deployment teams,
it put in place various implementation
strategies, considering peculiarities andconstraints of Signalling and automation
domain solution, such as:- material substitution;- supply chain workstreams
enhancement;- manufacturing and construction
process optimisation;- product redesign;- end-of-life management options.

MethodologicalNote• The evaluation and the implementation
processes: the proposed Eco-Design
solutions follow strict evaluation to ensure
their effectiveness in achieving theestablished goals, through:Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity- quantitative assessments, comparing
the environmental impact of theredesigned product to its predecessor;

Chapter 2
ESG Framework
and Roadmap- qualitative assessments, consideringfactors like product durability,
repairability, and recyclability.

Chapter 3
Governance
Chapter 4
Social Impact

The goal is to deploy solutions that effectively
reduce the product’s environmental impact
without compromising its safety, functionality,
performance, or user experience.

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

It creates product prototypes that, together
with the associated skills, enrich the future
product portfolio through collaboration withengineering and development departments.

From FY24, all new Hitachi Rail’s products
are being developed using a Life Cycle
Assessment (LCA) and an Eco-Design
perspective, recognising that 80% of a
product’s environmental impact can beaffected by the design phase. Through thisapproach, Hitachi Rail builds an inventoryof materials used throughout entire life
cycles, from raw material extraction to train
decommissioning. This method prioritises
recyclability, environmental impact, andenergy consumption from the outset ofthe process, and includes production andmaintenance processes that valorise wasteor spare parts that have reached the end oflife. Since introducing LCAs on rolling stock
since 2005, Hitachi Rail focuses on:

Letter to
Stakeholders

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report110Eco-Design Strategy

Letter to
Stakeholders

Eco-Design or “sustainable design”
sensitively improves the design of products
for disassembly, repairability, recovery, andrecycling, and includes techniques that are also
applied to Circular Economy, going beyond
the creation of a “green” product to meet theneeds of consumers in a sustainable way.
Companies that incorporate Eco-Design into

their long-term product innovation strategies
strive to alleviate negative environmental,social, and economic impacts of their products’
supply chain and their entire life cycle.
The Eco-Design Strategy Wheel illustrates
the eight main directions to follow to achieve
improvements.

Eco-Design Strategy Wheel
Rethink to a new
business model
Sustainable
end-of-life

Sustainable
Materials

Hitachi Rail pursues an Eco-Design Strategy
through improved performance in the use ofrolling stock. All the Life Cycle Assessment(LCA) studies conducted on local andregional trains, high-speed trains, trams,
and subways have shown that most of
the environmental impacts are due to theoperational and maintenance phase of therolling stock. The electricity mix that feeds
the grid affects the results, but reductionof energy consumption remains a primaryobjective. Hitachi Rail is focused on
reducing energy consumption during theoperational phase through:• weight reduction;• improved aerodynamical performance ofcar bodies and bogies;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• more efficient power units and related
piloting systems HVAC adsorption;
Sustainable
Supply Chain

Sustainableproduct life

Sustainable
Usage

Sustainable
Manufacturing
Sustainable Distribution• lighting efficiency.
While the production of suppliers’ partsand components has a low environmental
impact compared to the overall impacts of
the railway vehicle in its life cycle, HitachiRail’s Eco-Design Strategy also addresses
upstream stages to further reduce overall
impacts. It has launched a dedicatedprocedure to guide the eco-design processincorporating LCA from the conceptual
design to the preliminary and final phases.

Methodological
Note

After conducting LCAs, the results areshared with design members to:Highlights Fiscal
Year 2023• evaluate the attainment of train
performance objectives;

Chapter 1
Context and
Identity• identify critical points contributing
significantly to environmental impacts
throughout their life cycle;

Chapter 2
ESG Framework
and Roadmap• explore alternative materials to reduce
environmental impacts to be incorporated
in the project’s subsequent review;

Chapter 3
Governance
Chapter 4
Social Impact• increase the commitment of the supply
chain in reducing the impacts of the partsand components provided, in particular
by increasing the use of recycled content
from raw materials, such as steel,aluminium, and copper.

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Hitachi Rail is committed to involving
the supply chain to produce trains withimproved environmental performance and,through efforts to meet Scope 3 targets, itcommits to tracing and reducing the useof primary resources. In the Eco-Design
process, each Legal Entity compiles a listof train parts significantly contributing to
the carbon footprint and selects potential
suppliers based on their Environmental
Product Declaration (EPD) or carbon
footprint calculations. Suppliers, uponentering supply contracts, commit toprovide materials and weight details for

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report111

LCA review during the Detailed and Finaldesign phases.
Process owners must communicate changes,
such as:• train weight matrix;• refinements in the design for sub-groups,
equipment, and parts, including possible
material sheets from suppliers;• supplier-related changes, such as change
in origins and components;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• worked hours, resource consumption(energy, auxiliaries), and waste
production (air emissions, water
discharge, solid waste) in each involved
plant for specific projects;• simulation results, such as improved
power equipment performance, energy
recovery systems, product mass reduction,
optimised auxiliary consumption, andenhanced aerodynamics;• issues or changes in predictive
maintenance plans.

The LCA tool is used to assess proposedsolutions for reducing the environmental
impacts from previous phases. Hitachi
Rail involves the supply chain to gather
information on recyclability rates andrecycled content, aiming to increase thecircularity of trains. The LCA is the toolthat not only allows Hitachi Rail to pointout the hot spots to focus on to reduce theenvironmental impact of the train but also
monitors the effectiveness of the alternative
solutions proposed by design.
As part of its Eco-Design strategy, Hitachi
Rail obtained the first PAS 2080 certification
for the HS2 train in the UK. This certification,
released by a third-party certification body,
looks at the train’s carbon management,
starting from the design phase up to its
construction and operation. Currently, thetrain is in the conceptual design phase, andthe certification attests that, since the design
stage, the topic of product decarbonisation
has been a central theme, enabling Hitachi
Rail to meet its commitment to reduce Scope
3 emissions.

Industry first Social ProductDeclaration in the world
Hitachi Rail uses the Social Life Cycle
Assessment (S-LCA) to assess the social andsocio-economic aspects of its products andtheir impacts on different stakeholders along
their life cycle, in line with the Sustainable
Development Goals (SDGs).
In anticipation of approval in 2024,
this activity contributes to Hitachi Rail'salignment with the new obligations
that will derive from the Corporate
Sustainability Due Diligence Directive(CSDDD), that will ensure that large
companies take responsibility for theenvironmental and social impacts
produced along the value chain to build
their business.
Hitachi Rail is the first in the railway
industry to apply S-LCA to a train
life cycle, the Blues Train. From thestart, the goal of the project was to develop
a Social Product Declaration (SPD) following
ISO 14025 guidelines and to communicate
the impacts of the product’s life cycle tostakeholders. Hitachi Rail developed thefirst SPD in the world, demonstrating its
commitment to sustainable production andconsumption, while promoting transparency
and positive social impacts of products andservices. The study was conducted with thesupport of Circular S.r.l and various internal
departments.

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance

After the development of the S-LCA of theBlues train, the project continued with thedevelopment of the first Product Category
Rules for the SPD (PCR – SPD) and the
SPD of Blues which was audited andcertified by a third party and published in
November 2023. This part of the project
was conducted with Circular S.r.l and theInternational EPD System as provider. All
documents and information are available athttps://www.environdec.com/spd.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report112

Hitachi Rail Eco-Design Projects in FY23

Letter to
Stakeholders

PROJECT

Methodological
Note

DESCRIPTION

Highlights Fiscal
Year 2023

Hitachi Rail is theworld's first train
Hitachi Rail became the world's first train manufacturer to attain the rigorous PAS 2080 carbon reduction standard for the design, manufacture, and operation of the 100% electric HS2 fleet in the UK.
Life cycle analysis found that the CO2 emissions on HS2 trains will be 90% lower than taking the same journey by car or plane. These emission savings will reduce further as the UK electricity grid decarbonises.
manufacturer to
The PAS 2080 accreditation is globally recognised as one of the leading environmental standards in infrastructure design in manufacturing.
attain the world
Hitachi Rail was audited and approved for the renewal of the certification in January 2024. For the next audit - scheduled January 2025 - we anticipate that we may need to adjust the design solution to further reduce theleading PAS 2080
carbon footprint of HS2.
environmental
design accreditation
Hitachi Rail is on the way to achieving the Environmental Product Declaration (EPD) certification for the HS2 train. Once the final design review is released, Hitachi Rail will be able to update the LCA model - already
implemented on the SimaPro platform for PAS 2080 purposes - and issue the final release of the Life Cycle Assessment. The LCA and the corresponding EPD will be verified by a third-party certification body and published by
the International EPD System (IES) programme operator on their website www.envnrondec.com.

World first Social
Product Category
Rules (S-PCR) for
Rolling Stock

This year, Hitachi Rail finalised audited and published the world's first Social Product Category Rules (S-PCR) Declaration for Rolling Stock, following last year's successful Social Life Cycle Assessment (S-LCA) on the HTR 412
Blues train.
In FY22, Hitachi Rail carried its first Social Life Cycle Assessment (S-LCA) - representing the first assessment of the positive and negative social impacts of a train over its life cycle - on the Blues train, supported by Circular S.r.l.
Hitachi Rail subsequently began a new innovation project, also with Circular S.r.l. and using the International EPD System (Environdec.com), aiming to develop the first worldwide Social Product Category Rules (S-PCR).
Until now, it was only possible to evaluate and certify the environmental impact of one single product using ICO 14025. With this new project, Hitachi Rail and its Eco-Design team developed the world's first Social ProductDeclaration of Rolling Stock Product Group, allowing it to certify the social impact of its components and complete their sustainability assessment. The publication of the S-PCR of Rolling Stock represents a milestone in thecommunication tool of social impact assessment and covers an important gap.
From now on, other companies in the sector of Rolling Stock can assess the social performance of their train and improve their performance in a consistent manner and other companies can develop their own S-PCR for theirproducts.
During FY23, together with the PCR-SPD, Hitachi Rail's first SPD in the world was finalised, audited and published by the International EPD System (https://www.environdec.com/spd).

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

EPD Certification
HS2 Project

Chapter 1
Context and
Identity

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

113

Hitachi Rail’s Rail Control Eco Design Initiatives and Projects in FY23

Letter to
Stakeholders

PROJECT

Methodological
Note

DESCRIPTION

Highlights Fiscal
Year 2023

Hitachi Rail has consolidated its Eco-Design process:• ensuring compliance with sustainability requirements in contracts:- materials declaration;

Chapter 1
Context and
Identity- compliance to REACH, RoHS;
ECODESIGN PROCESS- carbon footprint.
CONSOLIDATION
AND TOOLS• supporting new bids on Life Cycle Assessment and Full Live Cost requirements:
DEFINITION- definition of LCA methodology to be applied to current strategic products and future products LCA – Life Cycle Assessment (ISO 14040);

Chapter 2
ESG Framework
and Roadmap- reuse of experience and know-how of the vehicle LoB.

Chapter 3
Governance• digital approach to Project Management and Delivery - BIM:
- the BIM digital model of each Part Number (Make or Buy) will include all environmental and Ecodesign Data to set up an integrated and streamlined process of information collection, analysis, elaboration and application.

Chapter 4
Social Impact

The Line 6 Depot and Campegna Station - an example of the application of eco-design approach and methodology in system integration design – has been completed anddelivered.

5

Chapter
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3•	The project (design, configuration, and eco design data analysis) has been carried out in collaboration with the Department of Industrial Engineering (DII) of the University of
Naples Federico II. This collaboration aimed at encouraging the use of sustainable technologies, thus reducing total CO2 emissions and the combination of advanced solutions
has represented an important step forward in the design and construction of sustainable buildings. It provides a tangible example of how innovation and sustainability cancome together to create a cutting-edge environment. The components of the main technical pillars of the application were:

Voluntary
Disclosure on
EU Taxonomy

ECODESIGNAPPLICATIOON CASE:• new materials adopted to enhance the building energy efficiency;
METRO NAPOLILINE 6 CAMPEGNA• photovoltaic systems to produce its own energy;
DEPOT PROJECT• energy-efficient cooling systems;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• smart grids;

Methodological
Note onConsumption
and Emissions• advanced systems for thermal energy storage;• free cooling systems for sustainable cooling of technical rooms.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report114

Innovation Projects
Hitachi Rail Research & Development (R&D)
function has created the “Zero Infrastructure”
framework, aimed at eliminating parts ofphysical infrastructures such as servers
and power and telecommunications cables
alongside railway lines. The aim is toprovide solutions with less equipment thatconsequently consume less; and – where
there is still physical equipment – to favour
green alternative sources of energy together
with batteries and capacitors. These
solutions in turn also reduce the cost ofoperating and maintain the railway.
Hitachi Rail projects within the “ZeroInfrastructure” framework are:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• the creation of alternative green powersources for the signalling systems along
the line;• the study and design on the use of cloudcomputing in signalling and automation
systems, including the implementation of
Verification and Validation laboratories in
the Cloud;• the use of wireless communication toconnect the signalling systems installed
along the line with the central stations;• the optimisation of installation andconstruction process and practices, inorder to minimise the amount of physicalmaterials and reduce the impact on
landfill in terms of waste. This aspect
is managed through weight reduction,

Letter to
Stakeholders

the enhancement of functional synergies
of components and devices to optimise
working cycles, the digitalisation ofdesign, and the deployment workflow by
BIM methodologies.

Hitachi Rail, as a partner of IAM4RAIL,
aims to improve the sustainability of therailway industry with the development
and demonstration of an Intelligent andIntegrated Rail Asset Management System(IAMS) covering fixed and rolling stock
assets, minimising the life cycle costs ofassets and extend their lifetime, while
meeting safety requirements and improving
reliability.

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

One of the key focus areas for innovation
activities is on Automated Maintenanceand Intelligent Asset Management. In FY23,
in accordance with the guidelines set by
Hitachi Ltd. Corporate, Hitachi Rail started
to implement pilot projects to investigate
and analyse the application of AI/Gen
AI to business processes and technicalsolutions. The aim is to significantly increase
the efficiency and efficacy of working
processes, reduce operational time inproject execution and solutions delivery, andincrease the quality of deliverables while
minimising reworking.

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

AI application is expected to determine
a consistent positive impact on technicalbusiness sustainability whilst also improving
environmental parameters.

Methodological
Note onConsumption
and Emissions

By integrating AI with Digital AssetManagement, Hitachi Rail can more
effectively acquire and utilise the enormous
quantity of environmental and performancedata, and fully monitor and finetune theoperations, feedback design decisions, andtechnical strategy.

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report115BEST PRACTICES

Masaccio Hybrid
Hitachi Rail’s Masaccio is the newmultimode single deck train for regionaltransportation, in operation in Italy since
December 2022 across six different regions,from North to South.
The Masaccio train is a concrete example
of Hitachi’s strong commitment to a moresustainable society, not only through theuse of highly recyclable materials, butalso thanks to the innovative features andperformances which it brings on the market.

Its different operating modes (electric,
diesel/electric, hybrid, battery), lightweight
construction and on-board technologies:• reduce fuel consumption, energy
consumption, Nox, and CO2 emissions, aswell as noise pollution;• provide a high km range in battery modefor zero-emissions e.g., while crossing
residential areas;• offer a flexible fleet management thanks
to the capability of running both onelectrified / unelectrified railway lines.

Advancing Digital and Green Solutions
in Rolling Stock

Methodological
Note
Highlights Fiscal
Year 2023

The Hitachi Fleet Monitoring Tool (HFMT) is a strategic digital asset monitoring platform,
powered by Internet of Things (loT), that delivers advanced wayside remote capabilities
and provides the maintenance organisation with condition data that enable effective
and efficient methods for fleet maintenance and asset reliability.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

This digital platform offers real time monitoring, with the ability to produce and control
passenger facing features such as passenger numbers, timetable, seat reservations uploads, remote HVAC temperature settings, and remote software uploads. HFMT offers
insights of real time train key systems such as toilets, HVAC, catering and doors, enabling the control room and maintenance staff to receive live events off the train andtake corrective actions.

Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactAlongside serving real-time insights and remote train control, HMT plays a significant
role in the maintenance organisation for efficient and effective train maintenance andhas enabled the adoption of digital and smart maintenance practices in Hitachi Rail,saving millions of pounds on maintenance activities.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

As a result, the Masaccio train has
been certified by a third party for its
environmental performance (EPD®), as well
as for its social performance (SPD – first in
the world).

Letter to
Stakeholders

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1165.3.2 Circular Economy: Materials and Waste
Materials
Hitachi Rail promotes the reduction of
the intensive use of raw materials in linewith the OECD Council principles and its
sustainability roadmap.
This commitment is reflected throughthe reliable quantification of the raw
materials used and strives for increasingly
standardised designs that can lead toan overall reduction in the direct and/or
indirect consumption of raw materials.

MATERIALS AND SUBSTANCES

42

Tonnes [t]H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Methodological
Note

GRI 301-1

FY22

FY23

Material – Aluminium

10,82015,981

new material

8,639

13,473

recycled material

2,181

2,507

Material – Steel

3,850

2,224

new material

3,850

2,224

recycled material--

Material – Copper

423

352

new material

423

352

-

-

Material - Iron-168

new material-

168

recycled material

-

-

955

1137

nitrogen

40

37

argon

569

521

carbon dioxide

1615oxygen

111

135

other

220

430

244

6,107

Oil

7,630

89

Glues and adhesives

15,735

10,077

recycled material

Specific initiatives have been launchedamong Procurement and Design Dpts toincrease the amount of recycled material
ratio and reduce the emission connectedwith raw material Specific Specificinitiatives have been launched among
Procurement and Design Departments toincrease the amount of recycled material
ratio and reduce the emission connectedwith raw material production (green Steeland Green Alluminium).

Letter to
Stakeholders

Liquefied compressed gases

Paints (water based)

Highlights Fiscal
Year 2023

For the reporting period, the materials
and substances used are listed in thetable. While consumption clearly varies
depending on the work commissioned, thehigher decreased was linked to oil (-99%)
and the higher increased was linked to iron(+41,900%) and paints (2,406%).

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

Primary materials, not pre-assembled

GRI
Content
Index

42

Glossary andMain Acronyms
contained in the
ESG Report

Data regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.
117

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Waste

Letter to
Stakeholders

Hitachi Rail’s internal policy is to reinforce
the principle of re-use, recycling, andrecovery of waste. All sites have waste
collection areas based on the type ofwaste and site layout. External specialist
companies collect and process hazardousand non-hazardous waste. For a detailed
picture of Hitachi Rail’s waste cycle, refer tothe following points:•u pstream generation: upstream waste
is generated and managed by third-party
suppliers who supply materials and/or
semi-finished products such as electronicboards, railway signals, train carriages,
and components for engine assembly. The
related waste includes packaging, plastic,
cardboard, paper, electronic waste, andscrap metal;• inputs: through its office, production,
maintenance and construction sites Hitachi
Rail purchases services, products, andproduction materials for the constructionof trains, mass transit, and railway
signalling;• operations: waste generated by
Hitachi Rail’s own operations includes
both hazardous and non-hazardous
waste. Non-hazardous waste includes
plastic, wood, cardboard, paper,electronic waste, scrap metal, andmixed waste. Hazardous waste
includes batteries, solvents, chemicals,
degreasers, and sludge. The generated
waste is managed in collaboration withauthorised entities;• activities: the activities that generate
non-hazardous and hazardous
waste include office activities, train
manufacturing, railway bogies, railway
signalling, train maintenance activities,
and plant maintenance;• outputs: indirect outputs are generated
by activities carried out by companies
working on Hitachi Rail sites for activities
such as maintenance, including painting
and installation of cabinets, and by supply
logistics;•d ownstream generation: downstream
waste is generated as the result of the
distribution and installation of trains andrailway lines.

Hitachi Rail made continuous efforts tominimise waste in its manufacturing facilities
by prioritising actions as follows:• s eparate waste and, if possible, recycle it;• reduce the production of plastic (Plastic
Free Project);• inform and train the personnel on reuse,through signs, articles, posters, etc;
• reduce the amount of waste in landfill(target 0% landfill waste within FY30).
During FY22, Hitachi Rail used newtechnologies to reduce organic material
waste while creating thermal and electricalenergy. Across the world, it continues topromote green initiatives on all sites through:MethodologicalNote• the elimination of plastic resetting waterbottles in all Italian canteens (as aconsequence, plastic waste was reducedby 12% and 3.6 plastic tons of waste
were avoided);Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity• the use of re-usable and biodegradable
products in India and Sweden (glass
bottles and cups were replaced byceramic ones which allowed for a waste
reduction of 10% compared to theprevious year);

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact• the evaluation of suppliers selling waste
such as iron, copper, ropes, aluminium,and steel.

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy• the use of bio waste bags in offices toreduce landfill waste and to increase
recycling;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report118

Across Hitachi Rail’s supply chain, its suppliers – who mainly generate construction
site waste during installation – continue to commit to the reduction of the amount of
packaging waste that occurs when semi-finished products are delivered.

As of FY23, the total waste production amounted to 17,672 tonnes, an increase of 13%
compared to the previous reporting year due to an increase in production activities withparticular reference to Kasado, Newton Aycliffe and Pistoia sites.

The following table provides details on the waste produced at the production sites andoffices, with the specification of the disposal method:

Approximately 80% of the total waste has been recycled or reused. Taking into account nonhazardous waste, this number reaches 83%, including 64% of used plastic which has been
recycled. With regards to hazardous waste, the number lowers to 37%.

WASTE PRODUCTION43 GRI 306-3; 306-4; 306-5

FY22

FY23

962

1,048

% Recycled

63.4%

36.8%

% Incinerated (mass burn)

24.5%

63.1%

% Disposed of in landfill

12.1%

0.0%

14,731

16,624% Reused

3.6%

26.0%

% Recycled*

87.4%

56.7%

% Incinerated (mass burn)

5.6%

13.0%

% Disposed of in landfill

3.5%

4.3%

15,693

17,672

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Total

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap• total non-hazardous waste increased by 13% (from 14,731 to 16,624 tonnes);

Tonnes [t]TOTAL NON HAZARDOUS WASTE

Methodological
Note

Looking into the trend of waste production by type of waste, it can be noted that:TOTAL

TOTAL HAZARDOUS WASTE

Letter to
Stakeholders• total hazardous waste increased by 9% (from 962 to 1,048 tonnes).

Total waste bydisposal method (%)

Chapter 3
GovernanceDisposal Methods of
Non-Hazardous Plastics (%)

Chapter 4
Social Impact

5

FY23
4.04
6.71

4.02
16.00

89.25

Chapter
Environmental
Impact36

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

79.98

Methodological
Note onConsumption
and Emissions* the increase in reused waste compared to recycled waste is due to a better reporting capacity and thus a better distribution of waste
between recycling and reuse.

FY22
Total waste reused
and recycled

FY23

64

Total waste incinerated(mass burn)Total waste disposedof in landfill
43

TCFD
Reference
Table

total plastic recycled

total plastic reused

total plastic incinerated

total plastic disposed

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG ReportData regarding FY22 differ from the ones represented in the previous ESG Report due to restatements registered following a methodological refinement in data collection and processing.

119

BEST PRACTICES

Letter to
Stakeholders

Improving Waste Management for
Sustainable Operations at Hitachi Rail Plant

Methodological
Note
Highlights Fiscal
Year 2023

The team at the Hitachi Rail plant in Pistoia implemented a new project to improve the order and cleanliness conditions of the temporary storage of waste consisting of wood packaging, with subsequent reuse.

Chapter 1
Context and
Identity

The project, conceived in collaboration between the Facility, Maintenance and HSE functions aimed at reducing the volumes of wooden packaging waste generated by the unpackingof the materials, prior to entering the temporary warehouse, which previously reached peaks capable of jeopardising the capacity of storage areas.

Chapter 2
ESG Framework
and Roadmap

Though this project Hitachi Rail reduced wood piles, consequently reducing the risk of falling materials, and improving decorum and cleanliness of the waste collection areas. Now,
wooden packaging waste will no longer be “recycled”, but rather “reused”, climbing the waste sustainability pyramid.

Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report1205.3.3 Water and Effluents
To minimise the impacts of its activities onwater, Hitachi Rail constantly invests in the
improvement of internal water management,
adopting new technologies, sharing
internal knowledge and implementing goodpractices through the application of the LCA.
Hitachi Rail assesses its water-related
impacts from business sites through the ISO
14001 certified Environmental Management
System and from its products through Life
Cycle Assessment (LCA), an internationallystandardised methodology aligned to
the ISO 14040 and the ISO 14044.
Both approaches help to quantify theenvironmental pressure related to products,
services and operations, the possible

Letter to
Stakeholders

environmental benefits and trade-offs, andthe areas on which to focus.
For FY23, Hitachi Rail approached the datacollection with an increased level of detail inorder to gain a more complete picture andgreater alignment with the requirements of the
GRI reporting standards. As a result, the data
for FY22 differ from those represented in theprevious ESG Report due to the new approachto data collection and the greater granularity
of information collected by each site.44
During the FY23 reporting period, the trend
in water withdrawal has remained quite
stable, registering an overall increase ofaround 0.53%.

Methodological
Note

WATER WITHDRAWAL GRI 303-3

Highlights Fiscal
Year 2023

FY22

FY23
Water
stressareas

All Areas

670,120240,208

673,679

296,452of which total third-party water (including tap water)

281,513

128,145

300,050

134,050of which total surface water (including rivers and lakes)

583

583

1,553

1,553

380,422

103,878

305,702

94,475of which total seawater

-

-

-

-

of which total rainwater

7,602

7,602

66,374

66,374----

Cubic metres [m³]Total water withdrawalof which total groundwater (including underground)of which total produced water

All Areas

Chapter 1
Context and
Identity

Water
stressareas

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Taking into account the sites located in water stress areas only, the trend increases
reaching up to 23.41%.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The management of water discharge is under the control of the Facility Function, which- with HSE Function - defines the control and monitoring standards in relation to local
applicable law.
Hitachi Rail manages all discharges, including those originating from indirect activities,
periodically carrying out chemical, physical, and biological control analyses to verify
the quality of the water before discharge. The management of these controls follows
Corporate procedures.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

44

Glossary andMain Acronyms
contained in the
ESG Report

The water stress related areas were identified based on the location of each site through the tool WRI Water Risk Atlas.
121

Letter to
Stakeholders

During FY23, water discharge increased by an overall 16.55% and by 40.21% while
taking into account the sites in water stress areas only

Water use has decreased by 54.24% across all sites and by 23.05% for the ones in water
stress areas only.

WATER DISCHARGE GRI 303-4

WATER USE GRI 303-5
FY22
All Areas

All Areas

Water
stressareas

Total water discharge

518,507

176,450

604,295

247,392	of which total discharged in third-party water(including sewer)

314,115

173,579

401,939

246,531	of which total discharged in surface water(including rivers and lakes)

Cubic metres [m³]Total water consumption
Water storage*

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

FY22

Water
stressareas

Cubic metres [m³]

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

FY23

Methodological
Note

Chapter 2
ESG Framework
and Roadmap

FY23

All Areas

Water
stressareas

All Areas

Water
stressareas

151,61363,75869,38449,060

60

60

60

60

Chapter 3
Governance
Chapter 4
Social Impact

5

201,521-

201,495

Chapter
Environmental
Impact-	of which total discharged in groundwater(including underground)

-

-

-

-

	of which total discharged in seawater(including marine area)

-

-

-

-

Hitachi Rail has also been implementing and tracking water recycling activities in order todemonstrate responsible management of water resources. These accounted for 60 m³ ofrecycled water during both FY22 and FY23.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

WATER RECYCLED/REUSED
Cubic metres [m³]Total water recycled and reused**

FY22

FY23

60

60

*Water held in water storage facilities or reservoirs

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table**Water that has been used more than once before being discharged from the undertaking’s or shared facilities’ boundary, so that water
demand is reduced.

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report122Letter to
Stakeholders

Hitachi Rail’s Kasado site has already met the Hitachi Ltd. water reduction target set for 2050, registering a 50% improvement of efficiency
in water use compared to 2010. It has done so by developing the following water cycle:• water is taken from a close river;• water is purified and tested;• water is used in the plant for industrial purposes, but also for drinking and cleaning;• after use, water is tested one more time and then released into the ocean.

Thanks to this cycle, 95% (around 240,000
m3 per year) of the total water taken fromthe river goes back to the ocean.

Methodological
Note

Hitachi Rail has implemented several
measures to manage water risks, such as:

Chapter 1
Context and
Identity• improvement of processes and equipment
to verify consumption and discharge,such as enhanced monitoring of water
consumption through dedicated water
metres;

Chapter 2
ESG Framework
and Roadmap

Highlights Fiscal
Year 2023

Chapter 3
Governance
Chapter 4
Social Impact• smart metres installation in multiple sites,
namely all UK sites, Pittsburgh, Batesburg,
Baltimore, Beijing, and Australia (forwhich the installation is still ongoing);

5

Chapter
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3• implementation of corporate andlocal procedures to define control andmonitoring criteria;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• support from external laboratories forsampling;

Methodological
Note onConsumption
and Emissions• pre-treatment systems before discharge,
including biological, chemical-physicalpurifiers, and collection and pre-treatment
tanks;

TCFD
ReferenceTable• automated water diffusion systems;

GRI
Content
Index• awareness campaigns on the sustainable
use of water resources.

Glossary andMain Acronyms
contained in the
ESG Report123Voluntary Disclosure on EU Taxonomy

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

The European Taxonomy (“Taxonomy”),
introduced by Regulation (EU) 852/2020
and in force since January 1, 2022, is aclassification system for environmentally
sustainable economic activities.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

The purpose of the Taxonomy is to ensure
the reliability, consistency, and comparabilityof sustainable economic activities to protect
private investors from greenwashing, assist
companies in the sustainable transition,
mitigate market fragmentation, and bridge
the sustainable investment gap.
Taxonomy has established six objectives for
identifying sustainable economic activities:• Climate change mitigation,• Climate change adaptation,• Sustainable use and protection of waterand marine resources,• Transition to a circular economy,• Pollution prevention and control,• Protection and restoration of biodiversity
and ecosystems.

For each environmental objective, a listof relevant economic activities has been
established. When a business activity fits
the description of an economic activity,
it is considered Taxonomy-eligible. To bein line with the EU Taxonomy, the activity
must substantially contribute to, at least,
one of the environmental objectives, while
simultaneously not causing significant
harm to the others. Therefore, to besustainable, an activity must satisfy boththe Substantial Contribution (SC) criteria
and the Do No Significant Harm (DNSH)
criteria, collectively known as the Technical
Screening Criteria (TSC). Additionally, thecompany must adhere to Minimum Social
Safeguards (MS), specific requirements
upholding social and governance principles.
During 2021, the Delegated Act on climatechange was published, along with its
Annexes I and II, related to the first two
objectives of the Taxonomy: Climate Change
Mitigation and Climate Change Adaptation.
These Annexes identify the eligible
economic activities, i.e. included within
the scope defined by the EU Taxonomy,
and define the related technical screening

criteria, according to which it is possible todetermine whether an economic activity istaxonomy-aligned, i.e. sustainable, to thefirst two objectives.

Sustainability Reporting Directive (CSRD),
which will require the integration of
Taxonomy information into a dedicatedsection of the Management Report.

With the publication of the newEnvironmental Delegated Act in 2023, theAnnexes referring to the four remaining
objectives were published, broadening thelist of economic activities included in theTaxonomy.

Hitachi Rail, as an active member of the
UNIFE European Railway Association, andassociated Sustainable Transport Committee,
contributed to the development of a jointstatement with other rail sector associations
and updated the position paper on the EU
Taxonomy.

The Article 8 of Regulation 852/2020
specifically requires companies subject
to the obligation to publish, starting fromJanuary 1, 2022, information on how
and to what extent their activities are
sustainable, according to the European
Taxonomy. This measure must be expressedboth qualitatively and quantitatively, thelatter in terms of revenue (Turnover), capital
expenditure (CapEx), and operational
expenditure (OpEx).

Chapter 2
ESG Framework
and Roadmap
Chapter 3
GovernanceIn this context, Hitachi Rail has decided tovoluntarily carry out the Taxonomy eligibility
assessment for FY23 in anticipation of such
regulatory changes, aiming at ensuring
maximum clarity, completeness, andcomparability to its disclosure at all times.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

Although not yet subject to the regulation,
Hitachi Rail is closely monitoring
developments in the EU Taxonomy,
including the compliance with the Corporate

Glossary andMain Acronyms
contained in the
ESG Report124Eligibility Analysis

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023

The current eligibility analysis has been
conducted through a thorough examinationof Hitachi Rail’s activities, involving different
internal departments and considering all theactivities currently included in the Taxonomy.
Therefore, the eligibility analysis has also
considered the newly added activities
adopted with the integrations of June 2023.

At this stage, only the potential inclusion of
the Group’s economic activities among thoselisted in the Delegated Act was assessed,
regardless of whether such activities met

one of the technical screening criteria
established by the same regulation.

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

Hitachi Rail’s eligible activities identified under Climate Delegated Act
EU Taxonomy
sectorH I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

EU Taxonomy activity

Activities
description

Hitachi Rail’s activities
Hitachi Rail’s line ofbusiness

Chapter 3
Governance

6. TRANSPORT

8. INFORMATION AND COMMUNICATION

Chapter 4
Social Impact

3.3 Manufacture of low carbon
technologies for transport

6.14 Infrastructure
for rail transport

8.1 Data processing, hosting,and related activities

Chapter 5
Environmental
ImpactManufacture, installation, technical consulting,retrofitting, upgrade, repair, maintenance, andrepurposing of products, equipment, systems, andsoftware related to the rail constituents detailedin Point 2.7 of Annex II to Directive (EU) 2016/797.
These constituents and services are essential tothe environmental performance, operation andfunctioning over the lifetime of rail rolling stock thatcomply with Section 3.3. of this Annex.

Manufacture, repair, maintenance, retrofitting,repurposing and upgrade of low carbon
transport vehicles, rolling stock and vessels.

Construction, modernisation, operation andmaintenance of railways and subways aswell as bridges and tunnels, stations, terminals,
rail service facilities, safety and traffic
management systems including the provisionof architectural services, engineering services,drafting services, building inspection services andsurveying and mapping services and the like aswell as the performance of physical, chemical andother analytical testing of all types of materials andproducts.

Storage, manipulation, management, movement,
control, display, switching, interchange,transmission or processing of data through data
centres, including edge computing.

Manufacture of train components

Manufacture and maintenance of trains

Construction and maintenance of infrastructure andsystem for rail transport

Integration, elaboration and management of datafor digital solutions

Rail Control

Smart Mobility

3. MANUFACTURING
3.19 Manufacture ofrail rolling stock constituents

VehiclesVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

125

Taxonomy KPIs
disclosure

TurnoverThe KPIs specified in the Taxonomy cover
Turnover, CapEx and OpEx. This allows aquantitative representation of Taxonomy
eligible/aligned activities, by presenting
the share of each KPI corresponding to suchactivities.

The proportion of Taxonomy-eligible turnoverhas been calculated as the part of net
turnover derived from products and services
associated with Taxonomy-eligible economic
activities (numerator) divided by net turnover(denominator) for the Fiscal Year ended
March 31, 2024.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

In order to represent the indicators,
the Regulation requires the use of
specific templates, provided in Annex
V of Delegated Regulation 2023/2486
amending Delegated Regulation
2021/2178, as well as the templates
included in the EU Delegated Regulation
2022/1214 regarding economic activities
in certain energy sectors.
As mentioned in the paragraphs above,
Hitachi Rail is carrying out a voluntary
Taxonomy assessment on eligible activities.
The absence of data related to the alignment
process should not be understood as a lackof aligned activities, but rather as the second
step of the Taxonomy analysis that will be
carried out in the near future.
Furthermore, in light of the voluntary natureof this first assessment, the data presented
below have been subject to a few limitations,due to the availability of information.
Nonetheless, Hitachi Rail is working toenhance the level of granularity for future
disclosures.

OpEx

Definition and reconciliation

The Turnover for the Organisation amounts
to 856.1 billion of JPY with an eligibility
rate of 100%.

CapEx

Definition and reconciliation
The Taxonomy-eligible/aligned CapEx
reflects the ratio of CapEx deriving from
eligible/aligned activities (numerator) tototal CapEx (denominator). In particular, thedenominator of the CapEx KPI comprises
the increases in tangible and intangible
assets during the year before depreciation,amortisation, write-downs and write-backs,
including those deriving from businesscombinations.

Letter to
Stakeholders

Definition and reconciliation
The eligible/aligned portion of CapEx
includes capital expenditure relating to assets
or processes associated with Taxonomyeligible economic activities (categorya.) pursuant to section 1.1.2.2. Annex I
Delegated Regulation art. 8). For fiscal year
2023 no CapEx related to a plan (“CapExplan”), intended to enable Taxonomy-eligible
economic activities to become aligned, nor
related to the purchase of products derivingfrom Taxonomy-eligible economic activities
were identified.
The allocation of CapEx to eligible activities
was performed by considering CapEx
directly attributable to the corresponding
activities. CapEx not directly related to thebusiness activities (for example cross-sutting
investment) were not included in the eligibility
KPI in order to ensure the robustness of thedata.

Methodological
Note

The Taxonomy-eligible/aligned OpEx
reflects the proportion of eligible OpEx withrespect to the total OpEx. For the purposeof this analysis, only OpEx connected to
R&D were considered, as they are the mostrepresentative cost items from the shortlist of
costs provided by the Taxonomy under the
OpEx KPI. OpEx were then allocated to theidentified economic activities associated withthe main business activities.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

The OpEx for the BU amounts to 11.7 billionof JPY with an eligibility rate of 100%.

Chapter 5
Environmental
Impact

The templates for the representation of theturnover, CapEx and OpEx indicators areshown below. Please note that only eligibility
information is shown, as only eligibility was
voluntarily assessed for FY23. The alignment
will be evaluated and disclosed in the future.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The CapEx for the BU amounts to 18.1 billionof JPY with an eligibility rate of 71%.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report126

Table 1 - Proportion of turnover from products or services associated with Taxonomy-eligible economic activities – disclosure
covering FY 2023
Financial
year 2023
Economic Activities

Substantial Contribution
Criteria
CodeTurnover Proportionof Turnover,year N

bnJPY

%

(1)

Y; N;
N/EL

(2)

Y; N;
N/EL

(3)

Y; N;
N/EL

(4)

Y; N;
N/EL

(5)

Y; N;
N/EL

Letter to
Stakeholders
Methodological
Note

DNSH criteria('Does Not Significantly Harm')
(6)

Y; N;
N/EL

(1)

Y/N

(2)

Y/N

(3)

Y/N

(4)

Y/N

(5)

Y/N

Highlights Fiscal
Year 2023

(6)

Y/N

MS

Y/N

Proportion of
Taxonomy aligned(A.1.) or eligible(A.2.) Turnover, year2022

Category
enabling
activity%E

Categorytransitional
activity

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

T

Chapter 3
Governance

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)

Chapter 4
Social Impact

T urnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

Of which Enabling

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

-

-

Of which Transitional

-

-

%

-

-

-

-

-

-

-

-

N/A

-

-

Chapter 5
Environmental
ImpactA.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)*

Voluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

EL; N/ EL; N/ EL; N/ EL; N/ EL; N/ EL; N/
EL
EL
EL EL
EL
EL
Manufacture of low carbon technologies fortransport

CCM 3.3

496.3

58%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Manufacture of rail rolling stock constituentsCCM 3.19

10.2

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Infrastructure for rail transport

CCM 6.14

349.5

41%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Data processing, hosting and related activities CCM 8.1

0.0

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Turnover of Taxonomy- eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
(A.2)

856.1

100%

A. T urnover of Taxonomy eligible activities (A1+A2)

856.1

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

100%

100%

0%

0%

0%

0%

0%

N/A
GRI
Content
Index

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
Total

0

0%

856.1

100%

Glossary andMain Acronyms
contained in the
ESG Report* It is specified that for FY2023 Hitachi Rail only carried out the eligibility assessment.

127

Table 2 - Proportion of CapEx from products or services associated with Taxonomy-eligible economic activities – disclosure
covering FY 2023
Financial
year 2023
Economic Activities

Substantial Contribution
Criteria
Code

CapEx

Proportionof CapEx,
year N

bnJPY

%

(1)

Y; N;
N/EL

(2)

Y; N;
N/EL

(3)

Y; N;
N/EL

(4)

Y; N;
N/EL

(5)

Y; N;
N/EL

Letter to
Stakeholders
Methodological
Note

DNSH criteria('Does Not Significantly Harm')
(6)

Y; N;
N/EL

(1)

Y/N

(2)

Y/N

(3)

Y/N

(4)

Y/N

(5)

Y/N

Highlights Fiscal
Year 2023

(6)

Y/N

MS

Y/N

Proportion of
Taxonomy aligned(A.1.) or eligible(A.2.) CapEx,
year 2022

Category
enabling
activity%E

Categorytransitional
activity

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

T

Chapter 3
Governance

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)

Chapter 4
Social Impact

CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

Of which Enabling

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

-

-

Of which Transitional

-

-

%

-

-

-

-

-

-

-

-

N/A

-

-

Chapter 5
Environmental
ImpactA.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)*

Voluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

EL; N/ EL; N/ EL; N/ EL; N/ EL; N/ EL; N/
EL
EL
EL EL
EL
EL
Manufacture of low carbon technologies fortransport

CCM 3.3

12.8

50%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Infrastructure for rail transport

CCM 6.14

4.9

19%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Data processing, hosting and related activities CCM 8.1

0.4

2%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

CapEx of Taxonomy- eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
(A.2)

18.1

71%

A. CapEx of Taxonomy eligible activities (A1+A2)

18.1

71%

CapEx of Taxonomy-non-eligible activities

7.3

29%

Total

25.4

100%

71%

0%

0%

0%

0%

0%

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

N/A

B. TAXONOMY-NON-ELIGIBLE ACTIVITIESGRIContent
Index
Glossary andMain Acronyms
contained in the
ESG Report* It is specified that for FY2023 Hitachi Rail only carried out the eligibility assessment.

128

Table 3 - Proportion of OpEx from products or services associated with Taxonomy-eligible economic activities – disclosure
covering FY 2023
Financial
year 2023
Economic Activities

Substantial Contribution
Criteria
Code

OpEx

Proportionof OpEx,
year N

bnJPY

%

(1)

Y; N;
N/EL

(2)

Y; N;
N/EL

(3)

Y; N;
N/EL

(4)

Y; N;
N/EL

(5)

Y; N;
N/EL

Letter to
Stakeholders
Methodological
Note

DNSH criteria('Does Not Significantly Harm')
(6)

Y; N;
N/EL

(1)

Y/N

(2)

Y/N

(3)

Y/N

(4)

Y/N

(5)

Y/N

Highlights Fiscal
Year 2023

(6)

Y/N

MS

Y/N

Proportion of
Taxonomy aligned(A.1.) or eligible(A.2.) OpEx,
year 2022

Category
enabling
activity%E

Categorytransitional
activity

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

T

Chapter 3
Governance

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)

Chapter 4
Social Impact

OpEx of environmentally sustainable activities(Taxonomy-aligned) (A.1)

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

Of which Enabling

-

-

%

-

-

-

-

-

-

-

-

-

-

-

-

-

N/A

-

-

Of which Transitional

-

-

%

-

-

-

-

-

-

-

-

N/A

-

-

Chapter 5
Environmental
ImpactA.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)*

Voluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

EL; N/ EL; N/ EL; N/ EL; N/ EL; N/ EL; N/
EL
EL
EL EL
EL
EL
Manufacture of low carbon technologies fortransport

CCM 3.3

4.5

38%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Infrastructure for rail transport

CCM 6.14

6.6

56%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

Data processing, hosting and related activities CCM 8.1

0.6

5%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
(A.2)

11.7

100%

A. OpEx of Taxonomy eligible activities (A1+A2)

11.7

100%

0

0%

11.7

100%

100%

0%

0%

0%

0%

0%

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

N/A

B. TAXONOMY-NON-ELIGIBLE ACTIVITIESOpEx of Taxonomy-non-eligible activities
Total

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report* It is specified that for FY2023 Hitachi Rail only carried out the eligibility assessment.

129

Table 4 - Nuclear and fossil gas related activities
Row Nuclear energy related activities
1.
2.
3.

Letter to
Stakeholders

YES/
NO

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuelcycle.

NO

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such ashydrogen production, as well as their safety upgrades, using best available technologies.

NO

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogenproduction from nuclear energy, as well as their safety upgrades.

Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

NO

Chapter 3
GovernanceFossil gas related activities
4.

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.

NO

5.

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.

NO

6.

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactNO

Voluntary
Disclosure on
EU Taxonomy

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report130Significant events occurred after the closingof the Fiscal Year covered by the ESG Report

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Acquisition of Thales GTS

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Hitachi Rail announced on 31st May
2024 the completion of its acquisitionof Thales’ Ground Transportation
Systems (GTS) business, expanding
its global presence to 51 countries
with the majority of its revenues now comingfrom higher-return signalling and systems.
Hitachi Rails key locations in Japan,
Italy, the UK and the US are strategicallycomplemented by GTS large centres inGermany, France, Spain and Canada with both businesses having an establishedreputation in the wider European market, theMiddle East and Asia-Pacific.
The closing sees 9,000 highly skilledcolleagues join the business taking Hitachi
Rail to 24,000 employees worldwide. It
enhances the Company’s full portfolio oftransport solutions with expertise in rollingstock, urban turnkey railways, mainline
digital signalling, freight signalling, andcommunication and supervision systems.

The company has established a new Agile
Innovation Team and will combine theexpertise from GTS’ five global Digital Hubs
& Competence Centres and the digitalstrength of Hitachi’s Group companies.
The new business is also poised to achieve
greater cost competitiveness, including
improving the effectiveness of procurement,
optimising engineering capabilities andinvestment in R&D.

Hitachi Rail is right at the forefrontof the global mobility sector
following the acquisition. The
closing of this acquisition strengthens thecompany’s strategic focus on helping
current and potential Hitachi Rail and GTS
customers through the sustainable mobility
transition - the shift of people from private
to sustainable public transport, driven bydigitalisation.

Hitachi Ltd. Standard
Ethics Rating

The transaction almost doubles HitachiRail’s engineering capability and increases
investment in innovation to provide anenhanced digital product offer, spanningsignalling, ticketing, operations and cybersecurity solutions.

Standard Ethics published the SE Global
Railway Manufacturers Index on June25, 2024. This sustainability index
compares 12 of the world’s largest
listed companies involved in train androlling stock production (ranging from

Chapter 2
ESG Framework
and Roadmap

metros to high-speed trains), as wellas rail transport services and systems,
including infrastructure maintenance andmodernization. The Index aims to provide
an overview of the industry’s sustainability
levels and to monitor progress towardachieving sustainability goals.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactStandard Ethics has defined nine grades,from EEE (the highest rating) to F (the lowest
rating). Hitachi Ltd. received a rating of
EE, which is defined as strong. Hitachi
Rail is committed to driving the sustainablemobility transition, and it is gratifying tosee our commitment reflected in this Index.
The Index will be revised annually, and welook forward to improving Hitachi’s rating
as we strive to become a more sustainablebusiness, achieve our targets, and makesustainable mobility a reality across allareas of the global railway sector.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after
the closing of
the Fiscal Year
covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report131Methodological Note on Consumption
and Emissions
Consumption data were collected at theoperational site level in the original unitof measurement. The conversion factors
used for translating energy consumption
into GJ are those provided by ISPRA(Italian National Institute for Environmental
Protection and Research) in the “Tabella
parametri standard nazionali” (Table of
National Standard Parameters).

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Scope 1
Scope 1 Direct GHG Emissions are ofutmost importance for Hitachi Rail due to its
commitment of Carbon Neutrality in its mainsites by 2030. Consequently, the Company isdoing its best to track the Year-on-Year trend
to identify the primary sources of emissions
and the best solutions to mitigate them.
The calculation structure and methodology
follow the guidelines provided by the GRI
305-1, considering emissions conversion
factors recognised by the international
community and consistent Global Warming
Potential (GWP) rates. Scope 1 emissions arecalculated using the factors provided in theirmost up-to-date publicly available version

by the UK government’s Department forEnvironment, Food and Rural Affairs (DEFRA).

Scope 2
Also, Scope 2 Energy Indirect GHG Emissions
are of paramount importance for Hitachi
Rail in line with its commitment to Carbon
Neutrality in its main sites by 2030. In thisregard, Hitachi Rail is committed in tracking
yearly variation in order to identify whichfacilities are responsible for the highest energy
consumption. This enables the prioritisationof future interventions (e.g., green energy
production, phase-out of polluting technologies,
modernisation of the plants, etc.).
The calculation structure and methodology
follow the guidelines provided by the GRI
305-2, applying for the first time in FY23 bothmarket-based and location-based calculation
method. Market-based emissions were
calculated adopting a combination of emission
factors provided directly by the suppliers,
market-based factors of EU AIB (Associationof Issuing Bodies) and, residually, for sites forwhich the previous factors were not available,

IEA (International Energy Agency) Emission
Factors. The market-based methodology
considers contractual instruments (e.g., Power
Purchase Agreements) and energy attributecertificates (RECs, GOs, etc.). Location-based
emissions instead were calculated adopting
IEA (International Energy Agency) Emission
Factors provided by Hitachi Ltd. and used at aGroup level.

calculation method has been adopted. This
follows the hierarchic order provided by the
GHG Protocol Guidelines, which has been
applied following this logic:

This dual approach, according to GRIStandards, allows to comprehensively assess
greenhouse gas emissions by considering
the actual energy procurement choices(market-based) and the average energy gridemissions (location-based). By employing
these two methods, the Organisation gains
a more detailed understanding of its carbon
footprint, allowing to develop more effective
strategies for reducing emissions andimproving sustainability performance.

• If not available, the spend-based method
has been selected. This provides a highlevel analysis based on the costs ofpurchased goods and services.

Scope 3In line with last year’s methodology, inorder to account for the highest number ofapplicable categories as possible, a hybrid

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance•W henever the internally gatheredvalues allow for an in-depth calculation
methodology (e.g., distance-based
method, waste-type specific method, etc.),
more precise methods have been selected,

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

By applying the mixed method approach, it
was possible for Hitachi Rail to confirm theextensive perimeter analyses and to identify
the main sources of emissions, prioritising
future activities necessary to address them.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table

For FY22 data some categories wererestated. In particular, for categories
5,11 and 12 have been updated throughthe alignment with current methodology
highlighted below. Moreover, certain
emission categories underwent an updatein line with the restatement of input data

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report132disclosed in the ESG Report. For these reasons, the total amount of Scope 3 emission has been restated. Furthermore, it is specified that for FY23 emission categories 3 and 15 have been
included, however, the computation has not been performed for FY22.

Letter to
Stakeholders
MethodologicalNote

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Computation methodology for each emission category is specified below.
Emission category

Methodology

1. P urchased Goods and Services

Computation adopting a hybrid methodology considering both a spend-based method and, when applicable, Supplier-specific method. The spend-based methodology was implemented considering
Environmentally Extended Input-Output (EEIO) emission factors. Emission factors, specific to the country and product or service provided by a supplier have been mapped to all expenditures made by Hitachi Rail.
The categorisation and emission factor mapping of all activities has been reviewed and approved by Hitachi Rail’s procurement team. Additionally, Hitachi Rail has started to incorporate direct actual emissions
from suppliers, based on the criteria of the presence of SBTi Approved targets and the third-party assurance of the GHG results. The pilot project involved 22 suppliers with the aim of expanding the perimeter
yearly, incorporating an ever-increasing number of suppliers actual emission into the computation, reaffirming the Company vision to shift toward full actual data computation in the upcoming years.

2. Capital Goods

Computation adopting a hybrid methodology considering both a spend-based method and, when applicable, Supplier-specific method. The spend-based methodology was implemented considering
Environmentally Extended Input-Output (EEIO) emission factors. Emission factors, specific to the country and product or service provided by a supplier have been mapped to all expenditures made by Hitachi Rail.
The categorisation and emission factor mapping of all activities has been reviewed and approved by Hitachi Rail’s procurement team. Additionally, Hitachi Rail has started to incorporate direct actual emissions
from suppliers, based on the criteria of the presence of SBTi Approved targets and the third-party assurance of the GHG results. The pilot project involved 22 suppliers with the aim of expanding the perimeter
yearly, incorporating an ever-increasing number of suppliers actual emission into the computation, reaffirming the Company vision to shift toward full actual data computation in the upcoming years.

3. F uel- and energy-related activities

Computation following GHG Protocol provisions, incorporating fuel and energy related activities not mapped in scope 1 and 2 with the updated DEFRA conversion factors for T&D, losses and WTT GHG impact.

4. U pstream transportation anddistribution

Computation adopting a distance-based method performed through the collection of data related to mass, distance, and mode of each shipment and the application of DEFRA Conversion factors. Where
necessary and on a residual basis, estimates of distances and/or weight were applied. Residually, the actual emissions reported by the suppliers were taken into account, according to a process designed toensure the exclusion of the possibility of double counting.

5. W aste generated in operations

Computation adopting a Waste-type-specific method using DEFRA emission factors: sum of the multiplication, by the respective conversion factor, of treated water and hazardous and non-hazardous waste, also
broken down by disposal method (recycling, incineration, landfill).

6. Business travel

Computation adopting a distance-based method using DEFRA emission factors. Business travel data was collected with particular reference to air travel with a split between domestic, long-haul, and short-haul
flights and leased vehicles and taxies,

7. E
 mployee Commuting

Computation adopting a variation of the Average-data method. Hitachi Rail computed from direct data gathering the average amount of emission from commuting per person for the Italian sites and used this to estimate thecommuting emission for the entire workforce. The methodology applied to the estimation of air pollutant emissions is based on the EMEP/EEA air pollutant emission inventory guidebook 2016 and is consistent with the 2006
IPCC Guidelines with respect to greenhouse gases.

8. U pstream leased assets

Category not calculated.

9. D
 ownstream transportation anddistribution

Category not applicable as all Hitachi Rail shipments meet the characteristics of category 4.

10. P
 rocessing of sold products

Category not calculated.

11. Use of sold products

Direct use-phase emissions were computed based on the provided EPDs using declared yearly distance and kWh/km, alongside production mix data from EcoInvent for European trains. It should be noted that the different
combinations of train power supplies were taken into account in the calculation, i.e., electricity and diesel. EcoInvent emission factor was used for diesel portion of usage for trains which corresponding EPDs have been
issued; DEFRA emission factor was instead used for the diesel portion of usage of other trains. The emissions related to this category currently encompasses vehicles and Rail Control products delivered in the FY23. RailControl business has been included for the first time in the category of the use of sold products through the inclusion of data referring to a portion of rail control components items produced in the Italian BU’s sites.

12. E nd-of-life treatment of soldproducts

Computation based on available EPDs for a portion of Vehicles delivered in the FY23. Materials data was paired with waste fate emission factors Ecoinvent 3.8 factors for material groups. The emission related tocategory 12 currently encompasses only the vehicles production business of Hitachi Rail.

13. D
 ownstream leased assets

Category not applicable.

14. Franchises

Category not applicable.

15. Investments

Computation based on the allocation of emissions based on the investor’s proportional share of total project costs (Average-data method) which involves using EEIO data to estimate the scope 1 and scope 2
emissions from the investee company and allocating emissions based on share of total project costs. Conversion factor set: EEIO emission factor (CO2/$). Perimeter considered is those of the FY23 Equity share.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report133

TCFD Reference Table

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Topic

TCFD code

SectionDisclosure at a glance*

3.1.1 “ESG Governance”

A global Sustainability Committee oversees sustainability topics including climate related topics. This Committee iscomposed by permanent members, including the Hitachi Rail Group CEO and key global heads of functions (e.g. SHEQ
Global Director, CSR&S, HR, Communication, HSE, Facility, Eco-design, GBMS, etc.), with specific competence on ESG
material topics to guide Hitachi Rail's vision and long-term environmental goals. Moreover, in FY23, Regional Committees
were established to coordinate the local implementation of the global strategy in coordination with the Sustainability
Committee.

Chapter 2
ESG Framework
and Roadmap

Governance

Describe the board’s oversight of
TCFD – G(a)climate-related risks and opportunities

Describe management’s role inassessing and managing climaterelated risks and opportunities

TCFD – G(b)3.1.1 “ESG Governance”
3.3 Risk Management Process and Internal Control System

Chapter 3
Governance
Chapter 4
Social Impact

A CSR & Sustainability function has been established within Hitachi Rail to manage ESG topics across all functions, goingfrom monitoring activities to reporting ones. Moreover, different management departments across Hitachi Rail are dedicated tovarious sustainability topics at global and local level and are addressing climate-related risks and opportunities. In particular,
there is a global energy management function that manages energy topics and the decarbonisation plan. ERM Function,
supported technically by CSR&S, guides risk assessment activities and updates Hitachi Rail Risk and Opportunity Portfolio.
The ARCC (Audit, Risks and Control Committee) and Senior Executives are involved in the periodic review of the risk
assessment results, as well as the Sustainability Committee which takes the proper following management decisions.

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Strategy
Describe the climate-related risks andopportunities the organisation has
TCFD – S(a)identified over the short, medium, andlong term
Describe the impact of climaterelated risks and opportunities on theorganisation’s businesses, strategy,
and financial planning.

TCFD – S(b)Describe the resilience of theorganisation’s strategy, taking into
consideration different climate-related TCFD – S(b)scenarios, including a 2°C or lower
scenario.

3.3 Risk Management Process and Internal Control System

During FY23, the Climate Change & ESG Technical Risk Area was assessed as a crucial element of the set strategy. This
comprehensive Risk Area encompasses several risk sources and events related to ESG targets and the related potential
financial, operational, and reputational risks. For the detailed assessment please refer to paragraph 3.3 Risk Management
Process and Internal Control System - Climate-related risks and opportunities.

2.1 “ESG Roadmap and Targets”
3.3 Risk Management Process and Internal Control System

In FY23, thanks to the integration of the analysis of risks related to climate change within the ERM, a qualitative/quantitative
analysis of the impacts of risks on company operations was carried out for the first time. For the detailed assessment pleaserefer to paragraph 3.3 Risk Management Process and Internal Control System - Climate-related risks and opportunities.
More details will be shared in the next ESG Report.

5.2 Environmental Goals and Decarbonisation Path

Hitachi Rail, following Hitachi Ltd. guidelines, identifies its risks and opportunities and assesses them through a qualitative
approach, taking into consideration three scenarios:a. Business environment and major risks and opportunities under the 1.5°C scenario;b. Business environment and major risks and opportunities under the 4°C scenario;c. A transition scenario assessing non-environmental market factors.

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

Risk management

134Section

Disclosure at a glance*

Letter to
Stakeholders

Describe the organisation’s processes
for identifying and assessing climate- TCFD – RM(a)related risks

3.3 Risk Management Process and Internal Control System

The CSR&S function, methodologically supported by the ERM function and in conjunction with the work of the ARCC and
Senior Executives, identifies and assesses Hitachi Rail's ESG risks, including climate related risks and opportunities.

Methodological
Note

Describe the organisation’s processes
TCFD – RM(b)for managing climate-related risks

3.3 Risk Management Process and Internal Control System

Climate related risks are managed within Hitachi Rail IRM and ERM system, based on the COSO Framework and otherrelevant external framework and monitored by ARCC.

Highlights Fiscal
Year 2023

Topic

TCFD code

Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated
TCFD – RM(c)into the organisation’s overall risk
management

3.3 Risk Management Process and Internal Control System

Chapter 1
Context and
Identity

Climate related risks are then managed within Hitachi Rail IRM and ERM system. Moreover, given the implementation fo the
UK MCD regulation and Hitachi Rail will to fully integrate a TCFD approach in its business strategy and operations, in thenear future, Hitachi Rail will commit to deep dive its scenario analysis and risk and opportunities quantitative assessment.

Chapter 2
ESG Framework
and Roadmap

Metrics & Targets
Disclose the metrics used by theorganisation to assess climate-relatedrisks and opportunities in line with its
strategy and risk management

TCFD – MT(a)Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas TCFD – MT(b)(GHG) emissions and the related risks

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Describe the targets used by theorganisation to manage climaterelated risks and opportunities andperformance against targets

TCFD – MT(c)2.1 E
 SG Strategy and Roadmap
5.2.1 Energy Efficiency and Consumption Trends
5.2.2 GHG Emission and Air Quality

Hitachi Rail has defined an extensive list of KPIs and metrics which go beyond reporting disclosure objectives and isconsidered a useful tool to evaluate and assess ESG performances over time. With regard to climate-related risks andopportunities, Hitachi Rail calculates its consumption trends of natural resources and monitors its related impacts on theoutside world.

5.2.1 Energy Efficiency and Consumption Trends
5.2.2 GHG Emission and Air Quality

Hitachi Rail calculates and discloses its Scope 1, Scope 2, and relevant categories of Scope 3 emissions, together withintensity ratio for energy, waste, and water.

2.1 ESG Strategy and Roadmap
5.2 Environmental Goals and Decarbonisation Path

Hitachi Rail is pledged to reducing the negative impacts of its activities and to enhance the positive ones, also through its
commitment to follow a Science Based approach on decarbonisation after Hitachi Group’s formal commitment to SBTi andthrough its effort in building a climate resilient development plan.
A decarbonisation plan for Scope 1 and Scope 2 emissions was developed for most emission intensive facilities in Hitachi
Rail as a result of that commitment.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report* The contents in this table are updated as of the date of publication of the ESG Report, following the end of the relevant FY, to provide an up-to-date view of the ongoing analysis. The references within the paragraphs of the document instead follow the scope of the FY23.

135

GRI Content Index

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

Statement of use

Hitachi Rail has reported in accordance with the GRI Standards for the period April 1st,2023, to March 31st, 2024.

GRI
Standard

Use of GRI 1

GRI 1: Foundation 2021

Activities and workers
2-6

GRI
Standard

Disclosure

Location

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

2-2

Organisational details

1.2 Introduction to Hitachi Rail
1.2.3 Group structure and business

Entities included in theorganisation’s sustainability
reporting

Methodological Note
1.2 Introduction to Hitachi Rail
1.2.3 Group Structure and Business1.2.4 Economic Performance

2-3

Reporting period, frequency
and contact point

Methodological Note
Letter to Stakeholders from
Giuseppe Marino

2-4

Restatements of information

Methodological Note and where
specifically indicated in the
document

2-5

External assurance-

Activities, value chain, andother business relationships

Omission/Notes

The Organisation and its reporting practices
2-1Disclosure

Disclosure 2-2-b not applicable as theconsolidated financial statement of Hitachi
Rail is included in the Report of Hitachi at
Group level.

Restatements are due to methodologicaland perimeter refinements, aiming
at a more accurate and complete
Representation of data, and are
indicated in the document throughfootnotes in correspondence with thetables with restated information.
Hitachi Rail have not requested external
assurance for ESG Report FY23 and it’s
not yet legally required to.

Location

Chapter 2
ESG Framework
and Roadmap

Omission/Notes

Chapter 3
Governance

1.2 Introduction to Hitachi Rail1.2.2 Business, Products andSolutions
3.4 Towards a Sustainable Value
Chain
4.5 Human rights

2-7

Employees

4.1 Our People
4.1.1 Human Capital

2-8Workers who are not
employees

4.1.1 Human Capital

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy

Omission of disclosure
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Governance
2-9

Governance structure andcomposition

1.2 Introduction to Hitachi Rail
2.1 ESG Strategy and Roadmap
3.1 Corporate Governance3.1.1 ESG Governance

2-10

Nomination and selection of 3.1 Corporate Governancethe highest governance body

2-11

Chair of the highest
governance body

3.1 Corporate Governance

2-12

Role of the highest
governance body inoverseeing the managementof impacts

3.1 Corporate Governance3.1.1 ESG Governance

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

136

GRI
Standard
2-13

Delegation of responsibility
for managing impacts

Location

Omission/Notes

2.1 ESG Strategy and Roadmap
3.1 Corporate Governance3.1.1 ESG Governance3.3 Risk Management Process andInternal Control System

Role of the highest
governance body insustainability reporting

Methodological Note
3.1.1 ESG Governance

2-15

Conflicts of interest

3.1 Corporate Governance

2-16

Communication of criticalconcerns

3.1 Corporate Governance

2-17

Collective knowledge of thehighest governance body

-

2-18

Evaluation of theperformance of the highest
governance body

Further details on GRI 2-18 point b and c
3.1 Corporate Governance4.3.2 Learning, Career Development currently not available.
and Performance Management

2-19

Remuneration policies

3.1 Corporate Governance

2-20

Process to determine
remuneration

3.1 Corporate Governance

Annual total compensation
ratio

N/A

2-14

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Disclosure

2-21

GRI
Standard

Disclosure

2-23

Policy commitments

2-24

Embedding policy
commitments

Omission – Not disclosed due toConfidentiality constraints

Strategy, policies and practices
2-22Statement on sustainable
development strategy

Letter to Stakeholders from
Giuseppe Marino

Location
1.2.1 Mission, Vision and Values
2.1 ESG Strategy and Roadmap
2.2.1 Our Dialogue with
Stakeholders and their
Involvement Process
2.3 Materiality Analysis
3.2.1 Code of Ethics and ESG
Policies
3.2.3 Anticorruption
3.2.4 Competition Law
3.2.6 Data Protection andCybersecurity
3.2.9 Whistleblowing Management
4.2 Diversity, Equity, and Inclusion
4.3 People Development and Care
4.4 Occupational Health and Safety
4.5 Human Rights
5.1 Environmental Policy

Letter to
Stakeholders

Omission/Notes

Methodological
Note

Policy commitments are not publicly
available apart from those explicitly
summarised in the ESG Report becauseof confidentiality constraints if the policy
commitments are not publicly available.
Any approved policy commitment in
Hitachi Rail is broadly shared with
employees through COSMO.

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
Impact1.2.1 Mission, Vision and Values
2.1 ESG Strategy and Roadmap
2.2.1 Our Dialogue with Stakeholders
and their Involvement Process
2.3 Materiality Analysis
3.1.1 ESG Governance3.2.1 Code of Ethics and ESG Policies
3.2.3 Anticorruption
3.2.4 Competition Law
3.2.6 Data Protection andCybersecurity
3.2.9 Whistleblowing Management
4.2 Diversity, Equity, and Inclusion
4.3 People Development and Care
4.4 Occupational Health and Safety
4.5 Human Rights
5.1 Environmental Policy

2-25

Processes to remediate
negative impacts

2.1 ESG Roadmap and Targets
2.3 Materiality Analysis

2-26

Mechanisms for seeking
advice and raising concerns

3.1.2 ESG Management System andCertifications
3.2 Business Ethics, Transparency
and Integrity
3.2.1 Code of Ethics and ESG
Policies
3.2.9 Whistleblowing Management

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

137

GRI
Standard
2-27

2-28

Disclosure
Compliance with laws andregulations

Membership associations

Location
3.2 Business Ethics, Transparency
and Integrity
3.2.1 Code of Ethics and ESG
Policies
3.2.3 Anticorruption
3.2.5 Export and Trade Compliance3.2.6 Data protection andCybersecurity
4.4 Occupational Health and Safety
5.3.1 Product Innovation and EcoDesign
2.2.3 Industry Association

Stakeholder engagement
2-29

2-30

Approach to stakeholder
engagement

Collective bargaining
agreements

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

3-2

Methodological Note
2.2 Stakeholder Engagement
4.3.3 Employee Engagement

Process to determinematerial topics

Methodological Note
2.3 Materiality Analysis

List of material topics

Methodological Note
2.3 Materiality Analysis

Management of material
topics205-2Disclosure

Location

Confirmed incidents of
3.2.3 Anticorruption
corruption and actions taken

206-1

Legal actions for
anticompetitive behavior,
antitrust, and monopoly
practices

207-1

Omission/Notes

Methodological
Note

Communication and training 3.2.3 Anticorruption
about anti-corruption policies 4.3.2 Learning, Career Development
and procedures
and Performance Management

205-3

Approach to tax

Highlights Fiscal
Year 2023
Chapter 1
Context and
Identity

3.2.5. Export and Trade Compliance

Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance3.2.7 Fiscal Transparency

Chapter 4
Social Impact

3-3Management of material
topics3.4 Towards a Sustainable Value
Chain

308-1

New suppliers thatwere screened using
environmental criteria

3.4 Towards a Sustainable Value
Chain

308-2

Negative environmental
impacts in the supply chain
and actions taken

3.4 Towards a Sustainable Value
Chain

409-1

Operations and suppliers at
significant risk for incidents
of forced or compulsorylabor

3.4 Towards a Sustainable Value
Chain
4.5 Human Rights

4.1.2 Industrial Relations
Management

414-1

Ethics, integrity and transparency
3-3

GRI
Standard

Supply chain management

MATERIAL TOPICS
3-1

Omission/Notes

Letter to
Stakeholders

Chapter 1: Context and Identity
2.1 ESG Strategy and Roadmap

414-2

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Omission for disclosure point a. ii.

Methodological
Note onConsumption
and Emissions

New suppliers that were
3.4 Towards a Sustainable Value
screened using social criteria
Chain
Negative social impacts in
3.1.1 ESG Governancethe supply chain and actions 3.4 Towards a Sustainable Value
taken
Chain
4.5 Human Rights

TCFD
Reference
Table

Omission for disclosure 414-2-b;c;d;e

GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

138

GRI
Standard

Disclosure

Location

Omission/Notes

Eco design
Management of material
topics5.3 Circularity, Innovation andResources Management

301-1

Materials used by weight orVolume5.3 Circularity, Innovation andResources Management

3-3

Reduction of energy consumption

302-1

Management of material
topicsEnergy consumption within
the Organisation

305-1
5.3 Circularity, Innovation andResources Management
5.2.1 Energy Efficiency andConsumption Trends

The data disclosed were subject torestatement.

305-2

305-3
302-4

Disclosure

Location

Omission/Notes

Methodological
Note

Reduction of emission and mitigation of climate change

3-3

3-3

GRI
Standard

Letter to
Stakeholders

Reduction of Energy
Consumption

5.2.1 Energy Efficiency andConsumption Trends

The data disclosed were subject torestatement

Management of material
topicsDirect (Scope 1) GHG
emissions

Highlights Fiscal
Year 2023

5.2 Environmental Goals andDecarbonisation Path5.2.2 GHG Emission and Air Quality
5.3 Circularity, Innovation andResources Management

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap

Highlights (FY23)
The data disclosed were subject to5.2.2 GHG Emissoin and Air Quality restatement
5.2.3 Sustainable Mobility

Energy indirect (Scope 2)
GHG emissions

Highlights (FY23)
The data disclosed were subject to5.2.2 GHG Emissoin and Air Quality restatement

Other indirect (Scope 3)
GHG emissions

Highlights (FY23)
The data disclosed were subject to5.2.2 GHG Emissoin and Air Quality restatement

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactWaste management
Water consumption optimisation
3-3

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

3-3

303-1

Management of material
topics5.3 Circularity, Innovation andResources Management
5.3.3 Water and EffluentsInteractions with water as ashared resource

5.3.3 Water and Effluents

306-1

303-2

Management of water
discharge-related impacts

5.3.3 Water and EffluentsOmission for disclosure points a. i.
and iv.

303-3

Water discharge

5.3.3 Water and EffluentsOmission for disclosure point c.

303-4

Water discharge

5.3.3 Water and EffluentsOmission for disclosure point b. and c.

303-5

Water consumption

5.3.3 Water and EffluentsManagement of material
topicsWaste generation andsignificant waste-related
impacts

Voluntary
Disclosure on
EU Taxonomy

5.1 Environmental Policy
5.3 Circularity, Innovation andResources Management
5.3.2 Circular Economy: Materials
and WasteSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

5.3 Circularity, Innovation andResources Management
5.3.1 Product Innovation and EcoDesign
5.3.2 Circular Economy: Materials
and Waste

Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report

139

GRI
Standard
306-2

306-3

DisclosureManagement of significant
waste-related impacts

Waste generated

Location
5.3 Circularity, Innovation andResources Management
5.3.1 Product Innovation and EcoDesign
5.3.2 Circular Economy: Materials
and Waste
5.3.2 C ircular Economy: Materials
and Waste

Omission/Notes

GRI
Standard

306-5

Waste diverted from
disposal

Waste directed to disposal

3-3

403-1

Highlights (FY23)
5.3.2 Circular Economy: Materials
and Waste
5.3.2 C ircular Economy: Materials
and Waste

403-3

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Employee welfare
3-3Management of material
topics

4.1 Our People
4.3.1 Talent Acquisition

401-1

New employee hires andemployee turnover

4.3.1 Talent Acquisition

Benefits provided to fulltime
employees that are notprovided to temporary or
part-time employees

4.3 People Development and Care

Parental leave

4.3 People Development and Care

401-2

401-3
402-1

Minimum notice periods
regarding operationalchanges

4.1.2 Industrial Relations
Management

Location

Omission/Notes

MethodologicalNote

Occupational health & safety

403-2
306-4

Disclosure

Letter to
Stakeholders

403-4

Management of material
topics

3.1.2 ESG Management System andCertifications
4.4 Occupational Health and Safety

Occupational health andsafety management system

4.4 Occupational Health and Safety

Hazard identification, risk
assessment, and incident
investigation

3.1.2 ESG Management System andCertifications
3.3 Risk Management Process andInternal Control System
4.4 Occupational Health and Safety

Chapter 1
Context and
Identity
Chapter 2
ESG Framework
and Roadmap
Chapter 3
Governance
Chapter 4
Social Impact

Occupational health services 4.3 People Development and Care
4.3.3 Employee Engagement
4.4 Occupational Health and Safety
Worker participation,
consultation, andcommunication on
occupational health andsafety4.4 Occupational Health and Safety

403-5

Worker training on
occupational health andsafety4.3.2 Learning, Career Development
and Performance Management
4.4 Occupational Health and Safety

403-6

Promotion of worker health

4.3 People Development and Care
4.3.3 Employee Engagement
4.4 Occupational Health and Safety

403-7

Prevention and mitigation
4.4 Occupational Health and Safetyof occupational health andsafety impacts directly linked
by business relationships

403-8

Highlights Fiscal
Year 2023

Workers covered by an
occupational health andsafety management system

Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index

4.4 Occupational Health and Safety

Glossary andMain Acronyms
contained in the
ESG Report

140

GRI
Standard

Disclosure

403-9

Work-related injuries

4.4 Occupational Health and Safety403-10Work-related ill health

4.4 Occupational Health and Safety

416-2

Incidents of non-complianceconcerning the health andsafety impacts of products
and services

Location

404-1
404-3

412-1

Management of material
topics

4.3.2 Learning, Career Development
and Performance Management

Average hours of training
per year per employee

4.3.2 L earning, Career Development
and Performance Management

Percentage of employees
receiving regularperformance and careerdevelopment reviews

4.3.2 Learning, Career Development
and Performance Management

Employee training on human 4.3.2 L earning, Career Development
rights policies or procedures
and Performance Management

201-1

Disclosure

Location

Direct economic value
generated and distributed

1.2.4 Economic Performance

3-3Management of material
topics

5.2.2 GHG Emission and Air Quality

305-7

Nitrogen oxides (NOx),sulphur oxides (SOx),
and other significant air
emissions5.2.2 GHG Emission and Air Quality

3-3

CustomIndicator

Management of material
topicsNumber of assessment andcertification obtained

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
Impact3.2.6 Data Protection andCybersecurity

3-3Management of material
topics405-1

Diversity of governancebodies and employees

4.2 Diversity, Equity and Inclusion

CustomIndicator

People involved in the
2.2.2 Our Customers and their
Customer Satisfaction Survey
Engagement

Ratio of basic salary andremuneration of women tomen

4.1 Our People
4.2 Diversity, Equity and Inclusion

Voluntary
Disclosure on
EU Taxonomy

2.2.1 Our Dialogue with
Stakeholders and their
Involvement Process

Total number of projects
2.2.1 O ur Dialogue with
and/or initiatives supporting
Stakeholders and theirlocal communities
Involvement Process

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

2.2.2 Our Customers and theirEngagement

Methodological
Note onConsumption
and Emissions

R&D and product innovation - Material Topic covered by a custom KPI
3-3

Management of material
topics5.3 Circularity, Innovation andResource Management

CustomIndicator

Average percentage ofrecyclable components invehicles5.3 Circularity, Innovation andResource Management
5.3.2 Circular Economy: Materials
and Waste

CustomIndicator

Number of innovative projects 5.3.1 Product Innovation andfinalised during the FY
Eco-Design

Support for Local Community

CustomIndicator

Chapter 2
ESG Framework
and Roadmap

3.2.1 Code of Ethics and ESG
Policies
3.2.6 Data Protection andCybersecurity

4.2 Diversity, Equity and Inclusion

Management of material
topics

Chapter 1
Context and
Identity

Data protection security - Material Topic covered by a custom KPIManagement of material
topics3-3Methodological
Note
Highlights Fiscal
Year 2023

3-3

405-2

Omission/Notes

Customer focusing - Material Topic covered by a custom KPIDiversity, Equality and Inclusion

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

GRI
Standard

Air Quality

Training and Career Development
3-3

Omission/Notes

Letter to
Stakeholders

TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in the
ESG Report141Glossary and Main Acronyms containedin the ESG Report

Letter to
Stakeholders
Methodological
Note
Highlights Fiscal
Year 2023
Chapter 1
Context and
IdentityThis glossary aims to facilitate the understanding of the terminology used both for sustainability issues and for those more specific to the business sector.
CSRD (Corporate Sustainability Reporting Directive)

GRI (Global Reporting Initiative) Standards

The CSRD (Corporate Sustainability Reporting Directive) is a European Directive governing corporate sustainability reporting.
The objective of this directive, which came into effect on 5th January 2023, is to ensure that investors and other stakeholders
have access to the necessary information to assess the impact of companies on people and the environment, as well as toevaluate the financial risks and opportunities arising from climate change and other sustainability issues. Companies subject
to the CSRD will be required to report according to the European Sustainability Reporting Standards (ESRS).
EPD (Environmental Product Declarations)
The International EPD® System is a global programme for environmental declarations and signals a manufacturer’s commitment to measure and communicate to stakeholders the environmental impact of its products and services and report these
impacts in a transparent way. With an EPD, manufacturers report comparable, objective, and third-party verified data which
records the environmental performance of their products and services.
GDPR (General Data Protection Regulation)
H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

Chapter 2
ESG Framework
and Roadmap

The General Data Protection Regulation is a European regulation that came into effect on 25 May 2018. It was designed tostrengthen and unify the protection of personal data of citizens within the European Union, giving them greater control overtheir data and imposing a set of obligations and responsibilities on public bodies and businesses in regard to the management of personal data. It also establishes significant sanctions for organisations that violate the provisions of the GDPR.
th

GHG (Greenhouse gas)
The IPCC defines Greenhouse gases as those gaseous constituents of the atmosphere, both natural and anthropogenic, which
absorb and emit radiation at specific wavelengths within the spectrum of thermal infrared radiation emitted by the Earth’s surface, by the atmosphere itself, and by clouds. This property causes the greenhouse effect. Water vapor (H2O), carbon dioxide(CO2), nitrous oxide (N2O), methane (CH4), and ozone (O3) are the primary greenhouse gases in the Earth’s atmosphere.
Moreover, there are several entirely human-made greenhouse gases in the atmosphere, such as the halocarbons and otherchlorine- and bromine- containing substances, dealt with under the Montreal Protocol. Besides CO2, N2O, and CH4, the Kyoto
Protocol deals with the greenhouse gases sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).

The GRI Standards provide a standardised framework for organisations to report on their sustainability impacts in a consistentmanner, fostering global comparability, transparency, and accountability. The set of Standards allows organisations to selectthe most relevant Topic Standards based on their material topics - economic, environmental, or social - ensuring an inclusiveand comprehensive portrayal of material impacts and their management in sustainability reports. In 2021, GRI introduced its
latest version of the standards, further encouraging organisations to engage with stakeholders in identifying and prioritising
their impacts (GRI 2).
IPCC (Intergovernmental Panel on Climate Change)
The IPCC is a United Nations intergovernmental body offering regular scientific assessments on climate change, future risks,and potential solutions for adaptation and mitigation. Through its Assessment Reports, it presents the updates related to climate change impacts and options for mitigating its effects. Also, it produces Special Reports on specific topics agreed uponby member governments and Methodology Reports that provide guidelines for greenhouse gas inventories preparation.
LCA and S-LCA (Life Cycle Assessment.)
Life Cycle Assessment (LCA) is a methodology used to evaluate the environmental, social, and economic impacts of a productor process throughout its entire life cycle, from raw material extraction to waste disposal and help inform decision-making
while identifying opportunities for improvement. Social Life Cycle Assessment (S-LCA) is a methodology used to assess andevaluate the social and societal impacts of a product or process throughout its life cycle considering factors such as labour
conditions, human rights, community wellbeing, and social equity. By considering the social aspects of a product or process,
S-LCA aims to support sustainable and socially responsible decision-making.
OECD (Office of Economic Cooperation and Development)
OECD is an intergovernmental economic organisation with 37 member countries, founded in 1961 to stimulate economic
progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market
economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices
and coordinate domestic and international policies of its members.

Chapter 3
Governance
Chapter 4
Social Impact
Chapter 5
Environmental
ImpactVoluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report
Methodological
Note onConsumption
and Emissions
TCFD
Reference
Table
GRI
Content
Index
Glossary andMain Acronyms
contained in
the ESG Report142Letter to
Stakeholders

PCR – Product Category Rules
A PCR (Product Category Rule) is a copyrighted document found in the EPD “cookbook,” providing guidelines for creating a
EPD (Environmental Product Declaration) for a specific product category. The PCR instructs on conducting the life-cycle assessment, declared/functional unit (product quantity and service life), and defining the use phase and end-of-life options. The PCR
allows accurate assessment of a product’s environmental impacts and ensures consistency and comparability across EPDs
within the same product category.

Methodological
Note
Highlights Fiscal
Year 2023

TCFD (Task Force on Climate Related Financial Disclosures)

Chapter 1
Context and
Identity

The Task Force on Climate-related Financial Disclosures (TCFD) is an initiative established by the Financial Stability Board(FSB) to develop recommendations for more effective climate-related financial disclosures. The TCFD aims to enhance transparency around climate-related risks and opportunities, helping investors, lenders, insurers, and other stakeholders to makemore informed financial decisions.

Chapter 2
ESG Framework
and Roadmap

IRIS (International Railway Industry Standard)

Chapter 3
Governance

IRIS certification is a global system developed by UNIFE in 2005 to ensure higher quality in the rail sector. It aims toevaluate those companies supplying to the railway industry through a standardised evaluation method and promotes
common language, guidelines, fostering transparency and trust in IRIS Certification throughout the supply chain. The
standard enhances competition and improves the quality of rail products, building upon ISO 9001:2015 to create arecognised and robust evaluation framework for the rail industry.

Chapter 4
Social Impact
Chapter 5
Environmental
ImpactEco-design
Eco-design, also known as ecological or sustainable design, is an approach that considers the environmental impact of
products and systems throughout their entire lifecycle. Its goal is to create environmentally friendly and resource-efficient
products, considering factors like energy efficiency, waste reduction, and the use of renewable materials. By adopting
eco-design principles, companies can contribute to a more sustainable future and appeal to environmentally conscious
consumers.

Voluntary
Disclosure on
EU Taxonomy
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 4 – F Y 2 3

GBMS (Global Business Management System)
The Global Business Management System is the unique set of rules common to the whole Hitachi Rail organisation. It is designed to cover, with the same approach and methods, the activities of all Hitachi Rail entities. The GBMS combines all related components of a business into only one system to facilitate management and monitoring in a continuous improvement
approach. There are four GBMS sections: Governance; Organisation; Process excellence and Enterprise architecture.

Methodological
Note onConsumption
and Emissions

MaaS (Mobility as a Service)

TCFD
Reference
Table

MaaS is an integrated system of transport aimed at optimising urban mobility through modular solutions, which are morecoordinated and efficient. The goal is to respond to the increasingly emerging necessity of mass transport in the sustainablemobility ecosystem.

GRI
Content
Index

S4M (Services for Mobility)
S4M delivers advertising that drives more customers to stores, dealerships and restaurants. Its drive-to-store platform, Fusio,delivers incremental customer visits which are always independently verified. Founded in 2011, S4M’s platform is available
globally, and used by over 1,000 brands worldwide to drive customers to physical locations.

Glossary andMain Acronyms
contained in
the ESG Report143

ESG Report 2024 – FY23

To share your feedback on this report please email:csrs@hitachirail.com

Creative concept, design and layout
MERCURIO GP – Milan
mercuriogp.eu

The Hitachi Rail ESG Report has been publishedin its digital format to minimise environment impact.
Please consider the environment before printing.