HITACHI RAIL

ESG Report 2023 – FY22

Think Responsibly, Ac t Sustainably

H I TA C H I R A I L . C O MIndexLetter to Stakeholders
from Giuseppe Marino

3

Guide to the ESG Report 2023

5

Highlights Fiscal Year 2022

6

Chapter 1/ Context and Identity

7

1.1	The Global Sustainability Scenario andthe Transport Sector Challenges and Trends
1.2 	Introduction to Hitachi Rail Identity and Business1.2.1 Mission, Vision and Values
1.2.2 Business, Products and Solutions
1.2.3 Group Structure and Business1.2.4 Economic Performance

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

Letter to
Stakeholders

Chapter 2/ ESG Framework and Roadmap

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17
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2.1 ESG Roadmap and Targets
2.1.1 Delivering a Sustainable, Safe andHigh-Quality Railway Business21

2.2 Our Partnerships for Sustainable Development
2.2.1 Industry Associations and Certifying Authorities

26
26

2.3 Stakeholder Engagement
2.3.1 Our Dialogue with Stakeholder
and their Involvement Process
2.3.2 Our Customers and their Engagement29

2.4 Materiality Analysis
2.4.1 Our Contribution to SDGs

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Chapter 3/ Governance38

3.1 Corporate Governance3.1.1 ESG Governance3.1.2 ESG Management System and Certifications

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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 Whistleblowing Management
3.2.4 Anticorruption
3.2.5 Competition Law
3.2.6 Export and Trade Compliance3.2.7 Data Protection and Cybersecurity
3.2.8 Fiscal Transparency
3.2.9 Internal Audit

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3.3	Risk Management Process and Internal Control System		
3.3.1 Responding to ESG Risks and Opportunities

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54

3.4 Towards a Sustainable Value Chain
3.4.1 Supplier Governance and Guidelines
3.4.2 Sustainable Supply Chain

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Chapter 4/ Social Impact

Chapter 5/ Environmental Impact

Guide tothe ESG
Report 2023

91

5.1 Environmental Policy

92

5.2 Environmental Goals and Decarbonisation Path5.2.1 Energy Efficiency and Consumption Trends
5.2.2 Emissions Reduction and Air Quality
5.2.3 Sustainable Mobility

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

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102
107
110

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Methodological Note

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

112

Chapter 5
Environmental
Impact114

Glossary and Main Acronyms
contained in the ESG Report

117

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Year covered by the
ESG Report61

4.1 Our People
4.1.1 Human Capital
4.1.2 Relations Management

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63
67

TCFD Reference Table

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4.2 Diversity, Equity and Inclusion

69

GRI Content Index

121

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

73
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85

4.4 Workers’ Rights and Human Rights

86

4.5 Occupational Health and Safety88

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ESG Report

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Letter to Stakeholders“

Letter to
Stakeholders

Guide tothe ESG
Report 2023

from Giuseppe Marino

Highlights Fiscal
Year 2022

In today’s world, faced with climate emergency, the pursuit of sustainability isn't just a choice – it's a responsibility.

Chapter 1
Context and
Identity

It is why last year we announced our decarbonisation pathway for Hitachi Rail as part of our commitment to becomea Climate Change Innovator, and why today I am proud to share our annual ESG Report, outlining our progress in thefinancial year 2022.

Chapter 2
ESG Framework
and Roadmap“

We understand that the role of rail transport is crucial, both in achieving the goals of climate neutrality by 2050,
and in bringing people, communities, and our customers closer together through an integrated and sustainablemobility ecosystem.

Chapter 4
Social Impact

A rich and diverse culture

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

Progress through innovation
It is our people that play the greatest rolein moving us forward. And our teams
have much to be proud of in FY22.
Amongst the many achievements, Hitachi
Rail launched Europe’s first battery
hybrid fleet of passenger trains in thepioneering Masaccio train; we introduced
the 360Pass smart ticketing app tohelp operators worldwide connect andoptimise their city’s entire transportation
network in real time; we became the firstrail manufacturer in the world to obtain

Chapter 3
Governancethe BSI PAS2080 Carbon Management
certification for the UK’s new HS2 trains;and – together with our Hitachi Group
partners - we started work to create aclosed-loop supply chain for lithium-ion
batteries.
This year, too, Hitachi Rail received the
EcoVadis Platinum medal for businesssustainability, putting us in the top 1%of companies in our industry (read more
about our ESG Ratings in Section 3.1.1).

Chapter 5
Environmental
ImpactA diverse workforce fosters innovationand success, which is why – as we growour team with nearly 1,500 new hires
last year – we continue to take further
strides in achieving gender diversity,with female representation in senior
positions rising by 2.6% in FY22.
And why, around the world, we
promote diversity within the industry
at large, as exemplified by our
ongoing Women in STEM activities
and during our annual Women’s
History Month campaign, whichcelebrated the voices of hundreds ofHitachi Rail colleagues worldwide(see Our People in Section 4.1).

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Year covered by the
ESG Report

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ESG Report

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Decarbonisation
pathway

Partnerships forsustainable growth

Becoming a climate change innovatormeans driving a modal shift away fromfossil fuelled cars and planes, accelerating
the decarbonisation of rail with batteries,
and decarbonising ourselves using
science-based targets.

At Hitachi Rail, we also recognise that
our journey towards sustainability is ashared endeavour, rooted in collaboration,transparency, and purposeful action.

Last year, we bolstered our existingcommitment, setting new targets to achievecarbon neutrality throughout our entire
value chain by 2050. And we are wellon the way, achieving a 12% decrease inCO2e emissions across Scope 1 and 2(read more about our progress on
Environmental goals in Section 5.2).
This year, we’ve set specific targets to
reduce all emissions by at least 5% in
FY23 compared to FY22.

As a partner and climate actor, we play afundamental role in the overall value chain,
and we have a responsibility to deliver
sustainably, as an innovative and reliable
partner to our customers. From FY23, forexample, all new Hitachi products will be
developed using Life Cycle Assessment,
adopting an eco-design perspective that
alleviates environmental, social, and economic
impacts in the product supply chain andthroughout its lifecycle (learn more about ourInnovative Product Design in Section 5.3.1).
In this way, our products can contribute to theContinuous improvement
is a team sport
growing circular economy that our societies
will need to achieve true sustainability.
Our pathway to decarbonisation hinges too
on our relationship with our supply chain. We
were pleased to welcome 3,000 of our trusted
suppliers to the Hitachi Rail Global Partner
Day, where we highlighted the importanceof sustainability and decarbonisation andcelebrated these partners for their contribution
to its success (learn more about our Sustainable
Supply Chain in Section 3.4). And we areproud that today, more than half of our
procurement spend is covered by suppliers
rated, like us, by EcoVadis for their sustainable
performance. We continue to onboard more
suppliers so we can support our partners intheir own decarbonisation journey.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

As sustainability gains increasing
importance, I'm reminded of our collective
power to effect change. I would like tothank our people, customers, partners andstakeholders, whose collaboration drives
our shared mission.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

I am deeply proud of the progress madeby all our teams as evidenced throughout
this report, and by the ambitious goals wehave set ourselves.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceThis commitment is reflective of our values
and of our determination to lead therail industry towards a greener, more
inclusive, and sustainable future.

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 3 – F Y 2 2

Giuseppe Marino

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

Chief Executive Officer of Hitachi Rail

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Guide to the ESG Report 2023 – FY22

Letter to
Stakeholders

Guide tothe ESG
Report 2023

(April 1 2022 to March 31 2023)
The following document constitutes Hitachi Rail's fourthannual sustainability report. Its purpose is to reporton Environmental, Social, and Governance (ESG)
performances, impacts and ambitions the Hitachi RailBusiness Unit of Hitachi Ltd., hereinafter referred to as"Hitachi Rail" or "Organisation".

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

The objective of the document is to enhance awarenessregarding Environmental, Social, and Governanceissues and consistently establish and implement effective
measures and strategies. The document is structured toprovide an overview of the context in which Hitachi Rail
operates and its identity and values (Chapter 1) andillustrate to the reader its approach to sustainability issues

through its ESG Targets and Roadmap (Chapter 2), andthen focus on its performance and impacts in the threesustainability dimensions: Governance (Chapter 3), Social(Chapter 4) and Environmental (Chapter 5).
To ensure the comprehensive disclosure of information,
Hitachi Rail reports with reference to the GRI Sustainability
Reporting Standards, as set forth by the Global Reporting
Initiative (GRI). For further details please consult the GRI
Content Index at the end of this document. To ensure thecoherence of data, a comparative analysis has been
conducted with the preceding Fiscal Year, wheneverpossible, although in some cases the reporting scope has
been expanded due to continuous improvements.

Highlights Fiscal
Year 2022

In this FY22 edition, Hitachi Rail has developed a new
approach to materiality analysis that looks to the futureof Corporate Sustainability Reporting from a perspectiveon the impacts the Organisation has on the economy,
people, the environment and human rights.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

The outcomes of this Materiality Analysis received approval
from Hitachi Rail’s Sustainability Committee in June 2023.

Chapter 3
Governance

Chapter 4
Social Impact

Hitachi Rail emphasises the intrinsic correlation between
its material topics and the United Nations Sustainable
Development Goals (SDGs) and the associated Targets towhich it contributes in line with Hitachi Group’s Business
Strategy and Corporate Commitments. For an in-depth
understanding of their interconnectedness, please refer tothe section titled "Our Contribution to SDGs".

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

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ESG Report

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Highlights Fiscal Year 2022
38 countries

13,765 employees

Environment Social
Decrease of -12% in Scope 1 and 2 emissions

0.68 lost time injury frequency rate

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

46 sites .
1

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Governance

Chapter 3
Governance

Chapter 4
Social Impact

EcoVadis platinum medal with score of 81/100

Chapter 5
Environmental
Impact(28 fewer incidents vs. last year)
New materiality analysis, with more than

8 (2 new) categories reported for Scope 3
emissionsAn average of 19 training hours per

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

1,900 internal and external stakeholders

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

employee (over 265,000 total training hours)
Water consumption and non-hazardous

90% completion rate of the annual

waste generation in line with previous FY

Ethics & Compliance training

Targeting a 100% reduction of Scope 1

0 incidents of corruption

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Reportand 2 emissions by 2050

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FY22 ESG Report perimeter relates to 46 sites. For additional information on the reporting perimeter, please refer to the Methodological Note.

6

1

Context
and Identity

Chapter 1:

Letter to
Stakeholders

Context and Identity

Highlights Fiscal
Year 2022

1

ChapterContext and
Identity

These assumptions also form thebasis of Hitachi Rail's idea ofsustainability, as further describedin paragraph 2.1.1, to offer an
integrated and sustainable mobility
ecosystem, capable of contributing to theachievement of prosperity and quality oflife in balance with natural capital.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant 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 3 – F Y 2 2

The United Nation’s 17 Sustainable
Development Goals (SDGs) describe
the major challenges humans will haveto face to ensure a sustainable, peaceful,prosperous, and equitable life on earth
for all, in the present and in the future.
In this context, the role of rail transport
becomes crucial in achieving the goalsof decarbonisation and in emphasising
its contribution to bringing people,
territories, and relationships closer
together for social and economic
well-being.

Guide tothe ESG
Report 2023

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contained in the
ESG Report

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1.1 The Global Sustainability Scenario andthe Transport Sector Challenges and Trends

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

Fiscal Year 2022 was characterised bystrong socioeconomic and environmental
instability; events such as the Russian
invasion of Ukraine and the climate
emergency, which led to devastating
events in many countries of the world,
made the challenges harder to tackle forcompanies worldwide.
Among the main trends in the transport
sector is the growing emphasis onelectrification and renewable energy
sources to power trains. This shift aims
to reduce greenhouse gas emissions anddependence on fossil fuels. Advancements
in technology are facilitating the adoptionof smart and automated systems tooptimise operations, improve safety,
and enhance passenger experience.
However, several challenges persist.
Upgrading existing rail infrastructure toaccommodate new technologies requires
substantial investments and coordination
among stakeholders. Ensuring seamlessintegration with other modes oftransportation and improving accessibility
to remote areas are pressing challenges.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Operators also faced challenges adapting
to the post pandemic world. Whilepassenger levels have mainly recovered
to pre-pandemic levels, the emergenceof hybrid working has made it harder topredict occupancy patterns. The traditional
peak rush hour for commuters has been
replaced with a more volatile trends,
making it hard to schedule traditional
maintenance activities for both trains andinfrastructure.

1

ChapterContext and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

As extreme climate events intensify,
amplified by the global pandemic,
the effects of climate change stress are
becoming more evident, stressing theneed of a notable shift in businesses’commitments to reduce their environmental
impacts. Regulators around the globe
are enacting an increasing number oflegislation requiring companies to havestronger climate and environmental
but also social commitments.
In January 2023 the Corporate
Sustainability Reporting Directive (CSRD)
entered into force to define astandard for Corporate Sustainability

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

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Reporting across EU and international
businesses. Additionally, various
frameworks and initiatives are being
applied internationally for the reportingof ESG topics. In particular, two of mostwidely used sustainability performance
reporting standards globally are the GRI
Standards and SASB Standards.
Within this context, Hitachi Rail, recognising
its role in Europe and in the global transport
sector, has chosen to engage in promoting
increasingly integrated, inclusive, collective,and environmentally low-impact mobility(infrastructure and services). For Hitachi
Rail and its clients, the challenge lies inaligning traditional economic and financial
objectives with the principles of sustainable
development.

Ensuring a continuous and sustainable
movement of people and goods within andbetween cities is fundamental to building
a sustainable future. The execution ofcontinuous and systemic innovation
processes represents a strategic driver for
Hitachi Rail to strengthen its leadership
positions in reference sectors. Throughinnovation, Hitachi Rail aims to offer
increasingly high-quality and personalised
services that cater to the needs oftravellers, clients, and other stakeholders,encompassing the entire value chain: fromdesign and construction to maintenance,and providing safe, integrated, and tailormade transport services.

Letter to
Stakeholders

Hitachi Rail launches first-of-its-kind research
into passenger attitudes to smart mobility

Guide tothe ESG
Report 2023

Following the successful launch of the new 'Smart Mobility' offering last year,
Hitachi Rail is excited to have launched a first-of-its-kind smart mobility reportin February 2023. The global report examines attitudes from 8000 survey
respondents toward smart city transport in eight global cities: Washington,
Toronto, London, Paris, Düsseldorf, Turin, Dubai, and Bangkok.

Highlights Fiscal
Year 2022

1

ChapterContext and
Identity

The headline discoveries:

Chapter 2
ESG Framework
and Roadmap• Three-quarters of people would use public transport more often if they had asingle effective digitised transport app;

Chapter 3
Governance• The single most important benefit of such an app is the ability to avoid
crowding, according to 3 in 4 respondents;

Chapter 4
Social Impact• In boost for cities' decarbonisation strategies, two-thirds of respondents would be
willing to pay for better services via more road charges, despite increased car usage.

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

What motivates peoples' travel decisions?
Overcrowding (48%) andbusyness (42%) of services are
the single biggest factors thatput people off of using public
transport. In contrast, people
identify the three C's – cost,convenience, and comfort – astheir biggest motivators to travel,with 79% noting the appeal of
the ability to avoid crowded
services, and 78% highlighting
the importance of shortest journey
time, and cheapest travel option.

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360Pass - metro station

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1.2	Introduction to Hitachi Rail Identity and Business

Letter to
Stakeholders

Guide tothe ESG
Report 2023

For over a hundred years, Hitachi’s
mission has been to contribute to society
through the development of superior
technology.

like the iconic Shinkansen in Japan, tothe digital signalling infrastructure thatenables autonomous trains, to deliveringand operating entire turnkey railways.

Today, Hitachi Rail is connecting the futureof mobility - helping every passenger,
customer and community enjoy the benefitsof more seamless, sustainable transport.

Hitachi Rail is committed to being a
climate change innovator by co-creating
greener products with its customers - suchas world-leading battery trains - andthrough its commitment to reduce its own
CO2 emissions to net zero by 2030 andthe entire value chain by 2050.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2Every year, the company's pioneering
technology enables more than 18bn
passenger journeys and helps to safely
transport millions of tonnes of freight.
As a trusted partner to cities and transport
operators around the world, Hitachi Raildelivers every part of the railway: frommanufacturing and maintaining trains,

Hitachi Rail is pioneering the digitaltransformation of transport. With its new
Smart Mobility suite of technology, Hitachi
Rail helps customers to predict, plan,manage and optimise mobility networks inreal time - 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.
From its origins in Japan, Hitachi Rail’s
reach is global, but its business is local– with success built on investing in thepeople and communities that it serves
around the world. Hitachi Rail is invested
in the future of its communities – asan employer, dedicated to developing
people, skills and talent, but also as aninvestor – bringing economic benefits
to local places through its supply chain
partnerships.

Highlights Fiscal
Year 2022

Hitachi Rail’s customers benefit fromadditional value from the wider HitachiGroup companies, including digitaltransformation expertise from GlobalLogic,
energy infrastructure from Hitachi Energy
and innovative business models andfinancing from Hitachi’s corporate entityand partners.

1

ChapterContext and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Hitachi Rail is growing and looking torecruit diverse talent now. Hitachi Rail now
operates with around 14,000 employees
in 38 countries, with strong roots in
Europe, Asia-Pacific and the Americas.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

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1.2.1 Mission, Vision and Values
The approach of Hitachi Rail is uniquein how its pioneering partnerships brings
innovation and expertise from the HitachiGroup and its wider stakeholders’ ecosystem.
Hitachi Rail’s beliefs and actions are
guided by a clear mission, vision andvalues as the Organisation takes pridein holding itself and its projects to thehighest standards, and the values provide
benchmarks to evaluate successes andopportunities for improvement.
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.

Letter to
Stakeholders

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

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

The Vision is that every
passenger, customer andcommunity around the globe
can enjoy the benefits of moreseamless, sustainable journeys.

ValuesGuide tothe ESG
Report 2023

Wa (Harmony) – (和)The need to show respect tocolleagues, suppliers, clients, andstakeholders.

Highlights Fiscal
Year 2022

1

ChapterContext and
Identity

Makoto (Sincerity) – (誠)To act with integrity in all words
and actions, exemplifying thefact that sincerity lies inholding tostated values.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Kaitakusha Seishin(Pioneering Spirit) – (開拓者精神)This means to lead with ambition,
to seek new challenges; and to
be unafraid of flexibility andadaptability to the changing
needs of the business.
Hitachi Rail’s people aroundthe globe choose to put thesevalues into practice by working
together, responsibly and with acollaborative approach with theaim of contributing to the society
with courage and knowledge.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

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Rio Tinto AutoHaul in Pilbara

121.2.2 Business, Products and Solutions
UK: Great Western Railway
Service & Maintenanceestension

Letter to
Stakeholders

Denmark:
Copenhagen metro digitalasset management

Sweden & Norway:
Design and installonboard ERTMS

UK: Javelin train upgrade

Guide tothe ESG
Report 2023

Greece:Metro Thessaloniki extension –15 Light Rail Vehicles

Highlights Fiscal
Year 2022

1

Canada: New OntarioLine Rolling Stock,
Systems, Operations& Maintenance

ChapterContext and
Identity

Philippines:
Electrical and mechanicalsystems and trackworks

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 3 – F Y 2 2France:Digital cab signalling for
SNCF and Eurostar

Chapter 4
Social Impact

Italy:‘Design & deliver’ 2000km
ERTMS digital signalling

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Key
VehiclesFrance:ERTMS (RBC Argos)
for SNCF reseau

Italy:
40 tram trains for Turin

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

Italy:
Options for Blues & Rock trains

Italy:
46 metro trains for Milan

Hitachi Rail’s production is dedicated to Vehicles and RailControl systems. The Vehicles division is mainly focusedon manufacturing activities and operations and service

Rail Control

Glossary andMain Acronyms
contained in the
ESG Report

Italy:
RFI framework for 700km
ERTMS digital signalling

TCFD
ReferenceTable& maintenance services, while the Rail Control division isdevoted to Rail control products, service & maintenance, andturnkey solutions.

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13

Rolling Stock

Digital Signalling & Systems

Smart Mobility

With a remarkable century-long track recordof serving customers and passengers, Hitachi
Rail excels in engineering and embraces
a dedication to innovation. Throughcollaborative partnerships with customers,
Hitachi Rail strives to enhance the passenger
experience across all Hitachi Rail’s rollingstock offerings. In terms of train products
and vehicles, the production is oriented on:
High speed trains (Shinkansen and Vehicles
at High Speed also called “VHS”), Main line
trains (Intercity and Regional trains) and Masstransit trains (Tram, Monorail and Metro).

Hitachi Rail specialises in the design,
production, installation, and commissioningof signalling components, systems, andcomprehensive mobility solutions formodern and enhanced railway, transit, andfreight lines. Hitachi Rail’s dedicated teams
worldwide provide extensive support, offering
a diverse range of signalling solutions. Thisapproach enables us to gain a comprehensive
perspective on railway operations, ultimately
enhancing performance and revenue
efficiencies for the Organisation’s clients.

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. This suite comprises
a collection of intelligent mobility solutions,encompassing the multi-modal passenger

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2Among 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 recyclabilityof 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 86.1% and provided with a good
recoverability rate of 95.9%.

Letter to
Stakeholders

smartphone application, 360Pass, anda cutting-edge orchestrator tool named
360Motion, tailored for operators andmunicipalities. With its capability tocreate a digital twin of an entire city's
public transport network, 360Motion
enables predictive analytics and real-time
responses, empowering cities to optimise
their transportation systems and facilitate
seamless movement for their citizens.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

1

ChapterContext and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Smart Mobility in Genoa
Social Innovation involves using innovation and digital technology to address society's
major problems. The Mobility-as-a-Service (MaaS) project in Genoa, Italy, exemplifies
this concept. MaaS is an integrated transport system designed to optimise urban mobility
with coordinated and efficient modular solutions. The goal is to meet the growing
need for sustainable mass transport in cities. Through the app, passengers can plan
multimodal journeys on public transport, access parking lots, e-scooters, and car-sharing
services. The app tracks the passenger's journey, enable contactless payments without
the need for physical tickets. Genoa is the first city to fully embrace this MaaS system,with 663 buses, 2500 bus stops, the subway line, two funiculars, one rack railway, ten
public elevators, and two suburban routes integrated into the platform.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Genoa App

This ambitious initiative aims to enhance the quality of life, protect the environment, and promote sustainable and connected mobility for thecity's residents and visitors. The app offers users access to various mobility services through a single tool. The app also features an intelligent
payment system that applies the best daily rate for the customer, ensuring convenient and efficient payment processes. In partnership with themunicipal administration and local Mobility and Transport Company), Hitachi Rail delivers significant contributions to society through Social
Innovation principles, making transportation more sustainable and user-friendly, ultimately benefiting the community and the environment.

TCFD
Reference
Table

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14

Turnkey
Hitachi Rail holds a prominent position
as a leader in the global designand construction of entire railways,
whether undertaken independently or incollaboration with consortium partners.
Their transportation systems are carefully
crafted, with a primary focus on wholelife cost considerations. As a result, thesesolutions exhibit exceptional performance,enhanced capacity, elevated safetylevels, improved service availability, andheightened passenger satisfaction. Withversatile capabilities, Hitachi Rail possesses
the capacity to act as a specialised
contractor or assume a leadership rolein joint ventures alongside civil work
companies and other rolling stock
manufacturers.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2Service & Maintenance
Hitachi Rail offers pioneering solutions
across a diverse range of services,encompassing Service & Maintenance forboth rolling stock equipment and legacy
signalling installations. By providing best-inclass services, Hitachi Rail aims to optimise
product life cycles, support customers'
operations, and elevate passenger
experience through the integration of
innovative digital solutions.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Line 6 metro project in Naples

Highlights Fiscal
Year 2022

The Linea 6 project, commissioned to Hitachi Rail by Naples Municipality, wasrealised in collaboration with the Engineering Department of the University of Naples
Federico II (UNINA), with the aim of promoting the use of sustainable technologies
through an approach that integrates Building Information Modeling (BIM) with Building
Energy Modeling (BEM). The project involves the construction of three structures: atrain depot, a HUB which will be for the canteen and changing rooms, and the station
proper. Each facility has been carefully designed to ensure efficient passenger flow
and maximise the use of energy resources.

1

ChapterContext and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Extending from the Mostra area to Piazza Municipio, Line 6 represents a significant step
towards improving urban mobility and reducing environmental impact. The works will be
carried out on an area of approximately 110,000 square metres in the areas adjacentto the Campi Flegrei railway station. Dynamic simulations for the analysis of energy,
economic and environmental impact performance, as well as multi-objective optimisationof the building-plant system were carried out for all proposed solutions. Among thesolutions adopted for the building envelope: south-side solar greenhouse (to optimise
winter solar gain) that transforms into an open porch during summer by opening theexternal windows, the use of heat-insulating glass, polymer windows and doors, which
represent a further step towards optimised thermal and acoustic insulation, cool paints
and low-emission interior paint to minimise winter dispersion.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

MethodologicalNote

The HUB was designed to offer a full range of services, including offices, canteen and changing rooms, with a focus on energy
efficiency and the adoption of eco-friendly solutions. Particular attention was paid to an intelligent and functional design that promotes
the well-being of users, while ensuring the optimisation of energy resources.

Glossary andMain Acronyms
contained in the
ESG Report

In addition, innovative energy-saving systems have been adopted, including: photovoltaics for own power generation, energy-efficientcooling systems, smart grids, state-of-the-art thermal storage and 'free cooling' systems for sustainable cooling of technical rooms.

TCFD
Reference
Table

The combination of advanced solutions represents a major step forward in the design and construction of sustainable building,representing a tangible example of how innovation and sustainability can come together to create a state-of-the-art environment.

GRI
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15

Prestigious prize awardedfor Hitachi Rail’s Taiwan train

Hitachi Rail UK fleet awarded
best-in-class at rail awards

Hitachi Rail's EMU3000 train, which is in operation for the Taiwan Railway
Administration, has been awarded the iF Design Award 2022, one of the world's
most prestigious design awards. The iF Design Award, sponsored by "iF International
Forum Design GmbH" in Hanover, Germany, has been recognizing outstanding
design and innovation in industrial products for over half a century.

The Hitachi Class 802 fleet operated by Hull Trains in the UK, running between
Hull and London, has been recognised for its outstanding reliability andperformance. The fleet, maintained at the Bounds Green Maintenance Centre
in North London, received the prestigious Golden Spanner Award for their
exceptional maintenance work.

The EMU3000 train was selected
for its originality, functionality, easeof use, quality, and environmental
considerations.

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

The iF DESIGN AWARD 2022
received approximately 11,000
entries from 57 countries and regions.
Hitachi Rail was assigned to deliver
600 EMU3000 train cars in 2019,
and they have been entering service
gradually, with the order set to be
fulfilled by 2024.
Takuya Yamakawa, Deputy Head ofJapan Business and Head of Asia &Japan Initiatives (Sales & Projects),
Railway Systems Business Unit,
Hitachi, Ltd., expressed their delight inreceiving the award and emphasised
their commitment to providing safeand reliable fleets for seamless andsustainable passenger journeys.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

1

ChapterContext and
Identity

The Hitachi Class 802 fleet was awarded the highest accolade, Gold, in the 2ndGeneration new inter-city category. The fleet has consistently ranked in the top-10
on the UK reliability table for the past seven periods.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

The team at the depot, including maintenance, engineering, and planning teams,
along with the collaboration between Hitachi Rail and Hull Trains, have playeda crucial role in achieving this success. The award marks a significant milestone
since the introduction of the AT300's for the Hull Trains fleet, highlighting the
team's dedication and excellence in keeping the fleet running at its best.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

About the 8000-series Metro cars

MethodologicalNote

The 8000-Series Metro trains are designed to enhance reliability, provide modern
on-board technology, and offer an improved passenger experience. The train designs
include popular features like on-board WiFi, heated floors throughout, improved
regenerative braking, digital screens for better journey information, high-definition
security cameras, ventilation system improvements, and stringent cybersecurity
measures. With 130 seats per pair of cars, these all-electric vehicles will be asignificant upgrade over the older 2000- and 3000-series fleets, which have been
in service since the early 1980s. The new fleet is expected to improve service forpassengers, facilitate easier maintenance, and reduce operational costs for Metro.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
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Index

16

1.2.3 Group Structure and Business

Letter to
Stakeholders

Hitachi Rail is present in five continents with around 14,000 employees. Hitachi Rail believes that a culture of sustainability is best practice, combining clear goals and plans forthe development of the business with staff’s personal and professional growth.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

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 3 – F Y 2 2

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

17

The ESG Report 2023 of the companies
belonging to the Hitachi Rail Business Unitof Hitachi Ltd. consists of Hitachi Rail Ltd.
and its fully consolidated subsidiaries andthe Rail division of Hitachi Ltd in Japan.
The reporting scope of qualitative andquantitative data and information in the
ESG Report 2023 includes 46 main sites
in the 38 countries in which Hitachi Rail
operates as shown below:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• 32 offices: UEA, Ankara, Baltimore,
Bangalore, Beijing (2 sites), Brisbane,
Brussels, Copenhagen, Genova,
Karratha, Kolkata, Kuala Lumpur, Les
Ulis, Lima, Madrid, Makati City, Miami,
Munich, Noida, Perth, Piossasco,
Pittsburgh, Riyadh, Seoul, Shanghai,Solna, Sydney, Taipei and New Taipei,
Zaragoza, Ludgate (Global Head
Office), Glasgow

The correspondence between the Group's sites and related legal entities consolidated on a line-by-line basis as of 31 March 2023
is shown below:

Letter to
Stakeholders

Guide tothe ESG
Report 2023

HITACHI Ltd. 1

Highlights Fiscal
Year 2022

HITACHI RAIL Ltd. 8
HITACHI RAIL TRANSPORTATIONSYSTEMS SPAIN S.A.
PERPETUUM LIMITED

1

ChapterContext and
Identity

HITACHI RAIL STS S.p.A. 14
SECURE RAIL INDIA PRIVATE LIMITEDHITACHI RAIL STS USA INC

4

Chapter 2
ESG Framework
and Roadmap

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 JV• 6 train maintenance centres:
Bounds Green, Craigentinny,
Doncaster, North Pole, Stoke Gifford,
Swansea

HITACHI RAIL ONTARIO HOLDINGS INC.

• 8 manufacturing sites: Batesburg,
Riom, Napoli, Pistoia, Reggio Calabria,
Tito Scalo, Kasado, Newton Aycliffe

HITACHI RAIL STS HURONTARIOHOLDINGS INC

1
HITACHI RAIL STS FRANCE SAS 5
HITACHI RAIL STS SWEDEN AB

Chapter 3
Governance

Hitachi Rail STS Hong Kong LTD

Chapter 4
Social Impact

HITACHI RAIL ESPANA S.L.U.

2

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

Chapter 5
Environmental
Impact1

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

5

Hitachi Rail Ontario GP Inc.

Methodological
Note

HITACHI RAIL STS RAILWAY SIGNALINGTECHNOLOGY (BEIJING)

3Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail STS Mobilinx Hurontario GP Inc

Number of sites

TCFD
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Table

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18

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 3 – F Y 2 2

Hitachi Rail is aware of the significanceof its economic impact generated on theexternal context in which it operates andon its internal and external stakeholders.
In particular, 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 pictureof its economic profile. Concerning FY22,
the prospectus for the calculation of theeconomic value generated and retained2
is constructed by aggregating, in scalar
form, items in the income statement inline with the representations shared with
Corporate, and represented in JPY, withthe aim of highlighting the formation
process of added value and its distribution
to the various stakeholders.

DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED

Letter to
Stakeholders

UNIT OF 4/21 - 3/22
MEASURE(FY21)

4/22 - 3/23
(FY22)

Guide tothe ESG
Report 2023

% DISTRIBUTION OF
GENERATED VALUE
4/22 - 3/23

Highlights Fiscal
Year 2022

Economic value generated
Revenues (net sales plus revenues from financial investments and sales of assets)

mn JPY467,298

537,307

1

ChapterContext and
Identity

100.0%

Economic value distributed
Operating costs (payment to suppliers, non-strategic investments, royalties and facilitating payments)

mn JPY

307,443434,28280.8%

Employee wages and benefits (total employee expenses – current payments, not future commitments)

mn JPY102,356

121,900

22.7%

Payments to provider of capital (e.g., investors)

mn JPY

2,252

3,573

0.7%

Payments to government (tax expenses)

mn JPY

32,685

11,5122.1%

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Economic value retained"Direct economic value generated" less "Economic value distributed"

mn JPY

22,562-33,960

Chapter 5
Environmental
Impact-6.3%

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

The table shows the development path that characterises Hitachi Rail's business activities. The solidity of financial performance, theactivities and the internal reorganisation processes to foster increasingly effective governance, have a significant impact on the analysis
in the Report, both qualitatively and quantitatively.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

2

GRI
Content
Index

Please note that the following data reported will refer to the legal entities consolidated Hitachi Rail Ltd. and its subsidiaries - STS Group, Perpetuum Group, STS UK. Japan sites and offices are not included.
19

2

ESG Framework
and Roadmap

Letter to
Stakeholders

Chapter 2

ESG Framework and Roadmap

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

2.1 ESG Roadmap and Targets

Chapter 1
Context and
Identity

Hitachi Rail aims to become a sustainability leader, leveraging its ability to identify innovative business opportunities.
Acting as a backbone of this strategic and holistic view, the Hitachi Rail follows the LEAVES Strategy with different levers and roles:

Leaves Strategy

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

Sustainability
Committee
sponsorships
Board-level sponsorshipfor successfully implementing an
ESG strategy reflects the entire
corporate culture. Therefore, clear
communication of the importance of
ESG to the Organisation is crucial

Stakeholders
engagement
Cross - function ESG teamEngaging with stakeholders, such as
employees, customers, and suppliers, to understandexpectations and concerns about ESG policy andaction plan is not only about sustainability. Due to theinterdisciplinary nature of ESG, the commitment andinvolvement of all stakeholders are essential.

Material ESG topics& alignment to thebusiness strategy
Focus on company-relevant andmaterial ESG topics set ambitious
targets and conduct KPI-based ESG.
A tracking process via a dedicated
KPIs model enables consistent ESG
management and communication to
the capital market and general public

Data infrastructure,transparency &accountability
Correct and consistent Reporting,which requires transparent
communication of ESG targets, underlying
metrics, and progress to the public.

2

Chapter
ESG Framework
and Roadmap

Moreover, Hitachi Rail is in a prime
position to make a significant
impact on the attainment of the UN
Sustainable Development Goals,
as described in section 2.4.1 “OurContribution to SDGs”. By aligning its
business activities with the SDGs andtheir targets, Hitachi Rail has identified
four key avenues through which it cancontribute:

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• development of innovative products
and solutions;• responsible management ofoperations and assets;

MethodologicalNote• continuous engagement withstakeholders and suppliers;

Glossary andMain Acronyms
contained in the
ESG Report• robust measurement of performanceagainst sustainability objectives.

TCFD
Reference
Table

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21

Strategic priorities

Letter to
Stakeholders

The results of the Organisation's materiality analysis (see updated materiality in section 2.4 “Materiality Analysis”) are of relevance in setting strategic priorities:
Occupational Health and
Safety: guaranteeing, throughthe creation of safe and healthy
working environments, the psycho-physicalhealth of all personnel and all those people
who access offices, maintenance centres
and production centres;

Ethics, Integrity and Transparency:
acting in compliance with the regulations
in force in the individual countries inwhich the Organisation carries out its activities,
implementing controls to prevent and monitor
corruption in all its forms and to ensure ethicaland transparent business conduct;

Customer focus: developing
products and services according
to criteria of honesty, fairness,transparency, and collaboration tomaintain a solid relationship withcustomers based open dialogue;

Guide tothe ESG
Report 2023

Reduction of emission
and mitigation of climatechange: effectively managing thepotential environmental impacts ofHitachi Rail's activities and contributing to theoverall reduction of atmospheric emissions.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

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

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Photovoltaic plant

With regard to Climate Change,
Hitachi Rail supports Hitachi Group’s
formal commitment to SBTi (moredetail section 5.2 “Environmental
Goals and Decarbonisation Path”) andfollows a science-based approach todecarbonisation, to reduce the negative
impacts of its activities on climate change
and to enhance the positive ones. After
Hitachi Rail has defined an extensive

set of metrics, KPIs and disclosures tomaintain control of its defined path,and to monitor its current performanceand trends. Many of these are present
in the current ESG Report, others will

be integrated over time, consistent with
the Mid-Term Management Plan andfunctional to the evaluation of strategy andrisk management.

TCFD
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Table

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22

2.1.1 Delivering a Sustainable, Safe and High-Quality Railway Business

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

As illustrated in paragraph 1.1 The
Global Sustainability Scenario and theTransport Sector Challenges and Trendsof this Report, Hitachi Rail operates
within a context of global mobility highly
influenced by sustainability and subject
to regulatory developments. Following
the latest reports3-4 stating CO2 levels in
the atmosphere have been rebounding
to pre-Covid19 levels, Hitachi Rail has
confirmed an overarching objective to
reduce Greenhouse Gas (GHG) emissions
charting its path to environmentally
sustainable business operations.
Hitachi Rail has updated its mid-term
roadmap by setting environmental
targets and establishing performancemeasurements and transparent disclosures
which drive its day-to-day activities.
It implements a sustainability culture,promoting specific skill development
coordinated by the Corporate Social
Responsibility and Sustainability
function (CSR&S), functionally reporting
to Head of SHEQ Department(see paragraph 3.1.1 ESG Governancefor further details).

Letter to
Stakeholders

DigitalInnovation

Lifecycle Analysis, Material
Recovery and Waste Reduction

Carbon Management and the
Decarbonisation Pathway

Within Hitachi Rail's diverse range ofrolling stock, signalling, and turnkey
solutions, digital technologies are
effectively harnessed 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 equipmentwith cloud-based solutions connected
via satellite communication.
Additionally, the operations teams
have acquired Perpetuum, a remotecondition monitoring Company, whose
analytics technology extends the safe
service life of equipment, effectively
reducing industrial and financial wastecaused by inefficient maintenancepractices.

Hitachi Rail prioritises the most recent
advancements that aim to minimisematerial and energetical consumption
for its customers throughout the productlifecycle. By implementing life cycle
analysis, Hitachi Rail incorporates
sustainable materials, including recycled
ones, and embraces renewable energy
sources, such as battery trains, to achieve
this goal.

While promoting waste reduction,material re-use, and the utilisation ofrecycled materials Hitachi Rail emphasises
innovating recycling processes anddesigns increasingly efficient products andsolutions to effectively reduce greenhousegas emissions. Hitachi Rail analyses thepotential effects of its strategic choices indiminishing greenhouse gas emissions,with a forward-looking perspective
encompassing short, medium, andlong-term horizons. This approachaims to identify prospects forbusiness development, enhance
operational efficiency, and mitigate
environmental risks. It centres on
speeding up the transition to renewableenergy sources, optimising energy andprocess efficiency in internal operations,and utilising market influence to drive
economy-wide decarbonisation efforts.
Consequently, this concerted effort not
only significantly curtails Hitachi Rail's
emissions but also contributes to reducing
emissions among its partners.

Furthermore, Hitachi Rail actively
encourages its suppliers to engage inenergy efficiency initiatives and otherenvironmental programmes aimed at
reducing their emissions; the adoptionof material recovery, an innovativetechnological approach for recycling
electronic equipment and materials5.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

Emissions Gap Report, UN Environment Programme, 2021.
4
Sixth Assessment Report, Intergovernmental Panel on Climate Change (IPCC), March 2023.
5
In compliance with the legal requirements arising from the EU Directive 2012/19, Waste from Electrical and Electronic Equipment (WEEE) and other internationally relevant legislation.
3

GRI
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Index

23

Actions to reduce greenhouse gas
emissions are part of the Environmental
Management System that Hitachi Railhas established at a global level, defining
a Carbon Management Approachbased on the following principles:•g lobal approach: development of
mechanisms to increase the commitment
to sustainability in all offices andproduction sites;• r easonable and feasible long-term
objectives: establishment of a clear andrealistic vision for path to be followed;• s upport for the development oftechnologies: implementation ofadvanced solutions;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2•e ffort to train a broader base of
employees in the LCA analysis;•m ethodological developments, including
impact assessment methodologies type I
and II and interpretation phases;• r ecognition of a plurality of establishedapproaches, since social life cycle
impact assessment methodologies
include different approaches developedin the literature;•d evelopment of areas where minimum
guidance prevails;• integration of Social Organisational Life
Cycle Assessment (S-LCA) to extend thefocus from products to the Organisation.

Hitachi Rail reports both direct andindirect GHG emissions as part of its
carbon management system. To reducethese emissions, its policies focus on
mobility, consumption reduction, energy
efficiency improvements, adoptionof renewable energy sources, andenhanced waste and water management
programmes. Hitachi Rail currently
studies and implements these practices on
selected manufacturing facilities, whichhave the greatest energy consumption
and impact in terms of GHG and pollutant
emissions. Based on those results, it
intends to review and implement a newframework of emission policies to createa lasting change across the Business Unit,
ensuring a conscious, orderly transition,for economic development.
Consistent with Hitachi Group’s criteria forenvironmental classification, Hitachi Rail’s
decarbonisation pathway is focused on
the premises of these selected production
sites, for which it has engaged to reachcarbon neutrality within 2030 (compared
to baseline year 2016 calculated for thosesites).

The organisation has announced thefollowing initiatives and key objectives:• implementing photovoltaic panel
technologies;•p roviding maintenance centres withinsulation systems to isolate system withdifferent thermal-acoustic conditions andprevent the two systems from exchanging
heat;• introducing solar thermal offices;• implementing pyro-gasification,technology aimed at the gasificationof the biomass while simultaneously
producing biochar;• introducing Thermal Power Unit;• exhausting fume extraction;• providing offices and other facilities withnew air conditioning systems;

Letter to
Stakeholders

First battery hybrid
fleet in Europe

Guide tothe ESG
Report 2023

Launched in FY22, Hitachi Rail’s
pioneering Masaccio train is the firstbattery hybrid fleet in passenger
service in Europe. Designed with afocus on accessibility, connectivity
and sustainability and made with
95% recyclable materials, the ‘tribrid’ train can switch seamlessly
between battery, electric or diesel
power, and is already cutting
emissions by more than 50%.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

In stations and urban areas,
batteries power the train completely,
eliminating emissions to theenvironment, including harmful
NO2 emissions, and reducing noise
pollution.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• relamping and replacing the lighting
system (traditional lamps) with LED
bulbs, thus moving in the direction offurther energy efficiency.

MethodologicalNote

It also aims to meet its carbon neutrality goalby increasing the use of renewable power
and implementing policies of energy saving
and thermal carbon credit purchasing.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

Blues Train
GRI
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24

365 days of all-electric Lumo - the most reliable
train in the UK
Hitachi Rail's 100% electric fleet - Lumo - celebrated its first year in operation withmore than 1 million miles travelled and more than 1 million passengers transported.
Officially the most reliable train ever conveyed in the UK, it continues to deliver
efficient and affordable journeys, connecting Edinburgh to London.

Letter to
Stakeholders

41,000 tons of CO2 saved in Scotland's Central Belt

Guide tothe ESG
Report 2023

Since its introduction in 2018, Hitachi Rail's 100% Class 385 electric commuter
trains allowed passengers in Scotland save 41,000 tons of CO2, the carbon
equivalent of 14,000 return flights from London to Tokyo. As ScotRail's fastest andmost reliable train, they are one of the UK's top three most reliable fleets.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

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

Chapter 5
Environmental
ImpactLumo

Class 385

360Pass smart ticketing app

360Pass - FunicularSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

360Pass smart ticketing app gives passengers the fastest and most convenient
multi-modal route options and real-time journey updates. Powered by Hitachi’s
Lumada Intelligent Mobility Management suite, municipalities and operators
around the world now have the tool to connect, scale and optimise their entire
urban transportation network in real time.

TCFD
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Table

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25

2.2 Our Partnerships for Sustainable Development

Letter to
Stakeholders

Guide tothe ESG
Report 2023

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

Hitachi Rail Partnerships for Sustainable
Development bring 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.

Commitment to the
UN Global Compact
As co-founders of the UN Global Compact
Network Italy, Hitachi Rail has confirmed
its support to the Global Compact,
a voluntary United Nations initiativethat supports global companies thatare committed to responsible businesspractices in the areas of human rights,
labour, the environment, and corruption.
The Group’s membership in the initiative
reiterates its commitment to the Global
Compact and its principles as an integral
part of the Hitachi Rail’s strategies andworkplace culture.
In 2023, Hitachi Rail submitted theCommunication on Progress (CoP)
Questionnaire, which focuses on five
disclosure areas (governance, humanrights, labour, environment and anticorruption) and is designed to help
participating companies monitor
performance across the Ten Principles of
the UN Global Compact.

Highlights Fiscal
Year 2022

2.2.1 Industry Associations and Certifying Authorities

Chapter 1
Context and
Identity

Hitachi Rail is a member of...
UNIFE (Association ofEuropean railway builders)

UNISIG (Association of European
Railway Signalling Companies)2

APTA (American Public
Transportation Association)

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

HSRG (High Speed
Rail Group)

Chapter 4
Social Impact

UITP (International Public
Transportation Association)
RIA (Railway Industry
Association)
ANIE (National Federation ofElectro technical and Electronic
Companies)

AICQ (Italian Association
for a Quality Culture)

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

Chapter 5
Environmental
ImpactARA (Australasian
Railway Association)

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

RSSI (Railway Systems
Supplies, Inc.)

Cosila (consortium forsafety in the workplace)

Methodological
Note

CosilaGlossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

26

Hitachi Rail in UNIFE
Within the scope of UNIFE, Hitachi Railcollaborates to promote the use of railway
transportation through the implementationof technological standards (ERTMS andTSI) and by suggesting European
research projects to improve safety,
energy efficiency, and environmental
protection in the field of railway
transportation.

Letter to
Stakeholders• Hitachi Rail participates in SHIFT2RAIL,
now known as Europe’s Rail,both proposed as a Joint Undertaking
in the railway sector to reduce
emissions and promote a modal shift
in transportation, and in line with theindications of the transportation
white book published by the EU
Commission.

•H itachi Rail sits on the Sustainable
Transport Committee, which aims to definea consistent and effective consensus
in the railway industry with respect toenvironmental issues and, particularly,
energy efficiency (reliable standards tomeasure energy consumption), life cycle
assessments in decision-making processes,
eco-procurement, and noise and emission

reduction. Hitachi Rail also sits in the
ERRAC (the European Rail Research
Advisory Council) which has a key
focus on the contribution of railways tosustainable mobility. Its primary objective
is indeed to communicate the railway
sector’s common Research & Innovation
vision to European institutions and otherimportant stakeholders.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
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 3 – F Y 2 2

Hitachi Rail and the studies conducted with UNIFE
Hitachi Rail has been an active member of the UNIFE European Railway
Association for almost 20 years, contributing to various working groups
and committees focused on sustainability. In the Sustainable Transport Committee,
they have supported the development of a joint statement with other rail sector
associations and updated the position paper on EU Taxonomy.
The focus has been on successful Taxonomy implementation in the rail sector.
In the Life Cycle Assessment Topical Group, Hitachi Rail concentrated on
Eco Design for Sustainable Products Regulation and Environmental ProductDeclarations. They were also involved in ISO Standardization for circular
economy guidelines and legislative discussions on Eco-Design and Circular
Economy Directives.

Chapter 4
Social Impact

In the Chemical Risk Topical Group, the main focus was on the new Proposal torestrict Per- and Polyfluoroalkyl Substances (PFAS), which will have implications
for the rail sector and Dangerous Substances Management, such as REACh
Regulation, SVHC, SCIP Database, and RISL (Railway Industry Substances List).

Glossary andMain Acronyms
contained in the
ESG Report

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

TCFD
Reference
Table

GRI
Content
Index

27

Hitachi Railin UITPThe Information & Telecommunication
Technology (ITT) Committee brings
together approximately 30 active UITP
members to anticipate the introductionof new technologies, evaluate theirimpact and benefit, and understand how
to improve existing systems and theirevolution. The Group promotes innovationand moves favourable developments
forward, suggesting recommendations,disseminating technical knowledge,

and good practices in informationand telecommunication systems. The
ITT Committee meets twice a year andmaintains a continuous exchange onthese topics with the operators, theorganising authorities, and the otheractors of the sector. Demonstrating thestrong commitment of Hitachi Rail, for two
consecutive mandates (2019 – 2023), a
representative of the Organisation is the
Chairman of the ITT Committee.

Hitachi Rail in
IT-TRANS

Letter to
Stakeholders

Guide tothe ESG
Report 2023

IT-TRANS is UITP’s flagship event on
IT held every two years in Karlsruhe,
Germany. It incorporates an exhibitionof over 250 stands with 6000+ visitors,
as well as an international conference
counting 550+ delegates.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant 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 3 – F Y 2 2

UITP (Union Internationale des Transports
Publics) is the International Associationof Public Transport and a passionate
champion of sustainable urban mobility.
Established in 1885, with more than 135
years of history, it is the only worldwide
network to bring together all public
transport stakeholders and sustainabletransport modes. Hitachi Rail actively
participates in the Working Bodies(Committees), contributing to several
technical and non-technical agendas andclosely working with other members of theassociations belonging to Industry, PTO(Public Transport Operators), and PTA(Public Transport Authorities).

Hitachi Rail in the Information &Telecommunication Technology Committee

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
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Index

Hitachi TMS Model Office28

2.3 Stakeholder Engagement

Letter to
Stakeholders

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

Guide tothe ESG
Report 2023

For Hitachi Rail, corporate social
responsibility translates into a daily
focus and constant care of its relations
with stakeholders. The understandingof their needs and expectations isachieved through the definition andimplementation of specific tools for
dialogue and interaction. The stakeholder
engagement process plays a central
role in Hitachi Rail's corporate strategy,reflecting its unwavering dedication to
inclusive decision-making and transparent
communication. The Organisation unit
makes meticulous efforts to outline various
dialogue channels and decision-making
mechanisms, sensitively addressing
the concerns and interests of different
stakeholder categories.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Customers

Regulatory
bodies

Chapter 3
Governance

HitachiGroup

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactInvestors

Banks

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

Employees

These figures depict Hitachi Rail’s
principal stakeholders, identified throughthe analysis of the reference sector andopen discussion with stakeholders.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Suppliers andbusiness partners

Localcommunities

National and Local
Governments

TCFD
Reference
Table

GRI
Content
Index

29

2.3.1 O ur Dialogue with Stakeholder and their Involvement Process
Core to Hitachi Rail’s stakeholder
engagement strategy is the principle ofinclusivity and receptiveness, whereby theOrganisation embraces the needs andperspectives of workers, customers, suppliers,and various other categories intertwinedwith the Hitachi Group, and cultivates anenvironment where shared values thrive.
Hitachi Rail seeks to identify common
priorities, pursuing them through three distinct
and transparent lines of action:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• opportunities for information: onedirectional communication from Hitachi
Rail to its Stakeholders, to provide pertinent
information, updates, and insights, keeping
stakeholders informed;• 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;• partnerships: forging specific projects
in collaboration with Stakeholders towork jointly on goals of mutual interest,
strengthening relationships and co-creating
value with its diverse partners.
Hitachi Rail aspires to progressively intensify
opportunities for dialogue and partnerships,
thereby cultivating an environment where
shared value thrives and emphasisingtransparency and responsiveness.
Hitachi Rail dedicates itself to evolving its
engagement strategies, continually striving
for an even deeper connection with its valued
stakeholders and the broader community.
At the forefront of this effort is thedecarbonisation strategy, focused on driving

modal shift for better public transport,
accelerating the adoption of batteries to aid
customers in decarbonisation, and reducing
emissions in Hitachi Rail's own operations
and supply chain.
Hitachi Rail highlighted progress at
the InnoTrans trade fair, Hitachi Rail,
showcasing decarbonisation through battery
technology with the launch of the Masaccio
Battery train and highlighting its own efforts
to reduce its own emissions through the
adoption of solar panels at manufacturing
sites in Italy and the engagement of the
supply chain in eco-friendly practices
through the EcoVadis rating agency
programme. Conscious of the environmental
impact of exhibitions and events, it also
promoted sustainability and the use ofrecyclable materials. Moreover, the teamfocused on increasing Gender Diversity
among spokespeople, with notable progressachieved in FY22.

Letter to
Stakeholders

Hitachi Rail assumes a prominent role infostering strong connections with local
communities, encompassing municipal
authorities, resident associations, metroand rail users, businesses, and local
workers. Depending on the nature ofeach commercial project, Hitachi Railemploys diverse methods to engage andcommunicate with these communities:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap•P articipation in local stakeholder
committees;

Chapter 3
Governance• F acilitation of communication between
local authorities and citizens;

Chapter 4
Social Impact•E ngagement in direct communication with
community members;

Chapter 5
Environmental
Impact• Involvement in programmes aimed at
empowering and developing local
communities.

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

30

Letter to
Stakeholders

Hitachi Rail and local communities
Serious fun at Italy’s EnergyMed 2023, anevent dedicated to the green revolution
and energy transition.
In Italy, Hitachi Rail and its partners brought
together young talent to develop their skills
using the Lego Serious Play method, sharing realideas for achieving the UN Global Sustainable
Development Goals.

Guide tothe ESG
Report 2023

Hitachi Rail donates ambulance
to Dr. M. C. Modi Charitable Eye
Hospital
Hitachi Rail has donated a Force Ambulance tothe Dr. M. C. Modi Charitable Eye Hospital toenable the structure to provide better medical andrelief services to the people of Bengaluru and to
render various humanitarian services, like smoothtransportation of patients in need of treatment to
the hospital.

Primary Engineer Rail Project
inspires the next generation
into a career in rail

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Organised by East Midlands Rail Forum, thePrimary Engineer Rail Project programme
encourages young people to think about a
STEM career, helping Hitachi Rail to attract thenext generation into a career in rail and further
encouraging diversity of people and ideas
into the industry.

2

Chapter
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 3 – F Y 2 2

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

31

2.3.2 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.
Nonetheless, Hitachi Rail’s customers
operate multiple types of transport. As such,
the Organisation is expanding its capability
to support them beyond its traditional areasof operation.

Whether as a leader or part of consortia,
Hitachi Rail innovates and collaborates
to deliver projects that meet customers’
needs, providing advanced solutions inevery aspect of rail travel, including traction
equipment and heating, air conditioning
and ventilation (HVAC), signalling (ETCS)
and traffic management systems (TMS),
commuter trains, metro/underground andintercity trains.
Hitachi Rail’s experts work together withcustomers to create new solutions to realworld challenges, working closely with
its extensive international supply chain
to promote innovation, resilience, andsustainability. Hitachi Rail knows its ability

Letter to
Stakeholders

to deliver valuable products to its customers
depends on its suppliers. Alongside project
management, Hitachi Rail actively engages
with customers to ensure their awareness ofbusiness news, updates, and developments.
This is achieved through virtual and faceto-face conferences, trade shows, press
releases, editorial content, and through thegroup website – www.hitachirail.com.
Promotion and online advertising support
these efforts, especially through theuse of social media channels to reachdecision makers, media, and industry
associations. Customer also participate
in 360-degree feedback loop to help
Hitachi Rail fully 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.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Customer satisfaction activities are handled
by the managers of various departments,
such as Safety, Health & Environment,
Quality, EMEA Business Unit, Americas& APAC Business Unit, Operation &Maintenance Business Unit, and Operations
Units. These activities take place at various
stages and are carried out using different
tools to accurately monitor the level ofcustomer satisfaction and project status until
the completion of the projects.

2

Chapter
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 3 – F Y 2 2

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

32
Class 385

2.4 Materiality Analysis

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

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

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 3 – F Y 2 2

A new approach to Materiality Analysis
According to the GRI Sustainability
Reporting Standards, materiality is theprinciple that identifies which topics
represent the most significant impactsof the Organisation on the economy,
the environment, and people, including
impacts on human rights. HitachiRail's new approach for the 2023
materiality analysis integrated
several new elements, such as the"Impact Materiality" process defined by
GRI 3: Material Topic 2021, as per therequirements set forth by the new GRI
Universal Standards 2021, in a processthat will gradually move towards a full
double-materiality 6 assessment.
This process involved engaging in
extensive stakeholder consultations

and conducting a rigorous analysis ofenvironmental, social, and economic
material aspects and related impacts to
identify the most relevant material topics to
be included in its sustainability reporting.
The new approach to the Materiality
Analysis has focused on the concept ofsignificant, actual, and potential impact on
the economy, people, and the environment,from an "inside-out" perspective, also
including elements from financial impact
dimension, known as "outside-in"
perspective. As a result, Hitachi Rail's
Materiality Analysis has been updated,considering the shift from a focus on therelevance of material topics for stakeholders
and the Organisation to a focus on theactual and potential impacts, both positive
and negative, arising from its activities.
The process can be summarised as follows:• external context analysis
and relevant macro-themes
identification: the analysis started
with the internal and external context
analysis, implementing a deep
benchmarking analysis focused on
business activities, stakeholders,sustainability sector trends, industry ESG
priorities, reporting trends and market
KPIs, having the specificfocus of rationalising and reviewing
Hitachi Rail’s material topics for FY22
through the identification of relevant“macro-themes,” broader than theprevious material topics;

Chapter 3
Governance• preliminary analysis andidentification of relevant impacts:
Hitachi Rail analysed its activities andof the sustainability context in which it
operates in order to identify possible
impacts related to the most relevant
ESG macro-areas. This allowed theelaboration of a list of impacts on themain stakeholders, differentiated bypositive/negative, current/potential,
reversible/irreversible impacts,by the area of impact (economic,
environmental, social, human rights)
and by the moment of occurrence along
the value chain (business operations –suppliers and partners, end use).

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
ReferenceTable

6 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.

GRI
Content
Index

33

This analysis was based on multiple
elements, including:- internal procedures and analyses
that Hitachi Rail developed during
its experience in the field ofsustainability;- Top Management: submissionof a dedicated survey to assess thesignificance of the expected financial
impact of each of the material topics(outside-in perspective);- Impact Materiality Workshop:
inaugural workshop session with
relevant stakeholders from the
middle management of Hitachi Rail’s
Functions. The workshop focused on

the identified impacts with the aim to
directly assess the perception of theirseverity and likelihood.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022- the GRI Universal Standards andSustainability Accounting Standards
Board (SASB) Sector-Specific Standards
applicable to the railway transportationindustry and the machinery and industrial
goods industry7;

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap- a diverse characterisation of impact, suchas positive or negative, short/medium/long-term, actual or potential, systematic or
linked to individual incidents, expected orunintended, and reversible or non-reversible.

Chapter 3
Governance

Chapter 4
Social Impact

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2	Through the analysis, 16 material topics
and 32 impacts were identified andsubmitted for approval to Hitachi Rail’s
Sustainability Committee;

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• stakeholder engagement andevaluation of material topics andimpacts: Hitachi Rail engaged the top
management and primary internal andexternal stakeholders to assess the eachmaterial topic:

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report- Internal and External
Stakeholders: submission of two
separate surveys on the relevancy ofpotential impacts related to each of thematerial topics (inside out perspective);
7

TCFD
Reference
Table

GRI
Content
Index

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 activity. The results of the workshop are summarised in the figures below.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Materiality Matrix 2023
X-asis: Relevancy from Internal stakeholders
Y-asis: Relevancy from External stakeholders

1

Occupational Health & Safety
Reduction of emission andmitigation of climate changeE
Ethics, integrity
and transparency

23
Chapter 3
Governanceintegrity
Customer focusing Ethics,
and transparency
S
Customer
focusing
Data protection
security
Waste management

Chapter 4
Social Impact

S

Data protection security

Eco - design
Supply chain
management

EmployeewelfareR&D and productR&D and product

GG

Chapter 5
Environmental
ImpactTraining and career development
Water consumption
optimisation

Diversity, equality and inclusion

Training and career development
Water consumption
optimisation

1

Reduction of energy consumption

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 3 – F Y 2 2

Supply chain
management

2

Chapter
ESG Framework
and Roadmap

E

Reduction of emission andmitigation of climate change

Waste management
EmployeewelfareChapter 1
Context and
Identity

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

Occupational Health & Safety

Air quality

Eco - design

3

Legend for the significance of the impacts

Air quality
Reduction of energy consumption2

Highlights Fiscal
Year 2022

Support for local community

Diversity, equality and inclusion
Internal Stakeholders

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, "Reduction of emissions andmitigation of climate change" emerges as
the most relevant;Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report• Social (S): the priority topics are"Occupational Health & Safety" and"Customer focusing";

Support for local community

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

GRI
Content
Index

Internal Stakeholders
35

2.4.1 Our Contribution to SDGs
In 2015, the 193 Member States of theUnited Nations officially signed the Agenda
2030, presenting the 17 Sustainable
Development Goals (SDGs), articulated
in 169 specific targets, based on a set offundamental and urgent issues for the planet
to be achieved by 2030. Hitachi Rail is wellpositioned to make a meaningful contribution

Letter to
Stakeholders

to achieving the SDGs, through its mission tocontribute to society through the developmentof superior, original technology and productsthat power sustainable connectivity.
Hitachi Rail’s contribution is based on the
broader framework of Hitachi Group's
commitment to contributing to the SDGs

as "Business Strategy" and "Corporate
Commitment." The contribution to the objectives
can be substantiated in different ways, i.e:
• 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.

Guide tothe ESG
Report 2023

• through management models which enable theOrganisation to follow a path of sustainablegrowth and guarantee a cohesive culture of
responsibility which promotes sustainableactions by individual collaborators.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

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

Chapter 3
GovernanceBusiness Strategy

Chapter 4
Social Impact

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

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Corporate Commitment

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

Among the UN Sustainability Goals, Hitachi Rail has identified the specific Goal to which it contributes the most through its business activites.
More detail on the SDG's targets to which Hitachi Rail contributes to, refer to the Annex A - Hitachi Rail's Sustainable Development Goals and Target".

GRI
Content
Index

36

Hitachi Rail's material topics and contribution to SDGs
TOPIC
Reduction ofemission andmitigation ofclimate change
Reduction ofenergyconsumption

Air quality

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

Manage operations with a holistic approach to reducing energy
consumption and the rational use of resources
Managing production processes by reducing emissions of
substances able to affect the natural composition of the air andimpact biodiversity, local communities and employee health

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

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

Waste
management

Eco-design

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

Letter to
Stakeholders

SDGS

TOPIC

TOPICS DESCRIPTION

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

Occupational
Health & Safety

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

Customer focusing

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

SDGS

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity2

Chapter
ESG Framework
and Roadmap

Chapter 3
GovernanceSupport 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

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

Chapter 5
Environmental
ImpactR&D and productinnovation

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

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

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

Chapter 4
Social Impact

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Ensuring professional management of sensitive and personal
data through the use of state-of-the-art procedures, tools andtechnologies, ensuring an effective IT security management systemand efficient use of information assets

TCFD
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Table

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37

3

GovernanceChapter 3:

Letter to
Stakeholders

Governance

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

3.1 Corporate Governance

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

Hitachi Rail operates on several continents
with different local offices at region andcountry level. The operational structure reflects
the international presence, with Corporate
functions at global level and local branches
able to manage the business specificities ineach territory.
The Organisation is led by Group CEO
Giuseppe Marino, who chairs the Global
Leadership Team from FY22. This Team iscomposed of 13 Senior Executives8, of which
one woman, who supervises precise areas of
responsibility and activities both for staff andbusiness functions.
The Hitachi Group governance structure is
widely cascaded and replicated within Hitachi
Rail. Several Committees take on specific core
strategic matters: Sustainability, as briefly
explained afterwards, but also HSE, Data
Protection, Audit, Risks and Control, etc.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Hitachi RailGREEN ECONOMY

3

Chapter
Governance

Chapter 4
Social Impact

ENVIRONMENTAL

Chapter 5
Environmental
ImpactSustainability Committee
ECONOMIC VALUESInternal integrationand collaboration

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

SOCIALSTAKEHOLDERS

Methodological
Note

External integrationand collaboration

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
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Table

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8

For additional information on Hitachi Rail Global Leadership Team, consult the section available on the corporate website (https://www.hitachirail.com/our-company/global-leadership-team/)39

3.1.1 ESG Governance

Letter to
Stakeholders

The Corporate Social Responsibility & Sustainability (CSR&S) function addresses ESG
topics; and from 2020, a Sustainability Committee oversees, approves, and provides input
to Hitachi Rail on its policies, strategies and programmes related to sustainability andcorporate responsibility issues, assessing their KPIs and risks.
The CSR&S Department manages and coordinates the work for the four strategic areas ofsustainability:

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

SUSTAINABILITYOF PRODUCTSSUSTAINABILITY
OF SITES

The mission of the CSR&S function is
to interface with the lead managers ofHitachi Rail’s business functions, reportingto them and to all other stakeholders
about the impact and progress toward thesustainability roadmap.
At the end of FY22, the CSR&S function
drafted a specific procedure dedicatedto the 'Preparation of the ESG Report'of the Hitachi Group Railway Systems
Business Unit Organisation. This document
discloses environmental and socio-economic
performance information, measures andoversees ESG performance and impacts,

SUSTAINABLE
CULTURE

Guide tothe ESG
Report 2023

Hitachi Rail’s
ESG KPI Model

Highlights Fiscal
Year 2022

Before the start of the annual reporting process for the ESG Report, Hitachi Railupdates the repository of all relevant ESG KPIs to be collected and integrated as toguarantee the higher possible level of granularity of information.

Chapter 1
Context and
Identity

In doing so, all data owners are notified and know what kind of data to collect,
the frequency of update needed and the standards to which they need to refer.

Chapter 2
ESG Framework
and Roadmap

As a result, the quality of data collection is increased, and regulatory updates andbest practices are implemented on a regular basis.

Chapter
Governance

3

Chapter 4
Social Impact

SUSTAINABLE
VALUE CHAIN

Chapter 5
Environmental
Impactand tackles sustainability risks andopportunities, making possible to definea clear governance model in the processof preparing the ESG Report, definingroles and responsibilities for each stage ofreporting.

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

This procedure describes the process ofsetting up and defining the ESG Report
including, among others, the reporting
timeline, reporting boundaries, descriptionof the materiality analysis process, thedata collection and consolidation process,and the finalisation, approval, andcommunication phases of the document.

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40

Sustainability Committee
The Sustainability Committee, led by theGroup CEO and composing permanent
Executive members and other specificappointed figures, manages Hitachi Rail’s
vision and long-term ESG goals in pursuing
continuous improvement of governancethrough a global structure, effective
decision-making and implementation.
In the FY22, the Committee held five
strategic and operational meetings withthe following outcomes:• develop its mission of addressing, evaluating
activities and correcting strategies;• mandate a specific organisational
Group Unit (SHEQ/R&D) to implement
and achieve the objectives of continuous
improvement, environmental protection,and social objectives, in the interestof the Stakeholders affected by thebusiness activities.
The Sustainability Committee, throughthe coordination of the CSR&S function,
also interacts with the representatives of
local governance, maintaining a holistic
view on ESG performance and targets.
The Sustainability Committee reports
directly to the CEO of Hitachi Rail andworks in partnership with Hitachi Group’s
Sustainability Promotion Division (SusD).

ESG Ratings: EcoVadis
EcoVadis is a third-party provider of businesssustainability ratings that organisations
can use to understand more about theirsustainability performance and thesustainability performance of their suppliers.
Since its founding in 2007, EcoVadis has
rated globally over 100,000 companies on
its platform in areas covering Environment,
Labour & Human Rights, Ethics, andSustainable Procurement. Hitachi Rail’s CSR&S
department has taken over the complete
management of the sustainability ratings.
After years of collaboration with EcoVadis and,following Hitachi Rail’s new organisational
structure, for the first time the EcoVadis ratingreflects the commitments and approach tosustainable topics of the whole Organisation.

The EcoVadis Sustainability Rating, which
is based on Hitachi Rail’s Non-Financial
Reporting is highly requested by mostimportant clients and has reached a newhigher level.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

In 2023, EcoVadis awarded Hitachi Railthe Platinum medal with a score of 81/100(+2 points compared to the previous
award), which covered only the signallingpart of the business.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Hitachi Rail is in the
top 1% of companies
rated by EcoVadis in
the manufacture of railway
locomotives and rollingstock industry.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant 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 3 – F Y 2 2•d iscuss leading CSR and Sustainability
issues, both from a strategic anddevelopment and implementation
point of view;

Letter to
Stakeholders

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
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Table

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41

3.1.2 ESG Management System and Certifications
The Global Business Management System(GBMS) 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
the Hitachi Rail entities. GBMS combines
all related components of a business into
one system for an easier management andmonitoring in a continuous improvement
approach.
There are four GBMS sections:• Governance: high level manuals,
global objectives and policies (strategy
execution);

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Organisation: Organisation’s
structure, roles and mandates(accountabilities for each organisationalrole), project team structure;

Letter to
Stakeholders• Process excellence: complete sets ofoperation practices, procedures, rules
and detailed instructions;

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022• Enterprise architecture: theOrganisation’s IT platforms and tools.

Chapter 1
Context and
Identity

Since its inception in April 2020, theproject team has now published anddeployed most of the global processes
published on the COSMO GBMS area
(Manuals, Global Policies, Strategy
and Governance, Support functions,Execution processes), in addition to
the Organisational Area (lead by HR
functions) with the Organisation Chart,
Roles & Mandates, Project Organisation
Structure.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
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Table

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North Pole_Perpetuum FOAK TAMON Install

42

Quality, Health, Safety and Environmental certifications

Letter to
Stakeholders

SHEQ Certification as of March 2023 (end of FY22)
Hitachi Rail RSBUCOUNTRY

SITE

IRIS

ISO 9001 ISO 45001 ISO 14001 EMA S SA 8000 ISO 50001 ISO 27001

USA
FRANCEUNITED KINGDOM

Newton Aycliffe

NaplesPistoia
Reggio Calabria

JAPAN

✔

✔
✔
✔

Stoke Gifford

Tito Scalo

ITALY

✔

Miami
Riom

✔
✔
✔
✔

Kasado

✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔
✔
✔
✔
✔

TRAIN MAINTENANCE

✔
✔
✔
✔
✔
✔

Ashford
Doncaster

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

UNITED KINGDOM

Landore Swansea
Edinburgh (Craigentinny)London (North Pole)
London (Bounds Green)

✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔

Naples (HQ)
Genoa

ITALY

✔
✔
✔
✔
✔

✔
✔
✔
✔

UNITED KINGDOM London Head Office Ludgate

SPAIN

Les Ulis
MadridZaragoza

✔

✔
✔
✔
✔

✔
✔
✔
✔

✔
✔
✔
✔

Roma
MilanoPiossasco✔
✔
✔

SAUDI ARABIA

RiyadhU.A.E.

Abu Dhabi

PERU

Lima

TAIWAN

TaipeiMALAYSIA
USA

Kuala Lumpur

IRIS

ISO 9001 ISO 45001 ISO 14001 EMA S SA 8000 ISO 50001 ISO 27001

AUSTRALIA

Pittsburgh PA
Pearl city (Honolulu)

Noida
MumbaiBangalore

CANADA

Ontario

PANAMA

Panama CityGERMANY

MunichTURKEY

AnkaraSWEDEN

Solna

DENMARK

Copenhagen

CHINA

Bejing

✔

✔

✔
✔

✔

✔

(included in the
Italian Certicate)(included in the
Italian Certicate)

✔
✔
✔
✔
✔
✔

✔
✔

✔
✔

✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔

✔
✔
✔

✔

✔

✔

✔

✔

✔

✔

✔

✔
✔
✔
✔
✔
✔

✔
✔
✔
✔
✔
✔

✔
✔

✔
✔

AS/ZNS 4801:01

AS/ZNS 4801:01

Kolkata(included in the
Italian Certicate)✔
✔
✔

(included in the
Italian Certicate)

SidneyThessaloniki

✔

✔

✔
✔
✔

(included in the
Italian Certicate)

AS/ZNS 4801:01

GREECE✔

(included in the
Italian Certicate)

Perth (Belmont)

Karratha

INDIA

✔
✔
✔

RawangBrisbane (Eagle Farm)

OFFICES AND SIGNALLINGFRANCE

SITE

OFFICES AND SIGNALLING continued

PRODUCTION SITES
Batesburg

COUNTRY

Guide tothe ESG
Report 2023✔

AS/ZNS 4801:01

✔
✔
✔
✔
✔
✔
✔
✔

Highlights Fiscal
Year 2022✔
Chapter 1
Context and
Identity✔

Chapter 2
ESG Framework
and Roadmap✔

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
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Table

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43

Key achievements
As part of the improvement process carried out in the last two years, all the Italiansites have been certified SA 8000: this standard encourages organisations todevelop, maintain and apply socially aligned practices in the workplace.
All vehicles manufacturing plant in Europe have been certified with ISO 50001
Certification, the ISO standard promoting a sustainable Energy Management System.
The SHEQ team revised the procedure for incident management to include the new
SHEQ reporting tool as systematic approach to incident reporting. It issued further
procedures related to engineering controls for management of critical risks like
Electrical Hazard, Working at Height, Train Movement, Contractor Management
and Confined Space. The Critical Risk Control Assessment, introduced in FY22, is an
important element of integration with the campaign Our Life Saving Rules.

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

In November 2022, all Rail Control Organisational Units completed the Capability
Maturity Model Integration (CMMI) Lev.2 Registration. This model is a proven setof best practices organised by critical business capabilities, whose objective is theoverall improvement of the business performances.

Occupational Health, Safety and Environment (OHSE) Management System
Hitachi Rail’s integrated OHSEManagement System ensures that process
and procedures are properly implemented
and maintained. This year Hitachi Railachieved a Global Multisite Certificate for
ISO 14001and ISO 45001, demonstrating
its constant efforts to build a safety culture
and promote health and safety activities.
Hitachi Rail HSE management system
includes a set of global documented
procedure and template, constituting the
backbone of the system. Hitachi Rail uses
an integrated approach to Health, Safety,
and the Environment to ensure that all
work practices are carried out in a mannerthat mitigates the risk of injury or harm topersonnel and the environment.
Hitachi Rail’s Management System
is complex, and it is composed ofelements from both an internal andexternal perspective, namely corporate

Letter to
Stakeholders

policies and assessments and third-party
certifications.

Guide tothe ESG
Report 2023

Additionally, each Country/Legal Entity/
Branch and Site/Project can develop,
according to specific legal and regulatory
requirements and operational controls
process needs, Local GBMS Instruction or
Project documents.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

In this way, all sites and projects where
Hitachi Rail operates are covered by a
dedicated management system.

3

Chapter
Governance

The main actor in the preparation andimplementation of the HSE Management
System is the HSE Unit, which ensure theplanning, implementation, coordinationand monitoring of HSE processes andpolicies that drive compliance with the
Global Business Management System,
relevant local regulations and, whereapplicable, customer requirement.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

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3.2 Business Ethics, Transparency and Integrity
The creation of sustainable economic
value must also be supported by policies,
practices and information processes thatguarantee ethics, integrity and transparency
in the 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 3 – F Y 2 2

There were no instances of non-compliancewith laws and regulations, and no fines
or non-monetary sanctions, including
anti-bribery and anti-corruption, export
and trade compliance, or personal dataprotection laws reported or recorded during
the FY22 reporting period. During fiscal
year 2022 (FY22), covering the period
1 April 22 – 31 March 23, Hitachi Rail’s
Legal & Compliance function undertook
numerous core initiatives to streamline
and simplify governance, and strengthen
and enhance elements of its complianceprogramme.

Legal

Compliance

The Legal function supports the wholebusiness with legal guidance and counsel
across all operations globally. During FY22,
the Legal function contributed to streamlining
and simplifying Hitachi Rail’s governance,
which is aligned to Hitachi Group directives
and requirements. It issued new governancemanuals to the internal Global Business
Management System (GBMS), including
Governance, Committees, Boards of
Directors, and Legal Entity Rules, as well as
Bid and Project Authorisation Rules.

The Compliance function operates asa matrix Organisation, with individualcompliance managers responsible for a
specific country or region, and area ofcompliance. During FY22, Hitachi Railappointed a Chief Compliance Officer aswell as dedicated compliance managers
to cover anti-bribery and anti-corruption,compliance operations, and whistleblowing
and investigations.

These activities integrated the ordinary
task under the direct responsibility of thefunction, such as the support of the wholebusiness with legal guidance and counsel
across all operations globally, including
but not limited to advising on contractual
matters, negotiations, bids, litigation,
mergers and acquisitions, and insurance.

During FY22, the Compliance launchedinitiatives to strengthen existing complianceprogramme elements:• Multi-faceted communication plan toensure that all Hitachi employees andstakeholders understand the expectations
regarding business conduct and ethics
connected with the launch of the new
Hitachi Group Code of Ethics andBusiness Conduct effective from March 1,2023;• Direct oversight in the Ethicspoint
system for all Hitachi Rail-related
whistleblowing concerns. During FY22,
Hitachi Rail received 43 reported
concerns through its various speak-up
channels, including 31 reported via the
new Hitachi Group Global Compliance
Hotline;Letter to
Stakeholders

Guide tothe ESG
Report 2023

• Support for the Procurement function indeveloping a risk model for assessing
compliance-related risks during supplierqualification. In February 2023,
Hitachi Rail moved to single technology
solution and platform, Jaggaer, which is
integrated with its SAP system for supplierqualification. Compliance reviews
include assessing red flags for entities,
owners, and management associatedwith, among others, sanctions and watchlists, regulatory actions, negative news,
and reputational risk. Human rights risks
are reviewed, and corruption risks arecomprehensively assessed considering
not only corruption perception scores, butalso financial secrecy, and corporate tax
haven indices.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

For FY23, the Compliance function willcontinue to:

Methodological
Note• Drive common requirements and a
streamlined compliance policies andprocedures framework for the business;

Glossary andMain Acronyms
contained in the
ESG Report• Refine a fit-for-purpose compliancerelated risk assessment framework;

TCFD
ReferenceTable• Communicate with employees andstakeholders and harmonise its existing
compliance-related Policies andProcedures across Hitachi Rail.

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3.2.1 Code of Ethics and ESG Policies
The Corporate Code of Ethics summarises all
the good practices for the ethical managementof human resources and the developmentof a work environment where respect andconsideration for each employee prevails.

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

The Hitachi Group Code of Ethics is a crucial
pillar of the Hitachi Group Compliance
Programme, providing rules, values andprinciples that are required to be followedby employees, executives, and directors, andthird parties engaging in business with Hitachi
Rail. The same rules, values and principles arealso intended to assist officers and employees
in making business decisions and acting inalignment with Hitachi’s Group Identity.
During FY22, Hitachi launched the new
Hitachi Group Code of Ethics and BusinessConduct, effective from March 2023. The
new Code was internally communicated anddisseminated to all employees, and publicly
posted to Hitachi Group and Hitachi Rail’s
external websites. The Code is applicable toall of Hitachi Rail and core policy commitments
related to business conduct are themed:• Being aware (making good decisions
and reporting 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 with trade compliance laws);• Caring for Hitachi Rail’s communities(caring for the planet, respecting humanrights, appreciating diversity, equity
and inclusion, providing a workplace
free of harassment, promoting healthand safety, and investing in local
communities).

Letter to
Stakeholders

Where appropriate, Hitachi Rail has internal-facing policies and procedures for its workforce
to supplement the commitments noted in the Code, such as the following ESG policies:
Quality Policy
Product Safety Policy
Health & Safety Policy
Environmental Policy
Business Continuity Policy
Information Security Policy
Social Accountability Policy
Human Rights Policy
Conflict Minerals Policy

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

✔
✔
✔
✔
✔
✔
✔
✔
✔

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail deploys annual Ethics & Compliance training with a dedicated session on
anti-corruption, to its workforce, including governance body members and all employees.
In FY22 90% of the workforce completed its training, correlating to ~13,000 individuals
across Hitachi Rail, including facilitated sessions held for production staff.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

3.2.2 Organisational, Management and Control Model
Hitachi Rail has adopted appropriate
measures to prevent liability in accordancewith Legislative Decree 231/01, with
the implementation of specific protocols
and supervision systems. These systems

are designed to prevent potential crimecommitted by Directors, Statutory Auditors,
executives, employees or by any person
who has a contractual, financial orcommercial relationships with the BU.

Each legal entity within Hitachi Rail has
adopted an Organisation, management andcontrol model pursuant to Legislative Decree
no. 231/01 (the model), which has beensubsequently updated following regulatory

and organisational changes. Furthermore,this regulatory framework is replicatedon the different geographical areas whenrequired, with consideration of the relevant
national specificities.

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

3.2.3 Whistleblowing Management

3.2.4 Anticorruption

Hitachi Group Whistleblowing Policy andProgramme is applicable to all Hitachi
Business Units, including Hitachi Rail. It
provides numerous “speak-up” channels
through which anyone internal or external
to the Organisation, can report concerns.
These channels include Managers, Human
Resources, Legal & Compliance, and the
Hitachi Global Compliance Hotline. Hitachi
Rail additionally uses supervisory bodies
and other eligible recipients as speak-up
channels within Hitachi Rail, as requiredby certain local laws and regulations. All
speak-up channels are publicly available on
Hitachi Rail’s external website and internallyto employees on a dedicated Ethics &Compliance Page on the intranet site,
COSMO.

The Hitachi Group promotes andimplements a corporate culture inspiredby responsibility, sincerity, fairness,and ethics. The Hitachi Group’s AntiBribery and Corruption Policy provides
the foundation for all Group companies
to ensure the strictest compliance withall anti-bribery and anti-corruption laws.
On this basis, Hitachi Rail is committed
to tackling corruption and preventing therisk of unlawful practices by ensuring fulladherence with Group-level requirements
and that all business activities are carriedout ethically and legally.

Hitachi Rail promotes a speak-up culture
whereby anyone can report, in good faith,actual or suspected violations or breachesof laws, regulations, Hitachi Rail’s Codeof Ethics and Business Conduct, or any

applicable Hitachi Rail policies, with zerotolerance for retaliation of any kind anyone
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 their circumstances,or through which they feel most comfortable
reporting their concern.
Concerns are evaluated promptly andeffectively by Hitachi Rail’s Compliancefunction to determine the appropriate courseof action. If an investigation is deemednecessary an independent investigatoris appointed that has the competency,
capacity, and appropriate authority to
manage and follow up on the concerns.
Strict confidentiality is applied, to the
maximum extent reasonably possible, tohandling concerns, including investigation
details, identity of the person reportingthe concern, and of the other individuals
involved.

There is a dedicated Anti-Corruption Manualfor Group Companies and a Policy for
Hitachi Rail to ensure compliance with antibribery and anti-corruption laws. Both the
Manual and Policy provide for due diligenceof third parties, management of gifts andentertainment, and whistleblowing “speakup” channels for employees and otherstakeholders to confidentially report concerns

Letter to
Stakeholders

related to bribery or corruption, and to
mitigate and manage associated risks.

Guide tothe ESG
Report 2023

Hitachi Rail deploys annual Ethics &Compliance training to its workforce,
including governance body members andall employees. Annual training focuses on allelements of the Code of Ethics and BusinessConduct, with a dedicated session thereincovering anti-corruption requirements; during
FY22 deployment, a 90% completion rate
was achieved, correlating to some ~13,000
individuals across Hitachi Rail who completed
the training, including facilitated sessions
held for production staff. During FY22,
Hitachi Rail did not confirm any incidents ofcorruption. Through speak-up channels, one
concern related to an alleged request for abribe from a reseller was reported, and duly
investigated. The investigation concluded thatthe allegation was not substantiated, andHitachi Rail followed all appropriate controls
in its engagement. No instances of corruption
or bribery were confirmed.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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47

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

3.2.5 Competition Law

3.2.6 Export and Trade Compliance

The Hitachi Group Compliance Programme’s
Fair Competition policy applies to Hitachi
Rail. The policy reflects and expands on thefair competition provisions of the Code of
Ethics, and is included in the annual Codeof Ethics training.

The failure to comply with regulations onexport, import, re-export or re-transfer
of products (tangible or intangible),technologies, information, and services(hereinafter “goods”) classified as “DualUse” has exposed several Companies
to administrative and criminal sanctions,
reputational damage, as well as significant
financial losses.

Hitachi Rail engages in business across theworld based on principles of adherencewith the law and business ethics as well as
fair and open competition in compliancewith EU competition laws, and thoseof other regions in which Hitachi Railconducts business. During FY22, Hitachi
Rail appointed a Head of Competition
Law responsible for managing competition
law risk and compliance on behalf of theOrganisation. This includes ensuring that
all employees of Hitachi Rail are aware of
their obligations under competition law andconduct themselves in compliance with theapplicable rules.

Hitachi Rail shares the concerns of theinternational community on the proliferationof weapons of mass destruction and theexcessive accumulation of conventional
weapons. Therefore, Hitachi Rail does notdeal in military products and is committed
to complying with all applicable export andtrade compliance laws and regulations.
The Hitachi Rail Export and Trade
Compliance Programme includes Export
Control procedures, policies, and a Manual.
The programme is applicable to all Lines ofBusiness (LoB) and Hitachi Rail Companies toprevent, 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 Export and Trade Compliance meets thestandard controls required by the Regulation
in force and is based on best practice andthe
European Commission Recommendation.

To reach its target, Hitachi Rail exercises
Export and Trade Compliance due diligenceagainst any possible illicit transactions andensured that no products are provided, andno trade is carried out in any country or any
entity in violation of laws and regulations.
Hitachi Rail holds two active EU General
Export Authorisation (EUGEA) licenses issued
in May 2020. During FY22, it applied
for and secured four EU Individual Export
Authorisation licenses for export of materials
from Italy to projects in the United ArabEmirates, Turkey, and Peru.
All Hitachi Rail employees are required tooperate in full compliance with the laws andregulations in force and training opportunities
to reinforce a culture of compliance are duly
offered.
The Compliance function, under its Export
and Trade Compliance programme,collaborates cross-functionally withEngineering, Industrialisation, andLetter to
Stakeholders

Operations to ensure that all Hitachi Railproducts are properly assessed, reviewed,
and classified under applicable law andregulation.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

During FY22, Hitachi Rail had no instancesof non-compliance related to productclassification. Hitachi Rail completed theclassification of all its rail control products
initiated in January 2019. The relevant
functions engaged in the export and tradecompliance programme, on a continual
basis, ensure updates to classifications per
new versions of products released and/or additional products as they are added
to the portfolio. Rail control manufacturing
sites in Italy (Tito, Pistoia, Naples), France(Riom), and the USA (Batesburg) manufacture
products bound for export that requireclassification. Hitachi Rail conducted analysis
on ~700 products during FY22.
No instances of non-compliance with laws
and regulations have been registered by theappointed Legal and Compliance function,
during the FY 2023.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

48

3.2.7 Data Protection and Cybersecurity
Hitachi Rail takes great care in ensuring
compliance with all relevant privacy
and personal data protection laws andregulations in effect wherever it does
business. The Group has developed distinct
approaches for IT security, managing dataprotection on the one hand at a Corporate
level, including GDPR, and on the other
hand, at a Project/Customer level.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2Privacy and GDPR
Hitachi Rail proactively manages personal
data lawfully and ethically in compliancewith current local privacy laws and bestinternational practices with reference to the
NIS Directive, Network and Information
Security Directive (see EU 2016/1148)
or EU Cybersecurity strategy. The privacy
policies and procedures across Hitachi
Rail entities, notices, and other customer
agreements clearly define the datacollected, why it is being collected, who
has access, and for how long. Hitachi
Rail seeks to process only the minimum
data required. Personal data processedin the systems is secured appropriately
and treated maintaining the privacy of
employees, partners, and customers
globally.
Hitachi Rail implements its Personal Data
Protection governance model, aligned

to GDPR principles and international
best practices, in all countries in which
it operates, standardising personal dataprocessing and granting the highest levelof compliance with local laws. HitachiRail’s governance model provides for theappointment of a Data Protection Leader,
Committee, and Data Protection Officer
where required. In the event of datatransfer to third parties or in the context
of projects execution, Hitachi Rail dataprotection and privacy specialists work
closely with teams across the Organisation
to maintain compliance with data privacy
standards and to ensure that any data isused in an ethical manner.
The second guideline introduced by
Customer Data Protection concerns the
security process in the business area.
Critical Infrastructures (CIs) are the physicaland virtual assets essential for the effectivefunctioning of Society and the national
economy.
Cybersecurity activities are aimed at
protecting the System and minimising risks
related to misuse of data and abuse ofconfidential information by authorised/
unauthorised personnel having malicious
intents, exposing passengers and personnel
to risk of harm and/or impacting thecontinuity of operations. These security
activities are managed by a Security

Letter to
Stakeholders

Management Systems, based on IEC
62443 standards. The Security Process
is implemented during all the phases of
the Project lifecycle, following the generalprinciples of Prevention, Detection andReaction.
The process evaluates and monitors the
Cybersecurity Risk Level by managing all
the cybersecurity activities, in accordancewith the contractual requirements, bestpractice, standards and laws. The aim of
the Cybersecurity Risk process consists
in protecting transportation system
information, minimising risks related
to Data Confidentiality, Integrity and
Availability, and it is designed based on
the Defence in Depth approach, whereconcentric domains are identified andprotected:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

POLICIES, PROCEDURES AND AWARENESS
Chapter 4
Social Impact

PHYSICAL SECURITY
Chapter 5
Environmental
ImpactPERIMETER NETWORK DEFENCE
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

INTERNAL NETWORK DEFENCE
HOST SECURITY

Methodological
Note

APPLICATION SECURITY

Glossary andMain Acronyms
contained in the
ESG Report

DATA SECURITY
TCFD
Reference
Table

GRI
Content
Index

49

Cyber Security Strategy
The Security and Control System (S&CS)
Unit defines the Cybersecurity strategy toapply, the level of detail of the Security
Risk Management activities, and any
learning needs. Output of this activity is
the Cybersecurity Management Plan, andthe list of Cybersecurity Risk Assessment
carried out every year for achieving thetolerable risk level.
In FY22, the S&CS Unit published the new
Cybersecurity Process on the Global Business
Management System (GBMS) Platform.
The Process ensures cyber protection of
Signalling Generic Products (GP), Generic
Applications (GA), Specific Application (SA)and Turnkey Systems developed by LoB RailControl for Hitachi Rail Customers.

Letter to
Stakeholders

Protection of Hitachi Rail's IT assets
The Cyber Security & IT Risks Unit
(or Cyber Security Unit) proposes
Information Security objectives anddefines countermeasures to protect 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-byday operations to ensure monitoring &detection of any threats, managing risk
mitigation with IT systems, and conducting
any security incident response whenneeded; finally, the Unit co-ordinates allannual Information Security and Cyber

Security audits, technical assessments, andmitigation reviews.
The central document for its activities
is Hitachi Rail's "Information Security
Management System (ISMS) Documentation
Framework," which is essential to ensurethat all activities are conducted according
to well-defined criteria.
The Cyber Security function collaborates
with other relevant Corporate functions(e.g., Legal and Compliance, Risk
Management) to ensure the implementationof the Organisation's IT security objectives.
However, the Cyber Security function
handles compliance issues separately,
focusing primarily on security incidents

and vulnerabilities. All these events arerecorded in an internal log, to track each
incident and the related corrective actions
taken. When events threaten the continuityof business operations, the Enterprise Risk
Management function takes control andworks in synergy with the Cyber Security
function to ensure a prompt response andan effective solution.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

During the FY, Hitachi Rail passed both
the Cyber Essentials Basics and Cyber
Essentials Plus assessments, obtaining
the renewal of the certifications anddemonstrating the effectiveness of theprotection against the growing threat ofcyber-attacks.

3

Chapter
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 3 – F Y 2 2

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Honolulu Metro50

3.2.8 Fiscal Transparency

3.2.9 Internal Audit

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 function - with anonsite presence in Italy, UK, US, and Japan - isin place for the entire Organisation to oversee
the proper implementation of the Internal
Control System and its continuous updating.

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

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.
Each 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.

Letter to
Stakeholders

The results are periodically shared with Senior Management and Hitachi.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

The function, in line with the industry bestpractices, operates in accordance with anannual Audit Plan that is drafted with a riskbased approach, and it’s formally approvedby the ARCC (Audit, Risk, Compliance
Committee) and the SEC (Senior Executive
Committee) at the beginning of the financial
year. The Plan is periodically reviewed andupdated considering the state of company’s
risks and specific business requirements.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactIn FY22, Internal Audit carried out 47 audits
mostly relating to operational matters, liketurn-key projects and internal processes, andcompliance matters.

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

Furthermore, Internal Audit is charge oftesting J-SOX9 controls in accordance with
Hitachi requirements. J-SOX requires theimplementation and operation of a large setof controls over financial reporting. In FY22,Internal Audit tested 938 controls regarding
the main financial processes like close thebooks, purchase to pay, order to cash, etc.
Testing activity is performed for the legal
entities located in Italy, France, US, Australia,
UK, Japan and in the main STS branches.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Hitachi Rail ships Train 1 of the Class 800 series from its factory in Kasado, Japan9

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

51

3.3 Risk Management Process and Internal Control System

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Ethics, integrity, and transparency put Hitachi Rail’s values into action

Highlights Fiscal
Year 2022

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

Makoto (Sincerity) – (誠誠)Hitachi Rail has a dedicated Enterprise Risk
Management function that collaborates
with the Compliance function on assessing
relevant risks. Enterprise Risk Management(ERM), belongs to the Integrated Risk
Management Framework (IRM) and applies
this common framework10 to provide
reasonable assurance to the Organisation’s
senior executive and ARCC that an effective
risk management system is in place. This
includes the identification and managementof potential events that may affect enterprise,
projects and programmes.

multidirectional, iterative process in whichalmost any component can and does
influence another. Hitachi Rail’s ERM Process
constitutes of the following steps:

The ERM structure comprising Lines ofBusiness, Regions, and Technical Risk
Areas (Operational and Organisational
Resilience) ensures enterprise risks andopportunities are managed in an integrated
way across the Organisation, covering
the key interdependencies. ERM is a• Monitoring - risks and actions progress
monitoring;10• Landscape evaluation - refresh Risk andOpportunity Portfolio and prioritisation of
Key Risk Themes and Technical Risk Areas;• Risk assessment - risk identification,risk analysis (before and after therisk response) and risk Evaluation(prioritisation of focus on key risks);• Treatment - action plan identification;• Reporting - periodical reporting of ERM
insight and summary to Senior Executives
and ARCC. (Audit Risks and Control
Committee).

Risk assessment is a key step of theprocess, when ERM function supports Risk
Owners in the identification/update ofspecific risks and opportunities belonging
to the main processes and strategic
objectives. Risks are firstly consideredin their ‘inherence’ and then evaluatedand prioritised with the Risk Owners whooversee setting the proper Risk Responseon which ERM can assess effectivenessof mitigation and detective actions andcontrols. ERM Function defines impact andlikelihood scales with associated criteria for
the Risk Analysis and assesses the velocity
of impacts, calculating the risk scoreaccordingly in order to align the Global
Risk Portfolio. As a result, Risk Owners are
required to provide mitigation plans to bemonitored over the time.

Chapter 1
Context and
Identity

The main categories of the Hitachi Rail Risk
and Opportunity Portfolio include:

Chapter 2
ESG Framework
and Roadmap• Strategic (incl. Climate Change & ESG
Readiness) - strategic threats;

3

Chapter
Governance• Financial - financial concerns;• Operational - inefficient and ineffective
operations;

Chapter 4
Social Impact• Regulatory (incl. HSE and Human
Rights) - compliance with legal andregulatory requirements.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
ReferenceTable

All best practices and external applicable standards were taken into account and monitored by Internal functions in designing, reviewing and implementing Policies and 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 Tradeway Commission) 2004, updated in 2017.

GRI
Content
Index

52

ERM annually refreshes the Hitachi
Rail Risk and Opportunity Portfolio andprioritises the Key Risk Themes to Deep
Dive in line with Mid Term Management
Plan; these will undergo response
identification and mitigation plans.
The ERM framework is continuously
updated, and the dedicated ERM function
is committed to monitor Hitachi Rail’s
enterprise profile, technically guiding
Risk Owners and Risk Champions and,
whereas possible, supporting them
useful methodologies and tools to be
implemented in the next future.

During FY22 Compliance partneredwith Procurement to assess and analysesanctions-risks across Hitachi Rail’s supply
base and engaged in broader discussionsof corruption and compliance-related risk
assessments.

The assessment resulted in thedevelopment and deployment of an
appropriate risk model, embedded ina single platform, for due diligenceduring supplier qualification, specificallyscreening against any red flags for

Letter to
Stakeholders

any association with corruption risks
for entities (and their ownership andmanagement) in Hitachi Rail supply chain.

Guide tothe ESG
Report 2023

This platform, Jaggaer, was launched in
February 2023.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

On March 2023 ERM provided, first to
Senior Executives and then to the ARCC,
an update on five Key Risk Themes:

Chapter 4
Social Impact

1. Production Capacity

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

2. Supply Chain Resilience
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

3. Energy Supply & Inflation
4. Geopolitical evolution

MethodologicalNote

5. Climate Change & ESG (further
details in the next paragraph).

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Hitachi Rail team and the new 100% electric train for British operator LUMO

53

3.3.1 Responding to ESG Risks and Opportunities

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

ESG is playing a key role in defining
a renewed perception of risks andopportunities in the Corporate
environments. From a mainly financial andcompliance perspective, Risk Management
Processes have been turning into acomprehensive framework: the integrationof ESG factors is assured throughstructured processes at both Corporate
and Hitachi Rail levels, which includes
analysing of the sustainability context,
identifying priorities (e.g. materiality
analysis), implementing specific actions
in support of sustainability goals andreporting. At each stage of the process,alignment on respect for human rights
is considered a fundamental element inpursuing sustainable success.
Adopting sustainability indicators
within the entire value chain is central
to the approach to report on the results
achieved, to anticipate decisions and to
guide actions.
The CSR&S and ERM functions work
together to identify risks and opportunities
and to evaluated by setting several
techniques and tools.

During FY22, the team assessed Climate
Change & ESG Readiness as a crucial
element of the Risk and Mitigation strategy
and shared these results with the ARCC.
This comprehensive Risk Theme raised
several risk factors and facets related to
ESG targets and the potential risk resulting
financial losses and reputational damage
due to unavailability of resources, productand processes roadmap or low business
function commitment.

Letter to
Stakeholders

Other relevant areas for Hitachi Rail ESG
Risks mitigation actions relate to its Supply
Chain, which is progressively assessed
through Ecovadis (see section 3.4“Towards a Sustainable Value Chain”) andthe review of the current CapEx approval
process to consider ESG as a source ofrisk and/or opportunity.

During FY22, Hitachi Rail has started its
path to enhance and better detail in the
ERM System ESG Risks, adopting a holistic
approach that leverages sustainability
materiality analysis and sustainability
context overview, and will result in an
overall update of the Hitachi Rail Risk andOpportunity Portfolio.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

ESG Risks are a priority for theOrganisation and their inherence withregard to the overall exposure of theindustry where it operates, is high.
However, Hitachi Rail monitors andreinforces its risk responses to reduce risks.
As a result, Hitachi Rail has introduced:

Chapter 4
Social Impact

Chapter 5
Environmental
Impact• A Carbon Neutrality Roadmap on
its main and most emission-intensive
facilities (see section 2.1 “ESG
Roadmap and Targets” and5.2 “Environmental Goals andDecarbonisation Path” for further details);

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• A Vehicle Product Approach, with anextensive Life Cycle Assessment and ECO
Design to Hitachi Rail product Portfolio
and the willing to obtain for flagshipprojects the PAS 2080:2016 Certification(Carbon Management Infrastructure).

Glossary andMain Acronyms
contained in the
ESG Report

Methodological
Note

TCFD
Reference
Table

Hitachi Rail offices in Kasado

GRI
Content
Index

54

Letter to
Stakeholders

Climate-related Risks and Opportunities

Guide tothe ESG
Report 2023

Hitachi Rail considers climate related risks and opportunities as a major commitment. Hitachi Rail is willing to implement TCFD recommendations and has started from this year its path totransparently disclose upon those recommendations (for further details please read “TCFD Reference Table”).
Aligning this will to the Corporate’s endorsement of the recommendations and, on a local level, the path towards UK MCD compliance, Hitachi Rail has identified its main climate risk andopportunity areas with regard to 2 different Climate Scenarios:

1) The business environment and major risks and opportunities
under the 1.5°C scenario:• Competitiveness will decline if there are delays in the development ofinnovative emission-reducing technologies (for examples dynamic headway,
flexible operations in response to passenger demand, and new mobility
services like MaaS).

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Demand will grow for railways, which emit less CO2 per distance covered. There
will be a shift to energy saving railcars from conventional models, the efficiencyof railway services will be improved through digital utilisation and through theprovision of sustainable mobility systems based on alternative multi-modal energy
vehicles. Data usage will also boost demand for new mobility services.
Opportunities• Innovative technologies should also encourage a shift in demand for longdistance public transport to less impactful modes of transport, i.e. rail (in EU
countries in 2018, rail accounted for only 0.4% of both greenhouse gas (GHG)
and CO2 transport emissions and for 2% of transport energy consumption).

Specific actions have been undertaken bothat global/local level to mitigate risks andenhance opportunities:•S pecifically, develop and market moreenergy-saving railcars and battery powered
railcars for non-electrified sections;• Strengthen railway services through digitalutilisation such as dynamic headway (flexible
operations in response to passenger demand)and new mobility services like MaaS;• Ensuring the competitiveness of the business byfocusing on sustainable activities according tointernational standards (i.e. EU Taxonomy) also

Chapter 1
Context and
Identity

2) The business environment and major risks and opportunities
under the 4°C scenario:• Compliance with EU Legislations and timely response with effective andsustainable products is crucial to stay in the market.
Risks

Highlights Fiscal
Year 2022

Chapter 2
ESG Framework
and Roadmap• Demand for electric powered transport will gradually increase even
without tighter energy regulations, causing high exposure and costs.
Risks

3

• Damage from typhoons, floods, and other natural disasters caused byclimate change will rise sharply.

Chapter
Governance• The high frequency of natural disasters will exacerbate damage tofacilities, worsen working environments, and disrupt supply chainsleading to delays in deliveries and the procurement of components.

Chapter 4
Social Impact

Chapter 5
Environmental
Impact• Transport systems more resilient to natural disasters can be developed.
Competitiveness can be enhanced by providing added value, as
Opportunities
energy-saving railcars and new technologies.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Increased control over the supply chain (also over their physicallocation and Organisation) can be achieved through supplierassessments aimed at covering these topics.

increases the ability to access capital and ESGdriven investments, both for internal and externalbusiness projects;• Respond with an integrated view of business
management that includes the management of
production sites and the decarbonisation of plants
and offices;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report• Given the increasing frequency of natural
disasters, take risk aversion into accountwhen deciding the location and equipmentlayout of a new plant;

TCFD
Reference
Table• Keep an eye on the supply chain instrengthening the ability to respond tobusiness disruption risks.

GRI
Content
Index

55

3.4 Towards a Sustainable Value Chain

Letter to
Stakeholders

Guide tothe ESG
Report 2023

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 theon-going 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 3 – F Y 2 2• 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 Procurement
agenda which will improve visibility,
monitoring and defining improvement
actions on key risks in Supply Chain, with aparticular focus on CSR and Sustainability,and decarbonisation.

3.4.1 Supplier Governance and Guidelines
The Hitachi Rail Supply Chain & Procurement
teams work within the framework of the Codeof Ethics and Supplier Code of Conduct toresponsibly and effectively source, procureand contract with suppliers based on the
Procurement Strategy and in line with its
Supplier Quality procedures.

Code of Ethics andSupplier Code of Conduct
The Code of Ethics and Supplier Code of
Conduct set out specific requirements whichmust be followed by everyone working for orwith Hitachi Rail. The Code of Ethics is fully
deployed across all areas of Hitachi Rail, while
the Supplier Code of Conduct is in place for the
UK and Japan business areas and expanded
in Italy in FY22. For Hitachi Rail’s business,
the Code also reflects the commitment tobecoming a climate change innovator. Hitachi
Rail is committed to having all its suppliers
conform to the Organisation standards, as wellas to the agreed business conditions. This isimportant because it promotes customer trustand confidence with products and services andshows them that suppliers are valued partners
in this process. Encompassing human rights,

health and safety, environmental management,
ethics, supplier commitment, product qualityand data protection, policy and expectations
are clearly explained in the document.
Hitachi Rail calls on all suppliers to act as
ethical and responsible companies, to commit
to the sustainability of their supply chains, andto promote innovation and excellence for therail industry. Following the publication of theCode of Conduct, Hitachi Rail, in partnershipwith all suppliers, is committed to doing its
part to provide the best for the millions ofpassengers who travel the world's rail networks
every day, for the benefit of a more 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 (see Section 3.2.3 Whistleblowing
Management). Hitachi Rail ensures whistleblower protection also in the supply chain andthat no-one among suppliers is subject to any
direct or indirect retaliation, illegal conditioning
and/or discrimination of treatment of any
kind, for having made reported in a good faithreport of a violation.

Highlights Fiscal
Year 2022

Supplier Audits

Chapter 1
Context and
Identity

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 the External Providers’ processes
and activities. External Providers audits canbe general (including qualification audits) or
relevant to one project only.

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

Chapter 4
Social Impact

This audit scope includes:

Chapter 5
Environmental
Impact• External Provider Monitoring Audits:
audits aimed at verifying the External
Providers’ processes;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• External Provider Qualification Audits: audits
performed to qualify an External Provider;• Project External Provider Audits: audits
aimed at verifying the External Providers’processes and activities on specific projects;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report• External Providers Safety Audits;• External Providers Business Continuity
Audits;

TCFD
Reference
Table• External Providers Information Security
Audits;GRI
Content
Index• External Providers HSE Audits.
56

Each audit can encompass one or morearea:

3.4.2 Sustainable Supply Chain• Quality

Sustainability sits at the heart of HitachiRail’s supply chain strategy to address
the climate crisis and transition to aregenerative economic model. Most of
the business social and environmental
impact occurs in the supply chain.
Through Sustainable Supply Chain
Strategy, Hitachi Rail will drive positive
intentions, deliver sustainable change andultimately empower the achievement of its
Sustainable Development Goals promises.

• Health & Safety and Environment• Safety• Information Security• Business Continuity• Social Accountability.

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

Suppliers and subcontractors are selected
to be included in the yearly audit
programme based on various risk-based
decision criteria such as spend, materialgroup risk (risk of what is being supplied tothe business), impact on the overall project
performance, impact on safety, time sincelast audit, results from internal stakeholder
assessments on supplier performance,
product quality (SQC) statistics or specificcases of request from operations.
The frequency of audits in general is basedon the material group provided. High risk
categories are prioritised in the selectionof which suppliers to audit as per criteria
above.

During FY22 Hitachi Rail introduced
the model of Sustainable Procurement
Strategy, based on externally recognised
frameworks i.e., OECD, UNGPs. This
will be aligned to deliver the Hitachi
Corporate Sustainable Procurement Policy
and wider Sustainable Development Goals
and Agenda 2030 commitments.
Hitachi Rail, started a process to improvethe digital carbon accounting engine
which uses the Greenhouse Gas (GHG)
Protocol to estimate total carbon footprint
through a spend-based methodology, for
the Scope 3 categories of purchased goodand services, capital goods, and upstream
transportation and distribution. This is
an innovative and tailored approachfor Hitachi Rail to solve the challengeof understanding the volume of Scope 3
emissions of suppliers without, typically,

Letter to
Stakeholders

having direct access to the Scope 1 and 2
emissions data for these suppliers.
Hitachi Rail has also been able to determine
the categories of spend with the highest
levels of carbon intensity. This gives a clear
opportunity to focus the efforts in collaboratingwith top supply chain partners to address theiremissions as well to track and monitor the
progress towards carbon neutrality over time.

Meanwhile, all suppliers are being
encouraged to register in the 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 for improvement.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

3

Chapter
Governance

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

Chapter 4
Social Impact

1

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

Chapter 5
Environmental
Impact2

Assessment of sustainability performance of supplier – EcoVadis Rating:
Actual assessment of suppliers based on risk and supplier materiality through the registrationin the EcoVadis ratings platform.

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report3

Assessment of carbon performance of partner - Carbon Scorecard:
Monitoring of the carbon performance of rated supplier eligible for the Carbon Scorecard.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

57

Screening of Hitachi Rail’s risk
distribution per theme - EcoVadis IQ:
Hitachi Rail screened over 6,800 suppliers
using the EcoVadis platform, representing
95% of its total annual third party spend.
This screening provides critical insights
on the inherent risks profile of suppliers interms of the industries they work in andthe countries in which they operate andallows Hitachi Rail to have a holistic CSR &Sustainability risk profile to focus resources
and prioritise the highest potential risks.
In FY2022 Hitachi Rail uploaded andassessed 6,802 partners ranging in 199
industries and 52 countries, registering a
10% increase with respect to last year.

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

OVERVIEW

6,802
199
52

Assessment of sustainability
performance of supplier – EcoVadis
Rating:Through a defined implementation plan
based on risk and supplier materiality, Hitachi
Rail today has over 759 top suppliers fully
registered in the EcoVadis ratings platform,
providing detailed visibility of their CSR &Sustainability performance. This marks anincrease of 281 (63% increase) new suppliers
screened for environmental, social, and ethicalcriteria. Today, 50% of annualised Procurement
spend at Hitachi Rail is covered by Rated
suppliers, an increase with respect to the 30%
covered last year. Over the year, Hitachi Railwill continue to expand the number of suppliers
invited to join the platform, providing essential
information on the performance of supply
base, and forming a basis for a broader
Sustainable Procurement strategy.

Letter to
Stakeholders

It should be noted that the figure “Inprogress” also includes suppliers being
re-assessed. The reassessment process
has shown significant improvement in theCountries

759

15

0-44

Chapter 1
Context and
Identity

16

4

84%
+4.25pts

3

Chapter
GovernanceHave a score of 45 (good) or higher

Chapter 4
Social Impact

	
Average Improvement points ofrated suppliers since Hitachi Rail
Implementation

19

61%

61

3
0-44

Improve

Chapter 2
ESG Framework
and Roadmap

20

5

In progress

178

Highlights Fiscal
Year 2022

0-4445-10045-100

Rated

score of the suppliers involved, showing ashared commitment and the development
toward a common path.

Evolution of reevaluated suppliers (%)

Partners

Industries

Guide tothe ESG
Report 2023

Stable57

Chapter 5
Environmental
Impact f suppliers reassessed haveoimproved their overall score in
the last 12 months

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report45-100

Methodological
Note

Ragress
Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

58

Assessment of carbon performanceof partner - Carbon Scorecard:
Around 9 in 10 of Hitachi Rail’s supplierson EcoVadis are eligible for the Carbon
Scorecard and of those, 49.5% of them are
rated as Intermediate or above.

Letter to
Stakeholders

More on supplier assessment integration in business practices:• EcoVadis was formalised in a Group Indirect Sourcing
procedure and EcoVadis Rating was incorporated in the UK
Supplier Selection Board (SSB) therefore, the EcoVadis rating(where applicable) for suppliers is included in the supplierselection decision alongside other selection criteria;

An overview of the regional distribution of supplier base can befound below:• A specific training section on EcoVadis was held, involving 167
people from procurement staff from around the Globe. 4 sessions
were delivered in total, each covering different regions.

1.4 0.1

Given the nature of Hitachi Rail’s global business presence, theOrganisation manages a large and diverse supply base covering
multiple areas of spend including:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Supplier distribution (based on spending) (%)
11.5

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

69.0

3

Chapter
Governance

18.0

Chapter 4
Social Impact• Materials – purchase of circuit boards, mechanical and plastic
parts, wayside equipment, cables, racks, cabins, industrial PCs,
on-board equipment and electromechanical components;

Chapter 5
Environmental
ImpactH I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Services – facility management and HSE, payroll services,
professional and ICT services, logistics services and travel;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Business services – engineering and development services and
RAMS activities (reliability, maintenance, availability and security);• Turnkey projects and subcontracts – systems such as
installation systems, telecommunications systems, auxiliary
braking systems, power supply and systems, supervision andcontrol systems, depots for equipment, signalling systems, rails
and civil works.

EuropeAsia

Americas

Oceania

AfricaMethodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Hitachi Class800 series - Bicycle storage59

Letter to
Stakeholders

Hitachi Rail and Partners Awards

Guide tothe ESG
Report 2023

Partner Turntide Technologies recognised for innovative and sustainable technology solutions
Turntide is doing outstanding work developing and manufacturing the battery system prototype for Hitachi Rail’s
reduced emissions hybrid and tri-brid trains, and this year was awarded the prestigious Queen's Award for Enterprise in
Innovation.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

It will be the preferred supplier to design and supply traction battery systems for Hitachi Rail’s intercity battery
train trial.

Chapter 2
ESG Framework
and Roadmap

A proud partner, Hitachi Rail celebrated Turntide at the Hitachi Rail Global Partner Day for its collaboration with DB ESG
on a battery systems design project, in line with the joint vision to support decarbonisation on the railway.

3

Chapter
Governance

3,000 suppliers come together at Hitachi Rail Global Partner Day

Chapter 4
Social Impact

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

At the global Partners Day, Hitachi Rail highlighted the importance of sustainability and decarbonisation to over 3,000
suppliers.

Chapter 5
Environmental
ImpactThey recognised five key supply chain partners for their contributions. DB ESG and Turntide Technologies were praisedfor collaborating on a battery systems design project for railway decarbonisation. Daeyang Electric Limited was
acknowledged for delivery, quality, and global collaboration. Mors Smitt was celebrated for delivering significant
weight savings, enhancing quality and reliability.

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

Anixter received the Strategy Partner of the Year award for their global accounts team and commitment to 'Made in theUSA' content.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

60

4

Social Impact

Chapter 4:

Letter to
Stakeholders

Social Impact

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

4.1 Our People

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

Hitachi Rail aims to build an environment
where talent from diverse cultural
backgrounds, experiences, and ideas play
an active role in cultivating a common
identity in all employees worldwide so they
may share the values of Harmony, Sincerity,
and Pioneering Spirit that comprise HitachiRail’s core mission.
The Organisation works with constantcommitment to ensure, on the one hand,the continuity of service and, on the other,
the protection of the health and safety of all
workers engaged in various capacities inthe various activities.

Chapter 1
Context and
Identity

The Organisation is managed at global
level, across LoBs and geographicalboundaries, with the support of all
Operational HR units for all employee
related matters. All Hitachi Rail’s employees
are recorded into the Organisational
Chart, which provides a clear descriptionof the mandates of each role, ensuringconsistency with the Mid-Term StrategicPlan, and encouraging collaboration acrossorganisations, regions and generations,by building an equitable and inclusive
Organisation where diverse talents areable to play an active role.
The structure allows Hitachi Rail toactively engaging in regular dialogue
with employees regarding opportunities,

Chapter 2
ESG Framework
and Roadmap

training, and career development throughits Global People Management System, as
well as through regular dialogue between
managers and employees.

Chapter 3
Governance4

As Hitachi Rail grows, the Organisation
expands and changes to accommodate andfoster synergies among the markets andbusinesses in which it operates.

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Hitachi Rail’s workforce is managed by the
HR function, guided by a set of HR policies
and a strong labour structure, defined inalignment with Corporate policies andguidelines as well as with regional and local
requirements.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

62

4.1.1 Human Capital
The Hitachi Rail workforce is shown in
the following tables, where employee
categories are broken down by gender,
geographical location, professional
categories, education, age, seniority, andtypes of contracts. All quantitative data
referring to human resources are to beunderstood in terms of headcount as of
31 March and never in terms of full-time
equivalents (FTE). Unless explicitly stated,
all HR data are disaggregated by region toensure both granularity and readability of
tabular and graphical formats.

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

Number of workers by region
Hitachi Rail employees are located all
around the world and its workforce isgrouped in several different regions, with
36% of the workforce concentrated in
Italy – constituting of a region itself due
to the concentration of workforce - a 26%
in the EMEA (Europe, Middle East, andAfrica) region and 21% in Japan. This year
confirms the trend of a growing workforce
in the EMEA. The remaining workforce isin the US and Canada (10%) and in the
APAC (Asia Pacific) region representing 7%of the total workforce.

Letter to
Stakeholders

FY21

NUMBER OF WORKERS BY REGION

MEN

WOMEN

Guide tothe ESG
Report 2023

FY22
TOT

%W

MEN

WOMEN

TOT

%W

Italy

4,056

735

4,791

15.3%

4,218

774

4,992

15.5%

Japan

3,359

317

3,676

8.6%

2,632

242

2,874

8.4%

EMEA

2,979

571

3,550

16.1%

3,019

575

3,594

16.0%

USA & Canada

762

238

1,000

23.8%

973

319

1,292

24.7%

APAC

793

168

961

17.5%

844

169

1,013

16.7%

Total

11,9492,029

13,97814.5%

11,686

2,079

13,76515.1%

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance4

Data reporting is based on the Company's local system of records, in accordance with existing local controlling models.

ChapterSocial Impact

Employees as FY22 (%)

Chapter 5
Environmental
Impact7.4
Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

36.3

9.4

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

26.1
20.9
Italy

Japan

EMEA

USA&Canada

APAC

GRI
Content
Index

ECOA interior work

63

Professional categories

Letter to
Stakeholders

58% of Hitachi Rail’s employees fall
into the white-collar category, of which
women, accounting for 15% of the total
workforce, represent 17%.
The proportion of women in the Executives
category is increasing over the years,

registering a 15% increase this year
(specifically with an increase of 2
people) compared to the previous fiscal
year, and a 30% increase in the Middle
Management category (specifically 175
people).

FY21

FY22

PROFESSIONAL
CATEGORIESMEN WOMENTOT%WMEN WOMEN

TOT%W

Executives

171

13

184

7.1%

166

15

181

8.3%

Middle Management

1,382

118

1,500

7.9%

1,832

293

2,125

13.8%

White Collar

6,303

1,571

7,874

20.0%

6,651

1,349

8,000

16.9%

Blue Collar

4,093

327

4,420

7.4%

3,037

422

3,459

12.2%

11,9492,029

13,97814.5%

11,686

2,079

13,765

15.1%

Total

This snapshot, which is new to previous Reports, is in line with Hitachi Rail's ongoingcommitment and journey to certify itself in compliance with ISO 30415: 2021.
FY22

WORKFORCE BY GENERATION

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

AGE

FY21
MEN WOMENTOT%WMEN WOMEN

TOT%W< 30 years

1,362

264

1,626

16.2%

1,304

251

1,555

16.1%

30-50 years

7,309

1,293

8,602

15.0%

7,142

1,312

8,454

15.5%

> 50 years

3,278

472

3,750

12.6%

3,240

516

3,756

13.7%

11,9492,029

13,97814.5%

11,686

2,079

13,765

15.1%

Total

By considering the distribution over generations, the Hitachi Rail's workforce is made ofa majority of Generation X employees.

%W

1

4

25.0%

Baby Boomers (1946-1965)

1,499

245

1,744

14.0%

Generation X (1966-1985)

6,689

1,199

7,888

15.2%

Generation Y (1986-1995)

2,762

515

3,277

15.7%

Generation Z (1996-2005)

733

119

852

14.0%

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

For the first time this year, Hitachi Rail also reports the classification of employment level by
age in the table below.

Chapter 3
Governance

4

FY22
<30

30-50

>50

TOT

Executives

-

69

112

181

Middle management

-

722

680

1,402

White collars

909

4,824

1,787

7,520

Blue collar

646

2,838

1,178

4,662

1,555

8,453

3,757 13,765

Total

FY22

TOT

3

Traditionals (1926-1945)

WORKFORCE BY GENERATION

As far as the age distribution is concerned, 61% is aged between 30 and 50; 27% over
50, while the remaining 12% are employees under 30 years old.

Guide tothe ESG
Report 2023

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

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 42% of
Organisation workforce has been employed by more than 10 years.
SENIORITY

FY21
MEN WOMEN

FY22
TOT

%W

MEN WOMEN

TOT%W< 5 years

4,097

773

4,870

15.9%

4,177

840

5,017

16.7%

5-10 years

2,256

501

2,757

18.2%

2,494

474

2,968

16.0%

11-15 years

1,552

243

1,795

13.5%

1,283

242

1,525

15.9%

16-20 years

1,458

243

1,701

14.3%

1,325

237

1,562

15.2%

21-25 years

696

66

762

8.7%

803

101

904

11.2%

> 25 years

1,890

203

2,093

9.7%

1,604

185

1,789

10.3%

11,9492,029

13,978 14.5%

11,686

2,079

Total

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

13,765 15.1%

64Hitachi Rail aims to build long-term
relationships with each of its employees;
the quota of employees with an openended contract reached 96% in FY2021
and remained stable ever since. The
overall number of employees globally has
seen a small decrease versus last year,with 98% of the FY22 employees now
employed on full-time contracts.
As can be seen from the tables, the trend
by region shows an increase in hiring with
open-ended contracts for the Italy and
APAC regions, despite overall decrease instaffing for FY22 compared to FY21.
For Italy, EMEA and USA & Canada
regions open-ended contracts increased
for the female corporate population.

Letter to
Stakeholders

OPEN-ENDED AND
FIXED CONTRACTS

JAPAN

EMEA

USA&CANADA

APAC

TOTAL

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

4,790

4,992

3,427

2,524

3,370

3,459

1,000

1,291

890

935

13,477 13,201

of which men

4,055

4,218

3,141

2,323

2,833

2,908

762

972

738

786

11,529 11,207

of which women

735

774

286

201

537

551

238

319

152

149

1,948

1,994

No. of fixed-term contracts

1

-

249

350

180

135

-

1

71

78

501

564

No. of open-ended contracts

FY21

1

-

218

309

146

111

-

1

55

58

420

479

of which women

-

-

31

41

34

24

-

-

16

20

81

85

4,791

4,992

3,676

2,874

3,550

3,594

1,000

1,292

961

1,013

Total

Guide tothe ESG
Report 2023

FY22

of which men

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

13,978 13,765

4

ChapterSocial Impact

FULL-TIME AND
PART-TIMEH I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2

ITALY

ITALY

JAPAN

EMEA

USA&CANADA

APAC

Chapter 5
Environmental
Impact

TOTAL

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

No. Full-time employees

4,723

4,925

3,635

2,843

3,455

3,494

999

1,286

945

993

13,757 13,541

of which men

4,045

4,208

3,322

2,603

2,947

2,979

761

971

787

837

11,862 11,598

of which women

678

717

313

240

508

515

238

315

158

156

1,895

1,943

No. Part-time employees

68

67

41

31

95

100

1

6

16

20

221

224

of which men

11

10

37

29

32

40

1

2

6

7

87

88

of which women

57

57

4

2

63

60

-

4

10

13

134

136

4,791

4,992

3,676

2,874

3,550

3,594

1,000

1,292

961

1,013

Total

FY21

FY22

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

13,978 13,765

GRI
Content
Index

65

The table shows a positive trend in thenumber of full-time contracts among
employees, especially in the Italy and
USA & Canada regions - with a particularattention to female workforce - and APAC.
The female trend is overall positive forboth part-time and full-time contracts,
while for men the figure is overall static.

Letter to
Stakeholders

OTHER CONTRACT
TYPES11

JAPAN

EMEA

USA&CANADA

APAC

TOTAL

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

Temporary workers

233

218

859

740

34

27

-

-

1

1

1,127

986

of which men

206

186

752

641

16

15

-

-

1

1

975

843

of which women

27

32

107

99

18

12

-

-

-

-

152

143

Contracts of different
categories

1

119

-

-

266

503

-

-

-

24

267

646

of which men

1

101

-

-

231

448

-

-

-

18

232

567

of which women

-

18

-

-

35

55

-

-

-

6

35

79

Total

234

337

859

740

300

530

-

-

1

25

1,394

1,632

Trainees

28

31

8

4

34

40

-

-

-

-

70

75

of which men

19

13

3

3

23

32

-

-

-

-

45

48

of which women

9

18

5

1

11

8

-

-

-

-

25

27

-

-

273

344

-

-

-

-

-

-

273

344

of which men

-

-

273

344

-

-

-

-

-

-

273

344

of which women

-

-

-

-

-

-

-

-

-

-

-

-

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

ITALY

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail employees
TCFD
Reference
Table

11

GRI
Content
Index

Please note that the categories “Trainees” and “Workers with a project contract” fall into the definition of “workers who are not employees” according to GRI 2-8 and therefore are not included in the total.
66

4.1.2 Relations Management
Industial Relations is the managementof interactions between a company
and its workers, unions, and otherstakeholders with the aim of fosteringa peaceful, equitable, and productive
work environment. Hitachi Rail promotes

Letter to
Stakeholders

respect for fellow employees, honesty,
and collaboration, emphasising the needof building an atmosphere of trust andrespect, to ensure that workers' rights areprotected and that opportunities for career
progression and development are provided.

Hitachi Rail manages employment
relationships with its employees
according to the labour laws andcollective bargaining agreements
in place in the different countries whereoperates.

The percentage of total employees
covered by collective bargaining
agreements changes according to thecountry; for example in Italy and France itis 100%, while for the United Kingdom it
accounts for 69.6%.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

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

Where employees are not coveredby collective bargaining agreements,
the Organisation determines working
conditions and terms of employment by:

Chapter 2
ESG Framework
and Roadmap• identifying roles in line withbusiness needs;

Chapter 3
Governance• determining salaries basedon levels of responsibility andtechnical skills;

ChapterSocial Impact

4

Chapter 5
Environmental
Impact• and benchmarking pay rates(either nationally and/or locally,
depending on the role). Benefits are
determined based on existing similarinternal roles and industry trends.

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

805s - Stafford station

67Industrial Relations in Italy

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

In Italy policies are aimed at fostering an
inclusive and diverse work environment
through active listening practices, suchas surveys and focus groups to gather
employees feedback and opinions,and procedures to ensure safe work
environments, minimising accidents andpromoting a culture of safety among
all levels of management. Additionally,
the business is amenable to discussion
and negotiation to come to reasonableagreements and forge enduring partnerships
based on trust with workers representatives.
The Annual Meeting represents a pivotal
event in Hitachi Rail's commitment andagenda to fostering strong industrial
and labour relations, bringing together
representatives from all unions and theCEO, providing a platform for open
dialogue and exchange of ideas. The
outcomes include agreements reachedwith labour unions addressing businessbonuses for the success of the prior fiscal
year and future objectives, making it

Industrial Relations in France
possible for the Organisation and its
employees to have greater incentives andalignment. Representatives from all Unions
work with Hitachi Rail's management on a
crucial platform called the "Osservatorio
Strategico" to get in-depth understandingof its business perspective.
For FY23, Hitachi Rail will continue toschedule frequent meetings with Unions
every 3 months, alongside corporate
representatives, evaluating and assessing
progress towards objectives; arranging
Unions meetings; keeping regular training
sessions with Unions to discuss learning
requirements and signing contracts
for government funding to encourageskill development; holding regularmeetings with Unions every six months todiscuss pertinent issues, introduce new
departments, and check smart working;arranging a meeting to discuss Survey
2023 findings and putting into practicea corresponding action plan to improve
employee engagement and satisfaction.

In the case of France, the bargaining
system does not require one to beunionised to benefit from a collective
agreement. At the national and company
level, all collective agreements areautomatically binding on the total of the
population. The French national metal andsteel sector is going through a period ofmajor reforms in the national collective
agreement involving major changes ina new grading system, working hours,
health plan, and working hours.
According to French law all companies
with more than 300 employees publish

Letter to
Stakeholders

annual data on equal pay for men andwomen, according to age, seniority,and category. These data are measured
according to a scoring system that takes
into consideration several factors, awareof the importance of gender equality andequal pay, Hitachi Rail has obtained arating of 85/100.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

In addition, Hitachi Rail through the"Goodwill/Benevolence at Work Charter":
implements good relations among
employees by promoting better and caring
management, which is implemented
through training and the hiring process.

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

68

4.2 Diversity, Equity and Inclusion

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Hitachi Rail adopts an inclusive culture,embracing and celebrating diversity in
its workforce by valuing differences incolleague backgrounds, age, gender,
sexuality, family status, disability, race,
nationality, ethnicity, and religion. Hitachi
Rail places paramount importance on
Diversity, Equity, and Inclusion (DEI) as
pivotal drivers for sustainable businessgrowth and societal advancement.

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

It embraces and celebrates diversity in its
workforce, recognising that it is a catalyst
for understanding markets, fostering
creativity, and driving innovation.

Highlights Fiscal
Year 2022

Aligned with broader Hitachi Groupinitiatives, Hitachi Rail pursues several
key themes to enhance DEI:

Chapter 1
Context and
Identity• cultivating a truly global workforce withdiverse talents from around the world;

Chapter 2
ESG Framework
and Roadmap• enhancing capabilities to better serve
global customers, improve operations,and explore new markets;

Chapter 3
Governance• harnessing diversity to foster innovationand creativity;

ChapterSocial Impact• attracting and retaining top talents
through a supportive and inclusive work
environment;

Chapter 5
Environmental
Impact• ensuring employee engagement andalignment with the Group's strategic
vision.

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

4

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

69

Over the past Fiscal Year, Hitachi Rail has
achieved notable progress in its pursuitof DEI objectives, in line with the DEI
targets of the Organisation to increase
gender balance and representation in
Hitachi Rail and to communicate
diversity inside and outside of theOrganisation:• the number of female employees
has increased by 80;• the percentage of women in
managerial positions has grownby 2.6%;• the internal communication anddialogue on DEI to address biases
was intensified;

HITACHI RAIL GENDER EQUALITY SURVEY 2022

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

Satisfaction in current job

Barriers in achieving career goals

Being treated by colleagues differently due to gender• the diversity of "ambassadors"
for External Communications was
fostered;Letter to
Stakeholders

Guide tothe ESG
Report 2023

• additional learning resourceson DEI for employees' benefit were provided.

Highlights Fiscal
Year 2022

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.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

The 2022 annual Gender Equality
Survey showed improvements in key
indicators. Comparing results to the previous
year, for respondents identifying as women,
results to highlight include:

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactFY 22 vs. FY 21

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

+10%
-6%

Methodological
Note

-4%

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Hitachi Rail Europe employee

70

Looking ahead, Hitachi Rail will continue
to strive for improvements across the rangeof DEI goals.
In line with the key themes at Hitachi Railthe ambitions over the next two years
include:• Talent – ensure the workforce diversity
reflects the local communities Hitachi
Rail serves and operates in;• Systems and Structures – ensure
systems, policies and practices areequitable and unbiased;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Culture – Further provide learning
opportunities for Hitachi Rail’s people
to develop the skills and competence
needed to create and sustain an
inclusive workplace.

Also, including actions to achieve theseambitions such as:• updating gender categories and pronoun selection to be inclusive for all;• launch talent acceleration and mentoring
programmes with a primary focus on
women;• develop Employee Resource Groups tocreate forums and provide feedback toshape future actions;• launch of a new Employer Brand
development strategy with the aim ofcorrectly communicates and best reflects
Hitachi Rail’s values and principles to all
potential talent.

In addition, the Hitachi Insights survey andother employee feedback opportunities
will continue to provide valuable insight
to measure progress and further shapepriorities.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Women's History Month Celebrating Hundreds of Hitachi Rail Voices

Chapter 3
Governance

In Hitachi Rail Diversity, Equality and Inclusion are also communicated through real stories. Here’s a selectionof Women's History Month celebrating the voices of hundreds of Hitachi Rail colleagues worldwide.

4

ChapterSocial Impact

I. L. is advancing STEM studies and careers for people with diverse backgrounds. Hitachi Rail Installation Engineer, I. L. washonoured as one of five "10,000 Degrees" alumni for her efforts to voice the advancement of STEM studies and careers. She
says, “What excites me about the future of the rail industry is seeing how one of the oldest modes of transportation is evolving
to become faster and greener in many different areas while connecting many individuals across the globe.”

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

M. L., a Supply Chain Director, has worked for Hitachi Rail for nearly 50 years. She started her career in a clerical role andmade her way to director level. Determined, diligent, and enamoured with manufacturing, M. knows this business is where
she is meant to be. She says, “My advice to other women: seek a mentor early on who has travelled a similar path to support
people’s journey. The best trait, in anyone, is to activity listen to gain knowledge”.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail's S. D. is a Test and Validation Engineer from Newton Aycliffe factory in the UK. She recently spent nine months
collaborating with the University of Birmingham on an innovative Digital Twin project, which allows rail engineers to conduct
testing without using real trains on a live track. A project that could have huge benefits for passengers and the rail industry,including reducing costs and disruption.

TCFD
Reference
Table

GRI
Content
Index

71

People with disabilities
In Italy, Law no. 68/99 introduced the
key concept of “targeted” employment
where successful appointments are madeby analysing positions, forms of support,
positive actions and solutions to issues
related to the work environment, tools andinterpersonal relations that a person would
experience in the role.

Letter to
Stakeholders

The table below shows the total number and percentage of the workforce represented by people with disabilities in Central andEastern Europe, the Middle East and Western Europe.
PERCENTAGE OF PEOPLE
WITH DISABILITIESBY REGION

ITALY

JAPAN

EMEA

USA&CANADA

Guide tothe ESG
Report 2023

APAC

Highlights Fiscal
Year 2022

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

FY21

FY22

% of men with disabilities

4.83%

4.77%

0.95%

1.25%

0.23%

0.13%

N/A

N/A

0.10%

0.00%

% of women with disabilities

7.61%

5.35%

4.42%

5.99%

1.75%

1.39%

N/A

N/A

-

0.59%

Chapter 1
Context and
Identity

Chapter 2
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 3 – F Y 2 2

In Japan, the law mandates that acertain percentage of the workforce
must constitute people with disabilities.
Hitachi Rail provides opportunities andpositions both in office-based roles and in
production roles.

Chapter 3
Governance

4ChapterSocial Impact

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.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Worker in a UK depot

72

4.3 People Development and Care

Letter to
Stakeholders

Guide tothe ESG
Report 2023

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

Hitachi Rail has adopted a People
strategy that aims to makeemployment with Hitachi Rail afunctional tool to promote theworker's work-life balance andenhance family leisure time, whilst
protecting their health and well-being.
Its health benefits cover Health Careto supplementary social security, andoccupational and non-occupational
accident policies. And, 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 thebenefits programme.

Highlights Fiscal
Year 2022‘People Care’ Concept
Hitachi Rail’s “People Care” concept
applies to employees’ wellbeing as bothprofessionals and individuals. People Careis linked to Hitachi Rail’s “Total Reward”
strategy, based on tangible and intangible
measures to create a working environment
where employees can continuously
gain experience, develop skills, forge
relationships, and find motivation.

Moreover, employees can benefit fromexclusive discounts and agreementson selected services and products,
enhancing their overall well-being witha comprehensive support system, alsooffering psychological assistance onvarious aspects of life, as well as legal,
fiscal, and social welfare guidance fromexperts in the relevant fields.

The programme actively supports
relationships between managers,
employees and colleagues. Support
services, such as flexible work schedule,
special arrangements with local
entertainment and sports centres, benefits
such as health insurance, accident
insurance, company-car, employee
scholarships, corporate welfare, canteen
and breakfast areas, and celebrations ofsuccessful projects are just some of thetools accessible to full-time and part-time
employees across regions.

These initiatives collectively exemplify
Hitachi Rail's dedication to nurturing a
thriving and supportive work environment,
ensuring that its employees flourish both
personally and professionally. The services
offered are:• 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 well-being;

Chapter 1
Context and
Identity• legal, fiscal and social welfare
support: legal, fiscal and social
welfare information service, provided byexperts in the social welfare sector andby lawyers and accountants enrolled in
the relevant professional registers;

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance• agile working method continues
to gain satisfaction and engagement in
Italy with the participation of the staff ofall offices. "Smart working" continues tofavour the need to reconcile work-life infull compliance with business activities
and objectives;

4

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• bonus upon completion of certain
seniority in the Hitachi Rail throughthe candidacies of some employees,
who have distinguished themselves intheir professional and working career, in
the recognition of the "Stella al Merito",an annual award for workers with atleast 25 years of seniority promoted by
the Ministry of Labour.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

73

Parents at Hitachi RailParental leave is recognised and guaranteed
to workers throughout all of Hitachi Rail.
Hitachi Rail grants parental leave inaccordance with legislation, collective
agreements, and internal policy. Beyond
the limits imposed by law and in line with
Sustainable Development Goals 5 (Gender

Letter to
Stakeholders

Equality) and SDG 8 (Decent work andEconomic growth), Hitachi Rail supports
its employees when they become parents
and promotes work-life balance in daily
activities. At the Organisation level, a totalof 236 employees took parental leave in thereporting period, marking a -12% decrease
compared to last year.
FY21

PARENTAL LEAVE12,13
Total number of employees that took parental leave
Total number of employees that returned to work in the reporting
period after parental leave ended

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

Total number of employees that returned to work after parental leave
ended that were still employed 12 months after their return to work

Hitachi Rail, as part of the continuous
improvement of its reporting systems, hasstarted an in-depth methodology for the
representation of parental leave metrics.
Through the provision of Welfare credits via anaccessible online platform, parents gain accessto a diverse array of goods and services. Also,
the availability of summer recreational and

Chapter 1
Context and
Identity

FY22

WOMEN

MEN

WOMEN

170

100

137

99

152

Highlights Fiscal
Year 2022

Chapter 2
ESG Framework
and Roadmap

MEN

171

Guide tothe ESG
Report 2023

80
83

100
93

Chapter 3
Governance

4ChapterSocial Impact

73

Chapter 5
Environmental
Impact77

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Reportcultural stays for employees' children further
underscores Hitachi Rail's commitment topromoting a harmonious work-life balance.

MethodologicalNote

The establishment of CRAL (Workers'
Company Recreational Clubs) adds to theenrichment of both Hitachi Rail's people andthe community through local recreationaland cultural initiatives.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

T he number of employees who took parental leave during the year may not coincide with the number of employees who returned to work during the same year or with the sum of the latter plus the number of
employees still on leave at the end of the reporting period, as in some cases the leave may have started and ended in two different reporting years.
13
All table data related to US & Canada region are not available due to privacy national requirements.
12

GRI
Content
Index

74

Letter to
Stakeholders

Strategy to Action:
Focus on People Care Initiatives in France

Guide tothe ESG
Report 2023

In Hitachi Rail, the People Cares concept focuses on employee wellbeing, as professionals and as individuals. Here's a snapshot of examples from
France that put Hitachi Rail's People strategy in practice.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Recruitment: all employees involved in the hiring process receive training in non-discrimination, ensuring fair and unbiased candidate evaluation. A Charter for Diversity and Equal
Opportunities is distributed to all participants, fostering an inclusive environment. Hitachi Rail actively integrates a disability/handicap programmes, demonstrating support for individuals
with diverse abilities. Moreover, Hitachi Rail collaborates with associations like "Elles bougent" to promote technical professions to a female audience, encouraging greater gender
diversity in the workforce.

Chapter 2
ESG Framework
and Roadmap

Equal Pay: Hitachi Rail upholds its commitment to equal pay by regularly reminding managers of their obligations. The Organisation diligently rechecks allocated increases to reduce
pay gaps and mitigate the impact of maternity/paternity leave on careers and pay differentials. Furthermore, extended paternity paid leave is provided to support work-life balance.

Chapter 3
Governance

4ChapterSocial Impact

Training: Hitachi Rail ensures employees receive appropriate training tailored to their personal situations. Employees in positions of responsibility are offered individualised support throughtraining or coaching. Additionally, the Organisation supports employees with childcare costs during training sessions that necessitate a modification in their parental arrangements.

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

Work/Life Balance: Hitachi Rail offers "extended parental leave" funded by the untaken paid leave account, allowing employees to accompany the arrival of a child. Flexibility inworking hours is provided through part-time work options, with equal treatment emphasised between full-time and part-time employees. Hitachi Rail also collaborates with inter-company
crèches to support work-life balance.

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

Agreement on Smart working: the successful experience of homeworking during the pandemic has led to an updated agreement promoting employees' well-being and attracting
demanding candidates. The minimum seniority required to access smart working is leveled down, and the flat-rate allowance for professional expenses is increased.

Methodological
Note

Agreement on Health Plan: Hitachi Rail updates its Health plan in line with the French steel and metallurgic industries reform, aligning some benefits with the new national
collective agreement while maintaining existing favorable benefits.

Glossary andMain Acronyms
contained in the
ESG Report

Provision of Rest Days for Employees' Parents: Hitachi Rail allows employees to donate paid leave anonymously to colleagues facing parental tragedies, providing
compassionate support.

TCFD
Reference
Table

Professional Equality Index: Hitachi Rail publishes its professional equality figures annually, with a grading of 85/100, as required by French Law to ensure pay equality and fairtreatment based on gender, age, seniority, and grading.

GRI
Content
Index

75

4.3.1 Talent Acquisition
Over the past 12 months, Hitachi Railhas strategically prioritised three crucial
aspects to strengthen and optimise
its employment strategy, ensuring theattraction and retention of top talent while
fostering a positive and inclusive work
environment.

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

Applicant Tracking System Systems
and Processes: a primary focus
has been on the implementation andimprovement of the Applicant Tracking
System (Workday) throughout Hitachi
Rail, outside of Japan. This modern system
has been carefully embedded into therecruitment process to enable a consistentand efficient approach. By leveraging thefunctionalities of Workday, Hitachi Rail’s
recruitment teams have been empowered
to deliver the required talent to internal
stakeholders promptly.
Recruitment Marketing: recognising
the significance of a compelling employer
brand and effective recruitment marketing,
Hitachi Rail has proactively engaged ininitiatives to present itself as an employerof choice in the industry. Developing andshowcasing captivating content that brings
to life the essence of Hitachi Rail and its
workforce is a key aspect of this effort.
To Convey the Hitachi Rail value
proposition, the team makes strategic

use of various channels including HitachiRail’s Careers Site (www.hitachirail.com/
careers) and other third-party platforms
like LinkedIn and Glassdoor to provide
up-to-date and relevant information topotential candidates. Hitachi Rail also
values and actively seeks feedback
from individuals who engage with theseplatforms, understanding that genuine
conversations contribute to continuous
improvement.
This open and responsive approach has
led to increased engagement, a surge in
job applications, and positive ratings,
reinforcing Hitachi Rail's employer brandand making it a preferred destination for
top talent.

Employee Value Proposition(EVP) and Employer Branding

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Realising the pivotal role of a strong EVP
and employer branding in attracting andretaining talent, Hitachi Rail has diligently
worked on defining its EVP for the firsttime. This process, nearing its conclusion,
will serve as the guiding foundation
for highlighting themes and values that
resonate with all employees, fostering a
sense of belonging and pride in being partof Hitachi Rail.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceAs part of its employment strategy
evolution, the Organisation is also actively
developing a new employer brand identitythat aligns with its strategic vision andcultural values. This step is seen as essential
in enhancing Hitachi Rail's ability to
attract the right talent who align with its
ethos and aspirations. By presenting itself
authentically and appealingly to potential
candidates, Hitachi Rail endeavours tocontinue flourishing with a diverse andskilled workforce, propelling its growth andsuccess in the dynamic railway industry.

4

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Azuma at Gleneagles

764.3.2 Learning, Career Development and Performance Management
During the fiscal year 2022, Hitachi
Rail made significant advancements inestablishing an integrated framework oflearning processes. Building upon theprevious year's efforts, the Organisation
successfully completed a comprehensive
global learning needs analysis process,capturing the Organisation's competency
demands Hitachi Rail's Learning &Development Department initiated asystematic process to collect, analyse, andprioritise learning needs throughout thedevelopment of key competencies as apriority for Hitachi Rail's growth and success.

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

Learning
During FY22 Hitachi Rail increased training
hours in almost all countries by deploying
global, regional and specific initiatives as aresult of the "Global Learning Needs Analysis"
process. This enabled the collection andanalysis of learning needs through the direct
involvement of business stakeholders in orderto build a framework for the implementation oftraining initiatives to support the development ofnecessary skills. The outcome of the process has
generated Hitachi Rail global learning plan.
Despite an overall reduction in training hours
globally, training hours have increased in
Italy, in the USA & Canada, and in the APAC
region, with the exception of Japan.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

TOTAL HOURS OF TRAINING BY GENDER AND REGION
ITALY

JAPAN

EMEA

USA & CANADAAPACAVERAGE

M

W

M

W

M

W

M

W

M

W

M

W

AVERAGE

FY22

71,20915,34687,080

10,20946,344

6,359

6,906

2,495

16,2193,169

227,759

37,578265,338

FY21

50,166

8,746 269,689

31,61949,114

6,882

4,094

1,618

9,518

2,330

382,581

51,195433,776

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

AVERAGE HOURS OF TRAINING BY GENDER AND REGION
ITALY

JAPAN

EMEA

USA & CANADA

APAC

Chapter 3
Governance

AVERAGE

4

M

W

M

W

M

W

M

W

M

W

M

W

AVERAGE

FY22

16.9

19.8

33.1

42.2

15.4

11.1

7.1

7.8

19.2

18.8

19.5

18.1

19.3

FY21

12.4

11.9

80.3

99.7

16.5

12.1

5.4

6.8

12.0

13.9

32.0

25.2

31.0

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

FY21

FY22

AVERAGE HOURS OF TRAINING BY GENDER AND PROFESSIONAL CATEGORY
MEN

WOMEN

TOTAL

MEN

WOMEN

TOTAL

Executives

8

9

8

12

19

12

Middle managers

94

31

89

43

29

41

White collars

54

31

49

28

24

27

Blue collars

9

3

8

6

3

6

Total average

32

25

31

19

18

19

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

77

Hitachi Rail provides its employees with a wide
range of training activities covering various
topics and business areas. This year, the mainareas covered by training were “TechnicalSpecialist Training” (34%), “EHS, Quality”(18%), “Language Training” (14%), and“Human Rights and Ethical Aspects” (14%).
It also continues to invest in technicaland professional upskilling, including

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

HOURS OF TRAINING PER CONTENT

role-specific training for engineers withpower of attorney14, certifications insafety-critical skills, special processes
in vehicle manufacturing, and nondestructive testing.
This year, it launched a training
programme for all Lob Vehicles workers
to ensure professional updating and fulfil
contractual training requirements.

FY21

FY22

Technical-specialist training

215,96249.8%

91,06834.3%

Language training

115,447

26.6%

38,46014.5%

Managerial training

11,737

2.7%

18,912

7.1%

EHS, Quality

42,4609.8%

46,623

17.6%

Human Rights and Ethical Aspects

41,0339.5%

36,642

13.8%

Other

7,137

1.6%

33,633

12.7%

TOTAL

433,776

100.0%

265,338

100.0%

As part of Hitachi Rail’s sustainability
agenda, the Learning team added
the “Introduction to Climate Change”
e-learning to its activities, which has been
designed to inform all employees of theimportance of getting a proactive approachand sense of responsibility toward climatechange.
In March 2022 Hitachi Rail launched
the first global course on environmental
impact to become a Climate Change
Innovator, developed by HitachiRail’s CSR&S Department. This was
disseminated worldwide as mandatory
training for all Hitachi Group employees(more than 360,000 employees). It
offers an opportunity to provide ideas
or proposals on how to support the fightagainst climate change in the daily lifeand for business activities. As part of the
training, Hitachi Rail collaborated with
Treedom, the first platform in the worldthat allows each participant to plant atree from a distance and follow its growthand story online.
Hitachi Rail's managerial
development efforts in FY22
focused on various training initiatives toenhance leadership and organisational
effectiveness. These initiatives include:14• LEAD – Leadership Enhancement
and Development Programme: thisprogramme aims to support managers inareas such as Effective Communication,
Feedback & Difficult Conversation, andDevelopment Culture. The goal is toequip managers with concrete tools for
effective people management, and thetraining programme was launched in
FY22, continuing throughout FY23;

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity• BAIC – Building an inclusive
culture: Hitachi Rail implemented theglobal BAIC programme in FY22 todevelop inclusive behaviours based on
the Organisation’s values and Diversity& Inclusion (D&I) policies. Creating an
inclusive culture is crucial for the successof the corporate strategy, improving
interpersonal interaction methods at
all levels for increased personal andcollective performance;

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• Business Continuity: BusinessContinuity (BC) refers to Hitachi Rail’s
ability to continue its operations inadverse 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), simulating critical situations
for effective management;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
ReferenceTable itachi Rail ensures compliance with regulatory obligations through training pursuant to Presidential Decree n. 137 of 7 August 2012 for personnel registered in the national register of engineers, allowingH
employees with power of attorney to sign projects/specifications/reports to remain proficient in their roles.

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H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• HSE Leadership Excellence:
numerous sessions of the "HSE Leadership
Excellence" training course were provided
to improve the culture of health andsafety within the Organisation. Leaders
were made aware of the importance of
HSE for themselves, their teams, and theOrganisation as a whole, emphasising
how behaviours influence the HSE culture.
Practical advice and tools were provided
to promote a positive HSE culture andeffective conversations on health andsafety;• Project Management: a seriesof Basic and Advanced ProjectManagement sessions were launched
in FY22, involving colleagues working
within project teams. Additional modules
like PM Leadership, Stakeholders
Management, and Contract
Management were designed basedon global training needs analysis toencourage a strong project management
culture.

Hitachi Rail continues to invest in technicaland professional upskilling, including
certifications in safety-critical skills, special
processes in vehicle manufacturing, andnon-destructive testing. The Organisation
also launched an impressive training
programme for all Lob Vehicles workers
to ensure professional updating and fulfil
contractual training requirements.
Furthermore, Hitachi Rail ensurescompliance with regulatory obligations
through training pursuant to Presidential
Decree n. 137 of 7 August 2012 forpersonnel registered in the national
register of engineers, allowing employeeswith power of attorney to sign projects/
specifications/reports to remain proficientin their roles. These comprehensive
training initiatives demonstrate HitachiRail's dedication to employee development
and organisational excellence.

Letter to
Stakeholders

Think responsibly,
act sustainably

Guide tothe ESG
Report 2023

Hitachi Rail considers
Sustainability a core
part of its heritage andmission, aiming to create
a better society for future
generations. To promote thisvalue, the company offersa course on Sustainability,
SDGs, and CSR, available
in four languages for all
employees.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

4ChapterSocial Impact

The course takes an engaging approach to encourage understanding andcommitment to real change in thinking and living.

Chapter 5
Environmental
Impact

The Learning and Development (L&D) strategy focuses on increasing learning
opportunities within the Organisation, fostering a culture where employees actively
seek growth in their competences and contribute their knowledge to the company.
Projects are underway 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 with new competences.

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

Methodological
Note

Additionally, initiatives have been implemented to raise employees' awarenessof environmental matters, including e-learning modules on SA8000 and Climate
Change, as well as face-to-face courses on environmental topics like waste
management.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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Performance

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

The Global Performance Management
process is performed for employee and line
manager, facilitated by the HR department,as part of the “People Development
Cycle”. The aim of the Global Performance
Management process is to improve people
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.
From FY22,Hitachi Rail has introduced
regional calibration meetings to improve thedata consistency for the global calibrations,ensuring alignment amongst the evaluation
process whilst observing cultural differences.
Regional managers took part in regional
calibrations to review the performance
ratings of their own teams, supported bytheir regional HR operations referent.

Letter to
Stakeholders

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 each individual with business goals andbusiness challenges.

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

Highlights Fiscal
Year 2022

FY21

FY22

PERCENTAGE OF EMPLOYEESRECEIVING REGULARPERFORMANCE REVIEWS (%)

MEN

Executives

100

100

100

96

100

97

The Talent Review process aims to:

Middle Management

100

100

100

100

99

100

•p
 romote potential, performance, anda development-oriented culture in the
Organisation;

White Collars

94

89

93

96

88

95

Blue Collar

85

91

85

78

82

78

• identify suitable actions to be
implemented for the enhancement ofpeople’s talents and growth also throughDevelopment Plans;

Guide tothe ESG
Report 2023

Total

91

WOMEN AVERAGE

90

91

MEN

90

Chapter 1
Context and
Identity

WOMEN AVERAGE

88

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

4ChapterSocial Impact

90

Chapter 5
Environmental
Impact• ensure a pipeline of talented people atall organisational levels;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• r etain talents, ensure continuous
improvement of skills, and support
individual needs;

MethodologicalNote• c alibrate of the rating distribution soas to be balanced at global level. This
process provides managers with theopportunity to focus and discuss theaccomplishments and strengths anddevelopment needs of their collaboratorsand teams (Talent Review).

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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4.3.3 Employee Engagement
Hitachi Rail provides several engagement
tools for its employees to effectively
communicate the Organisation's growth anddevelopment path and listen to and respondto the employee voice.
Hitachi Rail’s internal communication strategy
is linked directly to the global strategic
objectives. It connects employees with theirshared direction and purpose and keeps
them up to date with business achievements.
The communication channels are available
in up to five languages, recognising thediversity of Hitachi Rail‘s people. They are:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• COSMO: a global intranet accessible
to all Rail employees: updated regularly
with one site dedicated specifically to
Sustainability and CSR topics;• This Week on COSMO: weekly email toall employees with links to latest COSMO
news;

Letter to
Stakeholders

During FY22, the Internal Communication
Function aimed to inspire, motivate, andengage colleagues to reach their goals
by delivering communications into several
channels - and also to support leaders andmanagers to deliver engaging and interesting
communications - alongside promoting Hitachi
Rail as a great place to work, with a focus on
Wellbeing and Diversity and Inclusion.
Employees accessed COSMO more than 8
million times in FY22, keeping up-to-date withCOSMO news daily through a combination of
direct and indirect channels, including emails.

Themes of communication included:
Employee Wellbeing, including safety,
mental and physical health and Diversity,
Equity, and inclusion; Employee Voice;
Reward and Recognition including major
awards programmes; Sustainability, inparticular Decarbonisation; the Global
Reorganisation Programme and Quality
improvements.
As part of the Hitachi Insights Survey,
employees returned feedback on the positive
impact of themes, in particular relating to
Safety, Health and Wellbeing, teamwork,and manager effectiveness.

In FY2023, Internal Communication will
focus on Wellbeing as priority, this yearwith three focus areas:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022• an even stronger emphasis on
Diversity, Equity, and Inclusion - inparticular the attraction and retention of
women colleagues;

Chapter 1
Context and
Identity• the launch of a series Employee
Resource Groups focused on LGBQT+
communities, Black, Asian and minority
ethnic and multi-faith communities;

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance• action to support mental andphysical health.

4

ChapterSocial Impact

In addition, Internal Communication will
support the introduction of a new award
programme specifically for Hitachi Railcolleagues and bolster communications
about existing Hitachi Group reward
schemes.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• regular video announcements andwritten messages about Strategic
and Engagement themes;

MethodologicalNote• screens at production sites for
employees without regular access to PCs;

Glossary andMain Acronyms
contained in the
ESG Report• large scale video conferences withsenior leaders;

TCFD
ReferenceTable• employee app: two-way communication
with polling and real time alerts
mechanism.

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Measuring engagement through Hitachi Insights Survey

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

As a way of measuring levels of employee
engagement (through the comparison ofengagement drivers), every year Hitachi
conducts a Group survey, the Hitachi Insights
Survey. The survey is administered online
via an external vendor. It is available for
all Hitachi employees in many different
languages and individual responses areanonymous. Some of the crucial focus
areas are: clarity of direction, manager
effectiveness, empowerment, diversity
and inclusion, continuous improvement,
teamwork, recognition and reward,
professional growth, communication,
engagement, mid-term management plan,culture, growth mindset.
The aim is to identify key strengths andopportunities, to improve productivity andhelp leaders analyse and communicate theresults, as well as working together withteam members to develop and implement
plans that will lead to enhancing employee
engagement and ultimately improve teamperformance.
The survey is managed across the fulllifecycle including preparation phase,launch, survey management, post survey
phase, action plan management, KPIs setting
and action plan communication. In 2022,
13,600 Hitachi Rail employees were invited
to participate across all legal entities with anaverage response rate of 73% achieved.

Letter to
Stakeholders

Here are the results indicated among the top five strengths:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Teamwork 71.6%

Chapter 1
Context and
Identity

Pride in Hitachi Rail 70.1%

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceManager effectiveness 71.3%

4ChapterSocial Impact

Environmental sustainability 70.9%

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Engagement 70.3%

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Following the analysis of results, managers across the Group will now work on action
planning at team-level.
Passenger groups see the new Hitachi Rail Italy Rock trains

TCFD
Reference
Table

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Programmes to promote the Hitachi Rail well-being culture
Hitachi Rail runs several programmes
to promote occupational health services
and the wellbeing culture, including
psychological well-being, aiming at thecreation of a tangible value,functional to the individual andbusiness performance:• BeWell - Worth and Wellness, isthe project developed by Hitachi Rail toprovide its employees a concrete responseto the various and numerous daily
problems that can affect both professional
and personal life.

24 hours a day, 7 days a week without an
appointment and in total anonymity thanks
to the possibility of using a pseudonym.
•T ito Social Gardens: at the Tito
Scalo plant, in an area adjacent to
the photovoltaic plant, Hitachi Rail has
created the first company-garden. The
goal is to promote socialisation among
employees even after working hours.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2	This initiative is a symbol of the dedication
to nurturing a holistic work environment,
contributing to a greener planet but also
positioning Hitachi Rail as responsible
industry leader.
• Hitachi’s Voice of Youth: The Voice ofYouth team carried out a survey, asking

employees how the business can achievesustainability. The survey responses wereindividually analysed for core themes,
and mapped to identify nine common
points, which have been drafted as
Hitachi's 'Call to Action' and form thebasis of the manifesto. Here are nine
points that have been highlighted:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Hitachi's Voice of Youth: Call to Action
1. Green Kaizen: Establish philosophy of continuous improvement of operational sustainability at all levels

Chapter 3
Governance

2. Awareness and Involvement: Guide employees to contribute and invite all employees to collaborate
3. Innovation: Foster innovation by leading global coordination between R&D centers and business divisions,creating innovation eco-systems for the development of superior products	To mark World Mental Health Day on 10
October 2022 Hitachi Rail provided tools
for every team to have a conversation
about mental wellbeing and how to careof it, in order to be able to find out what
to do to feel happier, healthier and beable to cope with life’s challenges.
	This comprehensive assistance programme
includes a professional listening foremotional support in both online and inperson modes as well as legal, fiscal, andsocial welfare support. The psychologicalsupport service is anonymous andconfidential and is provided by
specialists in the field. Employees canschedule appointments for sessions withprofessionals working in their municipalityof residence or preference. In addition,
employees, or their immediate family
members, can call a free number available

Letter to
Stakeholders

4

ChapterSocial Impact

4. Information and Transparency: Transparent communication on goals, actions and how these goals aremeasured. Communication of detailed objectives and how this translates to actions for employees
5. Guidance and Education: Encourage employee training on sustainability and educate on core definitions
and sustainable alternatives

Chapter 5
Environmental
Impact

6. Appreciation and Empowerment: Enable grass-root change through autonomous decision-making andreward sustainability achievements like other business goals

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

7. One Hitachi: Actively encourage communication and collaboration within the Hitachi Group companies,
leveraging on inherent diversity to share knowledge and expertise.

	Hitachi's "Social Gardens" are createdwith the purpose of fostering employee
aggregation by promoting physical activity
as well as health prevention, maintenanceand care, supporting organic foodproduction and traditional local vegetableessences, and encouraging an appropriate
response to the need for healthy and safe
food; small plots of company-owned land
to be used for vegetable gardens andrecreational gardening are assigned forfree use upon written request.

8. Involve Sustainability Experts: Involve Sustainability experts in processes, audits and assessments.
Organise working groups to create awareness and train employees
9. Lead By Example: Demonstrate leadership, integrity, determination, conviction, pro-activeness, andcommitment to make sustainability a top priority in every decision. Take strong actions and show the urgency
and importance of this goal.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

The ambition is to form regional committees from volunteers across all Hitachi regions
and Business Units and look to embody the 'One Hitachi' ethos to be a truly global andcollaborative programme and to promote the exchange of ideas between young Hitachi
employees and emerging leaders.

TCFD
Reference
Table

Many other initiatives were launched at a local level, such as the menopause support
and awareness programme in UK, 10,000 Steps challenge in Australia and the project
VA.BENE in Italy.

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Engaging in safety
Employee engagement is also fundamental
when it comes to Health and Safetyissues: self-reflection plays a significant
role in developing and strengthening
health and safety culture. Hitachi Railapproaches incidents using the Kelvin
Topset methodology ensuring root causes,
and specific actions are uncovered toprevent reoccurrence. The management
teams analyse trends on a quarterly basis toensure its business reacts to emerging risks
and improvement areas, based on live data
captured via the Econline database.
Consultation and participation on HSE
issues occurs via a number of different
methods and sources. The primary method

Letter to
Stakeholders

for sharing information is through directcommunication with the HSE Unit anddirect supervisors of the workforce.
To ensure there is a consistent approachfor engagement, teams may need toestablish local HSE Committees of
appointed HSE representatives, taking
into account regulatory requirements.
In addition to HSE Committees, there
are informal initiatives which aim toencourage the Workforce to participate
and provide feedback on HSE mattersrelated to their work activities, including
meaningful safety conversations between
workers and management built on trustwith no fear of reprisals, risk workshops
and Reward & Recognition frameworks

to encourages best practice andparticipation.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Project
VA.BENE

Chapter 1
Context and
Identity

VA.BENE (VAlore e BEnessere) Project offers many services with great potential
for all Italian employees of Hitachi Rail and their family members. The project was
launched in order to promote the culture of well-being, including psychologicalwell-being, oriented toward the creation of tangible, functional value for theindividual and impact on organisational performan.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

VA.BENE project was awarded an Honorable Mention at the Challenge Safety
Factory 2023 in May 2023 given the importance of the project.

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 3 – F Y 2 2

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Newton Aycliffe Manufacturing Facility

84

4.3.4 Compensation and Benefits
The employment terms that Hitachi Railoutlines in individual contracts are usuallymore favourable to employees than thosedefined under general labour legislations orcollective agreements in place in the various
countries it operates.
Hitachi Rail has defined a total reward
framework strategy to include the design,
standardisation, implementation, andcommunication of pay and benefits toensure it is embedded in the BU’s ways ofworking and organisational culture.

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2Furthermore, through the contribution of
specialist companies in the field, Hitachi
Rail periodically evaluates organisational
positions comparing its remuneration
policies with those of the reference market.
The Hitachi Rail Rewards strategy aims todeliver outstanding business performanceand superior capabilities through an

engaged and motivated workforce. It aims
to attract people to the Organisation by
clearly differentiating its employment
offering, delivered at an affordable andsustainable cost, in line with business goals
and Hitachi Rail’s long-term objectives.
In this sense, Hitachi Rail has also beenworking to digitalise all the Compensation

Letter to
Stakeholders

processes such as salary review, bonuses
improving the governance and freeing up
time for the HR teams to work on morevalue-added activities.
Hitachi Rail monitors the ratioof basic salary between women
to men. The reported data show different

trends for regions and seniority levels,with delta limited within a maximum
18% variation, and are by their nature
conditioned by multiple factors over time(structure and perimeters of applicablecollective agreements, local compliance,
statistical significance of employee
numbers, etc.).

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

FY22
ITALY

JAPAN

EMEA

USA&CANADAAPACWOMEN/MENWOMEN/MENWOMEN/MENWOMEN/MENWOMEN/MEN

Executives

0.91

1.02

-

1.07

0.85

Middle Management

0.96

0.92

1.01

1.17

1.03

White Collar

0.96

0.82

1.02

0.86

0.85

Blue Collar

1.03

1.00

0.87

0.88

0.94

RATIO OF BASIC SALARY
OF WOMEN TO MEN15

15

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report(Basic salary W / basic salary M). Computation based on basic salary expressed in thousands of euro.

Methodological
Note

Looking forward to the future, the area intends to digitalise all the compensation processes standardising the different practices acrossthe countries, bringing efficiency and more transparency to the employees when feasible. The pay transparency as employees also
demand more information about how their compensation is determined and what benefits are available to them.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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4.4 Workers’ Rights and Human Rights

Letter to
Stakeholders

Guide tothe ESG
Report 2023

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

Hitachi Rail’s actions to pursue its ambitious
vision to “embed and advance respect for
Human Rights in all its activities, operationsand value chain” follows the relevant
regulatory standards generally shared by
the international community, such as the
UN Guiding Principles on Business andHuman Rights (Human Rights Due Diligence“HRDD”).
The Hitachi Rail Human Rights Policy, as
well as its Social Accountability Policy, iscommunicated internally and available to allmembers of the workforce on Hitachi Rail’s
Global Business Management System. The
policy commits to develop and implement
ongoing human rights due diligence toinclude identifying and assessing potential
and actual human rights impacts and taking

appropriate action to prevent or mitigate
risks. Where it may be identified that
Hitachi Rail has caused or contributed to anegative human rights impact, Hitachi Railwill provide for or cooperate in legitimate
processes to provide remediation. Moreover,Hitachi Rail’s Social Accountability
Policy provides the basis for the SA8000
certification extended to its Hitachi Rail STS
S.p.A. legal entity.
The policy applies to all officers andemployees of Hitachi and its consolidated
subsidiaries and it requires its business
partners and other relevant parties torespect human rights. The Group also
represented its commitment in the HitachiGroup Code of Ethics and Business Conduct
which was revised in 2023.

Highlights Fiscal
Year 2022

SA 8000
Hitachi Rail obtained the SA 8000
certification for the Italian sites in 2021
for the first time. This ethical certification
effectively and openly deals with andregulates the social consequences of its
operations. It also demonstrates to allinterested parties how they implement
labour and human rights laws and measures
to mitigate risks across the entire supply
chain. Hitachi Rail strongly believes that
following the path towards a Companywide SA 8000 certification will help toimprove working conditions for all its
employees worldwide. For this purpose,
the Organisation sets up a dedicatedSocial Performance Team consisting of 12
members, six of which were employees
and 6 trade union representatives. The
team met four times during the FY22, withthe objective of assessing the governanceprocess of the certification, the relatedrisks and opportunities and the evidence
gathered. The SA 8000 certification
guarantees that Hitachi Rail’s stakeholders(competitors, public bodies, customers,
suppliers, institutions, associations) respects
workers’ rights and commits to an ethicalmanagement of its business.

In line with the SA 8000 Standard, Hitachi
Rail is committed to:

Chapter 1
Context and
Identity• reject the use of child labour: Do notresort to or support the use of child labour,in line with current legislation, relevant
ILO Conventions and the International
Convention on the Rights of the Child;

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance4• reject the use of forced and compulsory
labour: Do not employ or support the use offorced and compulsory labour, condemning
all forms of modern slavery and prohibiting
the employment of labour carried out nonvoluntarily including due to threats or debt;

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report•p rotect the health and safety of workers
and their welfare: Ensure a healthy andsafe workplace by taking all appropriate
measures to protect the welfare ofworkers and prevent workers' accidents
and damage to their health during their
engagement;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report• respect the right to freedom of associationand collective bargaining: Respect andprotect workers' freedom to associate,
not obstruct their membership in labour
organisations, and promote collective
bargaining;

TCFD
Reference
Table

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Index86• respect the right to decent wages and fairworking hours: Comply with applicablelaws on working hours, rest and holidays,
ensuring a decent and sufficient wage;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• respect the principles of dignity, equality,and non-discrimination: Prohibit any form of
discrimination, based on age, ethnic origin,nationality, political and trade union views,
religious beliefs, sexual orientation, gender
identity, physical and mental disabilities,
and any other personal characteristic
not related to the right to collective
bargaining, gender identity, physicaland mental disabilities, and any otherpersonal characteristic not pertaining to theprofessional sphere. Comply with applicablelaws on working hours, rest and holidays,
ensuring a decent and sufficient wage;• respect the principles of dignity, equality,and non-discrimination: Prohibit any formof discrimination, based on age, ethnic
origin, nationality, political and tradeunion views, religious beliefs, orientation
sexuality, gender identity, physicaland mental disabilities, and any otherpersonal characteristic not related to theprofessional sphere.
Hitachi Rail has established dedicatedchannels to enable reporting any suspected
breaches of the Group's Code of Ethics or
any violation of laws and regulations related
to Corporate Social Responsibility, with afocus on maintaining high ethical standards
and compliance with applicable laws andregulations.

Human Rights Due Diligence

Modern slavery

Conflict Minerals

In FY21, to expand Human Rights Due
Diligence throughout the entire HitachiGroup, Hitachi Ltd. issued the Human
Rights Risk Management Implementation
Manual, which sets out the entire processof human rights risk management practices
for use in the practical operation of eachBusiness Unit and Group Company.

Hitachi Rail recognises the importance ofidentifying and preventing the action andcauses of modern slavery in its business
operations and supply chain.

Conflict minerals commonly associatedwith heavy industries sector include tin,tantalum, tungsten, and gold. These minerals
are essential for the production of various
components, and their extraction and tradein conflict-affected areas often fund armed
groups and perpetuate violence, contributing
to human rights violations.

In FY22, the Group welcomed a U.S. humanrights non-profit organisation as a visiting
lecturer and held a series of guidance sessions
on human rights risk assessments for BUs
and major Group companies in which theattendees worked on actual risk assessments.
Hitachi Rail recently revised that Manual as thesecond edition, organising and incorporatingknowledge obtained during the guidance
sessions and risk management work sheets andother tools. Hitachi Rail is structuring itself withan internal cross-functional working group tofollow and develop these issues.

Hitachi Rail complies with all reporting
requirements as it relates to modern
slavery under local law and regulation. In
its sixth statement, published under Section
54 of the UK Modern Slavery Act 2015,
Hitachi Rail detailed the steps it has taken
to address modern slavery and humantrafficking in the business, and it supply
chain. Also, a separate Modern Slavery
Statement that complies with the AustralianModern Slavery Act 2018 has been
lodged with the Australian Government for
the reporting period.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Tracing the origin of minerals throughout thecomplex global supply chains is a significant
challenge. The train manufacturing industry
relies on a vast network of suppliers, making it
difficult to verify the ethical sourcing of every
mineral used. Hitachi Rail is implementing
responsible sourcing programmes that establish
criteria for suppliers, encouraging them tosource minerals from conflict-free regions.

Chapter 3
Governance

4ChapterSocial Impact

Chapter 5
Environmental
ImpactHitachi Rail has adopted a policy to ensurethat the procurement/sourcing of materials
containing conflict minerals does notencourage activities of armed groups, humanrights violations, including child labour,
corruption and environmental destruction in
the conflict and high-risk regions.

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail will persist in investigating,upholding the OECD Due Diligence Guidancefor Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areasand carrying out thorough examinations inaccordance with the Guidance, consideringsocial concerns and the responsibilities ofcorporations in the respective regions.

TCFD
Reference
Table

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87

4.5 Occupational Health and Safety

Letter to
Stakeholders

Guide tothe ESG
Report 2023

UL
T

NS

UL
TA

Kn o wnr
isks

STEP 2
Assessrisks

CO

STEP 3T IO

Control risks

N

STEP 4
Review control
measures

S
U
LTA

N

Management
commitment

risk assessment (e.g., analysis and monitoringof working activities, including the nature of
the work, equipment, workspaces, personaland collective protective measures, technicalinfrastructure, and contractual issues, both forinternal and contracted tasks).

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Performance measurement is an essential
part of the HSE Management System:

Chapter 3
Governance• to determine whether HSE policies,
objective and targets have been
implemented and achieved;

N

STEP 1

Identify hazards

CO

NS

O

N

C

O
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 3 – F Y 2 2

N

TI

Step 3 – Check: Monitor & Review
Considering the following: to ensure that
control measures have been implemented asintended and are adequate; to implement
control measures which do not create otherhazards, environmental impacts or increaserisks. Also, no further changes have been
implemented, risk-control is reported to beworking effectively and risk management
process are effectively conducted.

IO
T
A

CO

ol
o n tr

The Health and Safety Risk Assessment andEnvironmental Aspect Evaluation follows
concept of ISO 31000 Risk Management,
considering the “Plan, Do, Check, Act”
cycle, as follows:

Step 2 – Do: Assess Risks
Using the defined risk matrix when assessing
and prioritising the risks; dealing with thehighest priority risks first and dealing withlower-risks or least significant risks last. Risk
is managed following the hierarchy of risk
control, implement appropriate measuresthat adequately manage the hazards andenvironmental impacts.

Step 4 – Act: Improve and Adjust
Hitachi Rail’s Health and Safety policy isbased on the application of the requirementsof relevant standards, namely UNI ISO 45001
in compliance with national and international
regulations. Hitachi Rail’s plan is focused oncontinuously improving Health and safety
standards.

dc
anEmployee representatives are identified ineach legal entity of the Organisation, inline with legal requirements to participate
to decision-making process in Health and
Safety matters. One of the main tasks wheremanagement and workers’ representatives
collaborate is Risk Management.

Step1 – Plan: Identify hazards / aspects
Considering the organisational internal andexternal context, identify the hazards andenvironmental aspects associated with thetasks, activities, working areas, environment,
and personnel to be assessed. This process
should involve observing, inspecting,investigating, communicating, consulting,and making a record of the hazards/
environmental aspect identified.

T IO

Hitachi is committed to ensuring that
activities are undertaken by considering
the Safety and Health of the employees,
contractors and individuals who may be
impacted by daily operations. Health and
Safety Policies are reviewed and updated
every year to ensure focus on strategic
objective and targets and mitigation of
impacts.

Highlights Fiscal
Year 2022

This policy is shared with all Hitachi Railpersonnel and all Stakeholders online andvia the Organisation’s intranet. The initiatives
adopted by Hitachi Rail to promote employee
welfare in the workplace are adequate for

4

ChapterSocial Impact• to check that risk-control measures havebeen implemented and are effective;

Chapter 5
Environmental
Impact• to learn from HSEMS failures, including
hazardous events (actual incidents, nearmisses and ill-health cases);Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• to promote better implementation of plans
and risk controls by providing feedback to
all parties;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report• to provide information that can be used
to review and, where necessary, improve
aspects of HSEMS.

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Table

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Managing the impact on non-employees

HSE Performance

Additionally, considering the product andservice delivered from Hitachi Rail, it is alsoessential to manage impacts on nonemployees. The main interaction with nonemployees is connected with partners andsuppliers during the process of executing,sub-contracting and outsourcing of Hitachi
Rail product and services.

In terms of HSE performance, the numberof near misses and unsafe situations isevaluated. The consequent result of thisstrategy is to focus primarily on
prevention of serious incidents byeliminating the causes identified
for close calls and near misses.
Furthermore, injuries are not counted
as absolute numbers but related toworked hours in order to consider in theperformances the increase or decrease ofbusiness activity.

The correct management of partners andsuppliers starts with a strong qualification
process to identify since onboarding
phase their performances in matter ofOccupational Health and Safety andidentify OHS deficiencies could affectthe employees and any other stakeholder

involved during delivery of Hitachi Rail
Product and Services. After onboarding
phase and contractual phase, the Suppliers
before site mobilisation are subject tospecific process of preliminary acceptanceof documentation of their SOW execution(HSE Plans, Method Statements etc),
employee’s qualification and equipment
certifications according OHS Requirementsfrom local regulation and site/project.
During execution, the Suppliers are
subject to a continual monitoring, in orderto evaluate the safety condition of siteand safe deliver the outsourced processaccording Hitachi Rail principles andvalues.

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

HSE Training
To implement the above principles,the Organisation developed adedicated process of training andlearning practices, in collaboration
with the functional managers and the
HR department, ensuring that eachcountry has a training matrix describing
the needed HSE competences for eachspecific role in the Organisation. It
includes standard HSE training elements
as well as specific ones required by local
regulation or projects.

Examples of global standard training for
FY22 are the HSE leadership masterclassesrolled out in connection with the leadershipprogramme as part of the strategic plan forlast fiscal period. The programme aimed toengage leaders and managers and ensure
their commitment in achieving a high reliablesafety culture in Hitachi Rail, where safety is
spontaneous part of the day-to-day discussion
among business leaders and workers andwhere decisions are taken considering safety
as the number one priority.

Letter to
Stakeholders

In the last three years, Hitachi Rail moved
the HSE performance approach fromreactive to proactive, identifying an
increasing number of leading indicatorsthat have replaced the lagging ones. In
particular, performance evaluation is basedon number of lost time incidents:

HEALTH AND SAFETY – KPI

FY21

FY22

Injury frequency index16

0.74

0.68

16

 o. Injuries/h. worked x 200,000 ratio in the table calculatedN
on recordable injuries, therefore excluding first aid cases.

Going into details with FY22 HSE data,
trend analysis shows an increase of firstaid reported. This is indicating a positively
increased capability and attention to reportingand not a higher number of cases. In order toensure accuracy, Hitachi Rail’s HSE Function
has launched a re-baseline project to capture
all missing first aid cases in the previous period
and adjust the target. Furthermore, close calls(or “near miss”) target was achieved andexceeded with a number of 549.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceIn addition, no incidents have beenrecorded identifying a violation of theOrganisation’s voluntary codes related
to HSE issues. Only one case has beenrecorded globally across the businessresulting in a fine to Hitachi Rail from theauthorities, due to delay in answeringa request of information. The delay wascaused by change of the official corporate
email address not being communicated tothe authorities in a timely manner.

4

ChapterSocial Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

More generally, in terms of HSE compliance,
Hitachi Rail is aware that the creation ofsustainable economic value, in the broadest
sense of the term, must also be supported
by policies, practices and information
processes to ensure and the robustness ofan internal control systems that guarantee
ethics, integrity and transparency in the dayto-day activities to comply all applicablelaws and regulations.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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89

Letter to
Stakeholders

At Hitachi Rail, the workplace is a place
where everyone is empowered to make theright decisions and do the right thing to takecare of health and safety of all.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

To help us achieve this, the Organisation
launched Our Life Saving Rules,
these critical risks were created throughconsultation with a variety of working teams,
no matter who people are, where they areor what they do these critical risks apply tothem.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceControls for these Life Saving Rules are nonnegotiables and work does not commence
until these risks are controlled and all
workers agree with the measures in place.

4

ChapterSocial Impact

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

Chapter 5
Environmental
ImpactIn terms of future HSE objectives, thenext financial year is to strengthen
Hitachi Rail’s global risk management
and control processes. To ensure risk
management is focused on essential
control measures, a working team, withdifferent backgrounds, has been formed
and a new Risk Assessment initiativeis underway in FY2023. This group of
experts will:• develop a rapid improvement programme
for infield risk assessments;

Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• simplify risk assessments - modernisingand making sham user friendly;• educate all layers of organisational withrisk management skills;

MethodologicalNote• standardise the approach across all thewhole business;

Glossary andMain Acronyms
contained in the
ESG Report• embed a culture of full disclosure
to highlight important issues andopportunities to improve;

TCFD
ReferenceTable•e ngage with workers as problem identifiers.

GRI
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Exhibition stand of Hitachi Rail90

5

Environmental
ImpactChapter 5:

Letter to
Stakeholders

Environmental Impact

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

5.1 Environmental Policy

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

Hitachi Rail uses a systematic framework
for integrating environmental management
practices by supporting environmental
protection, pollution prevention, waste
minimisation, as well as energy andmaterials consumption reduction.
Hitachi Rail applies environmental
management systems throughout theOrganisation (e.g., ISO 14001) and iscommitted to reporting to all stakeholders
on the environmental management andperformance of the Organisation.

Finally – to involve the entire value chain– Hitachi Rail is committed to promoting
sustainable environmental practices tosuppliers, contractors, and customers.
Its Environmental Policy places safeguarding
the environment at the heart of its
management and development strategies,
with a constant and targeted commitment topreventing pollution and pursuing continuous
improvements in its environmental services.
The policy is shared with all Hitachi Railpersonnel through the BU’s intranet.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

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 theenvironments as appropriate to its
purpose and context

to prevent environmental
pollution and to theprotection of the environment
relevant to its context

to improve its activities
also for the purposeof reducing its overall
impact in terms ofclimate altering emissions
in the atmosphereto involve staff, suppliersand contractors in theenvironmental issues, raising
their awareness on this subject

Chapter 3
Governanceto improve environmental
performance through theachievement of increasingly
ambitious targets and objectives,
consistently with the technologicalprogress of the sector and with thebudgeted expenses

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

to defineindicators forstraightforward
performancemonitoring

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Reportto start an open dialogue with the Public
Authorities, the communities and the public,
aimed at raising awareness of the realenvironmental impacts and cooperating to
update environmental regulations.

TCFD
Reference
Table

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92

Letter to
Stakeholders

Zero Construction Footprintfor Etihad Rail Project

Guide tothe ESG
Report 2023

The UAE-based Etihad Rail awarded a contract to Hitachi Rail in 2019 for thesecond stage of its rail network.

Highlights Fiscal
Year 2022

The Etihad Rail project, spanning 1,200km, is the first national freight andpassenger railway network that connects the seven emirates of the UAE. The second
stage of the project involved constructing a 605 km rail link between Ghuweifat,
located on the border with Saudi Arabia, and Fujairah on the east coast.

Chapter 1
Context and
Identity

Chapter 2
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 3 – F Y 2 2

Many of the environmental practices implemented in Etihad Rail construction site
go beyond the project's compliance requirements. Among the most significant
examples: ecological surveys were conducted in all project areas, not just thosewhere it was strictly necessary. Additionally, rather than relocating the animals,
the decision was made to avoid disturbing the habitat of the Spiny-tailed Lizard, acritical species identified along the planned route.

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactIn line with Hitachi Rail environmental policy, an ecological survey was conductedto ensure zero construction footprint impact on the biodiversity. Detailed
ecological reports were prepared based on the survey findings, and one of the
major outcomes was the identification of a critical species, the spiny-tailed burrow,along the planned route. As a result, a proposal was made and implemented toreroute the connection and avoid disturbing the active habitat of the Spiny-tailed
Lizard.

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

MethodologicalNote

Etihad Rail Project

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
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93

5.2 Environmental Goals and Decarbonisation Path

Letter to
Stakeholders

Guide tothe ESG
Report 2023

In September 2021, Hitachi Group set
new targets to achieve carbon neutrality
throughout its entire value chain by 2050
- bolstering the existing commitment toachieve carbon neutrality across all its
business sites by 2030.

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

In accordance with the Group's dedication,
Hitachi Rail has made a promise to attainneutrality by eliminating carbon emissions
not only from its own activities but also fromthe purchases and sales of its products andservices. This challenging objective will beaccomplished in collaboration with HitachiRail's customers and suppliers.
In December 2020, Hitachi Ltd. received
validation of its emission reduction targets
from the Science Based Targets initiative(SBTi), the international Organisation thathelps companies setting emission reduction
targets 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 Corporate made acommitment 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.
Reflecting the spirit of the SBTi commitment
from Corporate, Hitachi Rail set
intermediate goals to monitor Scope 1 and2 reduction progress at selected sites. Also,
to structure a pathway applicable to all its
facilities, Hitachi Rail is conducting a Pilot
Analysis on seven key facilities, monitoring
their year-on-year emission trends andthe effectiveness of the applied solutions
against baseline year emissions. This willallow the Organisation to outline the mostefficient emission reduction roadmap forthe remaining sites.
This year, Hitachi Rail has set a specifictarget to reduce Scope 1 and 2
emissions by at least 5% in FY23
compared to FY22. The target has been
defined based on the forecasts anddecarbonisation plan available to date.

Decarbonisation pathway
Realising these ambitions and developing adecarbonisation pathway means adopting
low-carbon choices and creating solutions
that are sustainable and compatible withthese goals. By becoming a Climate Change
Innovator, Hitachi Rail aims to develop
innovative technologies and solutions thatmark an alternative path to sustainablemobility, to help cities, governments andcustomers cutting carbon in the mobility sector.
It uses a new pioneering approach towards
technologies for designing solutions that cancreate a tangible and positive impact and avisible and persistent change.
• using technology to decarbonise its
own industrial footprint and contributing
to carbon neutrality targets following
Corporate adoption of Science Based
Targets;• driving a modal shift by making rail an
attractive alternative and enhancing with
Mobility as a Service;Highlights Fiscal
Year 2022

Modal shift to alternativetransport

Chapter 1
Context and
Identity

A fundamental pillar in the Hitachi Rail ESG
pathway is making rail technology the key
element to drive through a comprehensive
modal shift from air and automotivetransport to railway system, a shift thatremains one of the most impactful in terms ofdecarbonisation.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Accelerating electrification andbattery5

Chapter
Environmental
ImpactFurthermore, as pioneers in the rollingstock and digital systems, Hitachi Railaims at accelerating the decarbonisation
by creating new electrified railways or
powering trains with batteries.
The acceleration of electrification and thecentral role of technological innovation
make rail transport an environmental
frontrunner, as of today the global
non-electrified rail transport relying on
diesel amounts to no more than 25%.

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
ReferenceTable• accelerating the decarbonisation of railby creating new electrified railways or
powering trains with batteries.

GRI
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94

5.2.1 Energy Efficiency and Consumption Trends
The issue of resource scarcity, triggeredby rising demand and population growth,
is a common concern for the entire world.
As populations grow and living standards
improve, higher volumes of resources arecollected, extracted, used, and eventuallyemitted as waste.
Hitachi Rail works with customers andsociety to help building a world that uses
resources more efficiently.

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

Energy Consumption
Hitachi Rail mainly relies on electricity used
for lighting, plant operation and building
temperature control but also uses fossil fuels,
such as natural gas and district heating,to heat workplaces. To reduce electricity
consumption, the Organisation carries out
constant work on its real estate assets.
It employs energy-saving lighting andefficient heating/cooling technologies asmuch as possible:• installation of LED lighting systems;• construction of envelopes and installationof thermal insulation for windows/doors;• direct expansion of heating/coolingsystems (heat pumps);
17

Letter to
Stakeholders• installation of presence detectors orclocks/timers to control activation and/or
deactivation of powered systems;• improvement of the energy efficiency ofdata centres;• promoting energy saving practises byreminding personnel to turn off the lights,
their laptops and any other device thatmight consume energy.

ENERGY BY
SOURCE [GJ]17

PRODUCTION SITES AND
TRAIN MAINTENANCE CENTRESIts total energy consumption - naturalgas, electricity, diesel, LPG and petrol,
district heating - amounted to 583,962
GJ, in line with the previous year. The
percentage of electricity derived fromrenewable sources, both purchased fromcertified sources from the grid and selfproduced, reached 54% in FY22, anincrease of 30 percentage points withrespect to the previous period.

OFFICES

178
7,511
64,523

166,806

190,864

FY21

FY22

FY21

FY22

Electricity

283,028

271,050

52,28349,837335,311

320,886

Natural gas

154,495

176,870

12,311

13,994

166,806

190,864

LPG and Petrol

73,89264,321

209

202

74,10164,523

Diesel

3,398

2,729

3,234

4,781

6,632

7,511

10

-

525

178

535

178

514,823

514,970

68,562

68,992

583,385

583,962

Highlights Fiscal
Year 2022

Districtheating

Chapter 1
Context and
Identity

Diesel320,886

Chapter 2
ESG Framework
and Roadmap

Naturalgas

Chapter 3
GovernanceElectricity

Chapter 4
Social Impact

FY22

FY21

5

Chapter
Environmental
ImpactEnergy intensity (GJ per hour worked)

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

0.06

0.04

During FY22, Hitachi Rail registered achievements in the LPG and Petrol, district heatingand electricity, as a result of good practices and behaviours, and the energy-efficiency
investments made in several regions. The graph shows the energy consumption
trends over the two-year period. Again, the overall consumption of energy shows aconstant trend over the year. However, by taking into account the total hours worked,
energy intensity has gone from 0.023 to 0.027. It should be noted a refinement of
the methodology for calculating hours worked occurred in the year in order to better
represent the effort allocated in the year.

Guide tothe ESG
Report 2023

LPG andPetroil

TOTAL

FY22

Total

535
6,632
74,101

335,311FY21

District heating

Energy consumption (GJ)

0.023

0.027

Methodological
Note

0.02

Glossary andMain Acronyms
contained in the
ESG Report

FY21

FY22

TCFD
Reference
Table

GRI
Content
Index

Data regarding 2021 differs from the one represented in the previous CSR&S Report due to a methodological refinement in data collection and processing.
955.2.2 Emissions Reduction and Air Quality

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

Hitachi Rail is developing low-carbon,
sustainable solutions to decarbonisetransport around the world. Where
railways are only partially electrified,
Hitachi Rail is designing and building
new batteries and hybrid trains and trams
to cut diesel emissions and reduce thecosts and the disruption of electrification
programmes. The Organisation thinks
responsibly and acts sustainably.
As such, it is striving to deliver 100%
reduction in its own CO2e emissions by2030, and a 100% reduction through theentire value chain by 2050.
Hitachi Ltd. has set emission reduction
targets which have been validated by
the Science Based Targets initiative (SBTi,
scope 1,2,3) and Hitachi Rail is currently
focusing its attention on improving energy
and resource management. For example,
with different contractual agreement
and implementation frameworks, Hitachi
Rail is running a solar panel installation
programme at various facilities in Italy (Tito
Scalo, Reggio Calabria), Australia (Perth)and the United Kingdom (Newton Aycliffe,
Doncaster and Stoke Gifford). Likewise, it
encourages low carbon transportation byintroducing electric car sharing schemes
for its employees and supporting the use ofelectric vehicles at all Hitachi Rail sites.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

From strategy to reality:
the solar panels of Tito Scalo

Highlights Fiscal
Year 2022

As a matter of fact, Hitachi Rail has recently
completed the installation of a solar plant inTito Scalo, Basilicata, Italy. The plant is aninnovative solar panel system that will enable
to produce more than half of the electricity
needs of the site (50-60%).

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
GovernanceIn addition, the next-generation photovoltaic
array, connected to the national grid, will
enable the plant to reduce CO2 emissions by
325 tons per year. In details, the plant covers
an area of 6,000 square meters, roughly half
the size of a soccer field, and consists of 1,122
440Wp photovoltaic modules with double-sided
cells that allow to harness reflected energy,
maximising electricity production.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The system has a peak power of 494 kWp, witha producibility of 700-750 MWh/year. Since
the size of the photovoltaic system is minor than
500 kWp, it is possible to take advantage of theexisting Power Exchange Scheme, which allows
electricity fed into the grid during a given hour tobe offset for the electricity taken from the grid in
another given hour.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

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96

Looking at the bigger picture, Hitachi Rail
has also started to dive into the functioningof its entire value chain at all stages of
product development, from the procurementof raw materials and parts to production,transportation, use, disposal, and recycling.
As part of Hitachi Rail’s Sustainable
Procurement Strategy, it investigates its
Scope 3 emissions which typically accountfor over 90% of the CO2e emissions from agiven company. Hitachi Rail is working tobuild a clear view of the carbon emissions
generated by its value chain by calculating
its Scope 3 emissions in line with theGreenhouse Gas Protocol methodology.

In particular, the decrease in total Scope 1
and 2 emissions amounted to 12%.

On the other hand, Scope 3
emissions decreased and underwent
a significant change during the year as
Hitachi Rail refined its calculationof indirect emissions by adding the resultsof additional emission categories
as defined by the GHG Protocol.
Scope 1, 2 and 3 emissions areshown in the table below, alongwith relevant details.

GREENHOUSE GAS EMISSIONS18,19,20

Unit

FY21

FY22

Emissions due to Energy Production (Natural Gas)

tCO2e

10,897

10,774Emissions due to Energy Production (Diesel)

tCO2e

435

Emissions from Air Conditioning Systems (Fugitive Emissions)tCO2e

Emissions due to Internal Handling (Lorries and Forklifts)

In addition to the reported CO2e emissions,
Hitachi Rail also monitors the pollutant
emissions related to the consumption of nonrenewable resources used to run thermal
plants (methane and diesel) and to the
production processes that emit volatile organicand inorganic compounds. Compared to
FY21, total air emissions increased by 6%, notleast because of better tacking systems andincreased reporting capabilities.
FY21

FY22

NOx [Kg]

13,95815,639537

SOx [Kg]

693

917

2,446

1,878

CO [Kg]

5,073

5,751

tCO2e

60

28

220,235

232,211

LPG

tCO2e

4,749

4,128

Volatile Organic
Compounds [Kg]• policies on the mobility of people andgoods;

Total Scope 1 Emissions (-7%)

tCO2e18,587

17,347

Volatile Inorganic
Compounds [Kg]–

Emissions due to Electricity Consumption

tCO2e21,215

17,861• programmes for reducing consumption
and improving energy efficiency;

Emissions due to District Heating

tCO2e

25

8

Total Scope 2 Emissions (-16%)

tCO2

21,241

17,870• use of renewable energy sources;

Total Scope 1&2 Emissions (-12%)

tCO2

39,82835,216• waste and water management.

Total Scope 3 Emissions (-14%)

tCO2e3,886.025

3,349,241

Hitachi Rail reports direct and indirect
GHG emissions, engaging to reduce themthrough:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2With regard to CO2 emissions, Hitachi
Rail registered a decreasing trend for all
Scopes, notwithstanding the increasing
consumption trends. This is due to theincreased amount of certified renewableelectricity purchased from the grid bycertification by Hitachi Rail for FY22.

AIR EMISSIONS21

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
Impact343

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report ata regarding 2021 differs from the one represented in the previous CSR&S Report due to a methodological refinement in data collection and processing.
D
19
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 emission
factors adopted are a combination between IEA (International Energy Agency) Factors provided by Hitachi Ltd. and used at a Group level, and, where available, at sites supplied with green energy, market-based factorsof EU AIB (Association of Issuing Bodies) origin or directly from national energy providers. For what concerns Scope 3 emission calculation methodologies, further details are provided in the methodological note.
20
Additional details can be found in the Methodological Note. For this reason, the total amount of Scope 3 emissions for FY2021 reported in the following table differs from that published in last year's Report.
21
SOx, 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"(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 compound values and Volatile Inorganic Compounds were aggregated from direct measurements at the Batesburg, Kasado, Napoli, Newton Ayclifee, Pistoia and Reggio Calabria production sites.
18

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5.2.3 Sustainable Mobility
Hitachi Rail has set concrete targets aspart of its medium-term roadmap basedon achieving emission reductions throughdirect action both within operations andthroughout the value chain to produce highquality products, solutions and operations,service, and maintenance.

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

Hitachi Rail supports these goals throughits Decarbonisation Pathway and reducing
employee-commuting emissions. It has
appointed a single Mobility Manager
for Hitachi Rail’s Italian sites to promote
initiatives aimed at reducing emissions
related to the home-work journey of
employees, encouraging the use of local
public transport, and vehicle sharing.

Hitachi Rail Travel /Corporate car sharing
Hitachi Rail provides electric car
sharing between employees of the same
Organisation helping to reduce CO2
emissions related to employee travel.
Starting from a pilot project that took
place in the Naples site, Hitachi Rail isworking to make electric cars available toall employees for travel and business trips
between Hitachi Rail sites and other local
mobility points (Airport, Railway Station,
Hub car parks).

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Corporate Car-Sharing

Highlights Fiscal
Year 2022

During FY22, in the offices of Naples, Pistoia and Genoa,
Hitachi Rail introduced a Corporate Car Sharing System
for its employees to commute for business trips or to local
mobility points.

Chapter 1
Context and
IdentityThis service is available to all employees as an alternative
to taxis and private cars, even for short business trips(same-day services, visits to suppliers or construction
sites), with return within the same day to the dedicatedparking areas of the site to which they belong.

Chapter 3
Governance

Chapter 2
ESG Framework
and Roadmap

Chapter 4
Social Impact

To take advantage of the Corporate Car Sharing Service,employees simply need to download the "Green Sharing"
app or register on the dedicate website. Through the app,they can book an electric vehicle, which can be pickedup and returned free of charge in the special green areas
based in Hitachi Rail’s headquarters or in the dedicatedareas around the city, suitably marked on the app with a
special Green Zone logo. Hitachi Rail only selected electricvehicles to run the service and reduce polluting emissions.
Based on the pilot, the service will eventually
be offered to all Hitachi Rail employees andwill be designed for specific local needs.

The scope of such project does not only
achieve a reduced environmental impact
in reducing emissions, but it also improves

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

corporate welfare, cost containment andfacilitation of travel services and service
activities.

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Mobility (Travel for Business)

Sustainable mobility (home-to-work) - Hitachi Rail sites

Following the impacts of the COVID-19
pandemic, and subsequent slowdown ofbusiness travel, this year’s goal was toreintroduce business travel y through a
global gradual recovery of both national
and international trips within safety, security,and sustainability guidelines.

During FY21, the Hitachi Rail launched thefirst multi-site survey on mobility in the six
Italian sites. The survey was run once again
during FY22.

The CO2 data gives an emission ratio for thesurveyed Italian employees of 1.11 tCO2e/
year per capita. The main actions identified
to reduce the above-mentioned emissions are:

The aim of the survey was to detect themobility habits of employees related to theirhome-work-home journey and to respondwith alternative mobility solutions based on
the results obtained through the platform.
The participation in the survey was successful
and allowed Hitachi Rail to estimate CO2,
NOx, PM10, and VOC emissions related to
employees' home-work-home journeys.

• contacts with individual local mobility
companies (LPT);

At the same time, Hitachi Rail has
given great relevance to sustainability
prioritising the environment and monitoring
environmental impact of all business travels:

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Hitachi Rail relies on business agreementswith major airline companies who are
distinguished for their efforts to reduce
their impacts on the environment andpromotes stays in green and sustainable
hotels;• it is working on the harmonisationof its travel policy to provide global
guidelines to its employees to bookand organise their business travels withgreater awareness of safety, security, andsustainability criteria, using a self-service
booking tool.

It used the COPERT method (Computer
Programme to Calculate Emissions from
Road Transport) to estimate the amount ofpollutants released into the atmosphere:
FY22
u.m

Tot. Emissions

Emissions CO2[ton/year]

3,707.41

Emissions CO[ton/year]

57.45

Emissions VOC[ton/year]

6.92

Emissions NOX[ton/year]

11.02

Emissions PM10

[ton/year]

0.95• verification of framework agreements
for incentivised purchases of electricbicycles;• car-pooling apps;• if applicable, possible structural
improvements to encourage the use of
bicycles (e.g., increasing the numberof bike racks with possible electric
recharging);• gamification (virtual competition between
employees regarding mobility habits).
As a result, Hitachi Rail launched a pilot
project consisting of a Mobility HUBof shared services for employees incollaboration with local institutions on the
Naples site. It also continues to promoteand enable remote working to support
the reduction of pollution by employees
travelling to work and back to their homes
at Hitachi Rail sites all around the world.

Letter to
Stakeholders

Promoting
Sustainable
Mobility

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Among the different ways that Hitachi
Rail uses to incentivise the promotionof low-emission transport there is thedevelopment of the E-Charge project.

Chapter 1
Context and
Identity

E-Charge is a project developed by
Hitachi Rail to provide employees withan innovative electric vehicle charging
service. Electric charging stations areavailable at the parking lots of all
Hitachi Rail corporate offices in Italy.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

To date, 69 charging stations havealready been installed in Naples,
Genoa, Pistoia, Piossasco, Tito Scalo,and Reggio Calabria, with a total of
138 electrified stalls.

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Through the app E-Charge one canenter the payment method wishedand start and/or end the recharge
directly with a click. For Hitachi Railemployees, having an electric vehiclemeans saving time, money, andemissions. Hitachi Rail is proud to beable to provide mobility solutions andalternatives that incentivise a strong
cultural change towards a greener
world.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

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5.3 Circularity, Innovation and Resources Management

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Hitachi lithium-ion batteries to be partof closed-loop supply chain

R&D/Manufacturing
ng

Re

c li

Pro

d

ti o nBattery materials
are recycled

cyRecyclinguc

Hitachi isworking to createa closed-loop
supply chain for
EV lithium-ion
batteries

Recycled battery material
enters the production
process for further use

Hitachi Rail produces highly recyclable
trains, with some cases achieving above
95% recyclability. The Organisation also
effectively recovers a significant portion ofmaterials during maintenance operations
and refurbishes and reuses components
from older products in new ones.
In addition, Hitachi Rail adopts a reverselogistic approach to manage the end-oflife phase of trains, further contributing
to circularity. To maintain its role as aninnovator, Hitachi Rail has undertaken a
project to assess its circularity level andbenchmark it against a model of Circular
Economy implementation maturity.

Reuse/Refurbishing
Fleet operators reuse or
refurbish the battery to
make use of its second-life

bis

hing

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

se

ur

ef

Hitachi Group has established targets tominimise its impact on natural capital as partof its long-term environmental targets. Hitachi
Rail is responding to the shift from linear tocircular economy by working with customers
and society to create higher economic value,
designing and promoting use of less andpursuing products and solutions, as wellinternal processes and activities, with areduced environmental burden. The enabler
for achieving this is, again, technology:
Hitachi Rail’s knowledge transfer between

sources according to their availability,
renewability, affordability, sustainability, andenvironmental impact.

/R

Governance of natural
resources

research and business is a priority in ensuring
responsible resource management thatbalances the use of traditional and alternativeReuse

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

Circularity represents an ongoing challenge
in the current economic model of production
and resource consumption. For companies,
material conservation, product longevity
through repair and reuse, and eventual
recycling are no longer optional choices
but imperative necessities. Embarking on acircular business model demands a radical
shift, an endeavour that Hitachi Rail has
been actively embracing for several years.
Developing circular products or strategies
necessitates innovative thinking, substantial
investment, and meticulous research.

Highlights Fiscal
Year 2022

U

Fleet operators
Fleet operators use thebattery for the first time

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Circular economy is key to the plans for train batteries. The lithium-ion batteries
that power vehicles will be part of a closed-loop supply chain. Each battery canbe deployed for eight years on fleet, then the Organisation will extend theirvaluable life by integrating into line side equipment on railways, in Hitachi Rail’s
own factories or supply the growing after sale market. Once batteries reach theend of their first and second-life usage, they will be recycled and put back into
production.

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Circular Economy Project
Hitachi Rail incorporates the conceptof the Circular Economy within its
Environment and Quality Management
Systems at production sites in which therelevant certifications are managed.
The Circular Economy Project allows
Hitachi Rail to evaluate the opportunitycost of alternative business models interms of socio-economic (Life Cycle
Cost, Social Life Cycle Assessment) andenvironmental impact (Environmental Life
Cycle Assessment).

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

In recent years, the market dynamics
in this sector have shifted towards
increased customer demand for turn-key
transportation solutions that efficiently

Letter to
Stakeholders

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.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Detailed information on the material
content of each component is provided
to facilitate recovery and recycling
operations by asset owners22. Furthermore,
Hitachi Rail's commitment to sustainability
is demonstrated through the publicationof several Environmental ProductDeclarations (EPDs) and Carbon
Footprint Disclosures, showcasing progress
towards product recyclability, recovery,
and other environmental impacts.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Sustainability Exibition 2023, Milan
TCFD
ReferenceTable
22

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.

GRI
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5.3.1 Product Innovation and Eco-Design

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

At Hitachi Rail, innovation follows astructured process that entails a rigorous
approach, relevant needs assessment,
clear objectives and activities, driven
by customer needs. Through an "openinnovation" approach, it develops andtests new solutions and technologies todemonstrate their effectiveness in meetingthese while assuring positive impacts on
the business and community. It creates
prototypes of new products and solutions
that, together with the associated skills,
enrich the future product portfolio throughcollaboration with engineering anddevelopment departments.
From 2024, all new Hitachi Rail’s
products will be developed using Life
Cycle Assessment and an Eco-Design
perspective: recognising that 80% of a
product's environmental impact can beaffected by the design phase. The approachmeans building an inventory of materials
used throughout the entire lifecycle, from raw
material extraction to train decommissioning.
It prioritises recyclability, environmental
impact, and energy consumption from theoutset of the process, and includes production
and maintenance processes that valorise
waste or spare parts that have reached theend of their life. Using LCAs for rolling stock
design since 2005 has been a significant
undertaking, given the complexity of trains
with approximately 110,000 different parts.

Eco-Design Strategy
Eco-Design or “sustainable design”
sensitively improves product design forthe purpose of disassembly, repairability,
recovery, recycling, including a large
set of techniques that are also applied
to Circular Economy, going beyond
the creation of a "green" product,aiming to meet the needs of consumers
in a sustainable way. Companies thatincorporate Eco-Design into their longterm product innovation strategies strive
to alleviate negative environmental,social, and economic impacts in the
product supply chain and throughout its
life cycle.
All the possible solutions for a "sustainable"
product are easily generated by adopting
the Eco-Design Strategy Wheel, which
illustrates the eight main directions to follow
to achieve improvements.
Hitachi Rail pursues its Eco-Design
Strategy through the improvement of
performance when using the rolling stock.
All the 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 reduction

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Eco-Design Strategy Wheel

Highlights Fiscal
Year 2022

Rethink to a new
business model
Sustainable
end-of-life

Chapter 1
Context and
Identity

Sustainable
Materials

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Sustainable
Supply Chain

Sustainableproduct life

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSustainable
Usage

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

Sustainable
Manufacturing

Methodological
Note

Sustainable Distributionof energy consumption remains a primaryobjective to be pursued. Hitachi Rail istherefore focused on reducing energy
consumption during the operational phase:• weight reduction;

Glossary andMain Acronyms
contained in the
ESG Report• improved aerodynamical performance ofcar bodies and bogies;

TCFD
Reference
Table• HVAC adsorption;

GRI
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102

While the production of parts andcomponents has minimal environmental
impact compared to the overall impacts of therailway vehicle in its life cycle, Hitachi Rail's
Eco-Design Strategy also addresses upstream
stages to further reduce overall impacts. It haslaunched a dedicated procedure to guide theeco-design process incorporating LCA fromthe conceptual design to the preliminary andfinal phases. After conducting LCA, the results
are shared with design members to achieve
the following objectives:• evaluate the attainment of train
performance objectives;• identify critical points contributing
significantly to environmental impacts
throughout the life cycle;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• explore alternative materials to reduce
environmental impacts for incorporation in
the project's subsequent review.
In the Eco-Design process, each Legal Entity
compiles a list of train parts significantly
contributing to the carbon footprint andselects potential suppliers required toprovide EPDs or carbon footprints for theseparts. Suppliers entering supply contracts
commit to provide materials and weightdetails for LCA review during the Detailed
and Final design phases.

Furthermore, the Eco-Design function requests
process owners to communicate changes,
such as:• train weight matrix;• refinements in design for sub-groups/
equipment/parts, including possible
material sheets from suppliers;• s upplier-related changes (origin/components);•w
 orked hours and resource consumption(energy, auxiliaries) or waste production (airemissions, water discharge, solid waste) in
each involved plant for specific projects;• s imulation results (e.g., improved power
equipment performance, energy recovery
systems, product mass reduction, optimised
auxiliary consumption, enhanced
aerodynamics);• issuing or changing predictive maintenanceplans.
The LCA tool is used recursively to assess
proposed solutions for reducing environmental
impacts from previous phases. For supplies
involving metal parts (aluminium, steel,and copper), Hitachi Rail asks suppliers fordeclarations regarding recycled content tocustomise production processes and reduce
ecological footprints. Hitachi Rail involves
the supply chain to gather information on
recyclability rates and recycled content,
aiming to increase circularity of trains.

Letter to
Stakeholders

Industry first:
Social LCA in the
lifecycle of a train

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Social Life Cycle Assessment (S-LCA) isa method used by Hitachi Rail to assess
the social and socio-economic aspectsof its products and their impacts along
their life cycle, in alignment with the
Sustainable Development Goals (SDGs).

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

The company aims to understandthe social impacts related to labor
conditions and human rights andimprove its communication on thesematters.

Chapter 3
Governance

Chapter 4
Social Impact

5

Hitachi Rail is the first in the railway
industry to apply S-LCA to a train's life
cycle, particularly the Blues Train.

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

The project's goal is to create a
Social Product Declaration (SPD)following ISO 14025 guidelines tocommunicate the social impacts of the
product's life cycle to stakeholders.
This initiative demonstrates HitachiRail's commitment to sustainableproduction and consumption while
promoting transparency and positivesocial impacts in their products andservices. The study was conductedwith support from Circular S.r.l andvarious internal departments.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

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Hitachi AT200_First Class103

Hitachi Rail Eco Design Projects in FY22
PROJECT

BSI PAS 2080
Certification
on Design ofProduct & Services

S-PCR releasingfor Rolling Stock

Letter to
Stakeholders

DESCRIPTION
HAH-S, a joint venture company between Hitachi Rail, obtained the BSI PAS2080 Carbon Management certification for the HS2 Project related to a High Speed Train operating on the UK market. BSI PAS 2080 is
the world's first standard for infrastructure carbon management and is critical to helping companies reduce carbon use and costs. PAS 2080 certification was required by the contracting station even if the train is not part of theinfrastructure. At present, the conceptual design review has been completed and the next phase of the train's preliminary design is being finalised.

Chapter 1
Context and
Identity

Hitachi Rail has carried its first project on Social life cycle assessment (S-LCA) in 2022. It represents the first assessment of positive and negative social impact of a train along its life cycle. The Train assessed was the HTR 412
Blues and In this project Hitachi Rail has been supported by Circular S.r.l.
To follow up on this project directly after the development of the S-LCA, a furthermore innovative project has been started with the aim to develop the first Social Product Category Rules (S-PCR) worldwide.

Chapter 2
ESG Framework
and Roadmap

The project was again supported by Circular S.r.l. and required the involvement of the International EPD System (Environdec.com) as a provider platform. Indeed, until today, a product declaration according to the ISO
14025 was possible only to evaluate and certify the environmental impact of a product. That is the reason why Hitachi Rail and its Ecodesign Team have decided to develop for the first time (worldwide) the first social productdeclaration of Rolling Stock product group and allow to certify the social impact of its products and complete the sustainability assessment of them. The project started last year, and it will be finalised by the end of 2023. The
S-PCR draft has been already gone through two consultations process to get inputs and feedback from stakeholders of the rolling stock sector and experts on S-LCA. A few comments have been received and the S-PCR is now in
the final editing phase. The publication of the S-PCR of Rolling Stock represents a milestone in the communication tool for social impact assessment, it covers an important gap.

Chapter 3
Governance

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

EPD certification of the HS2 train will be obtained in the near future. 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 to issue the final release of the Life Cycle Assessment. According to relevant PCR (Product Category Rules) Hitachi Rail will prepare EPD (Environmental Product Declaration) for B2B communication. The LCA andcorresponding EPD will be verified by a third party certification body and then published by the IES (International EPD System) programme operator on the website www.envnrondec.com.

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Hitachi Rail faces a significant challenge in implementing the circular economy business model. Traditionally, the manufacturing industry followed a linear economic model, starting with raw material extraction, productcreation, and eventual disposal as waste (Take-make-use-dispose model). Given limited resources and population growth, this model is no longer sustainable.

Circular Economy
Business Model
Implementation

Highlights Fiscal
Year 2022

The certification was issued by an external body and all activities carried out by HAH-S were coordinated by the Hitachi Rail team. The HAH-S design team leader was involved during the verification and asked to demonstratethat the hot spots, in terms of the train's carbon emissions, had been discussed by the design team to find an alternative design solution for reduce them. For the next certification surveillance audit, Hitachi Rail expects the audit
team to request a possible alternative design solution to reduce the carbon footprint of the HS2 train. It was confirmed by BSI that Hitachi Rail is the first Rail Manufacture in the world to obtain this certificationand covers all Rolling Stock Products and Services.

From now on, other companies in the sector of Rolling Stocks can assess the social performance of their train and improve their performance in a consistent manner as well as other companies can develop its own S-PCR of their products.
EPD Certification
HS2 Project

Guide tothe ESG
Report 2023

The circular economy, a subset of the green economy, prioritises protecting natural resources, efficient usage, and waste reduction. Hitachi Rail's Eco-Design team leads the way in adopting a circular economy-based
development model, starting with the Italian driver. Key activities undertaken include:• identifying value chains and processes from a Circular Economy perspective;• mapping relevant business processes for Circular Economy implementation;• analysing material flows;• assessing market trends and regulatory developments related to Circular Economy;• developing a Maturity Model and Implementation Plan.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Now, the team is integrating this information into their processes, including:• technical specifications for purchasing;• warehousing and logistics;• waste management guidelines;• sharing customised packaging approaches.

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

Innovation Projects
In Hitachi Rail, the Research &Development Function gives priority
to those projects that best meet thesustainability requirements and the mostinnovative needs of Hitachi Rail’s customers
and their own customers. From thisprocess, one important framework project
was created: “Zero Infrastructure”.
This framework encompasses projects
aimed at eliminating parts of the physicalinfrastructure such as servers and power
and telecommunications cables alongsiderailway lines. This will allow Hitachi Railto provide solutions with less equipment
and consequently that consume less. In
the case of physical equipment still needs
to be powered, green alternative sourcesof energy are used together with batteries
and capacitors. In addition, this solution
also reduces the cost of operating andmaintaining the railway. The projects withinthe “Zero Infrastructure” framework are:• the creation of alternative green powersources to power 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 on
the Cloud;• the use of wireless communications toconnect the signalling systems installed
along the line with the central station.

Letter to
Stakeholders

In 2022 Hitachi Rail was granted a patentfor implementing safety critical systems
on Cloud and a prototype on cloudinterlocking based on such patent wastested on an actual train station even if not
in operation. While the Zero Infrastructure
programme can contribute to several
objectives such as building resilient andsustainable infrastructures reducing waste,
use of raw materials, energy consumption
and, indirectly, use of land by reducing
the need at Hitachi Rail clients’ sites for
dedicated space for its equipment, the S4M
programme on the other hand mainly
focused making transport systems more
attractive, reliable, convenient and safe forpassengers.

rolling stock assets, minimising the life cycle
costs of assets and extend their lifetime,
while meeting safety requirements andimproving the reliability, availability andmaintainability of the rail system. IAM4RAIL
will pave the way for the integration of asset
condition information and TMS, enabling
optimisation of train routing decisions andimproving the overall lifecycle of monitored

assets. It will ensure an increased volumeof rail traffic in existing lines with improved
cost efficiency and lower CO2 emissions
from their maintenance and operations.
Furthermore, construction time and costof new assets and lines will be reduced,
the durability and reliability of theirassets increased, and their life cycle costs
optimised.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactAnother key focal point of Hitachi Railinnovative activities is on AutomatedMaintenance and Intelligent AssetManagement. As an example, within
Europe’s Rail, Hitachi Rail is one of themain partners and Project Manager of
the IAM4RAIL project. This is focusedon the integration of asset condition
information, obtained via advanced andnon-intrusive monitoring systems, both withdecision-making tools and with the traffic
management system (TMS). IAM4RAIL
aims to improve the sustainability of therailway industry with the development anddemonstration of an Intelligent andIntegrated Rail Asset Management
System (IAMS) covering fixed andSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
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North Pole105

Smart Mobility

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

Hitachi Rail is actively focusing on Smart
Mobility to meet customer demands for
efficient operations, improved services,sustainability goals, and increased passenger
attraction. It established the Digital &Lumada Solutions (D&LS) line of businessin 2022, collaborating with Hitachi Group
companies like Global Logic and Hitachi
Energy developing a suite of Lumada-centric
solutions known as the Lumada Intelligent
Mobility Management suite.
The Smart Mobility Solutions framework aims
to create value-added services for enhancing
public transport operations and passenger
appeal. It facilitates the transition from private
to public transport, reducing environmental
pollution and supporting sustainability
targets, including E-Bus implementation. The
suite offers an integrated solution for efficient
E-Bus operations. The solutions created to thisaim are:• 360Pass: this solution enables
passengers to experience a hands-freeticketing technology in a multimodaltransportation environment, whilecollecting data to support operators to
improve their service (e.g., timetable
optimisation);

Letter to
Stakeholders• 360Flow: it is dedicated to analyse
the flow of passengers within thetransportation network, collecting
insights that are precious to theoperators to understand the usage of
their network and maximise the comfortof their passengers;

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity• 360EV: Operation Management for
e-Buses, it collects information fromelectric vehicles (supported by Hitachi
Energy solutions), creating an integrated
environment to offer to the operators all
the information they need to effectively
run electric fleets;

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact• 360Motion: it integrates information
coming from multiple transportation
services and from the other applicationsof the LIMM suite; it uses advanced
AI algorithms to create value added
services to support city planners,bus operators, and rail operators in
optimising public transport networks inreal-time, enabling scenario planningand predicting and managing future
disruptions.

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

106

5.3.2 Circular Economy in Hitachi Rail: Materials and Waste
Hitachi Rail is very aware of thecontribution that an efficient consumptionof raw materials can give in terms CO2eemission reduction. The Organisation
promotes the reduction of the intensive useof raw materials in line with 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 SUBSTANCES23

FY21

FY22

12,431

10,832

Alluminium - new material [t]

9,689

8,651

Alluminium - recycled material [t]

2,743

2,181

2,283

3,469

2,283

3,469

-

-

62

78

62

78

-

-

1

0

Iron - new material [t]10Iron - recycled material [t]

-

-

1,256

950

Nitrogen [t]6039

Argon [t]

736

568

Carbon dioxide [t]1815Oxigen [t]

119

110

Other [t]

323

219

263

243

Oil [t]

3,517

7,629

Glues and adhesives [t]7,006

15,734

Alluminium

Steel
Steel - new material [t]Steel - recycled material [t]CopperCopper - new material [t]Copper - recycled material [t]Iron

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

Liquefied compressed gases - tot

Paints (water based) [t]23Letter to
Stakeholders

For the reporting period under assessment,
the materials and substances used arelisted in the table. While consumption
clearly varies depending on the workcommissioned, the higher decreased
was linked to nitrogen (-35%) and thehigher increased was linked to glues andadhesives.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Due to a methodological change in data collection the data presented in the table for FY2021 differs from the one of CSR&S Report 2022.
107

WasteHitachi Rail’s internal policy is to reinforce theprinciple of re-use, recycling, and recovery
of waste. All sites have waste collection
areas based on the type of waste and sitelayout. External specialist companies collectand process hazardous and non-hazardous
waste. For a detailed picture of Hitachi Rail’s
waste cycle, refer to the following points:• Inputs: Hitachi Rail, through its office,production, maintenance and construction
sites activities purchases services, products,
production materials for the construction oftrains and railway signalling;

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2• Activities: Hitachi Rail's activities thatgenerate non-hazardous and hazardous
waste include office activities, train
manufacturing, railway bogies, railway
signalling, train maintenance activities andplant maintenance;• Outputs: waste indirect outputs are
generated by the activities carried out
by companies working at Hitachi Rail’s
sites and/or construction sites (e.g.,maintenance activities, painting, installationof cabinets, etc.) and by supply logistics;• Upstream generation: waste generated
upstream is generated and managed bythird-party suppliers who supply materials/
semi-finished products (e.g., electronicboards, railway signals, train carriages,
components for engine assembly, etc.).
24

Letter to
Stakeholders

This includes packaging, plastic, cardboard,paper, electronic waste and scrap metal;• Operations: waste generated by HitachiRail's own operations includes both
hazardous and non-hazardous waste. Nonhazardous waste includes plastics, wood,
cardboard, paper, electronic waste, scrap
metal, and mixed waste. Hazardous waste
includes batteries, solvents, chemicals,
degreasers, and sludge. Hitachi Railmanages the waste generated, both
hazardous and non-hazardous, by its
activities through authorised companies;• Downstream generation: waste
generated downstream is the result of the
distribution and installation of trains andrailway lines.
Continuous efforts are made to minimise
waste in Hitachi's manufacturing facilities,
with priority actions as follows:• separate waste and, if possible, recycle it;• reduce the production of plastic (Plastic
Free Project);• inform and train personnel on reuse,through signs, articles, posters, etc.
During FY22 Hitachi Rail used newtechnologies to reduce organic material
waste while creating thermal and electricalenergy. It made a further investment in a
furnace in Newton Aycliffe, which burns
wastes obtaining heat to use on the site. And,
across the world, Hitachi Rail continues topromote green initiatives on all sites:• the use of bio waste bags in offices to reduce
landfill waste and to increase recycling;• the elimination of plastic resetting waterbottles in all Italian canteens (achieved
plastic waste reduction by 12% and the
avoidance of 3.6 plastic tons of waste);• the use of re-usable and biodegradable
products in India and Sweden (glass bottle
and cups replaced by ceramic ones whichallowed for a reduction of 10% of wastecompared to the previous year);

Guide tothe ESG
Report 2023

• the evaluation of suppliers to sell waste suchas iron, copper, ropes, aluminium, and steel.

Highlights Fiscal
Year 2022

Across Hitachi Rail’s supply chain,
its suppliers – who mainly generate
construction site waste during installation– continue their commitment to reduce theamount of packaging waste that occurs
when semi-finished products are delivered.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

The following table provides details on thewaste produced at the production sites andoffices, with specification of disposal method.

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactWASTE PRODUCTION24

PRODUCTION SITES AND
TRAIN MAINTENANCE CENTRESOFFICES

TOTAL

FY21

FY22

FY21

FY22

FY21

FY22

Non-hazardous [t]11,29011,174624

644

11.91411.818% recycled

92.1%

91.1%

13.5%

17.0%

88.0%

87.0%

% incinerated (mass burn)

6.3%

7.2%

0.9%

1.4%

6.0%

6.9%

% disposed of in landfill

1.6%

1.7%

85.5%

81.6%

6.0%

6.1%

Hazardous [t]

756

885

7

8

762

894

% recycled

80.7%

72.7%

95.2%

43.1%

80.8%

72.4%

% incinerated (mass burn)

8.7%

14.6%

0.0%

8.3%

8.6%

14.5%

% disposed of in landfill

10.6%

12.7%

3.3%

48.6%

10.6%

13.1%

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

Due to a methodological change in data collection the data presented in the table for FY2021 differs from the one of CSR&S Report 2022.
108

As of FY22, the total waste production
amounted to 12,712.24 tonnes, anincrease of 28% compared to the lastreporting year mainly due to the new paintsystem installed at the production site
Newton Aycliffe.

The KPI concerning the kg of waste
produced per hour worked, shown in thegraph below, highlights an increase ofabout 13%, in view of the decrease in the
total hours worked.

Approximately 86% of the total waste isrecycled, with peaks of 91.1% in the caseof non-hazardous waste from production
plants and maintenance centres. Looking
into the trend of waste production by typeof waste, it can be noticed that:

Kg of waste produced
per hour worked
0.650
0.583

0.600

• total Non-Hazardous Waste decreased
by 1% (from 11,914.37 to 11,818.47
tonnes);0.550• total Hazardous Waste increased by
17% (from 762.14 t to 893.77 tonnes).

0.450

0.500

FY21

Towards a
Plastic Free World

Guide tothe ESG
Report 2023

Hitachi Rail is committed to a “Plastic Free” world. As such, during FY22, theOrganisation has provided a Freebeverage® service to all its canteens in Italy,
where employees can find free self-service dispensers with microfiltered waterand healthy and high-quality beverages. It is possible to consume these beverages
during lunchtime using a special multi-use cup several times before disposal.
The dispensers installed at the Freebeverage® stands feature high eco-friendly
performance, such as the energy class A++ and the contact free system, forcontactless beverage withdrawal.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Moreover, to achieve the goals of “Plastic Free”, Hitachi Rail provided its
employees with the latest generation of Water Bottle. These initiatives allow
for the almost complete reduction of the waste production of water andbeverage packages as well as to the limitation of environmental costs for theirtransportation.

0.516

0.400

Letter to
Stakeholders

Chapter 3
Governance

Chapter 4
Social Impact

5

Chapter
Environmental
ImpactFY22

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

Total waste by disposal method

7%

6%

6%

7%

88%

FY21

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

86%

Total waste
disposed ofin landfill

Methodological
Note

Total waste
incinerated(mass burn)

Glossary andMain Acronyms
contained in the
ESG Report

Total waste
recycled

TCFD
Reference
Table

GRI
Content
Index

FY22

109

5.3.3 Water and Effluents
Hitachi Rail is aware that it can continually
improve water quality by reducing
pollution, eliminating waste, and fighting
the release of chemicals and hazardous
materials, halving the percentage ofuntreated wastewater and substantially
increasing recycling and safe reuse.
To minimise the impacts on water causedby its activities, Hitachi Rail invests
continuously in the improvement of theinternal management of water resources,
through the adoption of new technologies,
dissemination of internal knowledge andimplementation of good practices throughthe application of the LCA.

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

Hitachi Rail assess its water-related impacts
on business sites through the ISO 14001
certified Environmental Management
System and for its products through Life

Letter to
Stakeholders

Cycle Assessment (LCA), internationallystandardised methodology aligned to
ISO 14040, 14044. Both approaches
help to quantify the environmentalpressures related to products, services andoperations, the environmental benefits,
the trade-offs and areas for achieving
improvements considering the full life cycleof our activities. These approaches also
consider local legislative and contractual
requirements.
During the FY22 reporting period, the trend
in water consumption has remained quite
stable, registering an increase of around 3%.
While water consumption has remained
stable, reported wastewater has increased
by 18%, in part because of the increased
presence of employees in office during
FY22.

To consistently evaluate consumption trends
year on year, Hitachi Rail also calculates
consumption in comparison with hours
worked. In FY22, the KPI showing thetotal water withdrawal per hour worked
has increased of around 12%, not least
because of the decrease in the number of
total hours worked.

WATER USED25

Total water used on site [m³]OFFICES

TOTAL

FY21

FY22

FY21

FY22

FY21

FY22

587,450

606,152

58,10855,632645,559

661,784

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Total water used on site
per hour worked

Chapter 3
Governance

0.06
0.05

Chapter 4
Social Impact

0.04
0.03

0.027

0.030

5

Chapter
Environmental
Impact0.02
0.01

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

FY21

PRODUCTION SITES AND
TRAIN MAINTENANCE CENTRES

Guide tothe ESG
Report 2023

FY22

The management of water discharges isunder the control of the Facility Function,
which with HSE defines the control andmonitoring standards in relation to theapplicable law.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

25

GRI
Content
Index

Due to a methodological change in data collection the data presented in the table for FY2021 differs from the one of CSR&S Report 2022.
110

All discharges, including those originatingfrom indirect activities, are managed by
Hitachi Rail and it periodically carries
out chemical/physical/biological control

WATER DISCHARGE26

PRODUCTION SITES AND
TRAIN MAINTENANCE CENTRES
FY21

Total volume of domestic orsanitary wastewater inflow inthe wastewater stream before
treatment [m³]Total volume of industrial
wastewater produced on site [m³]

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

Total water discharged [m³]analyses to verify the quality of the water
before discharge. The management ofthese controls is defined in Corporate
procedures.

FY22

OFFICES
FY21

TOTAL
FY22

FY21

FY22

A noteworthy practice related to water
use is the water management of the
Kasado site. Kasado has already met the
Corporate water reduction target set for
2050, consisting in a 50% improvementof efficiency in use of water compared to2010. It has done so by developing thefollowing water cycle:• smart meters have been installed inseveral sites (like All UK sites, Pittsburgh,
Batesburg, Baltimore, Beijing) andongoing for Australia;• water is taken from a close river;• support from external laboratories forsampling;• water is purified and tested;
243,266

1,690
244,956

291,420

1,672
293,092

19,23019,23017,931

17,931

262,496

1,690
264,186

309,351

1,672
311,023• water is used in the plant for industrial
purposes, but also for drinking andcleaning;• after the use, water is tested one moretime and then released into the ocean.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

• implementation of Corporate andlocal procedures to define control andmonitoring criteria;

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity• pre-treatment systems before discharge(biological, chemical-physical purifiers,
collection, and pre-treatment tanks);

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance• automated water diffusion systems;• awareness campaigns on thesustainable use of water resources.

Chapter 4
Social Impact

Thanks to this cycle, 95% (around
240,000 m3 per year) of the total watertaken from the river comes back to theocean. At Hitachi Rail several measures
have been implemented to manage water
risks, such as:

5

Chapter
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report• improvement of processes andequipment to verify consumption anddischarge: Enhanced monitoring ofwater consumption through dedicatedwater meters;

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

26

GRI
Content
Index

Due to a methodological change in data collection the data presented in the table for FY2021 differs from the one of CSR&S Report 2022.
111

Significant Events

Letter to
Stakeholders

Guide tothe ESG
Report 2023

occurred after the closing of the Fiscal Year covered by the ESG Report

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

After the finalisation of the sustainability report on March 31, 2023, Hitachi Rail continued the path of being a leader in sustainability. Below are some of the major initiatives that havetaken place since the end of FY22.

Chapter 2
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 3 – F Y 2 2

Recognition of the environmental standards achieved:
PAS 2080 certification
On September 5, 2023, Hitachi Railpublished a press release to announce its
PAS 2080 certification, becoming the firsttrain manufacturer to attain world leading
environmental design accreditation.
Hitachi Rail has become the world’s firsttrain manufacturer to attain the PAS 2080
carbon reduction standard for the design,
manufacture, and operation of the 100%
electric High Speed 2 (HS2) fleet in the
UK. PAS 2080 is globally recognised
as one of the leading environmental

standards in infrastructure design andmanufacturing.
The British Institute of Standard (BSI)awarded the certification following
verification of Hitachi Rail’s whole-lifecarbon analysis of the fleet, which includes
assessment of carbon management or
reduction during design, procurement,
manufacturing and operations.
Meeting the global PAS 2080 standard
requires Hitachi’s HS2 fleet to maintain avery low carbon footprint. CO2 emissions
per passenger of the train will be 90%
lower than taking the same journey via
car or plane. These emission savings will
reduce further as the UK electricity griddecarbonises.
To achieve PAS 2080, Hitachi Rail focusedon:• Reducing the energy consumption of
the trains while in operation by making
aerodynamic improvements to the

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
Impactcar body and bogies, improving theefficiency of power supplies and air
conditioning systems

Significant Eventsoccurred after
the closing of
the Fiscal Year
covered by the
ESG Report• Reducing the weight of the trains, in the
car body, bogies and wheelsets, and ininternal and external cabling

MethodologicalNote• Increasing the proportion of recycled
and recyclable materials across mostcomponents.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

112

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

Hitachi Rail's new $70 million train factoryand 800-yard test track in Hagerstown,
Maryland, has garnered attention for
its potential to significantly boost railtransportation in the USA. Led by former CEO
Andrew Barr, the team presented the final
designs and construction progress to esteemed
guests, including Maryland Governor Larry
Hogan and Maryland Congressman David
Trone, emphasising the project's positive
economic impact. With the ability to sustain
1,300 jobs, including 460 employed directly
by Hitachi Rail, the 41-acre site is poised
to bring substantial economic benefits to
Washington, D.C., Maryland, and Virginia.
The factory's focus on manufacturing
trains of all types, starting with the new allelectric fleet of 8000-Series Metro cars for
Washington, D.C., highlights Hitachi Rail's

Inauguration of the
new Milan Metro line, M4commitment to advancing rail transportationin the USA.
The appointment of Ryan Companies as
the lead contractor ensures the project'ssmooth execution, with the factory set to be
operational by early 2024. The facility's
impressive capacity to complete up to 20
railcars per month in a single shift reflects
the company's dedication to meeting thegrowing demands of the rail sector.
Hitachi Rail's investment in this new
facility showcases their active involvement
in improving passenger and freight railtransportation throughout the USA. From major
signaling systems to new railway construction
and support for rail freight firms, Hitachi Railremains at the forefront of shaping the futureof rail transport in the country.

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

The first section of Milan's new M4 metro
line, the blue line connecting Linate
Airport, has been inaugurated. Currently
spanning 5.4 kilometers with six stops,
the line is served by 4-car trains built byHitachi Rail, similar to those running on
Copenhagen's renowned undergroundnetwork.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

The M4 line is equipped with Hitachi's
CBTC technology, making it the first
driverless application in Italy, ensuring
precise stops at designated platform
points. By June 2023, the line will extend
to San Babila, and upon its completionin 2024, it will have 21 stations andcover 15 kilometers from Linate Airport
to Lorenteggio, with San Cristoforo as the
final terminus.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after
the closing of
the Fiscal Year
covered by the
ESG Report
Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

113

Methodological Note

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

H I TA C H I R A I L / / E S G R E P O RT 2 0 2 3 – F Y 2 2This document is the fourth ESG Report ofthe companies belonging to the Hitachi RailBusiness Unit of Hitachi Ltd. (also referred
to as "Hitachi Rail" or "Organisation")
consisting of Hitachi Rail Ltd. and its fully
consolidated subsidiaries and the Raildivision of Hitachi Ltd. in Japan.
The ESG Report - published annually - is thetool with which Hitachi Rail communicatesto internal and external stakeholders
the commitments, strategy, management
methods and results of the Organisation's
sustainability activities, declined in theireconomic, environmental and social aspects.
The objective is to enhance ESG awarenessand consistently establish and implement
effective actions and strategies.
The data and information in this document
refer to the fiscal year 2022 (1st April 2022
to 31 March 2023). In order to ensure
the comparability of data over time andto assess the development of activities, acomparison has been made with data forthe previous financial year, where possible.
Compared to the previous Report (“CSR& Sustainability Report 2022”), thereporting boundary has been expanded
due to ongoing reporting refinements andorganisational and production changes
throughout the reporting year. There are
no boundary restrictions for the humanresources data. The scope of environmental
data encompasses the performance of 46
sites in the 38 Countries in which Hitachi
Rail operates. Excluded from the reporting
scope to date are the Mito, Honolulu andThessaloniki sites and all construction sites
since the data collection system at thesesites is currently under implementation.
Finally, the health and safety data
encompasses the performance of 70 sites
in which Hitachi Rail operates. For more
information, please refer to Chapter 1:
Context and Identity, Section “Group
Structure and Business”.
Hitachi Rail has reported the information
cited in this GRI content index for fiscal
year 2022 with reference to the GRI
Sustainability Reporting Standards,
published by the Global Reporting Initiative(GRI). In particular, the new edition
published in 2021 (GRI 1, GRI 2 and GRI 3)
and that entered into force on 1st January2023 and all the other applicable 2016
GRIs were used. For Disclosure GRI 403:
Occupational Health and Safety, GRI 306:
Waste, GRI 303: Water and Effluents themost recent versions have been considered.
To ensure a comprehensive understandingof Hitachi Rail’s activities, performance,
results and related impacts, additional
information is disclosed in accordance withthe general disclosure principle of maximum
transparency. The Report covers information
related to environmental, social andpersonnel issues, as well as aspects related
to respect for human rights and the fightagainst bribery and corruption. In line with
the GRI Standards provisions, the complete
list of disclosures reported is presented in
the “GRI Content Index” at the end of the
document.
For the purpose of a correct representationof performance and to ensure the reliabilityof the data, the use of estimates has been
limited as much as possible, which, if
present, are based on the best available
methodologies and are appropriately
reported. In addition, any restatements ofChapter 1
Context and
Identity

previously published comparative data areclearly indicated in the document.

Chapter 2
ESG Framework
and Roadmap

As provided for by the GRI Standards
Hitachi Rail updated the materiality analysis
with a view to identifying the sustainability
topics material for the Organisation. In
particular, the contents of the Report wereidentified through a new materiality analysis
process, well-updated compared to theanalysis finalised in 2021 and incorporated
in the documents of the previous two fiscal
years. This update resulted from several
drivers: the Organisation’s increasingly
ambitious and conscious positioning, the
new reporting standards and sector bestpractices, and the commitment to proactively
address emerging international regulations.
This renewed process identified the most
relevant sustainability topics for Hitachi Railand its stakeholders through an engagement
process, discussions, and consultations.

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

In particular, the engagement activity was
the result of a comprehensive and structured
analysis process, which began with anextensive desk analysis of the internal andexternal reference context. Subsequently,

TCFD
Reference
Table

GRI
Content
Index

114

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

the impacts related to each significant
macro-topic for Hitachi Rail were identified,considering the impact of Hitachi Rail’s
activities on the environment and the impactof ESG issues toward the company.
The engagement process consisted of anengagement through surveys, addressed todifferent categories of internal and external
stakeholders with dedicated questionnaires
whose statistical significance was ensured
through sharing with representative samplesof respondents, and an engagement to
the most relevant referents of the main
structures of the Organisation through a
dedicated workshop, with a live vote andbrainstorming on the long list of individual
impacts preliminarily identified. Additionally,
Hitachi Rail also emphasises the close
link between these topics and the UN
Sustainable Development Goals (SDGs)
and the related Targets, through a specifictable that highlights the existing connection(see paragraph “Sustainability topics andcontribution to SDGs”). The criterion thatallowed the positioning of the SDGs was
the alignment of each Goal with the most
relevant associated topic.
The results of the materiality analysis wasapproved by the Sustainability Committee
in June 2023. For more details see Chapter
2 “ESG Framework and Roadmap” Section“Materiality Analysis”.

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).
• Scope 1
Scope 1 Direct GHG Emissions are ofutmost importance for Hitachi Rail due toits commitment of reducing them 100%by 2030. Consequently, the Company
is doing its best to track the Year-on-Year
trend to identify the primary sourcesof 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 recognisedby the international community andconsistent Global Warming Potential(GWP) rates. Scope 1 emissions arecalculated using the factors provided intheir most up-to-date publicly available
version by the UK government's
Department for Environment, Food andRural Affairs (DEFRA).

Letter to
Stakeholders• Scope 2
Also, Scope 2 Energy Indirect GHG
Emissions are of paramount importancefor Hitachi Rail due to its commitment
to reducing them 100% by 2030.
Hitachi Rail is doing its best to track
the Year-on-Year trend to identify whichfacilities are responsible for the highest
energy consumption. This enables theprioritization of future interventions (e.g.,green energy production, phase-out of
polluting technologies, modernization of
the plants, etc.). The calculation structure
and methodology follow the guidelines
provided by the GRI 305-2, applying
market-based calculation method whichreflects emissions from electricity thatcompanies have purposefully chosen.
The methodology considers contractual
instruments (e.g., Power Purchase
Agreements) and energy attributecertificates (RECs, GOs, etc.). The
Scope 2 emission factors adopted are a
combination between IEA (International
Energy Agency) Factors provided by
Hitachi Ltd. and used at a Group level,
and, where available, at sites supplied withgreen energy, market-based factors of EU
AIB (Association of Issuing Bodies) origin or
directly from national energy providers.

•S cope 3
In line with last year's methodology,
in order to account for the highest
number of categories as possible, ahybrid calculation method has been
adopted. This follows the hierarchic
order provided by the GHG Protocol
Guidelines, which has been appliedfollowing this logic:

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap–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 3
Governance

Chapter 4
Social Impact– If not available, the spend-based method
has been selected. This provides a highlevel analysis based on the costs ofpurchased goods and services.

Chapter 5
Environmental
ImpactSignificant 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
the extensive perimeter analyses and to
identify the main sources of emissions,prioritizing future activities necessary toaddress them.

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

115

Computation methodology for each emission category is specified below.

Letter to
Stakeholders

Emission category

Methodology

Guide tothe ESG
Report 2023

1. P urchased Goods and Services

Computation adopting a spend-based methodology. This category has been assessed using Environmentally Extended Input-Output (EEIO) emission factors. Emission factors, specific to the country and product or service provided bya 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 and the emission factors
applied to the top 100 Suppliers by both spend and emissions were reviewed again to ensure the highest level of representativeness.

2. Capital Goods

Computation adopting a spend-based methodology. This category has been assessed using Environmentally Extended Input-Output (EEIO) emission factors. Emission factors, specific to the country and Capital goods provided by asupplier 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 and the emission factors
applied to the top 100 Suppliers by both spend and emissions were reviewed again to ensure the highest level of representativeness.

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

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

3. F uel- and energy-related activities Category not calculated.
4. U pstream transportation anddistribution

Computation adopting a spend-based methodology. This category has been assessed using Environmentally Extended Input-Output (EEIO) emission factors. Emission factors, specific to the country and transportation mode provided
by a supplier have been mapped to all transportation expenditures encountered by Hitachi Rail. The categorisation and emission factor mapping of all activities has been reviewed and approved by Hitachi Rail’s procurement teamand the assumed modes of transport for the top 50 transportation Suppliers by both spend and emissions were reviewed again to ensure the highest level of representativeness.

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, useful to identify
the correct updated DEFRA conversion factor.

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 calculated.

10. Processing 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 AIB 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 2022 emission
factor was instead used for the diesel portion of usage of other trains. The emission related to category 11 currently encompasses only the vehicles production business of Hitachi Rail.

12. End-of-life treatment of soldproducts

Computation based on available EPDs. End-of-life data was not available from Japanese trains. Materials data was paired with waste fate emission factors and DEFRA factors for material groups. The emission related to category 12
currently encompasses only the vehicles production business of Hitachi Rail.

13. Downstream leased assets

Category not calculated.

For the first time, the 2023 Report includes
additional disclosures, updated to date,taking into account the recommendationsof the Task Force on Climate related
Financial Disclosures (TCFD). The ESG

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

Report include information on how
Hitachi Rail is monitoring climate-changerisks and opportunities, through a TCFD
Correspondence Table split in the areas ofGovernance, Strategy, Risk Management aswell as Metrics and Targets. Hitachi Rail iscommitted to progressively develop its own
environmental governance, strategy, metrics,
and goals, in line with best practices and
TCFD guidelines.

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

TCFD
Reference
Table

GRI
Content
Index

116

Glossary and Main Acronyms

Letter to
Stakeholders

Guide tothe ESG
Report 2023

contained in the ESG Report

Highlights Fiscal
Year 2022

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.
ARCC (Audit, Risks and Control Committee)

GRI (Global Reporting Initiative) Standards

The Audit and Risk Management Committee is responsible for monitoring the overall risk management framework, thefinancial reporting processes, the compliance processes, the performance of auditors and overseeing the audit program.

The GRI Standards provide a standardised framework for organisations to report on their sustainability impacts in
a consistent manner, fostering global comparability, transparency, and accountability. The set of Standards allows
organisations to select the most relevant Topic Standards based on their material topics - economic, environmental, or social- ensuring an inclusive and 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 prioritizing their impacts (GRI 2).

GHG (Greenhouse gas)

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

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 a number of entirely human-made greenhouse gases in the atmosphere, such as
the halocarbons and other chlorine- 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).

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

IPCC (Intergovernmental Panel on Climate Change)

Chapter 5
Environmental
ImpactThe 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 climatechange impacts and options for mitigating its effects. Also, it produces Special Reports on specific topics agreed upon bymember governments and Methodology Reports that provide guidelines for greenhouse gas inventories preparation.

Eco-design

IRIS (International Railway Industry Standard)

Eco-design, also known as ecological or sustainable design, is an approach that considers the environmental impact of
products and systems throughout their entire life cycle. Its goal is to create environmentally friendly and resource-efficient
products, taking into account 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 environmentallyconscious consumers.

IRIS certification is a global system developed by UNIFE in 2005 to ensure higher quality in the rail sector. It aims toevaluate 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 a recognised androbust evaluation framework for the rail industry.

EPD (Environmental Product Declarations)

ISO (International Standards Organisation)

The International EPD® System is a global programme for environmental declarations and signals a manufacturer’scommitment to measure and and communicate to stakeholders the environmental impact of its products and services andreport these impacts in a transparent way. With an EPD, manufacturers report comparable, objective and third-party
verified data reporting the environmental performance of their products and services.

ISO is an international standard-setting body composed of representatives from various national standards organisations.
Founded in 1947, it promotes worldwide proprietary, industrial, and commercial standards. It is headquartered in Geneva,
Switzerland, and works in 165 countries. It was one of the first organisations granted general consultative status with the
UN Economic and Social Council.

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

Methodological
Note

Glossary andMain Acronyms
contained in
the ESG Report

TCFD
Reference
Table

GRI
Content
Index

117

LoB (Line of Business)
Line of Business (LOB) refers to a product or a group of related products catering to specific customer transactions orbusiness needs. In certain industries, LoB also has a regulatory and accounting definition for statutory policies.
It typically represents an internal Corporate Business Unit, while "industry" encompasses all competitors in a similar market.
MaaS (Mobility as a Service)
MaaS is an integrated system of transport aimed at optimizing urban mobility through modular solutions, which are morecoordinated and efficient. The goal is to answer in a flexible way to the increasingly emerging transport necessity of masstransport in sustainable mobility ecosystem.
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.
Renewable energy
Renewable energy refers to useful energy collected from naturally replenishing sources like sunlight, wind, rain, tides, waves,and geothermal heat. It also includes biomass, although its carbon-neutral status is debated. It serves various purposes, including
electricity generation, air and water heating/cooling, transportation, and providing energy services in rural areas (off-grid) and,unlike fossil fuels, which are depleting rapidly, renewable energy sources can be sustained over human timescales.
PCR – Product Category Rules

SDGs (Sustainable Development Goals)
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, outlines acollective plan for global peace and prosperity. Its core comprises 17 Sustainable Development Goals which urge allcountries, to collaborate in a global partnership to address poverty and improve health, education, and economic
growth, to reduce inequality, combat climate change, and preserve oceans and forests. This agenda aims to create asustainable and equitable future for people and the planet.

Guide tothe ESG
Report 2023

Highlights Fiscal
Year 2022

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.
UNIFE (Association of European railway builders)
UNIFE is a Brussels-based association representing European train builders and rail suppliers since 1992 that advocatesfor over 100 rail supply companies involved in designing, manufacturing, maintaining, and refurbishing rail transportsystems. UNIFE also unites national rail industry associations representing 84% of the European and 46% of the global
rail equipment and services market, becoming a trusted partner for EU institutions and other organisations representing
rail sector stakeholders.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

UITP (International Association of Public Transport)

Chapter 5
Environmental
ImpactUITP (Union Internationale des Transports Publics) advocates for sustainable urban mobility. It is the only global networkthat brings together all public transport stakeholders and sustainable transport modes, being a network of 1,800
member companies from 100 countries, covering all public transport modes.

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 3 – F Y 2 2

A PCR (Product Category Rule) is a copyrighted document found in the EPD "cookbook," providing guidelines for creatinga 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.

Letter to
Stakeholders

Methodological
Note

Glossary andMain Acronyms
contained in
the ESG Report

TCFD
Reference
Table

GRI
Content
Index

118

TCFD Reference Table

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Task Force on Climate-Related Financial Disclosures
TOPIC

TCFD CODESECTION

Highlights Fiscal
Year 2022

Chapter 1
Context and
IdentityDISCLOSURE AT A GLANCE*GOVERNANCE
Describe the board’s oversight ofclimate-related risks and opportunities

Describe management’s rolein assessing and managing
climate-related risks and opportunities

TCFD –G(a)TCFD –
G(b)3.1.1 ESG Governance

A global Sustainability Committee oversee sustainability topics including climate related issues. This Committee is composed 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.), covering
broadly ESG material topics and members on call according to specific needs.

3.1.1 ESG Governance

A CSR & Sustainability function has been established within Hitachi Rail to manage all ESG issues. Moreover, different management departments across Hitachi Railare dedicated to various 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 issues and the decarbonisation plan. ERM Function, supported technically by CSR&S, guides risk assessment activities andupdate Hitachi Rail Risk and Opportunity Portfolio.

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance3.3.1 Responding to
ESG Risks and Opportunities 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 take the proper following management decisions.

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSTRATEGY

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

Collaborating with Corporate and thanks to a specific qualitative risk assessment carried out during FY22, Hitachi Rail have identified main risk and opportunity areas:
Describe the climate-related risks andopportunities the organization has
identified over the short, medium, andlong term
Describe the impact of climaterelated risks and opportunities on theorganization’s businesses, strategy, andfinancial planning
Describe the resilience of theorganization’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario

Physical risks related to more frequent and severe climate events and natural disasters such as typhoons, floods, and other natural disasters.
TCFD –
S(a)Significant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

3.3.1 Responding toTransition risks related to compliance with EU and other global relevant legislation and lack to competitiveness due to delays or failures in developing low carbon
ESG Risks and Opportunities solutions and technologies and/or ensuring their delivery.
Opportunities connected to the transition to a lower carbon economy may arise for the Railway system and for Hitachi Rail because of the higher demand for electric
powered transport and low emissions technologies for the long-distance transportation System.

TCFD –
S(b)2.1 ESG Roadmap
and Targets

MethodologicalNote

A specific impact analysis by the business and financial planning point of view have not yet been performed by Hitachi Rail, but two foremost challenges are part of its
strategy to address climate related risks and opportunities:a) Carbon Neutrality Roadmap on its main and most emission-intensive facilities;
3.3.1 Responding to
ESG Risks and Opportunities b) A Vehicle Product Approach, with an extensive Life Cycle Assessment and ECO Design to Hitachi Rail product Portfolio.

Glossary andMain Acronyms
contained in the
ESG Report

Hitachi Rail, following Corporate guidelines, identify its risks and opportunities and assess them through a qualitative approach, taking into consideration three scenarios:
TCFD –S(c)a. Business environment and major risks and opportunities under the 1.5°C scenario;
3.3.1 Responding to
ESG Risks and Opportunities b. Business environment and major risks and opportunities under the 4°C scenario;

TCFD
Reference
Table

c. A transition scenario assessing non-environmental market factors.
continues

GRI
Content
Index* 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 FY22.

119

TOPICTCFD CODESECTION

Letter to
Stakeholders

DISCLOSURE AT A GLANCE*RISK MANAGEMENT

Guide tothe ESG
Report 2023

3.3 Risk Management Process The CSR&S function, methodologically supported by the ERM function, deals with the identification and assessment of Hitachi Rail's ESG risks, including climate
and Internal Control System related risks and opportunities.

Describe the organization’s processes
for identifying and assessing climaterelated risks

TCFD –RM(a)Describe the organization’s processes
for managing climate-related risks

TCFD –
RM(b)3.3 Risk Management Process Climate related risks are managed within Hitachi Rail IRM and ERM system, based on the COSO Framework and other relevant external framework and monitored by
and Internal Control System ARCC.

TCFD –RM(c)The CSR&S function, methodologically supported by the ERM function, deals with the identification and assessment of Hitachi Rail's ESG risks, including climate
3.3 Risk Management Process
related risks and opportunities.
and Internal Control System
Climate related risks are then managed within Hitachi Rail IRM and ERM system. Also due to UK MCD regulation and the Hitachi Rail will full integrate a TCFD
3.3.1 Responding toapproach in its business strategy and operations, in the near future Hitachi Rail will commit to deep dive its scenario analysis and risk and opportunities quantitative
ESG Risks and Opportunities
assessment.

Describe how processes for identifying,assessing, and managing climaterelated risks are integrated into theorganization’s overall risk management

ARCC and Senior Executives are involved in the periodic review of the risk assessment results, as well as the Sustainability Committee which take the proper following
3.3.1 Responding to
ESG Risks and Opportunities management decisions.

Highlights Fiscal
Year 2022

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

METRICS & TARGETS

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

Chapter 1
Context and
Identity

2.1 ESG Roadmap
and Targets

Disclose the metrics used by theorganization 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(GHG) emissions and the related risks

TCFD –
MT(b)5.2.3 Emission Reduction
and Air Quality

Hitachi Rail calculate and disclose its Scope 1, Scope 2, and relevant categories of Scope 3 emissions, together with intensity ratio for energy, waste, and water.

Describe the targets used by theorganization to manage climaterelated risks and opportunities andperformance against targets

TCFD –
MT(c)2.1 ESG Roadmap
and Targets

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 Basedapproach on decarbonisation after Hitachi Group’s formal commitment to SBTi and through 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.

5.2.3 Emission Reduction
and Air Quality

Chapter 4
Social Impact

Hitachi Rail have defined an extensive list of KPIs and metrics which go beyond reporting disclosure objectives and is considered a useful tool to evaluate and assess
ESG performances over time. With regard to climate-related risks and opportunities, Hitachi Rail calculate energy consumption absolute values and intensity ratios.
Scope 1 and Scope 2 emissions are calculated, and Hitachi Rail is progressively improving the completeness and accuracy of its Scope 3.

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note* 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 FY22.
Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

120

GRI Content Index
Statement of use
Use of GRI 1

Letter to
Stakeholders

Guide tothe ESG
Report 2023

Hitachi Rail has reported the information cited in this GRI Content Index for the period from
April 1st, 2022, to March 31st, 2023, with reference to the GRI Standards.

GRI
DisclosureStandard

GRI 1: Foundation 2021

2-4

Restatements of information

Pertinent GRI sector standars There are no GRI sector standards applicable to Hitachi Rail business

GRI
DisclosureStandard

Omission/Notes

2-5

External assurance

GRI 2: GENERAL DISCLOSURE (2021)

Activities and workers

The Organisation and its reporting practices

2-6

2-1

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

Reference

2-2

2-3

Organisational details

Entities included in the
Organisation’s sustainability
reporting

Reporting period, frequency
and contact point

Activities, value chain andother business relationships

1.2 Introduction to Hitachi RailIdentity and Business1.2.3 Group structure and business
Methodological Note
1.2 Introduction to Hitachi RailIdentity and Business1.2.3 Group Structure and Business1.2.4 Economic Performance
Methodological Note
Letter to Stakeholders from
Giuseppe Marino

Omission of disclosure 2-2-b because“not applicable”; the consolidated
financial statement of Hitachi Rail is
included in the Report of Hitachi at
Group level.

2-7

Employees

Highlights Fiscal
Year 2022

Reference

Omission/Notes

Methodological Note
5.2.1 Energy Efficiency andConsumption Trends
5.2.2 Emission Reduction
and Air Quality
5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Restatements are due to methodologicaland perimeter refinements, aiming
at a more accurate and complete
representation of relevant sources/materials, and are indicated in the text
through footnotes in correspondence withthe reference tables.

-

Hitachi Rail have not requested external
assurance for ESG Report FY22.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
Impact1.2 Introduction to Hitachi RailIdentity and Business1.2.2 Business, Products and Solutions
3.4 Towards a Sustainable Value
Chain
3.4.1 Supplier Governanceand Guidelines
3.4.2 Sustainable Supply Chain
4.4 Workers Rights and Human Rights
4.1 Our People
4.1.1 Human CapitalSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Workers who are not employees are notincluded and number of not guaranteed
workers is not represented because
information is not available in all
Hitachi Rail regions.

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

121

GRI
DisclosureStandard

Reference

Omission/Notes

2-12

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

2-13

Governance structure andcomposition

Reference

Omission/Notes

Guide tothe ESG
Report 2023

Strategy, policies and practices

Governance
2-9

GRI
DisclosureStandard

Letter to
Stakeholders

Specific composition of Highest
1.2 Introduction to Hitachi RailIdentity and BusinessGovernance Body and Committees is2.1.1 D elivering a Carbon Neutral, not disclosed in terms of gender, underSafe and High-quality Railway represented social groups, stakeholder
representations and independence. This
Business
information is not considered completely
3.1 Corporate Governanceapplicable for Hitachi Rail because of its
3.1.1 ESG Governanceorganisational structure and ESG Reportboundaries, which consider the overall BU.

Role of the highest
governance body inoverseeing the managementof impacts

3.1 Corporate Governance3.1.1 ESG Governance3.1.2 E
 SG Management System
and Certifications

Delegation of responsibility
for managing impacts

2.1 ESG Roadmap and Targets
3.1 Corporate Governance3.1.1 ESG Governance3.1.2 ESG Management System
and Certifications
3.3.1 Responding to ESG Risks
and Opportunities

2-14

Role of the highest
governance body

Methodological Note

2-19

Remuneration policies

4.3.4 Compensation and Benefits

The frequency for senior executives or other
employees to report back to the Global
Leadership Team (GLT) on the managementof the Organisation’s impacts on theeconomy, environment, and people is notdisclosed because the process requires
Committees are in charge to updating GLT
upon specific internal policies.

Compensation policies are describedbut no specific details about the highest
governance body and senior executives areprovided in terms of variable pay, incentives
and other bonuses or clawbacks because
the information is limitedly applicable for
Hitachi Rail because of its organisational
structure and ESG Report boundaries,
which consider the overall BU. Mid-term
management plan connect performancesand remuneration policies to businessobjectives, including relevant ESG aspects.

2-22Statement on sustainable
development strategy

Letter to Stakeholders from
Giuseppe Marino

2-23

Policy commitments

Policy commitments are not publicly
1.2.1 Mission, Vision and Values
available apart from those explicitly
2.1 ESG Roadmap and Targets
2.2 Our Partnerships for Sustainable summarised in the ESG Report becauseof confidentiality constraints
Development
if the policy
2.4 Materiality Analysis
commitments are not publicly available.
3.3.1 Responding to ESG Risks
Any approved policy commitment inand Opportunities
Hitachi Rail is broadly shared with
3.4 Towards a Sustainable Value
employees through COSMO.
Chain
3.4.1 Supplier Governanceand Guidelines
4.2 Diversity, Equity and Inclusion
4.3 People Development and Care
4.4 Workers Rights and Human Rights

2-24

2-26

Embedding policy
commitments

Mechanisms for seeking
advice and raising concerns

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
Impact2.1 ESG Roadmap and Targets
Specific figures related to training
2.2 Our Partnerships for Sustainable that the Organisation provides on
Development
implementing the commitments is not
3.1.1 ESG Governancedisclosed because not available as a
3.3.1 Responding to ESG Risks
separate source of information.
and Opportunities
3.4 Towards a Sustainable Value
Chain
3.4.1 Supplier Governanceand Guidelines
4.2 Diversity, Equity and Inclusion
4.3 People Development and Care
4.4 Workers Rights and Human Rights

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

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

3.1.2 ESG Management System and Specific figures related to training
Certifications
that the Organisation provides on
3.2 Business Ethics, Transparency
implementing the commitments is not
and Integrity
disclosed because not available as a
3.2.1 Code of Ethics and ESG
separate source of information.
Policies
3.2.3 Whistleblowing Management

TCFD
Reference
Table

GRI
Content
Index

122

GRI
DisclosureStandard
2-27

2-28

Compliance with laws andregulations

Membership associations

Reference
3.2 B
 usiness Ethics, Transparency
and Integrity
3.2.1 C ode of Ethics and ESG
Policies
3.2.4 Anticorruption
3.2.6 Export and Trade Compliance3.2.7 D ata protection andCybersecurity
5.3.1 P roduct Innovation and
Eco-Design
2.2 Our Partnerships for Sustainable
Development
2.2.1 Industry Associations andCertifying Authorities

Stakeholder engagement

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

2-29

2-30

Approach to stakeholder
engagement

Collective bargaining
agreements

Methodological Note
2.3 Stakeholder Engagement
2.3.1 O ur dialogue with Stakeholder
and their involvement process
2.3.2 O ur Customers and their
engagement
3.4 T owards as Sustainable Value
Chain
4.3.3 Employee Engagement
Collective bargaining
agreements

Omission/Notes

GRI
DisclosureStandard

Process to determinematerial topics

Methodological Note
2.4 Materiality Analysis

3-2

List of material topics

Methodological Note
2.4 Materiality Analysis

Omission/Notes

Guide tothe ESG
Report 2023

Ethics, integrity and transparency
3-3Management of material
topics

Chapter 1: Context and Identity
2.1 ESG Roadmap and Targets

201-1

Direct economic value
generated and distributed

1.2.4 Economic Performance

205-1

Operations assessed for risks 3.2.4 Anticorruption
related to corruption

205-2

Confirmed incidents of
3.2.4 Anticorruption
corruption and actions taken

206-1

Legal actions for anti3.2.6 Export and Trade Compliancecompetitive behavior, antitrust, and monopoly practices

207-1

Approach to tax

3.2.8 Fiscal Transparency

307-1

Non-compliance withenvironmental laws andregulations

3.2 Business Ethics, Transparency
and Integrity

416-2

Incidents of non-complianceconcerning the health andsafety impacts of products
and services

2.3.2 Our Customers and their
engagement
3.2 Business Ethics, Transparency
and Integrity
3.2.7 Data protection andCybersecurity

Non-compliance with laws
and regulations in the socialand economic area

3.2 Business Ethics, Transparency
and Integrity
3.2.6 Export and Trade Compliance

419-1

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

Communication and training 3.2.4 Anticorruption
about anti-corruption policies 4.3.2 Learning, Career Development
and procedures
and Performance Management

205-3

MATERIAL TOPICS
3-1

Reference

Letter to
Stakeholders

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

123

GRI
DisclosureStandard

Reference

Omission/Notes

Supply chain management
3-3

204-1

308-1

308-2

409-1

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

414-1

414-2

3.4.1 S upplier Governanceand Guidelines
3.4.2 Sustainable Supply Chain

Proportion of spending on
local suppliers

1.2 Introduction to Hitachi RailIdentity and Business
3.4 T owards a Sustainable Value
Chain

Negative environmental
impacts in the supply chain
and actions taken

Reference

Omission/Notes

Guide tothe ESG
Report 2023

Reduction of energy consumption

Management of material
topics

New suppliers that werescreened using
environmental criteria

GRI
DisclosureStandard

Letter to
Stakeholders

3.4 T owards a Sustainable Value
Chain
3.4.1 S upplier Governanceand Guidelines
3.4.2 Sustainable Supply Chain

3-3

Management of material
topics5.3 Circularity, Innovation andResources Management

302-1

Energy consumption within
the Organisation

5.2.1 Energy Efficiency andConsumption Trends

302-3

Energy intensity

5.2.2 Emission Reduction
and Air Quality

302-4

Reduction of energy
Consumption

5.2.1 Energy Efficiency andConsumption Trends

302-5

Operations and suppliers at
3.4.1 Supplier GovernanceOmission for disclosure point a. ii.
significant risk for incidents ofand Guidelines
forced or compulsory labor
4.4 Workers Rights and Human Rights
New suppliers that were
3.4 T owards a Sustainable Value
screened using social criteria
Chain
3.4.1 S upplier Governanceand Guidelines
Negative social impacts in
3.4.2 Sustainable Supply Chain
the supply chain and actions 4.4 Workers Rights and Human Rights
taken

3-3

Management of material
topics5.3 Circularity, Innovation andResources Management

301-1

Materials used by weight orVolume5.3 Circularity, Innovation andResources Management

The data disclosed were subject torestatement.

The data disclosed were subject torestatement.

Chapter 1
Context and
Identity

Chapter 2
ESG Framework
and Roadmap

The data disclosed were subject torestatement.

Chapter 3
Governance

Reduction in energy
1.2.2 Business, Products and Solutions
requirements of products and 2.1.1 Delivering a Sustainable,
services
Safe and High-Quality Railway
Business

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactWater consumption optimisation
3-3Management of material
topics5.3 Circularity, Innovation andResources Management
5.3.3 Water and Effluents

303-1

Interactions with water as ashared resource

5.3.3 Water and EffluentsManagement of water
discharge-related impacts

5.3.3 Water and Effluents

303-3

Water withdrawal

5.3.3 Water and EffluentsOmission for disclosure point b and c.

303-4

Water discharge

5.3.3 Water and EffluentsOmission for disclosure point c.

303-2

Eco design

Highlights Fiscal
Year 2022

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

Methodological
Note

Omission for disclosure points a. i. and iv.
Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

124

GRI
DisclosureStandard

Omission/Notes

GRI
DisclosureStandard

Reduction of emission and mitigation of climate change

Waste management

3-3

3-3

305-1

305-2

305-3

305-5

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

Reference

305-6

Management of material
topicsDirect (Scope 1) GHG
emissions

Energy indirect (Scope 2)
GHG emissions

Other indirect (Scope 3)
GHG emissions

5.2 E
 nvironmental Goals andDecarbonisation Path5.2.2 E
 mission Reduction
and Air Quality
5.3 C
 ircularity, Innovation andResources Management
Highlights (FY22)
5.2.2 E
 mission Reduction
and Air Quality
5.2.3 Sustainable Mobility

The data disclosed were subject torestatement.

Highlights (FY22)
5.2.2 E
 mission Reduction
and Air Quality

The data disclosed were subject torestatement.

Highlights (FY22)
5.2.2 E
 mission Reduction
and Air Quality

The data disclosed were subject torestatement.

Reduction of GHG emissions Letter to Stakeholders from
Giuseppe Marino
Highlights (FY22)
5.2 E
 nvironmental Goals andDecarbonisation Path5.2.2 E
 mission Reduction
and Air Quality
Emissions of ozone-depleting 5.2.2 E
 mission Reduction
substances (ODS)
and Air Quality

The data disclosed were subject torestatement.

306-1

306-2

Management of material
topicsWaste generation andsignificant waste-related
impacts

Management of significant
waste-related impacts

Reference

5.1 Environmental Policy
5.3 Circularity, Innovation andResources Management
5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

5.3 Circularity, Innovation andResources Management
5.3.1 Product Innovation and
Eco-Design
5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

5.3 Circularity, Innovation andResources Management
5.3.1 Product Innovation and
Eco-Design
5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Waste generated

5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

306-4

Waste diverted from
disposal

Highlights (FY22)
5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Waste directed to disposal

Omission/Notes

Guide tothe ESG
Report 2023

306-3

306-5

Letter to
Stakeholders

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

MethodologicalNote

5.3.2 Circular economy in Hitachi
Rail: Materials and Waste

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

125

GRI
DisclosureStandard

Reference

Omission/Notes

GRI
DisclosureStandard
403-4

Employee welfare
3-3

Evaluation of the
management approach

4.1 Our People
4.3.1 Talent Acquisition

401-2

4.3 People Development and Care
Benefits provided to fulltime employees that are notprovided to temporary or
part-time employees

401-3

Parental leave

4.3 People Development and Care

402-1

Minimum notice periods
regarding operationalchanges

4.1.2 Relations Management

403-6

403-7

In the event of particularly significant
organisational changes, specificcommunications initiatives targeting broad
categories of employees are envisaged to
explain the reasons for the changes.

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

403-1

403-2

403-3

Management of material
topicsOccupational health andsafety management system
Hazard identification, risk
assessment, and incident
investigation

3.1.2 E
 SG Management System andCertifications
4.5 Occupational Health and Safety
4.5 Occupational Health and Safety

3.3.1 R esponding to ESG Risks
and Opportunities
4.5 Occupational Health and Safety

Occupational health services 4.3 People Development and Care
4.3.3 Employee Engagement
4.5 Occupational Health and Safety

Omission/Notes

Guide tothe ESG
Report 2023

Worker participation,
4.5 Occupational Health and Safety
consultation, andcommunication on
occupational health and safety
Promotion of worker healthHighlights Fiscal
Year 2022

4.3 People Development and Care
4.3.3 Employee Engagement
4.5 Occupational Health and Safety

Chapter 1
Context and
Identity

Prevention and mitigation
4.5 Occupational Health and Safetyof occupational health andsafety impacts directly linked
by business relationships

403-9

Work-related injuries

4.5 Occupational Health and Safety

416-2

Incidents of non-complianceconcerning the health andsafety impacts of products
and services

2.3.2 Our Customers and their
engagement
3.2 Business Ethics, Transparency
and Integrity
3.2.7 Data protection andCybersecurity

Occupational health & safety
3-3Reference

Letter to
Stakeholders

Chapter 2
ESG Framework
and Roadmap

Chapter 3
Governance

Chapter 4
Social Impact

Chapter 5
Environmental
ImpactTraining and career development
3-3Management of material
topics

4.3.2 Learning, Career Development
and Performance Management

404-1

Average hours of training
per year per employee

4.3.2 Learning, Career Development
and Performance Management

404-2

Programs for upgrading
employee skills andtransition assistanceprograms

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

MethodologicalNote

3.2 Business Ethics, Transparency
and Integrity
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
5.1 Environmental Policy
5.3 Circularity, Innovation andResources Management

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

126

GRI
DisclosureStandard
404-3

412-2

Percentage of employees
receiving regularperformance and careerdevelopment reviews

Reference
4.3.2 L earning, Career Development
and Performance Management

Employee training on human 4.3.2 Learning, Career Development
rights policies or procedures
and Performance Management

Omission/Notes

GRI
DisclosureStandard

Management of material
topics

4.2 Diversity, Equity and Inclusion

405-1

Diversity of governancebodies and employees

4.1 Our People
4.2 Diversity, Equity and Inclusion

Ratio of basic salaryand remuneration of women
to men4.3.4 Compensation and Benefits

405-2

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

413-1

Management of material
topicsOperations with local
community engagement,
impact assessments, anddevelopment programmes

Guide tothe ESG
Report 2023

3-3Management of material
topics

2.3.2 Our Customers and their
engagement

305-7

Nitrogen oxides (NOX),
5.2.2 Emission Reduction
sulphur oxides (SOX), andand Air Quality
other significant air emissions 5.2.3 Sustainable Mobility

Highlights Fiscal
Year 2022

Chapter 1
Context and
Identity

MATERIAL TOPIC NOT COVERED BY A GRI DISCLOSURE

Chapter 2
ESG Framework
and Roadmap

Data protection security
3-3

Chapter 3
GovernanceManagement of material
topics

Chapter 4
Social Impact

Customer focusing

Support for local community
3-3

Omission/Notes

Air quality

Diversity, equality and inclusion
3-3

Reference

Letter to
Stakeholders

3-3
2.3.1 Our Dialogue with Stakeholders
and their Involvement Process
2.3.1 Our Dialogue with Stakeholders
and their Involvement Process
4.3.3 Employee Engagement

Management of material
topics

Chapter 5
Environmental
ImpactR&D and product innovation
3-3Management of material
topicsSignificant Eventsoccurred after theclosing of the Fiscal
Year covered by the
ESG Report

5.3 Circularity, Innovation andResources Management

Methodological
Note

Glossary andMain Acronyms
contained in the
ESG Report

TCFD
Reference
Table

GRI
Content
Index

127

ESG Report 2023 – FY22
By SHEQ and CSR&S Department
We thank all the colleagues who collaborated to the creation of this Report
we continue to make our contribution
csrs@hitachirail.com

Creative concept, design and layout
MERCURIO GP – Milan
www.mercuriogp.eu

The Hitachi Rail ESG and Sustainability Report has been publishedin its digital format to minimise environment impact.
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