Third-Party Opinion

Dr. Naoki Adachi
CEOResponse Ability, Inc.
Studied plant ecology at the University of Tokyo, where he wasawarded a doctorate from the Graduate School of Science.
Undertook research concerning tropical forests at the National
Institute for Environmental Studies (NIES) and also at the Forest
Research Institute Malaysia (FRIM). After leaving NIES, he set up
his own consultancy business, specializing in corporate efforts
to conserve biodiversity and CSR procurement (supply chainmanagement). In addition to roles as a member of the Standing
Committee of the Ecological Society of Japan, an advisor to theSustainable Management Forum of Japan and Executive Directorof Japan Business Initiative for Biodiversity (JBIB), he also serveson the Ministry of the Environment’s Committee on Biodiversity
Private Sector Activities Guidelines and many other governmental
committees.

Furukawa Electric has this year elected to synthesize theinformation formerly contained in its CSR and annual reports as a
“Sustainability Report.” This appears to be in response to thetrend, particularly in Europe, to disclose a variety of non-financial
information, including that pertaining to environmental, social andgovernance (ESG), to investors. It is important in such reports toemploy clear indicators and show the items that companies aretargeting specifically. At this point, numerical targets are provided
mostly in the environmental field. Going forward, using moreeasy-to-understand indicators for the society and management
categories would make the report even easier to understand andsimplify comparisons. This report also deserves high marks forthe introduction, in President Shibata’s own words, of thebusinesses that Furukawa Electric will develop going forward(pages 7–10) and the special features on second-generation
high-temperature superconductor technologies (pages 11–16),
which explains specifically what sort of technologies theCompany has that will enable it to develop business in this field.
These introductions are detailed and clear.
As to sustainability, in times when life was much simpler,
clothing, food and housing were the main elements of people’s
lives to be sustainable. I believe that nowadays, energy andinformation needed to be added to that list. Furukawa Electric’s

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Furukawa Electric Group Sustainability Report 2012businesses support these two needs, and the Company’s
technologies to efficiently transmit, store and create electricityshould each make major contributions to realizing a sustainablesociety. As Furukawa Electric already possesses thesetechnologies, it has a definite advantage in exploiting them todevelop related businesses. The question that needs to beconsidered from a sustainability perspective is how the Company
will achieve these developments and realize the business.
Regardless of how many sophisticated technologies a company
has, products cannot be made without resources. As last year’s
flooding in Thailand demonstrated, unless a company can adapt
to weather disasters which are expected to be much more
severe, business stability will be lost. I would like to see Furukawa
Electric explain specifically how it will respond to such issues andwhat it is doing to guarantee the sustainability of the businesses
themselves. According to this report, at present the Company
has only short-term goals looking two to three years into thefuture. I definitely hope that the Working Group for Sustainable
Planning (page 18) established this year will set targets andformulate plans to realize sustainability over the much longer
term, and that the Company will pursue activities accordingly.
These initiatives should focus not just on contributing tosociety through technology but also take the lead in promoting
new activities that will enable the Company to boost its own
sustainability, as well as that of society as a whole. For instance,in addition to promoting energy conservation, it should become
possible to shift to more renewable energy sources and togenerate renewable energy. Looking just at superconducting
cables, for example, by 2030 demand is expected to be 1.6
times the current level (page 13). Resource requirements arelikely to grow in direct relation to this demand increase. Suchquestions will arise as how to procure increasingly scarce metal
resources and how to shift from the use of petroleum-derived tobiologically-derived plastics. The Company needs to describe aclear path and start on specific actions.
In fiscal 2012, Furukawa Electric analyzed and evaluated therelationship between biodiversity and its businesses andformulated an action plan based on the issues discovered (page26). I was also involved in this process and became aware that
Furukawa Electric had a truly diverse relationship with biodiversity.
The reason companies undertake to conserve biodiversity is thatbiodiversity is directly connected to their business risks. Even
more important, however, is that biodiversity and the ecosystemservices are supporting corporate activities, so are they essential.
For this very reason, it is essential to minimize the loads thatbusinesses place on ecosystems; limiting this impact to the levelthat nature allows is the ultimate condition for sustainability.
Though this is an extremely challenging issue, I hope theCompany will look more deeply into this matter, and look forward
to Furukawa Electric showing the world exactly what asustainable company looks like.