Material issues

12
Unifying thinking

Developing strengths(invisible assets)

3

4
Picturing the desired future

5
Evaluation analysis for achieving the vision

Developing strategies, acting andrepeatedly evaluating and improving

Management
material issues
Material issues
These material issues have been integrated into our businessstrategies in the medium-term management plan, and wewill address the issues by formulating and implementing
specific measures. In addition, these measures will be taken
not only to pursue the Group’s growth and profits but also tocontribute actively to achieving the SDGs. At the Sansha Electric
Manufacturing Group, we will address social issues leveraging
our technologies and innovations, thus contributing to theestablishment of a sustainable society.

Process of identifying
material issues

Identifysocial issues

We selected the social issues that the Sansha
Electric Manufacturing Group will focus on byreferencing the Sustainable Development
Goals (SDGs) and other international initiatives,the code of conduct in the industry the Groupis a part of (the Responsible Business Alliance(RBA) Code of Conduct*), major guidelines (theGlobal Reporting Initiative (GRI) and ISO26000) and megatrends.

We analyzed andassessed how significantly
the selected social issues
interested stakeholders,
the size of their impact
and how significant they
are to the Group to createa draft set of material
issues.

High* T he RBA Code of Conduct is guidance formulated forelectronics industry and electric equipment-relatedindustry supply chains.

Identify social issues
Social issues to which we pay close attention

Climate change

Rise of renewable energy and new energy

Shift of global economic power fromdeveloped countries to emerging countries

Analyze risks and opportunities
Risks• Suspension of business activities due tonatural disaster• Tight electricity supply-demand balance• Instability of electricity supply• High cost of power generation• Fierce competition due to market expansion• Impact on global environmental problems• Delay in the utilization of digital technologies

Progress of technologies/innovation

Decline in the domestic population

27• Emergence of new competitors following
technological innovation• Decline in international competitiveness due
to a labor shortage• Decline in technological strengths caused bydifficulties in acquiring human resources

Identify andreview material
issuesAnalyze theselected issues

Perspective of society
and shareholders

At the Sansha Electric Manufacturing Group, we have beenproactively contributing to building a sustainable society
through business under one of the components of ourcorporate philosophy: Valuable Products for Society. Since
before the Sustainable Development Goals (SDGs) wereadopted, the Sansha Electric Manufacturing Group has beenaddressing social issues, attaching importance to environmental
consideration and responsibility for social impact.
In formulating the CG23 medium-term management plan, wepaid close attention to social issues and evaluated importantfactors that are directly related to the Group’s business, as wellas the interests of our stakeholders and the impact on them.
Through this evaluation process, we identified six material issues
that we should tackle on a priority basis at the Sansha Electric
Manufacturing Group.

Perspective of impacton businessHigh

We determined the priority material issues tobe addressed after the management teamassessed the appropriateness of the draft. The
Board of Directors adopted a resolutionregarding them concurrently with the mediumterm management plan.
Going forward, each time a new medium-term
management plan is formulated, we will revise
them in consideration of changes in businesscircumstances and society.

Material issues that were identified and main initiatives
Responses and opportunities• Development of technologies and products for stable
power supply• Development of environmentally friendly products• Investment to replace aging equipment• Increase in business opportunities• Development of technologies and products
compatible with new and renewable energy• Expansion of the areas in which we operate• Response to infrastructure development associatedwith urbanization• Development of technologies and expansion ofservices using IoT

Material issues

1

Contribution to acarbon-free society andenvironmental conservation2

Constructing a robust
infrastructure andcontributing to industrial
development

3

Providing safety, security
and new value to improve
services

4

Strengthening ofmanufacturing

5

Reduction of theenvironmental impact ofproduction activities

6

Promotion of diversity andpersonnel in action

Main initiatives

Related SDGs

• Development of high-efficiency products• Development of products related to new energy andrenewable energy• Development of uninterruptible power supplies (UPS)• Stable supply of power supplies for surface treatment• Creation of proposals for systems rather than sellingstandalone products• Reinforcement of the remote maintenance system• Implementation of IP strategy• Investment in streamlining and automation• Design standardization• Setting up projects to reduce CO 2 emissions• Considering the replacement of aging equipment• Procurement of power from renewable energy sources• Innovation utilizing diverse human resources• Improvement of productivity by improving businessefficiency• Development of human resources that are experts intechnology• Reviewing human resource development systems andincreasing education and training programs• Promoting diversity• Improving work environments

SanRex REPORT 2023

28