Societal Performance
Companies are increasingly being called upon to create a business framework to advance CSR initiatives
covering not only their own in-house activities but also their value chain.
Hitachi aims to continue fulfilling its social responsibilities throughout the value chain. We thus takemeticulous care in ensuring the compliance, ethical conduct, and fairness of our own activities and those of ourbusiness partners. We also seek to offer safe and rewarding workplaces for all employees based on the belief
that enabling them to fully realize their potential is the source of our sustainable growth.

Supply Chain Management
As a company that procures products and services from suppliers in regions and countries around the world,
we are reviewing our own CSR standards, and auditing and cooperating with the CSR initiatives of our
suppliers. Hitachi is also taking the lead in responding to the issue of conflict minerals by scrutinizing thecountries where raw materials are mined in order to prevent infringements on human rights by countries
engaged in conflict. Keeping abreast of global trends, we will continue to share and strengthen on a Groupwide basis our commitment to fulfilling our social responsibilities throughout the supply chain.

Creating and Sharing Procurement Policies
Our basic procurement policy is contained in the Hitachi
Guidelines for Procurement Activities, drafted in line with
the United Nations Global Compact and which call for theelimination of discrimination in employment andoccupation, the rejection of all forms of child and forcedlabor, and environmental protection activities. Suppliers are
selected strictly in accordance with the guidelines.
In fiscal 2016, we released the Hitachi Group CSR
Procurement Guidelines, a full revision of the 2009 HitachiGroup Supply Chain CSR Deployment Guidebook. This
revision incorporates the provisions of the HitachiGroup Codes of Conduct and also makes references toversion 5.1 of the Electronic Industry Citizenship Coalition(EICC) Code of Conduct, promulgated in January 2016. We
distribute the Guidelines to the approximately 30,000
suppliers of Hitachi business units and Group companies,
from whom we request acknowledgment of suppliers’
understanding in writing.

CSR Supply Chain Management Framework
CSR supply chain management and green procurement
policies and initiatives are discussed within Hitachi’s
Value Chain Integration Division, which is headed by thechief procurement officer (CPO) and reports directly tothe president of Hitachi, Ltd. Policies and initiatives
adopted by the division are shared throughout the Group
via the Hitachi Group CSR Green Procurement
Committee, which includes members from business units
and key Group companies.
In fiscal 2011, we appointed procurement officers tooversee local procurement in China, the rest of Asia,
Europe, and the Americas. We are expanding our suppliersin emerging nations while also strengthening our response
to CSR-related risks expected to arise from the global
expansion of our supply chain.
In fiscal 2015, we introduced a new initiative to provide
information directly to suppliers in a face-to-face format.
The January 2017 CSR and green procurement seminar
held in Shenzhen for Hitachi Group partners in China wasattended by 45 people from 32 companies.
74

Hitachi, Ltd. Integrated Report 2017

Supply Chain Management Organizational Structure
President
Development of CSR/green
procurement policy

Value Chain Integration Division
Procurement office conferences

Conferences for procurement managers

CPO Joint Committee(every two months)

Hitachi Group CSR
Green Procurement
Committee (biannual)Group procurement
strategy conference(biannual)

Regional procurement
conferences (China/Asia/
India: biannual; Europe/
Americas: annual)

Target price conference(biannual)

Implementation by
all procurement members
Business unit procurement members

Major Group company
procurement members

understanding of the challenges our suppliers face.
Starting in fiscal 2017, we will be asking our suppliers to
conduct CSR Monitoring using the updated checklists.
CSR Monitoring (Self-Check) Results
FY

Suppliersin JapanSuppliers
outside Japan

Checklists
collected

2012

57

41

98

2013

55

45

100

2014

0

200

200

2015

0

218

218

2016

198

118

316

Total*

310

724

1,034

CEO Message

To monitor how well Hitachi’s CSR supply chain
management philosophy has been adopted by our
suppliers, since fiscal 2007 we have asked key suppliers to
conduct CSR Monitoring (self-checks) using the JEITA
Supply Chain CSR Deployment Guidebook and detailed
checklists, and in fiscal 2016 we collected checklists from316 suppliers inside and outside Japan.
After analyzing the results, we provide feedback for thebusiness operations related to the suppliers, and then workwith those involved in the operations to resolve supplierrelated issues.
Alongside the revisions made to the Hitachi Group CSR
Procurement Guidelines, the checklists have also been fully
updated to allow us to obtain a more detailed

Our Business Model

Implementation of CSR Monitoring (Self-Checks)* Total also includes self-check results from fiscal 2011.

Implementation of CSR Audits
No major infringements were found at the 20 Asian
suppliers audited in fiscal 2016, but some small areas
needing improvement were noted, such as overtime work
exceeding stipulated rules (19 suppliers), failure to conductperiodic inspections of machinery and equipment (6), andinsufficient management of hazardous waste (9). We havemandated that suppliers affected by these issues submit
improvement action plans and will be working with andadvising them until they complete the planned improvements.

Strategic Focus

Since July 2012, the Hitachi Group Procurement Division
has been auditing the manufacturing bases of suppliers in
China and the rest of Asia. Our audits are based on theinternational SA8000 certification standard developed bySocial Accountability International (SAI), an American CSR
evaluation institution, and are conducted by an EICCrecognized auditor, who checks suppliers’ CSR initiatives
from such perspectives as labor and human rights, healthand safety, the environment, and ethics.

Human Rights Due Diligence in Procurement

Management & GovernanceValue Creationcompanies and the CSR division of Hitachi Asia. The
working group has evaluated human rights risks within the
supply chain, set priorities, and considered measures for
reducing risks.
In fiscal 2016, we published the revised Hitachi GroupCSR Procurement Guidelines based on results obtained
from activities in fiscal 2015 as well as input from a rangeof sources and perspectives, including Hitachi Europe Ltd.,
Hitachi (China), Ltd., and outside experts.

Response to the Conflict Minerals Issue
Each Hitachi Group company is investigating and responding to the issue of conflict minerals in line with our customers’
requests based on Hitachi’s conflict mineral policy.

Hitachi, Ltd. Integrated Report 201775

Performance

Starting in fiscal 2015, the Hitachi Group Procurement
Division began implementing human rights due diligencebased on the Hitachi Group Human Rights Policy. With theconsulting assistance of the nonprofit organization Shift,
we have created a working group centered on the
procurement and CSR divisions at Hitachi, Ltd.—which
serve as the corporate divisions overseeing activities
throughout the Group—and also including the procurement
and CSR divisions of two in-house and four GroupLabor Practices
Hitachi has a human resource strategy that emphasizes the concept of “decent work” (that is, work that ishumane and fulfilling). We make a thoroughgoing and meticulous effort to realize this ideal, actively
pursuing dialogue with all employees on their basic rights and career development and setting up avariety of consultation opportunities as well as mechanisms—just in case—to report compliance abuses.
We also implement a variety of initiatives reflecting the globalization of our business, from promoting
diversity and inclusion in our human capital to globally implementing fair employee evaluation systems
and working conditions.

Global Human Capital Development
Advancing Global Human Capital
Our global human capital management strategy optimizes
both human and organizational performance. One example
of our initiatives is the Global Human Capital Database
covering all Hitachi Group employees, excluding factory
workers outside Japan. This database enables us to fully
ascertain the status of worldwide Group human capital. We
have also built a global grading system that applies to all
managers in the Hitachi Group worldwide, using it as acommon platform for job evaluations throughout the Groupand as a common standard for assessing the value ofmanagement duties.
We began to thoroughly revise our training ofmanagement candidates in fiscal 2015, implementing the
Global Advanced Program for Key Positions (GAP-K) to

Conducting a Global Employee Survey
Since fiscal 2013, we have been conducting an annual
global employee survey called Hitachi Insights as a way ofmeasuring employee engagement.* In September 2016,
the survey was administered for the fourth time. Around
210,000 employees worldwide were sent the survey in oneof 14 different languages, and roughly 180,000 responses
were received.
The results for internal awareness and understandingof the 2018 Mid-term Management Plan and employee
attitudes toward Hitachi’s corporate culture improved in all
14 categories, including those concerning the plan’stargets, compared to the findings of the previous fiscal
year’s survey.

Career Development Initiatives
Hitachi believes that the starting point of careerdevelopment is the work that employees perform on a daily
basis. Based on Hitachi’s Global Performance
Management (GPM), we implement a cycle aimed at thegrowth of each employee through a process in which goals
for daily tasks are set and then pursued, followed by theevaluation of the results to formulate the next objectives.
Along with our workplace-centered initiatives, we also
provide direct support for individual employees through ourcareer development programs. In fiscal 2002 we launchedthe Hitachi Career Development Workshop (H-CDW) as a
76

Hitachi, Ltd. Integrated Report 2017accelerate their development. In fiscal 2016, 23 people
were selected to participate in GAP-K over a three-month
period. Additionally, Hitachi has held the Global Advanced
Program for Leadership Development (GAP-L) in Singapore
every year since fiscal 2012. The program mainly targets
local human resources with potential for leadership at therespective subsidiaries outside Japan. In fiscal 2016, 24
leaders from around the world took part in the program.
Starting in fiscal 2014, we also initiated a globally
standardized training course for general managers and new
managers. To date, around 7,200 people worldwide havetaken part in this course across our Group.

Scores were particularly high for “pride in your company”
and “teamwork,” but those for “resources and support”
remained low from fiscal 2015. Employees may haveexpected Hitachi to do better on the level of staffing as well as
information and resource tools—a situation we will continue
to address by reforming working patterns, introducing new
tools, and deepening communication with employees.
* Hitachi uses the term “engagement” to refer to employees’ understanding of
the company’s strategies and policies, as well as their job satisfaction anddesire to take actions on their own initiative to bring about results.

Group-wide initiative in Japan. Around 9,700 people haveparticipated in the program so far (as of March 31, 2017),
with a focus on technicians, managers, and researchers intheir thirties. According to the January 2016 survey
conducted of the most recent participants, about 80% of
the 422 answers received from group managers and about
70% of the 277 answers from section chiefs agreed that
“H-CDW has been helpful to my career development andwork.” Of the responses from section chiefs, about 60%
reported making use of their workshop experiences inmanaging subordinates.

Developing Women’s Careers
Hitachi, Ltd. has created two key performance indicators(KPIs), announced in fiscal 2013, to enable as many female
employees as possible to take up leadership positions andto participate in management decision making. We
organize a variety of seminars to boost women’s motivation
and also take steps to enhance awareness and create awomen-friendly corporate culture in workplaces as awhole—including managers and male employees.
Employee compensation is set according to eachindividual’s roles and achievements, with no divisions or
differences based on gender or age.

CEO Message

an environment where women and other members of ourvaried workforce can use their skills in leadership andbusiness management. In October 2016, we introduced an
Allowance for Balancing Child Care and Work to further
promote balance between work and child care.
The Diversity Development Project, launched in fiscal
2006 under the president’s direct leadership, was replacedin fiscal 2009 with the Diversity & Inclusion Development
Center, which currently operates under the directsupervision of the Human Capital Group.
Additionally, Hitachi and 17 Group companies jointly
operate the Advisory Committee and the Diversity
Development Council to accelerate awareness acrossHitachi as a whole, including support for diverse humancapital and work-life management.

In November 2016, we hosted the first Global Women’s
Summit for female employees of the Hitachi Group. Held in
the United Kingdom, the event was attended by more than
120 staff members from 25 Group companies around theworld and featured a keynote speech from an external
speaker and workshops on topics ranging fromunconscious bias to individual career development. The
participants also shared stories about their careers and theissues they faced at their workplace.

Strategic Focus

Promoting Diversity and Inclusion
Diversity is the wellspring of innovation and our growthengine. Hitachi regards personal differences—gender,
nationality, work history, age, sexual orientation, andphilosophy—as facets of people’s individuality. By
respecting our employees’ individualities and positioning
them as an advantage, Hitachi frames its diversity andinclusion as conducive to both the individual’s and thecompany’s sustainable growth.
Since the 1990s, we have been at the social forefrontin supporting women and other members of ourmultifaceted workforce. This includes setting up systems tohelp balance work with child and nursing care. Entering
Phase 3 of our diversity management roadmap, we areembracing diversity as a management strategy under theslogan of “Diversity for the Next 100.” This means creating

Our Business Model

Diversity and Inclusion

Goals for Hitachi, Ltd. (KPIs)

Hitachi, Ltd. Integrated Report 2017Management & Governancecompanies, with 40% of senior management positions heldby European personnel. The CEO of global operations is a
London local who has since become an executive officer at
Hitachi, Ltd.

77

Performance

Recruiting Human Capital in Europe
The railway business, which is an important business fieldfor Hitachi, is promoting the recruitment of local humancapital. We shifted the primary site of our railway businessto London in 2014 and built a global operations framework
managed by Hitachi, Ltd. and several other Group

Value Creation

Appoint female executives by fiscal 2015 by promoting from within (including the CSR and Environmental
Strategy Division chief as a corporate officer in April 2015).
Increase the number of female managers in Japan to 1,000 by fiscal 2020 (2.5 times more than at the end of
fiscal 2012).

Occupational Health and Safety
Fundamental Idea for Occupational Health and Safety
Ensuring the health and safety of all employees is the basic principle underlining the Hitachi Group Health and Safety Policy.
This policy is shared by all Hitachi Group companies around the world. Employees work together to create safe, secure
work environments that aim to be accident free.

Hitachi Group Health and Safety Policy
Principle
Policies“Health and Safety Comes First.”
In accordance with our mission, “Contribute to society through the development of superior,original technology and products,” the Hitachi Group will endeavor to ensure safe and healthy
workplaces under the principle of “Health and Safety Always Comes First.”

To accomplish this, we will:
1. Continually be involved in health and safety activities in order to prevent work-related injuries and sickness bydesignating the health and safety of employees as management’s top priority.
2. Comply with the local laws and regulations in each company regarding health and safety.
3. Develop a safe and comfortable work environment by encouraging employees to maintain their own health and taking
a proactive stance on health and safety activities in the workplace.
4. Require an understanding of Hitachi’s principle and the promotion of health and safety awareness from all business
partners of the Hitachi Group.
5. Contribute to the creation of a safe and pleasant society by emphasizing activities that make health and safety a toppriority in all of Hitachi’s business activities.
Revised November 2013

Framework for Promoting Health and Safety
Hitachi views occupational health and safety as vital
preconditions for advancing our business. Manufacturingand maintenance are particularly accident-prone lines ofwork, and we have around 36,000 employees performing
work of this type in Japan. We promote a range of Groupwide occupational health and safety activities globally that
include preventing workplace accidents by setting andapplying minimum safety standards to be observed byGroup manufacturers as well as taking additional measures
tailored to the specific conditions at each company. We
respond quickly when an accident occurs and use lessons
from the incident to make improvements and boost ourlevels of health and safety management.
In accordance with Japanese law, a health and safetycommission—composed of company representatives,
labor-union officials, and employees—is convened every
month to discuss and share information related to such
issues as workplace accident causes and78

Hitachi, Ltd. Integrated Report 2017

countermeasures, the situation regarding employees who
have taken sick leave, and other points of concern. In
2016, we recorded one fatal workplace accident in Japanand two in the rest of Asia.
We built the Hitachi Group Health and Safety Portal
System in 2012 to ensure that the health and safety
performance of every Hitachi Group company in Japan isshared by the entire Hitachi Group. Group-wide information
on work accidents is registered in the system so thatcompanies can track causes and see what preventive
measures have been initiated. To help prevent recurrences,
statistics are kept on types of accidents. Since 2014, wehave carried out initiatives to share information on
workplace accidents globally, including one that tracks andprovides feedback on accidents occurring at Group
companies outside of Japan.

Our Business Model

Communicating CSR Initiatives and Material Issues
Building positive ties with our various business stakeholders is an important management issue that
contributes to achieving not only a sustainable society but also to Hitachi’s sustainable growth.
Hitachi views CSR as being centered on stakeholder engagement and continually implements initiatives inaccordance with a nine-item framework for CSR management. We communicate our achievements throughchannels including the Hitachi Sustainability Report and also engage in stakeholder dialogue to build an evenbetter relationship with society.
Items Covered in the Hitachi Sustainability Report
ThemesMaterial issues

GRI Standards

Realizing sustainable, innovative management

GRI 203: Indirect economic impacts

CEO Message

1 Recognition of social responsibility
Understanding issues through dialogue and taking partin initiatives
2 Corporate governancePursuing management transparency and efficiency
Sharing the Hitachi Group Identity

GRI 205: Anti-corruption
GRI 419: Socioeconomic compliance

Advancing risk management on multiple fronts
Respect for human rights throughout the value chain

GRI 412: Human rights assessment
GRI 408: Child labor
GRI 409: Forced or compulsory labor
GRI 410: Security practices
GRI 411: Rights of indigenous peoples
GRI 414: Supplier social assessment

Respect for workers’ rights

GRI 402: Labor/management relations
GRI 406: Non-discrimination
GRI 407: ‌Freedom of association and collective
bargaining

4 Labor practices

Strategic Focus

3 Human rights

GRI 401: Employment
Achieving a fair and equitable work environment

GRI 402: Labor/management relations
GRI 202: Market presence

Promoting diversity and inclusion

GRI 405: Diversity and equal opportunity

Promoting occupational health and safety

GRI 403: Occupational health and safety

A strategy for growing together with our global humancapitalGRI 404: Training and education

Promoting environmental management

GRI 201: Economic performance

Enhancing environmental management on an ongoingbasis

GRI 302: Energy
GRI 305: Emissions
GRI 306: Effluents and waste
GRI 307: Environmental compliance
GRI 308: Supplier environmental assessment
GRI 404: Training and education

Responding to environmental risks and opportunities

GRI 201: Economic performance

Achieving a low-carbon society

GRI 301: Materials
GRI 302: Energy
GRI 305: Emissions

Achieving a resource efficient society

GRI 303: Water
GRI 306: Effluents and waste

Achieving a harmonized society with nature

GRI 304: Biodiversity

Management & Governance

6 Fair operating practices

Value Creation

5 Environment

GRI 419: Socioeconomic compliance
Promoting work practices in line with international
ethics codes

GRI 205: Anti-corruption
GRI 206: Anti-competitive behavior
GRI 415: Public policy

Engaging in responsible procurement

GRI 204: Procurement practices
GRI 414: Supplier social assessment
GRI 308: Supplier environmental assessment

Pursuing customer satisfaction

GRI 417: Marketing and labeling

Ensuring accessibility to products and services

GRI 417: Marketing and labeling

Ensuring thorough management of quality and safety

GRI 416: Customer health and safety
GRI 418: Customer privacy
GRI 419: Socioeconomic compliance

Promoting sustainable community involvement anddevelopment

GRI 413: Local communities

7 Customers (consumer issues)

9 Review and improvement of CSR activities
Enhancing CSR management
Hitachi, Ltd. Integrated Report 201779

Performance

8 Community involvement and development