4MEDIUM-TERM MANAGEMENT PLAN:
NON-FINANCIAL STRATEGYStrengthening of Human Capital,
Message from the Director in Charge …………………………………………… 44
Strengthening Intellectual Capital,
Message from the Director in Charge …………………………………………… 50
Value Creation through Digital Transformation (DX) ………………………… 54
Initiatives for Environment ……………………………………………………………… 56
Initiatives Across the Entire Supply Chain ……………………………………… 62

P&I LAB., a collaboration facility operated by DNP

42

DNP Integrated Report 202343

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY
the enhancement of corporate value.
Furthermore, we have established four material issues(materiality) to address in pursuit of this realization. We will
implement concrete measures in each area: (1) support forcareer autonomy of employees and strengthening oforganizational capability; (2) health and productivity
management that increases the happiness of employees; (3)hiring, personnel assignment and reskilling based on humanresource portfolio; and (4) promotion of diversity andinclusion by utilizing diverse individuality. We will boost theeffectiveness of these initiatives by conducting
value-relevance analyses, examining the outcomes they yieldfor employees and their contributions to the improvement of
human creativity, corporate value and financial value.
To drive unprecedented transformation beyond our
traditional path, it is important for each employee toindependently shape their careers and further develop theirstrengths. To provide even better support for employee career
autonomy, we will continue to invest optimally and effectively
in our human resources, thereby strengthening our humancapital. The DNP Group will continue to advance a humanresource strategy aimed at significantly enhancing humancreativity, with the ultimate goal of elevating corporate value.

Non-financial Strategy

The key base and source of strength for the DNP Group in
creating a better future is the presence of every employee.
Based on this awareness, we aim to develop systems andstructures that take into account the broader society. We also
strive to create and implement appealing policies, not onlyinternally but also from an external perspective. For example,
over the three years starting from fiscal 2019, we madeconcentrated efforts to revamp various personnel systems,
actively promoting investment in human resources.
In fiscal 2022, as a foundation for such efforts, the DNPGroup formulated and publicly announced its Human Capital
Policy, which represents the companyʼs universal andfundamental approach to human resources. This policy aims
to further reinforce and maximize our human capital based ona clear belief that respecting employees leads to therespected employees driving corporate growth and enhancing
society alongside our desire for each individual to develop
their strengths and grow further in their roles both within andoutside the company.
In the new Medium-term Management Plan starting infiscal 2023, we will enhance our investment in humanresources based on our Human Capital Policy. We will
significantly increase “human creativity (added value
productivity)” globally to clearly connect this investment toStrengthening of Human Capital

Human Capital Policy

We aim to significantly increase “human creativity(added value productivity)” globally based on the
Human Capital Policy to clearly connect investment in
human resources the enhancement of corporate value.

Respecting employees leads to respected employees
driving corporate growth and enhancing society
Nurturing human capital who can be active in society (both within and outside DNP)

Labor andManagement
Joint
Declaration

Kenji Miya, Senior Managing Director

Human Capital Operational Mission

DNP Group Safety and Health Charter

DNP Group Diversity Declaration

DNP Group Declaration on Health

Human Resources Development Vision

DNP Group Welfare Vision

DNP Group
Human Rights
Policy*Including stakeholders
other than employees

The link between strengthening human capital and enhancing corporate value

44

Material issues

Initiatives

Support for career
autonomy of employees
and strengthening oforganizational
capability

Implementation of a DNP
version of “compensation
and related policies thatare more closely founded
on a job-oriented
perspective”

Health and productivity
management that
increases the happinessof employees

Management reform
based on DNP Group
Declaration on Health

Hiring, personnel
assignment andreskilling based onhuman resource
portfolio

Implementation of
personnel assignment
to focus businessareas and reskilling

Promotion of
D&I utilizing diverse
individuality

Cultivation of culture
enabling active
participation by
diverse personnel

Specific measures
Multi-track post-based compensationand support for career autonomy
Maintaining and securing competitivecompensation levels and systems
Improving training aimed at strengtheningorganizational capability

Direct effects and impact on the internal environment
Promoting multi-track career (management specialist)
Support for employeesʼ career autonomy
Promoting job-based (post-based) compensation and securing
specialized human resources

Employee self-actualization and autonomous career development

Enhancing training programs to improve management skills

Enhancement of management capabilities(verification through management feedback)Measures to realize the DNP Group
Declaration on HealthExpanding health and productivity promotion programsfor employees

Developing the psychological capital and reduction in presenteeism

Penetration of DNP Value Objectives (DVO) system

Management transformation and strengthening of team capabilities
through penetration of the DVO system (1 on 1 meetings/team meetings)

Creation of organizations and teams with guaranteed
psychological safety
Enhancement of DVO initiatives

Measures to improve organization engagement

Development of Health and Wellbeing Awards to strengthenorganizational and team skills

Improvement in employee engagement survey scores

Strengthening of hiring and expert training
based on human resource portfolio

Strengthening hiring and training of specialized personnel

Increase in number of basic DX personnel

Visualization and raising ofskill level of DX personnel

Financial and corporate value

Expansion of DX training program
Definition and visualization of the skill level ofbasic DX personnel and those promoting DX

Increase in number of personnel promoting DX

Reskilling from areas business forreforming to focus areas

Facilitating job transfers after reskilling training

Optimization of personnel allocation

Promotion of active participation by women(enhancing diversity in decision-making)

Increasing number of female managers

Active participation of diverse employees

Encouragement of male employees to takechildcare leave (support for work-life balance)

Improving male childcare leave uptake rate

Creation of a comfortable work environment

Implementation of unconscious bias training for all employees(fostering a psychologically safe workplace culture)

Increasing number of participants in unconscious bias training

Development ofautonomous careers

Improvement in engagement
and wellbeing

Flexible and resilient
management

Taiwa (dialogue) andCooperation

Expansion of existing
business

Enhancementof humancreativity

Creation of value forsociety throughbusiness innovation(added value productivity
through investment in
human resources)

Greater profitability

Growing sales

An organization thatconsistently generates
innovation

DNP Integrated Report 202345

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY■

Support for career autonomy of employees and strengthening of organizational capability

Starting in fiscal 2019 and continuing for three years, we haveconcentrated our efforts on reforming our personnel systems
to establish and enhance systems that support employee
career autonomy and bolster organizational capabilities.
From fiscal 2023, we will advance these initiatives further,aiming to explore the optimal approach for investing in humanresources and career development frameworks that best alignwith DNP's business and talent needs.
We are implementing the DNP version of “compensation andrelated policies that are more closely founded on a job-oriented
perspective,” with a focus on supporting autonomous careerdevelopment so that each employee can acquire expertise andskills that are applicable both within and outside theorganization. This unique hybrid personnel system combines
the merits of membership-based and job-based systems.
We have also strengthened support for initiatives such as
challenging preferred job roles based on voluntary aspirations
and self-improvement, all of which are grounded on amulti-track role classification system that allows employees toautonomously choose management or specialist roles. We haveplaced greater emphasis on clarifying the roles andcompensation associated with job positions after career
choices have been made.
We will also implement a range of associated measures.
These include a heightened focus on job roles and positions
for senior management and specialists, introducing a
feedback system from subordinates to management,
expanding internal talent recruitment efforts, implementing
an internal side-job program, renewing our self-improvement
support system, formalizing employee assignments to startup
companies, expanding the ICT professional system andstarting region-specific employee programs. These actions
are all predicated on the principle of upholding a competitivecompensation structure.
Expected outcome• Complete implementation of the DNP version of“compensation and related policies that are more closely founded
on a job-oriented perspective”

A hybrid career autonomy-type mechanism leveraging the merits of membership-based and job-based systems*Concrete visualization

Role/duty/position

Select young talentMore job-based= Post-based (management or specialist)

Select young talentTransition from membership based to more
job-based
Membership-based system= Development, growth, proficiency-based(job group and grade specific)*For general positions= Autonomous multi-track (management or specialist)*For mid-level employees

Grade

■

Health and productivity management that increases the happiness of employees

In fiscal 2021, we formulated and disseminated the DNP Group
Declaration on Health as a top commitment. In accordancewith this commitment, we will focus not only on physical andmental health, but also on efforts that include developing
psychological capital (a positive mind) and building
psychological safety (trust-based relationship).
As one of our important management strategies, DNPGroup is implementing a series of measures based on thecommitment. By investing in the health of our employees, we
believe we can not only maintain and improve their health, but
we can also enhance their vitality, creativity and productivity,
thereby revitalizing the organization. Through the formation ofa vibrant team, we aim to boost corporate value and link this toenhancing the happiness of each employee.
In fiscal 2021, we introduced the DNP Value Objectives(DVO) system as part of management reform efforts based on
the commitment. In line with this, we will strengthen teammanagement and build relationships of trust to drive new value
creation.
Through an engagement survey, we visualize issues andother factors in the organization, and promote employeesʼ
self-understanding and mutual understanding via dialogue toincrease their motivation and encourage teams to achieve their
expected results.
As part of our specific initiatives for fiscal 2023 and beyond,46

we are promoting our DVO Penetration Program aimed atachieving the full integration of DVO throughout the company
and establishing a new management style. Additionally, we are
implementing the Health and Wellbeing Award that evaluates
factors beyond business revenue and conducting engagement
improvement initiatives within our manufacturing department.

■

Hiring, personnel assignment and reskilling based on human resource portfolio

Strengthening of hiring and expert training based on human resource portfolio
The DNP Group has developed a human resource portfolio
categorized into multiple types based on the roles genuinely
required and the expertise and management abilities present
within each business. In pursuit of our business strategies,
we assess the adequacy of talent for each type and promote
recruitment and development that emphasizes the qualitative
aspects of our workforce.
When it comes to recruiting rare specialized personnel,
we do not just rely on internal development; we also actively
seek external candidates for our team. Especially for highly
skilled professionals, we offer competitive compensation
packages and have dedicated provisions in place forprofessional staff. We have already recruited physicians andother medical professionals in our medical & healthcare
businesses, and we will continue to do so across various
other sectors. Regarding the development of specialized• Development and level of engagement with DVO system:
45 % → 100 % (FY2022 → end of FY2025)• Engagement survey score: Up 10 % (FY2022 → end of FY2025)• Smoking rate: Less than 15 % by FY2026• Implementation rate of specific health guidance:

More than 60 % by FY2024

As the business environment undergoes rapid changes and
we enter what is often referred to as the 100-year life era,
the importance of reskilling is increasing more than ever. At
DNP, we have also been strengthening our business portfolio,
and from fiscal 2020 to fiscal 2022, we reallocated personnel
from areas business for reforming to focus business areas at
an average annual rate of approximately 200 employees. For
example, employees from manufacturing backgrounds inInformation Communication have transitioned to roles inindustrial high-performance materials and electronics
manufacturing, which they had not previously experienced.
Over the course of three years, approximately 170 employees
made such transitions. These employees acquired thenecessary knowledge and skills (reskilling) required for their
new roles at their respective reassignments. We conductedgroup training sessions aimed at boosting their motivation
before facilitating job role transitions. In addition, in fiscal

5

FY202013

FY2021

12

FY2022
0

2

4

6

8

10

12

14

(No. of people)

2022, we introduced talent recruitment programs with roletransition training for our focus business areas.
We will continue to implement reassignments andreskilling from areas business for reforming to focus businessareas as necessary in the future.

Image of the DNPweb (intranet) screen

Visualization and raising of skill level of ICT personnel and DX personnel• Expansion of ICT personnel, and the enhancement of

We will be strengthening the number of individuals in Career
Development Program (CDP) Level 3. Additionally, to support
the promotion and enhancement of DX in each business, wewill expand the training programs aimed at human resource
development based on the IT Skill Standard (ITSS) and its
skill levels.
• Expanding education to boost DX skills

We are broadening our training curriculum to encompass
Agile development, cloud computing and AI and data science.
Our goal is for 27,500 eligible employees to finish thefoundational DX literacy standard education by the end of2025, equipping them with crucial DX knowledge.
President ʼs message on the DVO
Penetration Program

Hiring specialized personnel

Reskilling from areas business for reforming to focus areas

new ICT job transition and development measures

Expected outcome

personnel, for instance, in ICT development roles, we arefocusing on planned development and retention by visualizing
individualsʼ skill levels and establishing a Career Development
Program (CDP) aimed at skill enhancement.

Number of individuals with IT Skill Standard Level
3 or above (FY2020-2022)(No. of people)

800
600
400
200
0

497

FY2020619

FY2021733

FY2022* IT Skill Standard (ITSS) Level 3 indicates a level of proficiency where one possesses applied

knowledge and skills, can independently make judgments and carry out tasks related to their
responsibilities, and is capable of identifying and resolving issues.

Health and Wellbeing AwardDNP Integrated Report 202347

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDefining DX personnel and promoting visualization
Amid changing industrial structures and society, there is a
growing focus on DX personnel. In line with the Digital Skill
Standard (DSS) released by the Ministry of Economy, Tradeand Industry at the end of December 2022, the DNP Grouphas redefined DX personnel. We have categorized talent andvisualized skill levels, as shown in the diagram, to accelerate
human resource development.
DX foundational personnel refer to individuals who haveacquired knowledge and skills based on the DX literacy
standard. They will be developed across all job roles throughe-learning and DX literacy education. DX promotional
personnel encompasses individuals with specialized roles in
DX Literacy
Standards (DSS-L)

Harnessing diversity: Promotion of active participation by women (enhancing diversity in decision-making)driving DX initiatives. These talents are identified incollaboration with business divisions, and their development
is prioritized.

Expected outcome• DX Literacy Standard Basic Education: Targeting completion by

27,500 individuals (end of FY2025)• Acquisition of human resources for driving business strategy• Innovation in new business creation and realization of DX in
manufacturing operations

DX Promotion Skill
Standards (DSS-P)

As outcomes by fiscal 2022, we established initiatives toaccelerate the increase in the representation of female
managers. Specifically, we continue to conduct practicalleadership training for leader-class individuals, as well as
maintain processes for promoting managers and assistantdepartment heads, along with a Sponsorship Program to
expedite the appointment of managers at the department
head level and above. These efforts are contributing to thedevelopment of next-generation business leaders. In June
2023, we celebrated the appointment of our second female
executive officer from within the company. Enhancing
diversity in decision-making increases value creation and risk
management capabilities. In addition, we recognize that
improving the ratio of women in management leads toimproved productivity within the DNP Group, evident in higher
engagement survey scores and a reduction in overtime hours.

Job category

Ratio of females at each level
（%）

30
4

25

5

20
3

15

6

10
1

5

2

0
FY2016FY2017FY2018FY2019FY20201. Executives and equivalents
3. Section managers and equivalents
5. Full-time employees

FY2021

FY2022

FY2025targets

2. Department managers and equivalents
4. Leaders (one step before management)
6. Entire management

ICT development
Technologies
and R&D
Sales andplanning

Candidates
for DX
promotional
personnel

DX foundational
personnel

Manufacturing
and production

DX promotional
personnel

Business architect

Harnessing diversity: Encouragement of male employees to take childcare leave (support for work-life balance)

Designer

Since December 2020, when we announced ourparticipation in the 100% of Male Taking Childcare Leave
Declaration both internally and externally, the uptake ofmale childcare leave has increased from the 50% range to
83.6% and has spread to management positions. By
encouraging male employees to take childcare leave, we are

Data scientist
Software engineer

working to change gender role perceptions.
We will also continue to promote the utilization of special
leave for life support, which can be taken to accommodate
life events, and continue our efforts with initiatives such as
the Kangaroo Club, a seminar that supports employees andtheir partners in balancing work and childcare.

Cybersecurity

Administration

Harnessing Diversity: Implementation of unconscious bias training for all employees(fostering a psychologically safe workplace culture)

Promotion of D&I utilizing diverse individuality*D&I: Diversity and inclusion

With the aim of significantly enhancing human creativity(added value productivity) as outlined in our human capital
strategy, the DNP Group has been expanding its efforts andsystems to transition from a homogenous and uniform
organization to one rich in diversity, and to ensure that a wide
range of talent can thrive within the Group amid the ongoingchallenges of an aging population and declining birth rates.

While these efforts have received high praise both internallyand externally, employee surveys have revealed disparities
between the companyʼs initiatives and the realities ofindividual workplaces. This underscores the significance ofadvancing “ Diversity and Inclusion (D&I) initiatives thatleverage the strengths of diverse individuals” as a criticalchallenge.

Illustration of the inclusion loop
Challenge

SupportEmpathy
Appreciation

Fulfillment

Assistance

Initiative(Sense ofownership)

Experience

Recognition

48

Diverse individuals are inclusive of each other, and thosearound them support the challenges of individuals whotake the initiative. We assess the results of thesechallenges as valuable experiences and, through open
dialogue, connect them to a sense of fulfillment. This
fosters a culture where inclusion becomes second
nature, with individuals receiving recognition from theirpeers for their contributions and feeling motivated toembrace new challenges. These interconnected loops
occur across various departments and, in unison,
amplify the collective strength of All DNP.

In 2021, we initiated the internal event Diversity Week topromote an understanding of the importance of D&I andtranslate it into concrete actions. In 2023, the event gained
significant momentum, with over 10,000 employees
participating in live-streamed lectures. Additionally, 57 D&I
promotion committee chairs, led by division heads and Group
company presidents, within the DNP Group engaged with theresults of their respective organizationʼs engagement surveys,
declaring their commitment to fostering a betterorganizational culture.
Starting in fiscal 2023, we will implement unconscious
bias training for all officers and employees, including thepresident, with the aim of establishing psychological safety
and creating an organizational culture where diverse ideas
and opinions can thrive.

57 D&I promotion committee chairs
declare their commitment

Expected outcome• Percentage of female managers: 8.4% → 12 %(FY2022 → end of FY2025)• Unconscious bias training: 100 % participation(end of FY2025)• Percentage of male taking childcare leave: 83.6 % → 100 %(FY2022 → end of FY2025)• Engagement survey score: Up 10 %(FY2022 → end of FY2025)

DNP Integrated Report 2023

49

Non-financial Strategy

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDNP will enhance intellectual capital by evolving anddeepening its long-cultivated unique strengths in Printing &Information (P&I) and bolstering collaboration with external
partners in order to differentiate itself from competitors andboost global competitiveness.
Our research and development policy involves envisioning“a better future” that we aim to create, using it as a starting
point to strengthen our unique technologies, and ultimately
driving the development and delivery of new products andservices toward the realization of future scenarios. Under our
FY2023-2025 Medium-term Management Plan, we will
promote the “creation of new businesses and enhancement oftechnological strengths,” the “global rollout of technologicalstrengths,” the “strengthening of stable businesses andcultural reform” and the “realization of data management
infrastructure.” We allocate an annual budget of approximately
30 billion yen for our research and development investments.
Within our business portfolio, we will concentrate ourresources on the focus business areas of growth-driving
businesses and new businesses with high growth potential
and attractiveness in the market. Our primary focus will be onthese areas as we strive to combine a variety of intellectual
assets more effectively, speeding up the development andcommercialization of products and services.
Furthermore, we will advance collaboration between
industry, government and academia through open innovation,
strategically driving the acquisition of technology andbusiness development. In the context of increasing global
demand for reducing environmental impact and enhancing

Strengthening Intellectual Capital

Combining strengths in P&I andcollaboration with partners to bolster
our business portfolio from theperspective of intellectual capital
Masato Yamaguchi, Senior Managing Director

Basic strategy for strengthening intellectual capital
Material Issues

Creation of new
businesses andenhancement oftechnological strengths

Global rollout oftechnologicalstrengths

Strengthening of
stable businesses andcultural reform

Actions

Creation of new value
through All DNP

Transformation ofinternal systeminfrastructure
supporting theutilization of ICT

Acceleration of global expansion
centered on Life & Healthcare
Strengthening of overseas marketing
and R&D system
Strengthening of stable business anddevelopment of new products throughaggregation of knowledge by All DNP
Optimization of R&D mechanisms and systems

R&D investment

Continue at a scale of
30 billion yen
per year
Users of data
management
infrastructure*:
3,678 → Approx. 6,000(FY2022 → end of FY2025)

Advance modernization and globalization tostrengthen digital ICT infrastructure
Advance visualization and deeper analysisof data-integrated infrastructure, andcontinuously update infrastructure* Data management infrastructure: Infrastructure that aggregates data from various systems within the DNP Group, and processes, analyzes and visualizes the aggregated data for use in management decisions

50

Business model x technology/R&D/
intellectual property strategy

OutputIntellectual capital

Creating value

New value creation

Unique strengths of
P&I

P&I Innovations

Increasing the value of
products and services --Increase insales/income

Technology based on printing processes(planning and design/information
processing/microfabrication/precision
coating/post-processing/materials
development/assessment and analysis)
Sales, planning, manufacturing andmanagement

Acquisition and strengthening of technology
through open innovation

Refinement andacceleration of global
rollout of DNP ʼs unique
technology andproducts

Input

Strengthening of DNP ʼs unique technology

Fostering culture creating new value

Realization of data
management
infrastructure*

KPIs (FY2025)

Creation of new businesses in focus business areas
capturing megatrends and business opportunities

Build business portfolio
from future scenariosLong-term value creation by strengthening and expanding intellectual capital (technology, R&D/intellectual property-related)(printing and information)

Specific Measures

well-being, we will also strengthen marketing, research anddevelopment and business expansion efforts directed towards
overseas markets, particularly in sectors such as Life &Healthcare. We will foster an organizational culture that
actively combines the strengths of our intellectual property,
including patents obtained thus far, and those from bothwithin and outside the company. This approach will allow us
to create new value in both existing and new businesses.
In recent years, we have been vigorously promoting Digital
Transformation (DX) to both drive business growth and foster
innovation in productivity. For DNP, DX is positioned as thefusion of hybrid strengths of complete opposites, such as
analog and digital technologies, real and virtual realities andmanufacturing and services. This approach enables us to build
a unique business model and generate new value. In alignment
with this DX strategy, we will create new business, transform
existing business, drive dramatic improvements in productivity
and promote innovation of internal information infrastructure.
In particular, we will concentrate on expanding resources forvalue creation through DX, including the development of
in-house DX personnel, the recruitment of necessary external
expertise and collaboration with partner companies.
We will integrate “business development activities” and“ technology/R&D activities” with “strategic intellectual
property acquisition” that supports those activities within ourbusiness divisions, R&D divisions and intellectual property
divisions. We will strive to create “a better future” byconsistently embracing change and enhancing synergies
within All DNP to generate new value.

Collaboration with various partners

Othernon-financial capital
Financial capital

Securely and seamlessly connect the realand digital, contributing to the evolutionof an information society

Printing & Information
DNP ʼs core values
developed through printing
Contributing to a sustainable society
where people can live safe, secureand healthy lives

Strengthening
business base

(Fiscal year ended March 2023)

Outcomestrategies(Fiscal year ended March 2023)

Patent rights: 12,143
1,312
Design rights:
Trademark rights: 1,275

In order to create new values, we integrate “ technology/R&D
activities” and “business development activities” with “strategic
intellectual property acquisition” that supports those activities.

Business Development
R&D investment
32.5 billion yen&
Strategic acquisition of
intellectual property

strategies

Intellectual
property

Future standards
The better future of peopleʼs
expectation where various
issues have been resolved

strategies

Promote strategic investments for the next fiscal year and beyond
DNP Integrated Report 2023

51

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

For strategic acquisition of intellectual property

Basic policies and structures for technologies and R&D

Business Development
strategies

strategies

Intellectual
property
strategies

Understanding the intellectual property that underpins products and services that gain top market share

DNP views intellectual property as one of the essential assets for value creation. Especially for products andservices that have gained top market share in Japan and internationally, our patent network of core and peripheraltechnologies has a significant effect on business development.

Setting focus businesses and strategic acquisition of intellectual property

We will strategically build a stronger business portfolio by setting focused businesses with high growth potential
and attractiveness in the market. To this end, we are promoting open innovation and focusing on the strategicacquisition of intellectual property to ensure the superiority of our position.

For DNP, which has expanded its business domains byapplying and developing technologies cultivated in theprinting process, strengthening technology and R&D is a
crucial management issue. We will always take theconsumerʼs point of view as we accurately understandenvironmental, social and economic issues, and create
optimal solutions.
DNP will further evolve and deepen the already-strong
technologies that we have cultivated to handle, in a safe andsecure manner, important information entrusted to us bycompanies, organizations and consumers, and will also
accelerate development by promoting collaboration withvarious partners, including venture companies, start-ups,
students and research institutions, and by exploring newtechnologies. Also, we will combine our internal and external
technological strengths to solve various problems and create
new value that excites people.
As a base for such cultivation, exploration and utilizationof technologies, we will strengthen AI-based data analysis
and the use of cloud environments, taking advantage of the
major trends in DX.

Utilization oftechnologies
Utilization of technologies
by new businesscreation divisions andexisting businessdivisions in products
and services

Cultivation oftechnologies
Strengthen alreadystrong technologies
Image processing,massive data processing,information security,
assessment and analysis, etc.

Utilization of the cloud | AI | Data analysis

Exploration of technologies
Partnership with technologicalventure companies
Partnership with outside
research institutes

Technologies and R&D structures

Technology and R&D Expenditures

DNPʼs technology and R&D divisions are developing
proprietary technologies to solve diverse issues in a wide
range of business fields, with a focus on the three areas ofSmart Communication, Life & Healthcare and Electronics. We
are building and operating robust structures that create newvalue in existing and new businesses by promoting the
combining of technologies and collaboration with external
partners.

DNP continues to invest over 30 billion yen annually intechnology and R&D, with the amount reaching 32.5 billion
yen in the fiscal year ended March 31, 2023, and 34 billion
yen planned for the current fiscal year ending March 31,
2024. In recent years, in order to solve increasingly diverseand complex problems and create a better future forourselves, we have been increasing the expenditures of the
R&D department at the headquarters based on the All DNP
concept, which combines the strengths of the entire Group.

Integrating three strategies to create value

Controlled by Head
Office(Development headquarters)

Strengthen governance and implement strategies

Intellectual property policies and the state of progress will be shared with management and other personnel
having different responsibilities and utilized in management decision-making while ensuring effective governance.
At the same time, there will be a further strengthening of cooperation between each business unit and theintellectual property department to accelerate the expansion of focus businesses.

Smart
Communication

Information Innovation

Life Design (Packaging)

The DNP Group sets its focus businesses by carefully
examining the environmental, social and economic valuethat each business generates based on the growth potential,
attractiveness and profitability of domestic and overseas
markets. Under our FY2023-2025 Medium-termManagement Plan, we are concentrating our management
resources into focus business areas made up of
growth-driving businesses and new businesses. We willfurther strengthen our patent portfolio within our focus
businesses as part of our efforts to acquire and expand
intellectual property.

Mobility
High-performance
Materials

Number of patents held in Japan(No. of patents)

14,00012,392

12,226

12,00011,525

11,726

12,143

10,0006,000

Fine Devices
Optoelectronics

0

5

10

15

20

(¥ billion)
25

30

35

FY201230.8

FY201330.8

FY201431.7

FY201531.7

FY201631.4

FY201733.2

FY201833.7

FY201933.6

FY202032.6

FY2021

33.1

FY202232.5

40

Short-term development

4,000

0

Electronics

New businesses field

8,000

Medium- and long-term
development

2,000

52

Living Spaces

Technology and R&D Expenditures

Supervision

Publishing andMedia Services

Imaging Communication

Life &
Healthcare

Head officeresearch anddevelopment
framework

R&D and Engineering Management Division

Sales division/field

Business unit

Advanced Business Center

Our various resources, including intellectual property, will be concentrated on focus businesses. We will endeavor
to develop human resources who are well versed in business, technologies, R&D and intellectual property, andwe will encourage a culture of managing risk and respecting the rights of others.

Research and Business Development Center

Concentrate resources and developing human resources

Technology Development Center

We will establish business models exploiting intellectual property for our focused businesses through the value
creation process by integrating business strategy, development strategy and intellectual property strategy. We
plan scenarios for creating value in the long term and strengthen internal and external collaboration.

FY2018FY2019FY2020

FY2021

FY2022DNP Integrated Report 202353

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDX promotion and control unit

Electronics

Information
systems

Life & Healthcare

R&D

Smart Communication
New businessdevelopment

The Chief Digital Officer (CDO) appointed by the President
supervises company-wide activities relating to DX. We haveestablished a full-time DX promotion and control unit at thehead office and will enhance cooperation between thedivisions in charge of new business development, R&D,
information systems and other relevant divisions within theoperation division and implement a range of measures acrossthe entire Group to drive digital transformation.

CDO

DNP positions DX as “value creation through P&I Innovations,” combining digital technologies with our businessstrengths of All DNP. Leveraging the hybrid strengths of P&I (Printing and Information) incorporating opposites suchas analog and digital technologies, real and virtual design, and products and services, we will create new businessmodels and drive our business model transformation, based on our medium- to long-term business portfolio
strategy, and offer these technologies and services as new value to a sustainable society.

DX promotion unit
Top management

Value Creation through Digital Transformation (DX)New business fields

Building our medium- to long-term business portfolio
We aim to generate further profits in our business activities by transforming
our business structure and making focused investments in priority
businesses leading to the resolution of social issues and megatrends.

Culture of challenge
We have established a new business development division that creates innovation in a highly flexible environment, and is boldly
addressing the challenges of developing new business through DX. Going forward, we will continue to drive transformation ̶
what could also be called “ discontinuity”̶ by fostering values such as tackling challenges without fear of failure, collaborating
across internal and external barriers and taking swift, agile and proactive action.

Securing and developing human resources
Electronic library service

AI-supported chest cancer exam
X-ray interpretation system

Metaverse combines physicaland virtual spaces

Authentication / security

Photo-related services
and solutions

Creation of new business models
Transformation of existing business model
Creating value through DX
Creating value
Creation of new products andservices using digitaltechnologies

Establishing the DX infrastructure

P&I Innovations
Securely and seamlessly connect the real and digital,
contributing to the evolution of an information society

Addition of new value to existingproducts and services using
digital technologies

Printing & Information
DNP ʼs core values
developed through printing

Innovation of internal systems
and development and increase of
ICT and DX personnel

DX promotion unit

Culture of challenge

Contributing to a sustainable society where
people can live safe, secure and healthy lives

Strengthening
business base

Capabilities

DNP has defined the ideal image of human resources who support DX promotion based on the Ministry of Economy, Trade andIndustry (METI) Digital Skills Standard. We will improve DX literacy for all employees and provide education on topics such as
agile development, cloud computing, AI and data science for those who promote DX. (See page 47-48)
In the area of content and XR communication, which is one of our focus business areas, we are engaged in efforts to reskill
human resources from conventional 2D production designers to 3D production and UI/UX designers. We are also working todevelop human resources who enhance the user experiences.
We also provide cybersecurity education to approximately 30,000 DNP Group employees both in Japan and overseas, toraise awareness of cyberattacks.

Dramatic improvement of
productivity through a shift tosmart factories

Securing and developing
human resources

Establishing the DX
infrastructure

We are driving value creation through DX, with strategies based on both creating value and strengthening
our business base. Utilizing DNPʼs core values in image processing, security technology and optimized
design of business processes, we will continue to enhance our human and intellectual capital, andengage in complex and continuous activities with the comprehensive strength of All DNP ̶ leveraging ourorganization, corporate culture, human resources and DX infrastructure as synergistic capabilities.
TOPIC

Achieving data-driven management

Driving DX in manufacturing

Utilizing IT systems and digital technologies, DNP
transformed its business management. In addition to sales
and production status data, we have built a data management
infrastructure platform that aggregates data that contributes
to business growth, and processes, visualizes and analyzes
the aggregated data to speed up decision-making andprovide new added value.
By modernizing business systems in focus business areasthat allow us to make effective use of our competitive
advantage, we will continue to feed strategic data back tothis data management infrastructure and continuously update
it as an offensive platform. With our eyes set firmly on the
global market, we will continue to strengthen ICT governanceat our overseas bases and aim to become a digitallyadvanced company on a global scale.

To build a strong business portfolio, we are implementing
internal manufacturing DX to reform in cost structure andbusiness structure of existing businesses. By optimizing all
business processes of sales order, procurement, production,
logistics and sales, we not only improve productivity andquality, but also contribute to decreasing environmental
impact by reducing energy consumption and waste material.

Strengthen
financialbase

Achievingdata driven
management
Gaining a competitive advantage
through the strategic use of data

Strengthen
non-financial
capital

Selected as a DX Stock 2023
In recognition of our efforts to create new business models and initiatives such as the DX promotion unit, humanresource development and utilization of digital technology, DNP was selected as one of the DX Stocks 2023, under the
Digital Transformation Stock Selection (DX Stock) program, in which the Ministry of Economy, Trade and Industry (METI)
and the Tokyo Stock Exchange (TSE) jointly evaluate, select and announce the stocks of companies that are actively
engaged in DX. We were also awarded the Special Prize at the Cyber Index Awards 2022 (sponsored by Nikkei Inc.), in
recognition of our efforts in cybersecurity education in human resource development.

54

Work style reform and improving engagement
Internal system infrastructure innovation andstrengthening information security

Utilizing advanced technologies
With the aim of utilizing AI in various business areas, we havecreated an environment and system in which approximately
30,000 DNP Group employees ̶ both in Japan and overseas ̶
can use generative AI as part of our DX initiatives. We
operate an AI chat service in a high-security environment thatcan be used for business-related research, documentationand code creation.
We will actively utilize AI in our focus business areas
relating to content & XR communication to provide new value
to consumers, companies and other organizations, etc.
We have also started to examine the possibility ofcommercialization of decentralized/distributed ID. We are
currently engaged in evaluation for technologies such as
self-sovereign identity (SSI) digital certificates that allow
individuals to manage their identity data, and are promoting
the feasibility of social implementations, such as the use ofdigital IDs in school operation, job change/job hunting bycertifying individual career data and corporate human capitalmanagement.

DNP Integrated Report 2023

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4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Non-financial Strategy

Initiatives for Environment

Contributing to the realization of adecarbonized society, a recycling-oriented
society and a society in harmony with nature
DNP continuously strives for coexistence between our business activities and the global environment, andidentifies environmental conservation and the realization of a sustainable society as part of its Code of
Conduct. With strong requirements to reduce the impacts on the global environment, in recent years inparticular, we are engaging in activities with a focus on the environment throughout our entire supply chain.

DNP formulated the DNP Group Environmental Vision 2050 and defined what we expect to accomplish toward the year 2050 inorder to create a sustainable society. With a primary focus on the following initiatives, we will continue to step up our efforts tocreate value and strengthen the business base that underpins the creation of that value, toward the realization of a decarbonizedsociety, a recycling-oriented society and a society in harmony with nature.

Creating value

Environmental Medium-term Targets
DNP Group Environmental Vision 2050
Medium-term targets

Transforming business portfolio based on
environmental impact and added value
Expanding the development and utilization of
low-carbon materials
Decarbonization of products and services throughcalculation and reduction of CO 2 emissions for eachproduct
Creating recycling scheme and expanding theutilization of recycled materials

Efforts to address environmental
issues based on both creating
value and strengthening
business base2050 targets

Reducing GHG emissions
by 40% from FY2015 levels
by 2030

Reduce GHG emissions
from own business activities
Net zero emissions
by 2050

Sales of super eco-products＊1
to account for 10% ofgross sales in 2025

Building decarbonized society

Increase 2025 resource
recycling ratio＊2 by 5%from FY2015 levels

Reduce 2025 water
usage by 35%

DNP ʼs vision for society

Contribute via
products and services

Decarbonizedsociety

Mitigation of and adaptation
to climate change

Recyclingoriented society

Efficientresource reusethroughout
the value chain

from FY2015

Efficient resource use

Strengthening business baseClarifying environmental impact
Introducing renewable energy
Investing in energy-efficient facilities, optimizing
production bases to address environmental impact
Minimizing the impact of business activities on
ecosystems
Ensuring traceability of raw materials andtransparency of supply chain

The effects of climate change have become increasingly serious every year and have a large impact on the environment, society
and the economy. There are calls to accelerate efforts toward achieving carbon neutrality by 2050, as a response to this climatechange crisis, and the importance of the roles to be played by companies is always increasing.
By working to resolve climate change and other environmental issues, DNP intends to resolve social issues and create newvalue to meet peopleʼs expectations. We are also proactively engaging in dialogue with stakeholders by enhancing the quality
and volume of information disclosed via our integrated reports, websites and other media, utilizing an international framework
recommended by the Task Force on Climate-related Financial Disclosures (TCFD), while maintaining transparency with regard to
the various risks and opportunities that climate change poses to our business.

Governance

DNP Group Environmental Vision 2050

Initiatives in the Medium-term Management Plan
(FY2023-2025)

Efforts to the realization ofa decarbonized society

Guidelines for Procurement ofPaper for Printing andConverting

100% of purchased
products are compliant

Minimizebiodiversity impact

Society in harmony
with nature

DNP regards addressing environmental issues ̶ including
climate change ̶ as one of its key management challenges.
In April 2022, DNP reorganized the Sustainability Committee
heated by the president in order to enhance environmental,social and economic sustainability and further drive DNPʼssustainable growth and enhanced functionality. By
coordinating with the BCM Promotion Committee, which
ensures the safety of employees and maintains production
activities in the event of a natural disaster or otheremergency, and the Corporate Ethics Committee, whichseeks to raise employeesʼ compliance awareness and reducerisks, the Sustainability Committee has established a flexible
and robust governance system that covers company-widerisks.
The Sustainability Committee meets regularly, four times
a year, and at other times as necessary for the purposes ofmanaging medium to long-term management risks relating tosustainability, identifying business opportunities andreflecting them in management strategies; and delivers
reports and makes recommendations to the Board of
Directors. The Board of Directors receives reports andrecommendations on matters discussed and resolved by the
Sustainability Committee, and deliberates and supervises
policies and action plans, etc., for responding to risks andopportunities relating to sustainability. Strategies and policies
on environmental issues determined by the Committee are

addressed by the DNP Group as a whole, in coordination with
the Business Unit & Group Company Environmental
Committees.

Board of Directors

BCM Promotion
Committee

Sustainability
Committee

Corporate Ethics
Committee

OfficeEnvironmental management department

Business Unit & Group Company Environmental Committees
Promotion Office
Technical andmanufacturing
groupGroups promoting
each environmental
targets

Business Unit & Group Company Sites

Risk management

throughout
the value chain

Protect biodiversity*1 Super eco-products are products and services that DNP deems to be exceptionally environmentally conscious based on its proprietary criteria.
*2 Resource recycling ratio is the rate of unneeded materials, excluding valuable materials such as paper, etc., recycled by either material or chemical recycling.

We set medium-term targets and are accelerating the pace of specific activities aimed at achieving the DNP Group Environmental
Vision 2050. In particular, we are investing efforts into reducing GHG emissions and improving our resource recycling rate, andare making greater progress than originally planned.

DNP engages in integrated risk management to minimize thenegative impact of variable factors (risks) and expand
business opportunities based on a flexible and resilient
governance system.
Environmental, social and economic risks andopportunities are identified, evaluated and managed by the
Sustainability Committee at least once a year. We prioritize
activities and set targets based on factors such as businessplans, financial impact, stakeholder concerns, impact on theenvironment and society and likelihood of occurrence, andreflect them in our management strategies. For risks with aparticularly high level of importance or priority, we select arisk management department and reflect the risks in businessstrategies and plans after discussions by the Management
Committee, with each organizational unit playing a central
role in responding to them. For opportunities, we manage
priority themes throughout DNP and link them to strategic
business development.

(For details of our environmental targets, see page 17 of the DNP Group Environmental Report 2023).

Vision of society

Medium-term targets

Actual results for
FY2022

Decarbonizedsociety

Reduction in GHG emissions: 40% reduction compared with FY2015 levels by the end of FY2030 (Scope 1 and 2).

36.5% reduction

Resource recycling ratio: five-point increase compared with FY2015 by the end of FY2025 (51.7%→ 56.7%)

6.3-point increase

Recycling-oriented
societySociety in harmony
with nature

56

Percentage of items in compliance with the Guidelines for Procurement of Paper for Printing and Converting:

98% by the end of FY2025, 100% by the end of FY2030

94％

Strategy
DNP utilizes multiple scenarios published by international
institutions (see pages 58-59) to identify risks caused byclimate change and consider strategies for addressing risks in
its business activities. We use these scenarios to evaluate andanalyze qualitative and quantitative financial impact and theperiods of time during which we will be affected. Climatechange-related risks include transition risks associated withtransitioning toward a decarbonized society, such as thetightening of regulations and increased demand for low-carbon
C scenario) and changes associated withtechnologies (1.5°Cphysical impacts resulting from rising temperatures (4°scenario). Based on the results of its scenario analyses,
DNP Integrated Report 2023

57

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Impact on financial affairs, etc. of DNP

200,000• Introduction of

next-generationenergy sources

0

2015

58

2022

2030

2040

2050

MediumHigh
Medium

­

­

High

Low

Low

­

­

Mediumdeveloping the calculation business­

Short to medium term

• Secure an advantage by calculating CO2
emissions from productsʼ entire lifecycle,­

Medium term

High
High
High
High

MediumLow
Medium - High
Medium HighLow

Medium termLong term
Short tomedium term
Short
term

­

­

­

­

functional films to control light andtemperature• Increase in demand for products (such as

flexible LED sheet) that contribute to the safe
and stable supply of food by avoiding external
impacts

High

High

Short to medium term

High

High

Disaster control measures for production facilities
and bases, development of production systems in
multiple locations, etc.

• Increase in demand for products utilizing

MediumHigh• Decreased revenue due to delayed manufacturing• Increased cost of disaster control measures

Suspension ofoperations inlocations susceptible
to flooding such as
river basinsinterruption of supply

­

­

­

­

High

• Increased energy expenses• Increased capital expendituresand shipping• Increased cost of purchasing raw materials and

High

High

Increase in costs
due to growing
demand for cooling• Decreased revenue due to delayed manufacturing

Medium• Decreased revenue due to delayed manufacturing

Disaster control measures for production facilities
and bases, development of production systems in
multiple locations, etc.

as a company leading the way insustainability

MediumHigh

Hindrance tooperations due toaverage temperature
increases

Disruption of
supply chains• Decreased revenue due to delayed manufacturing• Increased cost of disaster control measures

improvement of engagement

Short to medium term

MediumHigh

Medium­Suspension ofoperations in theevent of a disasterand a decrease in revenue due to a decrease intransactions• Outflow of human resources and an increase in
hiring costs

Medium term

MediumHigh
MediumMedium­Medium• Increased information disclosure andMediumIncrease intemperature
andlong-termheat waves• Loss of market due to a lack of carbon reduction

growing market for low-carbon products andservices
Aim for 10% percentage of gross sales
from sales of super eco products by FY2025• Enable the market for recycled materials,
biomass materials and paper, etc., to growas replacements for existing plastic products• Securing an advantage by calculating CO2
emissions from productsʼ entire lifecycle• Securing advantages and human resources

Increase incorporate image, aconcerns of decline in stock
stakeholders price and exclusion
Increase inwind andflood
damage fromheavy
rainfall,flooding, etc.

lack of carbon reduction• Acceleration of the shift to non-petrochemical
products, a negative impression of plastic products
penetrates markets• Growing demand for the replacement of
non-environmentally conscious materials withalternative materials

MediumWorsening of the• Promotion of the development of and the• Loss of market and decrease in revenue due to a

Medium term

Changes incustomer
behavior

Reduction in
products andservices that are
not low-carbon orenvironmentallyconscious

popularization of EVs (battery pouches forlithium-ion batteries, mobility-relatedmaterials and films for use as coating
alternatives, etc.)
Aim for 100 billion yen in overall sales ofbattery pouches for lithium-ion batteries by 2025
• Widespread adoption of low-carbon producttechnologies accompanying growing demand
for semiconductors (nanoimprint lithography)[See pages 22-23 for details of focus businesses]

Short to medium term

decreased profit

neutrality

Mediumtechnologies• Loss of markets due to delays in development andMedium - High• Increased investment in the development of new

Medium term

next-generation fuels such as hydrogen andammonia• Increased demand due to the widespread

Short tomedium term

To achieve
net-zero GHG
emissions

Accelerating

Shift totechnologicallow-carbon innovation totechnologies achieve carbon

Waterrelated risks
in riverbasins2050 target

400,000

toward reducing emissions

Short term

600,000

reduction of emissions

reduction of emissions• Appealing to a proactive corporate stance

Short term

• Introduction of renewable energy­• Increased demand from major clients, etc., for the• Gain on sale of emissions rights due toMediumterm

800,000• Tougher rules on accurate tracking of emissions• Increase in media for disclosing emissions datacarbon tax on GHG emissions
Estimate for expenses as of 2030, assuming 140
US dollars/t-CO2 of carbon tax using the scenario of
the International Energy Agency (IEA):
approx. 8.4 billion yen/year

next-generation fuels such as hydrogen andammonia

Mediumterm

high-efficiency equipment• Conversion of business portfolio• Introduction of renewable energy

power generation• The promotion of development for the use of

Medium termMarket/evaluation
Urgency
Physical impact• Energy saving activities, replacement with

• Growth of sales of products related to solar• Business contracts impacted• Suppliers passing on the prices of raw materials

Estimated additional expenses as of 2030 due tothe tightening of GHG emissions regulations to limit
the temperature increase to 1.5 C level:
Approx. 400 to 800 million yen/year­

development of low-carbon products

from investments

Roadmap for achieving carbon neutrality by 2050

1,000,000• Increase in expenses for purchasing emissions rights­• Increased market share through early

The SSP5-8.5 Scenario is one of the climate change scenarios presented by the Intergovernmental Panel on Climate Change (IPCC) in its Sixth
Assessment Report. It is a scenario in which GHG emissions increase significantly due to fossil fuel-dependent social development, with the averagetemperature increasing by over 4°C by 2100, which will have a significant impact on ecosystems and human activities.

2030 target

Certificate
Estimate for additional expenses as of 2030 due
to the tightening of GHG emissions regulations tolimit the temperature increase to 1.5 C level:
Approx. 600 million yen/year• Increase in operating cost due to imposition of a

Introduction of acarbon tax

Toughening ofemissions reporting
obligations

SSP5-8.5 Scenario

A reduction of
40% from
FY2015 levels

Introduction of anemissions trading
system• Increased expenses for purchasing Non-Fossil

Period Level Likeliofofhood
impact impact

Positive• The promotion of development for the use of

The NZE 2050 Scenario is one of the climate change scenarios published by the International Energy Agency (IEA). In order to create a decarbonizedsociety and ensure energy security, it envisions the strengthening of ambitious and coordinated policies, the introduction of low-carbon technologies,
and the creation of markets. It is a scenario in which carbon neutrality is achieved by 2050, and the average temperature increase is limited to 1.5°C.

1,200,000

Tightening
GHG
emissions
regulations

Acceleration of the
carbon neutrality ofthe supply chain

Net Zero Emissions by 2050 Scenario (NZE)

GHG emissions (Scope 1+2) / t-CO2

Mandatory
introduction ofrenewable energy

Medium termof renewable energy

Physical risks in the short term are assumed to be frequent
and aggravated damage from torrential rains, which may
cause suspension of operations and disrupt the supply chain,etc. In the medium and long term, we anticipate an increasein costs and the interruption of operations, etc., caused by arise in average temperatures and a change in demand forwater. In preparation for these risks, we have organized asystem for managing business continuity. More specifically,
for the past several years, we have been implementing
disaster control measures such as raising outdoor facilities
and installing water control barriers. We have also beenworking to enhance our supply chain management bybuilding production systems at multiple plants, diversifying
suppliers, etc.
On the other hand, demand for products and services that
adapt to the effects of rising temperatures is also expected toincrease. For example, we will work to expand our range of
products and services utilizing our proprietary converting
technologies, such as lighting film, which maintains a
comfortable space by efficiently incorporating sunlight intoindoor spaces, and a multifunctional insulation box that
supports logistics operations at low temperatures and constanttemperatures. We will also expand the use of functional films,
such as by supplying flexible LED sheet, an LED lighting
solution that contributes to improving productivity in growing
agricultural products for plant factories, which are less affectedby wind and flood damage.

Chronic

4 ºC
Scenarioto encourage energy saving
Systematic capital expenditures based on internalcarbon pricing (ICP)• Increased capital expenditures for the introduction

Example reference scenario

1.5 ºC
Scenario• Increased capital expenditures accompanying efforts

Period Level Likeliofofhood
impact impact

Medium term

Response to physical risks and opportunities

Negative

MediumObligation to raiseemission reduction
targets

Scenario analysis reference scenarios
Type

Risks related to climate

Mediumterm

TypePolicies, laws and regulations

Transition risks include the likeliness of the increase in theuse of renewable energy, the introduction of emissions
trading (cap and trade) and the introduction of a carbon tax,etc., due to the tightening of GHG emissions regulations. We
expect this to increase operating costs. In response to this,DNP is transforming its business portfolio based on
environmental impact and added value. Under the DNPGroup Environmental Vision 2050, we are striving to achieve
net-zero GHG emissions from business activities at ourestablishments by 2050. We have set medium-term targets
for 2030 and are improving our energy conservation
activities, replacing existing equipment with higher-efficiency
equipment using internal carbon pricing and systematicallyintroducing renewable energy.
Meanwhile, we expect that demand and market for
low-carbon products and services will continue to grow,requiring the accelerated shift to and development of
low-carbon technologies. In response to such changes,
DNP is working to create value by enhancing its allianceswith numerous external partners by leveraging its strengths
in P&I (Printing and Information). Specifically, we have set
the Mobility and Industrial High-performance Materials
businesses as focus businesses under our Medium-termManagement Plan, in view of their profitability and market
growth potential. In addition to products that contribute to
the creation of a decarbonized society, such as clean
energy-related materials, components and products suchas battery pouches for lithium-ion batteries, we also
expect to see business growth in security solutions forthe sharing economy. We are also driving sales ofenvironmentally friendly packaging, which offers both
environmental conservation and convenience, andClimate change-related risks

Technology

Response to transition risks and opportunities

rolling out a certified system to calculate life cycle CO 2,
which contributes to decarbonization across the entire
supply chain by calculating CO 2 emissions throughout theentire lifecycle of our products and services. To strengthen
these businesses, we are intensively investing management
resources and implementing strategic investments.

Transition

DNP will respond flexibly and strategically to foreseeableclimate risks and increase the resilience of its businessactivities for all scenarios in the medium to long term.

Degree of impact We have determined the degree of impact on the interests of stakeholders and the business considering business plans, identified risks related to the environment
given their likelihood and categorized the risks that are predicted to have a long-term effect or a financial impact of 10 billion yen or more as having a high degreeof impact. Risks with an impact lasting several years or a financial impact of several hundred million yen were categorized as having a low degree of impact.
Degree of financial impact: High: approx. 10 billion yen Medium: 1 to 10 billion yen Low: less than 1 billion yen

DNP Integrated Report 2023

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4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Efforts to realize a recycling-oriented society

Targets and indicators
To minimize the risks associated with climate change, we
calculate the GHG emissions of the entire DNP Group (Scopes
1, 2 and 3) and develop strategies based on the results ofthese calculations. In order to achieve carbon neutrality by
2050, we have set the goal of reducing GHG emissions(Scopes 1 and 2) associated with business activities at ourestablishments by 40% by 2030, compared with emissions
in FY2015, and are engaged in various reduction activities.
Specifically, in addition to transforming our business portfoliowith consideration of environmental impact and added value,
we are implementing measures such as the introduction ofhigh-efficiency equipment that factors in internal carbon
pricing (3,000 yen/t-CO 2). As a result of these efforts, we
expect to be able to achieve our GHG emission reduction
target for 2030 ahead of schedule, and are now considering

raising the target. In addition, we are investigating the statusof our suppliersʼ targets for controlling and reducing their
GHG emissions to control our Scope 3 emissions, which
account for more than 80% of GHG emissions across ourentire supply chain.
To maximize business opportunities, we are working to
expand our focus businesses based on the Medium-termManagement Plan. We have set the goal of raising thepercentage of gross sales from sales of super eco-products(specific products and services that DNP deems to be
exceptionally eco-friendly based on its own criteria) to 10%
by 2025, and sales are growing at a pace that exceeds thistarget. We will continue to increase the number of our
products and services that contribute to the creation of adecarbonized society.

Super Eco-Products examples and sales performance
DNP has established guidelines for developing eco-friendly products and services* from the perspective of reducing
environmental impact throughout their life cycle, and is working to create eco-friendly products and services fromthe development stages. Among them, we have identified products and services that are exceptionally eco-friendly
as Super Eco-Products.
*See DNP Group Environmental Report 2023 page 20

Mono-material packaging materials

Multifunctional insulation boxes

As a response to the problems of marine plastic waste, climate change and the toughening of waste import regulations in various
countries, the importance of recycling plastic resources in Japan is also increasing. DNP is making efficient use of resources
throughout its supply chain to help realize a recycling-oriented society as laid out in the DNP Group Environmental Vision 2050.
Since fiscal 2021, we have been working to recycle unneeded materials, using the resource recycling rate ̶ the percentage ofmaterials included in unneeded waste that are recycled by material and chemical recycling̶ as an indicator. We set a target of
improving this recycling ratio by 5 points (51.7% →56.7%) in comparison with fiscal 2015 levels by fiscal 2025, and as a result of
recycling (primarily plastics) we achieved an improvement of 6.3 points (58.0%) in fiscal 2022. Going forward, we aim to achievea resource recycling ratio of 65% for all unneeded materials, and a resource recycling ratio of 50% for plastics by 2030, further
accelerating the efficient use of resources.

DNP awarded Japan DX Grand Prize (Special Prize) for demonstration
experiment for visualization of resource recycling
In June 2023, DNP was awarded the special prize in the SX/GX category of the Japan DX Grand Prize, which is run by
the Japan Digital Transformation Promotion Association, in recognition of its efforts in the Saitama Prefecture
Resource Recycling Visualization Demonstration Experiment. In this project, DNP ensured
traceability (i.e., management and tracking of information) from the collection to therecycling of used plastics from households, visualizing and communicating information on
CO 2 emissions generated in all processes. As a result of the experiment, we obtained
results indicating that communicating this data to consumers in an easily understandable
manner leads to a change in their awareness of recycling.
Going forward, DNP will continue to promote efficient use of resources by engaging invarious measures for resource recycling and enhancing communication strategies toencourage consumers to take action and reduce environmental impact.

Efforts to realize a society in harmony with nature
DNP recognizes that its business activities affect biodiversity, and believes that maintaining DNPʼs coexistence with nature isessential for the companyʼs sustainable growth. We strive to minimize our impact on biodiversity and maintain harmony with
regional ecosystems throughout the entire value chain to establish a society that is in harmony with nature. We have examined therelationship between our business activities and biodiversity, prioritized the key themes of raw material procurement (which isdependent on ecosystem services and greatly impacts biodiversity) and the creation of greenery areas on company premises (as aneffective use of land for contributing to the conservation of biodiversity), and are implementing specific activities to address them.

Ensure traceability in procurement of raw materials (paper)
Mono-material packaging materials use only a monomaterial, and are therefore easily recyclable and contributeto the recycling of resources. Utilizing our innovative
converting technologies, they offer high performance as abarrier to oxygen and water vapor and in blocking light.

Multifunctional insulation boxes offer a high degree of heatinsulation performance due to their high-barrier film, making it
possible to keep the internal temperature constant for an extended
period of time without using a power supply. They support safe andsecure logistics operations with temperature quality throughthermal design technology and temperature control using IT.

We established the DNP Group Guidelines for Procurement of Paper for Printing and Converting in 2012 for the
procurement of paper, which, in DNPʼs business activities, significantly relies on and impacts ecosystems, tomaintain sustainable forest resources. The Guidelines specify the criteria for selecting suppliers and types of paper
to purchase, and we are strengthening our relationships with suppliers and verifying the legitimacy of raw materials.
At present, we are promoting the active use of paper products with forest certification and the assurance oftraceability to achieve 100% compliance with the Guidelines.

DNP is selected harmony with nature site certification-equivalent“30by30* Alliance for Biodiversity”
Super Eco-Products sales trends and ratio of their sales to gross sales
Sales(billion yen)

60

FY201980.0

FY202087.5

FY2021134.8

FY2022

163.1

5.7%
6.5 %
10.0 %

11.9 %
Ratio of Super
Eco-Products
to gross sales

DNP is redeveloping the Ichigaya district in Tokyo, home to its head
office, as a center for new value creation. We are growing“ Ichigaya-no-Mori” (The Ichigaya forest), a greenery area replicating
while imaging the wooded area of Musashino which once spread there.
By creating a new forest in an urban area as part of this city planning
project, we aim to achieve both the development of a business base andcontribution to the environment. The Ichigaya-no-Mori site has also been
selected as “harmony with nature site certification-equivalent ” under ademonstration project by the 30by30 Alliance for Biodiversity, which isrun by Japanʼs Ministry of the Environment (MOE). Together with thegrowth of the highly diverse Ichigaya-no-Mori site, DNP will continue
working to create new value originating in the Ichigaya district.
＊30by30: A global goal adopted at the 15th Conference of the Parties to the United Nations Biodiversity Conference (COP15) to protect and conserve at least
30% of land and sea areas in a healthy state by 2030

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4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Initiatives Across the Entire Supply Chain

Principal themes of CSR management

DNP is engaged in initiatives addressing the principal themes of CSR management throughout its supply chain to
help create a sustainable society. Our main activities and achievements in fiscal 2022 were as follows.

Business to Contribute to
SDGs Achievement

Fair Operating Practices

Human Rights and Labor

Environment

Responsible Procurement

Product Safety and Quality

Information Security

Corporate CitizenshipSupply chain
Company activities (manufacturing, distribution, etc.)

Product Safety and Quality• Strengthening of our management structure based on our Basic• Value creation through three strategies: business strategy,• Global production bases• Supplier surveys based on CSR Procurement Guidelines• Acquisition and strengthening of technology through open

• Quality management based on the DNP• Supplier survey on responsible minerals procurement• Technology and R&D investment in excess of 30 billion yen

Procurement

Responsible Procurement

Procurement Policy and CSR Procurement Guidelines

development strategy and intellectual property strategy
innovation

Average score: 82

per year: 32.4 billion yen

Smelters/refiners that are Conformant " in the Responsible Minerals
Assurance Process(RMAP) audit: 260• Patent rights: 12,143, design rights: 1,312,

trademark rights: 1,275

Strengthening intellectual capital

Initiatives for stakeholders

Human Rights and Labor

Fair Operating Practices

Information Security

Pages 50–53

Product Safety and Quality

Employees• Responsible procurement activities• Improving the percentage of female managers: 8.4%

•Partnership-building declaration

56 bases in Japan, 16 bases overseas

Group Quality Policy and DNP Group
Product Safety Policy• Rigorous management based on the
DNP Groupʼs Basic Policy on Information

Security
Ratio of compliance assessments
conducted: 100 %Privacy mark / ISO/IEC27001
certification obtained• Corporate ethics and compliance(DNP non-consolidated)• Improving the percentage of males taking childcare leave: 83.6 %(DNP non-consolidated)• Improving the ratio of employees with disabilities: 2.6 %(DNP non-consolidated)• Improving the ratio of annual paid leave taken: 53.3 %• Reduction in frequency rate of lost workday injuries: 0.3 %Strengthening of human capitalUse, disposal and recycling of products

Business to Contribute to SDGs Achievement

Businesses that contribute to achieving the SDGs utilizing
Printing & Information core values
Focus business strategy P14-17• Contributing to a sustainable society where people can live safe, secure and healthy lives• Securely and seamlessly connecting real and digital, contributing to the evolution of an information society

Creating value primarily in focus business areas
Digital interfaces

Semiconductors

Content & XR communication

P18-27

Mobility and industrial high-performance materials

Medical & healthcare

Providing products and services with a top market share both in Japan and overseas
P4-5

Corporate CitizenshipSuppliers and outsourcing contractors
Cooperating suppliers: 180
Suppliers and outsourcing contractors participating in engagement
activities: 22

Information Security

education
Ratio of Autonomous Corporate Ethics
Training conducted:
100 % (107 organizations)• Participation rate of information

security education and training:
100 % (Approx. 41,000 persons)Client companies and consumers

Local communities• Number of serious accidents caused by• Social contribution activity programs• Percentage of newly developed products• Menu items at employee cafeteria

our products: 0 accident

undergoing product safety and risk assessment:

100 % (330 products)• Percentage of quality system inspections carried out:

100 % (51 units and companies)

conducted: 58, external participants: 1,610

including a donation
Total of dishes: 38,912,
amount of donations: 1,945,600 JPY*Including refugee support menu items

Pages 44–49

Enhancing the internal whistle-blower systems

Providing dishes with fundraising for refugee support at employee cafeterias

In accordance with the Whistleblower Protection Act, DNP established the Open Door Room in 2002 as a contact point for employees for consultation and reporting(whistleblowing) of matters relating to corporate ethics. Also in 2015, we established an external contact point for consultation and whistleblowing via an attorney ʼs office.
In fiscal 2022, we expanded the scope of coverage for the Supplier Hotline which was established in 2009 as a contact point for whistleblowing from outside thecompany, and renamed it the Compliance Hotline. Through the operation of these systems, we will continue working to ensure fairer, more equitable corporate activities.

DNP engages in a variety of corporate citizenship activities with employee participation, to help realize a society in which no one is left behind. In fiscal 2022, we beganproviding refugee support menu items that include donations as part of the fee at employee cafeterias nationwide, to support more than 100 million refugees around the world.
Coinciding with World Refugee Day and Human Rights Week, dishes were served in honor of Ukraine, Syria and Myanmar. A total of 3,544 meals were eaten, and donations
amounting to approximately 180,000 yen will be used for UNHCR's refugee relief activities, along with company donations (a total of 50 million yen over a period of five years).

Initiatives for environment

Environment• Procurement papers conforming to DNP Group Guidelines for

Procurement of Paper for Printing and Converting
Percentage of key suppliers that have obtained the conformancecertificate: 94%• Reduction of GHG emissions (Scope 3) in cooperation with

suppliers• Reduction of GHG emissions (Scope 1 and 2) 36.5 %reduction compared to FY2015 levels• Improvement in resource recycling ratio improved from

51.7% in FY2015 to 58.0 %• Maintenance of performance at 70% or below environmental

laws and regulations standard levels
Number of cases exceeding regulation levels: 2

Initiatives for Environment• Calculation and reduction of CO 2

emissions and implementation of LCA forthe entire supply chain• Creating products and services comply

with guidelines for developing eco-friendly
products and services
Ratio of Super Eco-Products in total sales:
11.8 %

Eco-friendly design team of DNP
In October 2022, we launched a cross-divisional eco-friendly design team that combines DNPʼs diverse
technologies and know-how to contribute to resolving environment-related issues at companies. Going forward,
we will provide companies with services aimed at solving various issues, with the aim of achieving long-term
harmonious coexistence between the environment and businesses.

Pages 56-61

Initiatives for responsible minerals procurement
DNP has been engaged in responsible procurement initiatives since2006, to enhance sustainability throughout the supply chain. In
particular, because of concerns that certain mineral resources containedin raw materials may cause serious human rights violations in the mining
process, we have stipulated “responsible mineral procurement ” as oneof the matters to be complied with in the DNP Group CSR Procurement
Guidelines, and established a management system based on the OECD
Due Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas ̶ an international standard for
responsible procurement.
In fiscal 2022, we conducted a regular survey of our major suppliers
using the RMI＊1 (Responsible Minerals Initiative) RMAP＊2 (Responsible
62

Minerals Assurance Process). We identified 414 smelters/refiners for tin,tantalum, tungsten, gold, cobalt and mica contained in DNP ʼs raw
materials, and confirmed that 260 of them were Conformant certified. We
also assess human rights risks based on DNP ʼs own risk management
framework and standards. At the same time, we will continue to conductdetailed assessments of smelters/refiners with potential risks and strive
to prevent and improve upon them. For aluminum, which is a raw material
for DNP ʼs main products, we have launched new initiatives to identify andevaluate smelters/refiners, etc. By holding regular discussions with therelevant suppliers, we are conducting engagement initiatives andevaluating the eight smelters/refiners identified to confirm that no
significant human rights risks are found.

As global human rights due diligence legislation and the strengtheningof risk management related to mineral resources progresses, DNP is
engaging in further initiatives such as creating a management systemand conducting supplier surveys to introduce similar management
measures for 16 minerals including lithium, nickel and copper.
In fiscal 2023 and beyond, we will continue to strengthen our
response to human rights risks in our supply chain, with a primary focus
on mineral resources.
*1 RMI: An organization that spearheads the responsible procurement of minerals. More than 400

companies/organizations from around the world are members.
*2 RMAP: A program that verifies compliance with responsible minerals procurement in conjunction withthe management system and procurement practices of smelters and refineries based on theevaluations of independent third parties.
*3 CAHRAs: Conflict-Affected and High-Risk Areas.

Risk assessment results for six conflict minerals(tin, tantalum, tungsten, gold, cobalt and mica)
Number of responding companies

171

Number of smelters/refiners subject to risk assessments

414

Number of smelters/refiners that are either “Conformant” or “Active”
in the RMAP audit or are not located within DNP CAHRAs＊3 (1)397

Number of smelters/refiners under (1) with “ Conformant ” RMAP
audit status260

DNP Integrated Report 2023

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