Hitachi Sustainability Report 2022
Fiscal 2021 Results

Hitachi Sustainability Report 2022

1 Introduction

002

002 Editorial Policy

Contents

Management

3 Environmental
028

003 Hitachi Group Profile
031

004 Business of the Hitachi Group

Introduction

005 Global Business Overview

028

159 E xecutive Summary

079 Innovation strategy

011 Hitachi Group Identity

038 Environmental Management System

041

042 C ontributing to a Decarbonized Society Throughthe Decarbonization Business

012 Sustainability Roadmap
 id-term Management Plan 2024
013 M
and Sustainability

045 Contributing to a Decarbonized Society at
Business Sites (Factories and Offices)

015 Materiality

020 Engagement and Initiatives

049 Climate-related Financial Information Disclosure(Based on TCFD Recommendations)

056

020 Stakeholder Engagement
 ain Initiatives and Groups Hitachi
022 M
Is involved with
Leadership and Policy
023 Industry
Recommendations

Achieving a Decarbonized Society
041 Efforts to Achieve a Decarbonized Society

012 Sustainability Management

 ramework for Promoting
018 F
Sustainability Strategy

Environmental Governance062

Achieving a Resource Efficient Society

170 E xecutive Summary
171 Business Ethics and Compliance

177 Risk Management091 Global Human Capital Management

177 E xecutive Summary alent Development
095 T179 Addressing Risks and Opportunities

100 Diversity, Equity and Inclusion

182 Business Continuation Initiatives

 ork-Life Management
106 W

184 Information Security

111 Occupational Health and Safety

184 E xecutive Summary

120 F reedom of Association and Collective
Bargaining

185 Information Security

122 Human Rights

188 Personal Information Protection

190 Governance Data

122 Executive Summary

190 C orporate Governance123 R espect for Human Rights Throughout
the Value Chain

191 Business Ethics and Compliance

130 Value Chain Management
130 Executive Summary
132 R esponsible Procurement

6 Assurance

059 Building a Society That Uses Resources Society

137 Quality and Product Safety
Management

192 Assurance

Achieving a Harmonized Society with Nature reserving Ecosystems
066 P

067

088 Executive Summary

Business Ethics and Compliance057 B uilding a Water Efficient Society

064 Managing and Reducing Chemical Substances

026 External Assessments and Awards

085 Intellectual Property

088 Human Capital

Environmental Data

158

160 C orporate Governance

170056 Effort to Achieve a Resource Efficient Society

062 Efforts to Achieve a Harmonized Society with
Nature024 Leadership in International
Standardization Activities

081 R esearch and Development001

5 Governance

Advancing Our Environmental Vision andLong-Term Environmental Targets

Governance

009 Chief Sustainability Officer's Message

076

159 Corporate Governance036 F ramework for Promoting Environmental

007 CEO's Message

4 Social

Assurance

077 Executive Summary

033 Environmental Action Plan

036

Governance077 Innovation Management

Environmental Innovation 2050

006

Social029 Executive Summary

Environmental

031 T he Environmental Vision and Hitachi

2 Management

Environmental

140 C ustomer Satisfaction (CS)142 Community
142 Executive Summary
143 S ocial Contribution Activities

147 Social Data

067 GHG Emissions Throughout the Value Chain

147 Innovation Management069 Environmental Load from Operations

148 H uman Capital074 Environmental Management Data

156 Value Chain Management

 nvironmental Accounting
075 E

157 C ommunity

192

Contents

Hitachi Sustainability Report 2022

Editorial Policy

Introduction

Management

Environmental

SocialGovernance

002

Assurance

GRI 102-45/102-46/102-48/102-50/102-51/102-52/102-56

Disclosure Structure for Financial and
Non-Financial Information

Basic Concept
The Hitachi Sustainability Report 2022 presents our stance toward environmental (E), social (S), and governance (G) issues anddetails the activities we undertook in relation to these in fiscal 2021.
Inasmuch as the report is a tool with which we engage with our stakeholders through comprehensive information disclosure,
it is based on the disclosure requirements of the GRI Sustainability Reporting Standards (GRI Standards). Additionally, in creating
the report, as well as referring to the industry disclosure standards relevant to Hitachi as defined in the Sustainability AccountingStandards Board’s (SASB) Sustainable Industry Classification System (SICS), with respect to climate change, we disclose a variety
of information based on the proposals of the Task Force on Climate-related Financial Disclosures (TCFD).

The Hitachi Integrated Report discloses both financial and nonfinancial information about Hitachi’s value creation process. The
Hitachi Sustainability Report serves as a tool for comprehensively
reporting more detailed ESG-related information.
Value Creation Story

Integrated Report

What This Report Covers (Scope of Report)

Companies:

Hitachi, Ltd. and its consolidated subsidiaries
Financial data

ReportingBoundary:

Environmental data
Social andgovernance data

1,141 companies, namely Hitachi, Ltd. and 1,140 consolidated subsidiaries and equity-method
associates and joint ventures
854 companies, namely Hitachi, Ltd. and 853 consolidated subsidiaries.
Data on the environmental load from operations applies to business sites with a large environmental load thatare classified as Category A.*1 Some data for major companies acquired/merged in fiscal 2020 is listed in notes.
Boundary of individual data indicated

Reporting cycle:

Published every year as an annual report

Date published:

September 2022 (Previous report: September 2021)

P.038 Environmental Management System

Hitachi, Ltd.

: Information on or initiatives of Hitachi, Ltd.

Hitachi: Information on or initiatives of all Group companies
worldwide including Hitachi, Ltd.

•Sustainability Report•Corporate Governance
Report*1•Sustainability Website
https://www.hitachi.com/
sustainability/

Investor Information•Annual Securities Report*1•Financial Statements*1•Business Report*1•Corporate Strategy(Mid-term Management Plan)•Investor Relations Website
https://www.hitachi.com/
IR-e/ComprehensivenessNotes: • The data for each fiscal year are the results according to the boundary of data in that fiscal year.
• The base fiscal year data has been revised to match the boundary of data for fiscal 2021.
*1 All Group business sites are classified into one of three categories: A, B, or C, based on the Criteria for Classification of Environmental Management established by Hitachi,
and the most suitable management is then conducted for each in accordance with the respective level of environmental risk.

Hitachi References in This Report

Sustainability/
ESG Information

Key Guidelines Referred to in Preparing This Report⃝ GRI Standards, Global Reporting Initiative	Each section is labeled with GRI topic numbers showing which disclosure
requirement it corresponds to.
⃝ Sustainability Accounting Standards, IFRS Foundation⃝ Environmental Reporting Guidelines (2012/2018 version), Ministry of theEnvironment, Japan

Financial

Note: Some information on activities in April 2022 and after is also included.

Non-financial

The main period covered is fiscal 2021 (April 1, 2021, to March 31, 2022)

Period:*1 Statutory disclosure/
Timely disclosure

Independent Assurance
GRI 102-56

To enhance the credibility of this report, we have engaged
KPMG AZSA Substitutability Co., Ltd. to perform a thirdparty review. The
mark indicates disclosed information
assured in accordance with the International Standard on
Assurance Engagements (ISAE) 3000 and ISAE 3410.

Contents

Hitachi Sustainability Report 2022

Hitachi Group Profile

Introduction

Management

Environmental

SocialGovernance

Assurance003

GRI 102-1/ 102-2/102-3/102-4/102-5/102-6/102-7/201-1/203-1

Company Profile (as of March 31, 2022)

Consolidated Financial Highlights for Fiscal 2021 Based on the International Financial Reporting Standards (IFRS)Corporate name

Hitachi, Ltd.

Revenue

10,264.6 billion yen (up 118% year on year)

Incorporated

February 1, 1920 (founded in 1910)

Adjusted Operating Income Ratio

7.2% (up down 1.5%)

Head office

1-6-6 Marunouchi, Chiyoda-ku, Tokyo, Japan

EBIT*

850.9 billion yen (up 0.6 billion yen)

Representative

Representative Executive Officer, President & CEO Keiji Kojima

Net income attributable to Hitachi, Ltd. stockholders

583.4 billion yen (up 81.8 billion yen)

Capital

7.7% (up 1.3points)

1

461,731 billion yen

ROIC*

Number of employees(consolidated)368,247 (Japan: 156,768, outside Japan: 211,479)

Number of consolidated
subsidiaries

853 (Japan: 157, outside Japan: 696)

Note: Hitachi’s consolidated financial statement is prepared based on theInternational Financial Reporting Standards (IFRS).
*1 EBIT: Income from continuing operations before income tax, less interest
income, plus interest charges.
*2 ROIC:	Return on invested capital. Calculated as follows: ROIC = (NOPAT + Equity method gain/loss)/Invested capital × 100. NOPAT(Net operating profit after tax) = Adjusted operating income × (1 – Tax burden). Invested capital = Interest-bearing debt + Total
equityNumber of equity-method
associates and joint
287
ventures2

Revenue/Adjusted Operating Income Ratio/Net Income(billion yen)(billion yen)

12,00010,0008,000

9,368.6
7.6%

1,200

10,264.6

9,480.6

8,767.2

8.0%

8,729.1

7.5%

1,000

7.2%
5.7%

800

583.4

501.6

6,000

600

362.9
4,000

400

222.5
87.5

2,000

200

■ Revenue (left scale)■ Net income attributable to Hitachi, Ltd. stockholders (right scale)

0

2017

2018

2019

2020

2021

(FY)

0

⃝ Adjusted operating income ratio (%)

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

Assurance

004

Business of the Hitachi GroupIn April 2022, Hitachi formulated the Mid-term Management Plan 2024 targeting further global advances and growth in the Social Innovation Business based on three pillars of growth: digital, green and innovation.
To increase management efficiency and speed, we simplified our structure, grouping together businesses with similar characteristics organized into three sectors: Digital Systems & Services (DSS), Green Energy& Mobility (GEM) and Connective Industries (CI). Together with customers, we will resolve social issues leveraging a business structure that includes the Automotive Systems Business (Hitachi Astemo).

■ Digital Systems & Services

Others4%

Main products and services• Front Business:IT and digital systems in mission-critical fields
such as financial institutions, public offices, municipalities
and social infrastructure• IT Services: DX solutions and services• Services & Platforms: Designs, digital engineering, data
analytics, cloud services and IT products

Digital Systems &Services

Hitachi Metals

20%

9%

Hitachi Construction
Machinery

9%

Automotive
Systems Business

15%

Revenue

10,264.6
billion yen(FY2021)

Green Energy &Mobility18%■ Connective Industries
Main products and services• U rban Group: Elevators, escalators and building services,
home appliances, air conditioning systems• A
 dvanced Technologies Group: Healthcare (clinical chemistry andimmunochemistry analyzers, automated cell culture equipment, particle
therapy system, etc.), measurement and analysis (semiconductor
metrology/inspection equipment, electron microscopes, etc.)• Industry Group: Industry & distribution solutions, robotics SI, watersupply and sewage, utilities solutions, industrial machinery

Connective
Industries

25%

Others3%

Hitachi Metals■ Green Energy & Mobility

4%

Main products and services• Energy solutions (power grids, nuclear, renewable anddistributed power sources)• Railway systems (rolling stock, signals, controls, services
and maintenance, smart mobility, turnkey)

Hitachi Construction
Machinery

12%

Automotive
Systems Business7%

Connective Industries
Source: Aibel

30%

Digital Systems &Services

Adjusted EBITA

855.3
billion yen(FY2021)

33%

Green Energy &Mobility

11%

Notes: 1 F
 igures based on new segment classifications applied from fiscal 2022 onward.
2 Hitachi Construction Machinery was deconsolidated on August 23, 2022.
Hitachi Metals is scheduled to be removed from the scope of consolidation in
March 2023.
3 Adjusted EBITA=Adjusted operating income – acquisition-related amortization+ equity in earnings (losses) of affiliates■ Automotive Systems Business
Main products and services• P owertrains, chassis, advanced driver assistance, motorcycle systems

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

005

Assurance

Global Business Overview (As of March 31, 2022)
Japan

Overseas revenues account for 59% of total revenues for Hitachi.
By combining Lumada with global business portfolios built up in each region and business, Hitachi will further accelerate its
global rollout and expand the value created and realized through the Social Innovation Business on a global scale.

Number of
employees

Approx.

China■ Digital Systems & Services

Number of
employees■ Green Energy & Mobility

Approx.

■ Connective Industries

4,187.0
billion yen

PowerGrids BU

Component ratio
Building
Systems BU

Revenues

1,331.6

Hitachi Global Life
Solutionsbillion yen

Component ratio

13%

EuropeNorth America

28,000 97

41%

Nuclear Energy& Energy BU
Industry Group

Building
Systems BU
Hitachi High-Tech

Number of
employees

Number ofsubsidiaries

158

Revenues

51,000 136■ Others (Including Hitachi Construction Machinery, Hitachi Metals)

Approx.

157,000

Number ofsubsidiaries■ Automotive Systems Business

Number of
employees

Number ofsubsidiaries

Number ofsubsidiaries

Approx.

43,000 148
ASEAN, India, and other areas
Revenues

Revenues

1,555.1

billion yen
Component ratio

15%

Number of
employees

1,299.4

Power
Grids BU

billion yen

Approx.

Component ratio

Railway
Systems BU
Hitachi High-Tech

13%

Railway
Systems BU

Approx.

Power
Grids BU

Revenues

1,183.2

Railway
Systems BU

billion yen

Other areas
Number of employees

70,000 200

Power
Grids BU

Industry Group
Hitachi High-Tech

Number ofsubsidiaries

Component ratio

Number of subsidiaries

20,000 115

Revenues

708.1billion yen

11%

Hitachi High-Tech▶ 19 customer
co-creation centers

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance006

007 CEO's Message
009 Chief Sustainability Officer's Message
011 Hitachi Group Identity
012 Sustainability Management
012 Sustainability Roadmap
013 Mid-term Management Plan 2024 and Sustainability
015 Materiality
018 Framework for Promoting Sustainability Strate

Management

020 Engagement and Initiatives
020 Stakeholder Engagement
022 Main Initiatives and Groups Hitachi Is Involved with
023 Industry Leadership and Policy Recommendations
024 Leadership in International Standardization Activities

026 External Assessments and Awards

Hitachi Sustainability Report 2022

CEO’s Message

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

GRI 102-14/102-15

Support people’s quality of life withdata and technology that fosters asustainable society

In the wake of the financial crisis following the collapse of Lehman Brothers, Hitachi made a major shift
to the Social Innovation Business, which aims to solve social issues through co-creation with customers,
leveraging our core strengths in IT (Information Technology) × OT (Operational Technology) × Products.
For about 10 years until last fiscal year, as one CEO passed the baton to another, we have been on atransformational journey to reform our business structure to further expand our Social Innovation Business.
The three-year term of our Mid-term Management Plan 2021 was, in a sense, about putting thefinishing touches on this process of structural reform. Our key objective to become a global leader in theSocial Innovation Business guided us to focus our resources on building a global business foundation.
Acquiring global leader ABB’s Power Grids business (currently Hitachi Energy) provided us with core
infrastructure in the environmental business that is essential for renewable energy use. Further, ouracquisition of GlobalLogic, a leading-edge digital engineering firm that is growing rapidly on its strength incollaborating with customers, gave us the global base needed for our Lumada-focused digital business.
In the Mid-term Management Plan 2024, Hitachi aspires to “support people’s quality of life withdata and technology that fosters a sustainable society.” In our business activities, we must be mindfulof planetary boundaries—tipping points for destructive changes to the global environment—and act toprotect the planet. In the social aspect, our next major objective is ‘wellbeing’—where every individual canfully express their individuality and play an active role. Hitachi focuses on research and development thatwill enable us to use data and technology to build a sustainable society that does not exceed planetary
boundaries while realizing wellbeing. We have set an overall theme for our Mid-term Management Plan
2024— “From structural reform to organic growth”— which will pave the way for growth over the next ten
years by earning the trust of our customers as their partner in finding solutions to issues.
To meet expectations from global initiatives and stakeholders, we have identified six key material

President & CEO
Hitachi, Ltd.

Keiji Kojima

007

Hitachi Sustainability Report 2022

Contents

issues which we will address through our deepened
commitment to sustainable management taking into
account the greatest strengths we have and the challenges
we face. The Senior Executive Committee and the Boardof Directors are discussing the status of progress on the
management targets we have set based on these, as wellas possible new initiatives. In the interest of strengthening
governance to achieve the objectives of the Mid-termManagement Plan 2024, we are working to clarify ourapproach to accountability, including linking major KPIs tothe performance evaluation of executive officers.
The world has entered an era of highly unpredictablesocial and economic change. There are critical steps wemust take to ensure reliable implementation of our planin this volatile environment. One crucial focus is gathering
information on potential risks so that we are prepared totake rapid action when risks materialize. We are committed
to responding to the diverse range of risks we face,
including those related to the economic environment,
geopolitics, natural disasters and compliance, in a swift
and comprehensive manner. In April 2022, we establisheda central risk management framework and accountability
structure for this purpose.
With regards to the environment, we have set up aGroup-wide cross-sectoral organization under the Chief
Sustainability Officer to promote decarbonization efforts
among our customers and within the Hitachi Group. A
key aim is to promptly provide customers with relevant
knowledge and expertise that the Group has accumulated.

Introduction

Management

Environmental

Social

We will leverage this new framework to achieve the targets
of contributing to reduce CO2 emissions by 100 million
metric tons annually by fiscal 2024 and also achievingcarbon neutrality in the value chain by fiscal 2050.
We must not lose sight of the fact that the mostimportant factor in continuing to provide value to ourcustomers and the broader society to build a sustainable
world is our people. The driving force behind the evolution of
our Social Innovation Business is the talents from all over theworld who identify with our purpose of solving social issues.
Solving increasingly complex social issues requires creativity
that goes beyond conventional thinking. Diversity, Equity
and Inclusion is the key to achieving this. It is crucial that
we encourage collaboration across organizations, regions
and generations, and build an equitable and inclusive
organization where our diverse talents are able to play anactive role. We will develop talents and foster a corporate
culture that enables each and every employee to see social
issues as their own and to fulfill their best with passion,
thereby improving engagement with employees.
To address environmental challenges such as climatechange, social issues such as urban population growth,and new social issues that we cannot even predict at thistime, Hitachi will take on the challenges and grow throughco-creation with our customers and other stakeholders. I
invite you to keep your eyes on Hitachi, as we move into the
future.

Governance

Assurance008

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Chief Sustainability Officer's Message

Environmental

SocialGovernance

Assurance009

GRI 102-14/102-15

Sustainability will be the Growth Driver

Lorena Dellagiovanna
Vice President and Executive Officer, Chief Sustainability Officer,
Head of Global Environment Division, and CDIO
Hitachi, Ltd.

Hitachi believes a strong commitment to sustainability willbe the Growth Driver. Sustainability is not a cost nor is it
for compliance. It is a value creation for the business first,
and as a consequence, for society. It is important to clarify
that sustainability is not a concept up in the air, something
nice to have, but it’s a key driver for any business to survive
in the mid-to-long term future. It has become increasingly
accepted that the objective of maximizing shareholder value
requires not only top competitive performance, but also theattention to a variety of sustainability’s issues.
As indicated in the Mid-term Management Plan 2024,
we aim to enhance our corporate value through sustainability
with a focus on planetary boundaries and wellbeing.
Speaking to the environment, to accelerate andpromote the achievement of Hitachi's long-term
environmental targets as measures, Hitachi developed twobusiness strategies, GX for GROWTH (customer and society
decarbonization) and GX for CORE (Hitachi decarbonization).
Under GX for GROWTH, we will support customers in
reducing CO2 emissions by expanding Hitachi's greener andmore efficient product portfolio and providing customers
with End to End (E2E) solutions across sectors. By fiscal

2024, we aim to contribute to reduce CO2 emissions byapproximately 100 million metric tons per year. We will
accelerate the development of various solutions realizing
energy transition, the electrification of mobility and theenergy saving. GX for CORE aims to decarbonize our own
operations. We aim to achieve reductions in Scope 1 and 2
by investing approximately 37 billion yen over the next three
years to meet the carbon neutrality target in fiscal 2030 and
50% CO2 emissions reduction throughout the value chain by
the same fiscal year. In addition, we launched a framework
for issuing green bonds to mobilize more funds to accelerate
activities toward carbon neutrality. Based on these efforts,
including preparation of SBTi net zero certification, we aim
to improve ESG evaluation.
At the same time, we are also looking to the future
by investing in the R&D of green technologies, such ashydrogen, methanation, and Direct Air Capture (DAC).
Hitachi supported COP26 held on November 2021 as
1st Principal Partner in Japanese companies. In COP26,
Hitachi had opportunities to discuss with VIPs such as
Ministers and present our activities in several events.
Through these activities in COP26, we developed good

Hitachi Sustainability Report 2022

Contents

relationships with stakeholders including government. We
recognize that we have a role to play as part of the global
community. Through COP26, we were able to demonstrate

Vice President and Executive Officer Dellagiovanna speaks at COP26

Introduction

Management

Environmental

Socialour strong commitment to climate action. We will focus onadvancing decarbonization with our clients and partners todeliver our commitment pledged in COP26. We will continue
to monitor the development in COP27.
In terms of society, Hitachi believes that, through theinclusion of diverse talents, we will be able to collaborate andcreate innovation in data and technology in the digital age torealize a sustainable society and support people's wellbeing.
In addition to strengthening the acquisition and development
of digital talents, we aim to enhance employee engagement
by creating a culture in which every employee can contributein solving social issues, and a work environment in which
Diversity, Equity and Inclusion (DEI) are fostered on a global
scale, thereby achieving both business growth and asustainable society.
All of the above are in line with Hitachi’s mission
to contribute to society but respecting human rights isessential. It is indispensable for the development andsustainability of the company. In accordance with the HitachiGroup Human Rights Policy, we are promoting human rights
due diligence (HRDD) and other efforts to embed humanrights risk management into our operation and too see thatpeople’s rights and dignity are respected throughout thevalue chain.
We look forward to co-creating solutions withour customers, partners, and the global community tosolve sustainable issues. Together, we will innovate for asustainable society.

Governance

Assurance

010

Mid-term Management Plan 2024
Consolidated Financial Results for the Year Ended March 31,
2022 and Mid-term Management Plan 2024
https://www.hitachi.com/New/cnews/
month/2022/04/220428.html

Green Strategy
Green / Innovation Strategy
https://www.hitachi.com/IR-e/library/presentation/
webcast/220613_01_gis.html

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

011

Hitachi Group Identity
Carrying out Corporate Activities Based on the Hitachi Group Identity

Solidifying the Hitachi Group Identity
GRI 102-16

Approach

Hitachi’s Mission is to “contribute to society through thedevelopment of superior, original technology and products.”
To fulfill our Mission, we adhere to our Values, which reflect
the Hitachi Founding Spirit of “Harmony, Sincerity andPioneering Spirit.” Under our Mission and Value, we haveadded the Hitachi Group Vision, which describes what the
Hitachi Group aims to become in the future. These elements
together make up the Hitachi Group Identity. Based on
the Hitachi Group Identity, continuously considering thenext generation, we carry out corporate activities from a
medium- to long-term perspective informed by sensitivity to
the changing needs of society. The Mid-term Management
Plan is our action plan to realize the Hitachi Group Vision; byintegrating our management and sustainability strategies, weseek to enhance the effectiveness of this approach.
By implementing the plan, the Hitachi Group seeks
to fulfill its responsibilities as a good corporate citizen
and member of the global community which provides
value to customers and society leveraging robust, diverse
governance; the Pioneering Spirit and strong ethical stanceof our employees; and operations that help address social
issues. We operate and pursue our activities in line with the
Hitachi Group Codes of Conduct, which are the guidelines
for ethical behavior and decision-making shared by all
executives and employees of the Hitachi Group.

Hitachi Group Identity

The mission that Hitachi
aspires to fulfill in society

MISSION

The values crucial to
the Hitachi Group inaccomplishing its mission

VALUES

What the Hitachi Groupaims to becomein the future

VISION

Contribute to society through the development ofsuperior, original technology and products.

Hitachi Founding Spirit:
Harmony, Sincerity, Pioneering Spirit

Hitachi delivers innovations that answer
society’s challenges. With our talented
team and proven experience in global
markets, we can inspire the world.

P171 Complying with the HitachiGroup Codes of Conduct

Training

Hitachi promotes brand education using training tools andcourses, based on the idea that social issues can be solved
if each and every one of its employees understands andpractices the Hitachi Group Identity.
One way we promote understanding of and familiarity
with the Hitachi Group Identity and the Hitachi Brand iswith the annual Inspiration of the Year Global Award, which
recognizes remarkable activities that contribute to enhancing
the value of the Hitachi Brand by demonstrating the HitachiGroup Identity. In fiscal 2021, the award saw 307 applications
from Hitachi Group employees around the world. Projects
that utilized data and technology to help create a sustainable
society while supporting people’s happiness were selectedfrom various regions for the Grand Prix. One such award
went to a project in Europe working to promote the transition
to electric vehicles and to co-create technological andcommercial innovations. The Grand Prix-winning projects
were recognized at the Global Awards Ceremony and sharedwith all employees through our intranet.
"Hitachi Group Identity Movie - I am Hitachi," a movie
featuring the award winners, is released on our website,allowing a wide range of people inside and outside the Groupto see how Hitachi Group employees around the world are
endeavoring to realize a better society.

Hitachi Group Identity

Hitachi Group Identity Movie - I am Hitachi

https://www.hitachi.com/
corporate/about/identity/index.
html

https://www.hitachi.com/corporate/about/identity/i_am_hitachi/
index.html

Hitachi Sustainability Report 2022

Contents

Introduction

Sustainability Management

Management

Environmental

Social2019

GRI 102-11/102-26/102-27

Commenced operation of the
Hitachi Internal Carbon Pricing(HICP) system

Sustainability Roadmap

2018

nment

2021

Set the target of achievingcarbon neutrality throughout theentire value chain by fiscal 2050

Formulated Hitachi Environmental
Innovation 2050l

2022
Set the target of contributing to CO2 emission reductions
through business (100 million metric tons in fiscal 2024)

2013

Gov

Formulated Hitachi Group
Human Rights Policy, Launched
Human Rights Due Diligence (HRDD) initiative

erna

nce

2019
Instituted the Hitachi Group
Global Procurement Code,Enhanced digital talent

2011
Intoroduced global
HR management

2016
2003

Promoted workstylereforms

Shifted to a company withcommittees(currently a company with anominating committee, etc.)

012

Set the target of achievingcarbon neutrality at Hitachi business sites
by fiscal 2030

2016

Socia

Assurance

2020

Announced endorsement of Task Force on Climate-related
Financial Disclosures (TCFD) recommendations

EnviroGovernance2017
Set diversity
targets

2021

Set Diversity,
Equity and Inclusion(DEI) targets
Ratio of female and non-Japanese executives
and corporate officers

FY2024:15% each FY2030: 30% each2010
Enhancement of interactions with Capital Markets,
Hitachi IR Day was launched

2000

2010

2012
Increased numberof independent
directors, including
non-Japanese
directors

2016
Enhanced disseminationof information about
medium- to long-termsustainable growth

2020

2021

Introduced evaluation systemthat considers environmental value

into short-term incentive compensation for executive officers

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

013

Assurance

Mid-term Management Plan 2024 and Sustainability
Towards a Sustainable Society:Mid-term Management Plan 2024
TargetActivities

In accordance with Hitachi’s Mission to “contribute to society
through the development of superior, original technology
and products,” we have been working to promote Social
Innovation Business leveraging its core strengths in IT(Information Technology) × OT (Operational Technology) ×
Products, and Lumada*1 to help build a sustainable society.
In order to respond to the increasingly complex global
issues of recent years, it is essential that we promotemanagement with a long-term perspective and maximallyutilize Hitachi’s diverse management resources to achieve
further evolution of the Social Innovation Business.
Hitachi has responded by imagining the future—what
the earth, society, and people will look and act like in 2050—
and back-casting to determine new business opportunities
that should be undertaken now and in the medium- tolong term to help realize a better future. In April 2022, weestablished the Mid-term Management Plan 2024 to clarify
this vision.
*1 Lumada: Solutions, services, and technologies that leverage Hitachi’s digitaltechnology and are offered to customers to accelerate the digitization ofcustomers’ businesses.

issues through its business, while respecting planetary
boundaries and realizing wellbeing for all individuals. To
achieve these goals, we will expand Lumada businessthrough even greater utilization of data and technology andachieve further evolution of Social Innovation Business with
our three growth drivers: “Digital,” “Green,” and “Innovation.”

Vision Targets of Mid-term Management Plan 2024
Today and tomorrow, the various stakeholders and social
challenges that surround us are growing more complex.
On a global scale, the environment is reaching its limit toaccommodate lives of abundance and safety for humans,as the thresholds of several of the nine planetary boundaries
have already been crossed. Recent changes to workstyles
and the diversification of personal values have madewellbeing (physical, mental, and social) a vital part of how wechoose to live and work.
Hitachi aims to resolve the increasingly complex social

Supporting people’s quality of life with data and technology that foster a sustainable society

Growthation for Soc
iet
Cre
y
Co

Planetary
Boundaries

Wellbeing

Green

Protect the earth
while maintaining
social infrastructure

DigitalInnovation

A society where
every individual is
comfortable and active

PeopleSociety

Mid-term Management Plan 2024
https://www.hitachi.com/New/cnews/month/2022/04/220428/
f_220428pre.pdf

Hitachi Vision 2050
https://www.youtube.com/watch?v=w8-0cK-CZPI

Customers (Power, Transport)

Customers (Financial, Public Services)

Customers (Industry, Urban)

Customers (Vehicle)

Green Energy & Mobility

Digital Systems & Services

Connective Industries

Hitachi Astemo

Hitachi Sustainability Report 2022

Contents

Three Growth Drivers
DigitalWith an understanding of management issues faced bycustomers, Hitachi will contribute to the enhancement ofcustomer business value through a cycle of co-creation
with customers, which involves designing, implementing,managing and maintaining solutions, while working toresolve subsequent issues.
We will expand earnings and achieve global growthby leveraging digital technologies to drive the value cocreation cycle.
Green
Hitachi will lead global GX (Green Transformation) by
switching to renewable energy, electrification, energy
conservation and automation, and contribute to therealization of a sustainable society. We will proactively invest
in the green field to contribute to an annual reduction in
CO2 emissions of approximately 100 million metric tons byfiscal 2024. Additionally, we will promote decarbonizationin order to realize Hitachi Environmental Innovation 2050,
which aims to achieve carbon neutrality throughout the value
chain by fiscal 2050. Leveraging knowledge gained throughthis process and providing environmental value tailored toeach business domain and region, we aim to realize both asustainable society and growth of the Hitachi Group.
Innovation
Focusing on its vision for the world in 2050, Hitachi will
identify areas where R&D is required while striving to create
innovative technologies and products contributing to theresolution of social issues. At the same time, we will increase
the speed of innovation by further accelerating collaborations
with promising startups, government and academia.

Introduction

Management

Environmental

SocialIn April 2022, Hitachi simplified its structure, grouping
together businesses with similar characteristics organized
into three sectors: Digital Systems & Services (DSS), Green
Energy & Mobility (GEM) and Connective Industries (CI) to
streamline and speed up its management function. With
the addition of the Automotive Systems Business (Hitachi
Astemo), We will leverage our three growth drivers—Digital,
Green, and Innovation—to provide value to our customers
and society, and to promote sustainability management.

Contribution to the SDGs
Approach

GRI 102-11

Hitachi’s Social Innovation Business aims to realize asustainable society through contributing to the resolutionof global social and environmental issues as definedby the SDGs, and we consider it to be a source ofsustainable growth for us. We are striving to create social,environmental, and economic value through our Social
Innovation Business, as well as working to reduce negativesocial and environmental impacts. We are also seeking a

Governance

Assurance014

deeper understanding of business risks arising from socialand environmental changes to ensure business continuity
with greater resilience.
In 2016, we examined the relationship between theopportunities and risks associated with the SDGs and ourbusinesses to identify 11 goals as Hitachi’s priority SDG
issues: five goals where we can make particularly significant
impacts through our key businesses and six goals that we
can contribute to through our entire corporate activities. In
2022, based on the 2024 Mid-term Management Plan, we
added two more goals, Goal 10: Reduced Inequalities andGoal 16: Peace, Justice, and Strong Institutions, expanding
our list of priority SDG issues to 13.
Through our active involvement in a broad range ofbusiness fields, we believe we can contribute extensively tothe achievement of SDGs beyond the 13 goals identified,
and we will strive to contribute to the achievement of all 17
SDGs.

Business Strategy

Corporate Commitment

Hitachi Sustainability Report 2022

Materiality

Contents

Introduction

Management

Environmental

Materiality

Activities

GRI 102-47/102-49/103-1/103-2

Hitachi practices sustainable management, which positions sustainability as the core of its business strategy, and is
working toward realizing a sustainable society through the Social Innovation Business.
In the Mid-term Management Plan 2024, we declared our new aspiration of “supporting people’s quality of life
with data and technology that fosters a sustainable society.” While some of the nine planetary boundaries have alreadybeen exceeded, Hitachi is aware of each one and works to protect the planet and maintain society. Hitachi aims tosolve social challenges to realize a future that balances protection of the planet and people’s individual wellbeing.
The materiality analysis process
With a comprehensive understanding of social issues, Hitachi has identified six material topics and 15 sub-material
topics based on an analysis of risks and opportunities from a sustainability perspectives as well as feedback fromstakeholders.
Based on these material topics, Hitachi will monitor measures as well as discuss the progress of, and new
initiatives for, each materiality at the Senior Executive Committee and the Board of Directors.
Further, Hitachi’s materiality was developed based on backcasting from 2050 and input from stakeholder dialogue
in Japan and Europe, based on the Strategic Focus Area disclosed in the Hitachi Integrated Report 2021 publishedlast year.

1

Comprehensive understanding of social issues·Identifying social issues from the SDGs, GRI standards, SASB standards, ESG external evaluation items, etc.

2

Ranking issues by priority from Hitachi’s point of view
·Identifying innovation areas where Hitachi should contribute based on backcasting from 2050
·Analyzing risks and opportunities

STEP

3

Ranking issues by priority from a stakeholders’ point of view·Evaluating material topics based on assessments and comments from investors, NGOs, and ESG evaluation organizations·Evaluation through dialogue with investors, NGOs, and sustainability experts

STEP

4

Identifying Materiality

STEP

STEP

Governance

Assurance

015

GRI 102-15/102-32

Toward a Sustainable Society: Hitachi’s Materiality
TargetSocialEnvironment
Contributing todecarbonization andresource circulation
Resilience
Contributing to themaintenance andrapid recovery ofsocial infrastructure
Safety & Security
Contributing to safe
and secure societybuilding
Quality of Life
Contributing tophysical and mental
wellness and aprosperous life.

Business with
Integrity
Adhering to ethicalstandards as well as
respect human rights

Diversity, Equity
and Inclusion (DEI)
Contributing toa society where
everyone can shine

Our aspirations
As a climate change innovator, Hitachi will contribute to
the realization of a carbon neutral society with Hitachi's
superior green technologies, by providing value tocustomers in all business segments. We will also promoteresource efficiency toward the transition to a circular
economy.
Hitachi helps people live safely by contributing to therapid recovery of supply chains and the maintenance ofsocial infrastructure by providing system solutions that can
respond immediately to risks, such as natural disasters,
pandemics, and cyberattacks.
Hitachi contributes to the realization of comfortable andactive lifestyles for people by providing solutions in thebuilding, mobility, and security fields that support urban
development for safe and secure living.
Hitachi is harnessing our healthcare and digitaltechnologies to help more people develop bonds and enjoy
healthier, more prosperous lives. We will also continue topursue the happiness and wellbeing of our employees, as
we believe that their happiness and wellbeing is the groundon which Hitachi's future will flourish even more fully.
As a Group responsible for social infrastructure aroundthe world, Hitachi will manage its business with honesty
and integrity, trusted by society, respect human rights
and provide a safe workplace. We will reflect a system of
ethical and responsible business conduct, including respectfor human rights, in our business activities and decisionmaking standards, working together with our employees,
collaborative partners and communities throughout the
supply chain.
Hitachi has a place for everyone, welcoming differencesin colleagues’ background, age, gender, sexuality, family
status, disability, race, nationality, ethnicity, and religion.
At Hitachi, we treat everyone fairly, recognizing differences
to allow everyone to perform at their full potential.
We respect and value these and other differences because
only through them we can understand our markets, create
better ideas and drive innovation.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance016

15 Sub-Material Topics and Targets
Material topics

Sub-material topics

TargetCarbon neutrality through the value chain• FY2030: Achieve carbon neutrality in business sites (factories and offices)• FY2050: Achieve carbon neutrality through the value chain

Contributing to CO2 reduction through business• FY2024: 100 million metric tons/year

Transition to a circular economy• FY2024: Full application Eco-Design for new product development•F Y2030: Zero*2 waste to landfill*1 from manufacturing sites

Effective use of water• Reduction rate in water use per unit (compared to FY2010)
FY2024: 24%, FY2050: 50%

Decarbonization
Environment
Contributing todecarbonization andresource circulation

Resilience
Contributing to themaintenance and rapid
recovery of social
infrastructure
Safety & Security
Contributing to safe andsecure society-building

Quality of Life
Contributing to physicaland mental wellness anda prosperous life

Business with Integrity
Adhering to ethicalstandards as well as
respect human rights

Diversity, Equity andInclusion (DEI)
Contributing to a society
where everyone canshine

Resource circulation

Harmonize with nature

Minimize impact on natural capitalStrengthening supply chains

Build flexible supply chains capable of responding to disasters and risks

Maintaining social
infrastructure

Resilience and sophistication of maintenance through DX
of social infrastructure•C ontribute to stable energy supply through substation management
Approx. 1.9 billion people*3

Safe and secure urban
environments

Safe and comfortable transportation• A total of 15 billion people use railway services annually*3

Ensuring cyber security

Secure cybersecurity for social infrastructure and business systems
Increase healthy life expectancy and wellbeing• Blood tests and other physical exams: 20 billion tests/year*3

Build a trustful relationship with others• Users of happiness service (10 thousand in FY2022 → 90 thousand in FY2024)

Employee happiness

More flexible working styles to increase engagement• Employee engagement score (FY2021: 65.0% → FY2024: 68.0%)

Business ethics andcompliance

Encourage employees to apply ethical standards in dayto-day work.

•A chieve a score of at least 60 (out of 100) in FY2022, the first year of results from
Ethical Culture & Perceptions Assessment, improving it every year

Respect for human rights

Promote human rights due diligence and strengthen monitoring of procurement partners for responsible procurement, including human rights

Occupational safety

Creating a safe working environment without accidents

Safe and secure products
and services

Ensure products and services safety while putting customers first

Connected andprosperous society

Diverse organization that
fosters innovation
Contribution to a diverse andequitable society• Zero fatal accidents

Strengthen diversity in management• Ratio of female and non-Japanese executive and corporate officers(30% in FY2030)

Acquiring and developing digital talent• FY2021: 67,000 persons → FY2024: 98,000 persons

Empower DEI of society through community
relationship programs• Support young generations in Asia through the Hitachi Young Leaders Initiative
A total of 405 students participating (as of end of July 2022)*1 Wherever this is compatible with local conditions and regulations *2 Less than 0.5% *3 FY2021 results

Relevant SDGs

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Importance for stakeholders

HigherHitachi has mapped the 15 sub-material topics in terms of importance for Hitachi andstakeholders. The level of importance to Hitachi is defined as the gap between ourgoals and our current initiatives.

High
Growth driver● Business ethics
and compliance（▲）●Respect for ●Decarbonization
human rights （■■■▲）（▲）●Diverse organization ●Employee● Connected andthat fosters innovation happiness●Harmonize
prosperous（■■■▲）（■■■▲）
with naturesociety（■■）●Resource（■）
circulation●Safe and secure（■■■）
urban environment（■■）● Occupational● Maintaining social
safety（▲）
infrastructure（■■）● Ensuring cybersecurity（■■▲）●Strengthening● Contributing to a diverse
supply chains（■■）
and equitable society（▲）● Safe and secure products
and services（■■■▲）

SocialGovernance

017

Assurance

Stakeholder dialogue about the materiality
GRI 102-44

We held a stakeholder dialogue with on the theme of materiality in Japan and Europe
in fiscal 2021. We received feedback on Hitachi’s proposed materiality and measuresfor each materiality from disclosure experts, leading sustainability companies, European
Commission, NGOs, international organizations, and institutional investors. In Europe, we
divided the dialogue into a planet session and a people session, with Hitachi explaining
its measures for the environment, human capital, and respecting human rights, while
participants gave suggestions for new perspectives and improvements.
Principal comments from stakeholders· Hitachi should indicate the direction society wants Hitachi to move along or the goals that
Hitachi itself has.
· When it comes to diversity and inclusion, it would be better to include “equity” and make it“diversity, equity, and inclusion.”· For the circular economy, the approach shouldn’t just be to reduce materials and waste but
also to think about new business models.

HigherImportance for Hitachi■Green ■Digital ■Innovation

Environmental

Foundation of societal trust ▲● Environment ● Resilience ● Safety & Security ● Quality of Life ● Business with Integrity● Diversity, Equity and Inclusion· With human rights and decent work, Hitachi should go beyond conventional monitoring,audit, and other compliance approaches to engage with all aspects of supply chains throughpartnerships with external stakeholders.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

018

Framework for Promoting Sustainability Strategy
Establish a System to Promote Sustainability
GRI 102-18/102-19/102-20/102-21/102-26/102-27/102-30/102-31/102-32/102-33/102-34/102-35/103-3

Structure

Framework for Implementing the Hitachi GX Strategy
President & CEO
Three Functions to Lead Cross-Group Growth Strategies

Digital Strategy

Green Strategy
Global Environment Division
Lorena Dellagiovanna
Vice President and Executive Officer, Chief Sustainability Officer
Internal Environment Initiatives Division

Digital Systems & Services

Green Energy & Mobility

Innovation Strategy

Global Environment Business Division

Connective Industries

Hitachi Astemo

Sustainability Strategy Promotion Meetings Framework
Board of Directors
Senior Executive Committee
Sustainability Promotion Meeting
Environmental Value Promotion Meetings

Social Value Promotion Meetings

Internal Environment Initiatives Division Progress Meeting
Circular Economy (CE)
3R Promotion
Project Meeting

Carbon Neutrality (CN)Eco-Management
Meeting

CN2030
Promotion ProjectMeeting

HRDD Execution
Managers Meeting

Procurement related Meeting (Group Procurement Strategy Meeting etc.)

Global DEI Council

Hitachi is working to promote sustainability strategy,
including the Hitachi GX Strategy, under the guidance ofVice President and Executive Officer Lorena Dellagiovanna,
who was appointed to the newly established position ofChief Sustainability Officer on April 1, 2022.
Under the Global Environment Division, which ismanaged by the Chief Sustainability Officer, as a framework
for implementing the Hitachi GX Strategy, we haveestablished the Internal Environment Initiatives Division topromote efforts to achieve carbon neutrality throughout
our in-house production activities and the value chain, 3R
activities, and the Global Environment Business Division tolead growth in our environmental business.
In fiscal 2022, we established a new Sustainability
Promotion Meeting, with members that include the Chief
Sustainability Officer, business promotion division heads
at Business Units (BUs) and key Group companies, andRHQ Sustainability Officers, to discuss important measuresconcerning sustainability, conduct monitoring of progressin reaching targets, and more. Important matters aimed
at achieving the Mid-term Management Plan are also
discussed or decided on by the Senior Executive Committee
and presented to the Board of Directors.
In addition, for important themes such as carbon
neutrality, the circular economy, human rights due diligence(HRDD), and Diversity, Equity and Inclusion (DEI), we areworking to promote sustainability throughout the HitachiGroup by setting up separate meetings composed of
responsible officers from individual BUs and major Group
companies to consider Group-wide policies, share
information, and so on.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialOverview of Sustainability Related Conference Bodies
Meeting

Attendees

PurposeFrequency

Sustainability Promotion
Meeting

Chief Sustainability Officer, Business promotion
division heads at BUs & key Group companies and
RHQ Sustainability Officers

Deliberation, implementation and monitoring ofmaterial sustainability initiatives

Twice peryear

Internal Environment
Initiatives Division
Progress Meeting

Heads of Business promotion/Environment-related/
MONOZUKURI(production)/Procurement divisions
from BUs and key Group companies

Formulating and implementing plans based on
the environmental action plan

Twice peryear

Eco-Management
Meeting

Heads of Environment-related divisions from BUs and
key Group companies

Deliberation and implementation of actual action planto achieve Hitachi Environmental Long-term goals

Twice peryear

CN2030 Promotion
Project Meeting

Heads and members of Environment-related/
MONOZUKURI(production) divisions from BUs and
key Group companies

Monitoring and implementation of CN action planand discussion of acceleration

Everyquarter

3R Promotion ProjectMeeting

Heads and members of Environment-related/
MONOZUKURI(production) divisions from BUs and
key Group companies

Promotion of actions for 3R activities towardrealizing CE

Everyquarter

Procurement related
Meeting (Group
Procurement Strategy
Meeting etc.)

Chief Procurement Officer, heads of the procurement
divisions at BUs and key Group companies

Disseminating Hitachi group global procurement
policy and strategy, and discussion on theframework of Sustainable Procurement

Twice ormore peryear

HRDD Execution
Managers Meeting

HRDD execution managers from BUs and key Group
companies

Provide information and knowledge necessaryfor HRDD implementation, and share status of
implementation in BUs and key Group companies

Once ortwice peryear

Global DEI Council

DEI promotion leaders from BUs and key Group
companies

Implement DEI promotion policies and initiatives,and share best practices

Once ortwice peryear

Fiscal 2021 Executive Sustainability Committee*1 Agenda Items
Term

Agenda Items

Governance

Assurance

Reflecting Sustainability Targets in Executive
Compensation Evaluation
SystemIn fiscal 2021, Hitachi introduced evaluations that takeenvironmental value into consideration in the executive
compensation system for the first time with the aim ofaccelerating the creation of environmental value. All executive
officers, including the CEO, set targets for environmental
value and were evaluated for their achievement of individual
targets.
From fiscal 2022, in addition to environmental targets
such as decarbonization and resource efficiency, we
introduced quantitative and qualitative target setting foroccupational health and safety and product quality in thecompensation evaluation of all executive officers to further
advance sustainable management.
 xamples of Sustainability Targets Reflected in Fiscal 2022
E
Compensation Evaluations
Sustainability Targets

Decarbonization·Efforts to realize carbon neutrality*1 inbusiness sites (factories and offices) by
fiscal 2030
·Efforts to achieve carbon neutrality* by fiscal
2050 throughout the value chain

Resource efficiency·Efforts related to resource efficiency

May 2021

New DEI-related targets, issues associated with reaching targets, action plans, etc.

Occupational
health and safety·Zero fatal accidents·Wellbeing initiatives

June 2021

Reviewing targets and considering promotion measures for Hitachi Environmental Innovation 2050, etc.

Product quality·Efforts to enhance product quality

July 2021

Hitachi Group priority human rights risk survey results (concerning migrant workers and forced labor), framework for managing
human rights risks, etc.

December 2021

Progress reports for DEI-related activities, future measures necessary to link DEI to growth, etc.

January 2022

Materiality plans aimed at achieving the next Mid-term Management Plan and approaches to advancing the circular economy, etc.

*1 Holding sustainability-related discussions under a new committee system from fiscal 2022019

*1 Regarding fiscal 2030 and fiscal 2050 decarbonization targets, single-yeartargets are set Groupwide and for each BU.

Hitachi Sustainability Report 2022

Contents

Introduction

Engagement and Initiatives
Stakeholder Engagement

ApproachManagement

Environmental

SocialGovernance020

Assurance

GRI102-13

Activities

GRI 102-40/102-42/102-43

In its commitment to promoting the Social Innovation Business, Hitachi endeavors to accurately identify the various social issues facing each country and region, and to work toward resolution of theseissues through engagement in collaborative creation with a wide range of stakeholders, including customers, governments and municipalities, as well as academic and research institutions. In addition,with the goal of enhancing the value of our human capital, we work to promote activities with an emphasis on maintaining direct dialogues between the management and employees as an essential
management resource in the promotion of business. Furthermore, with the recent rise in ESG investment, we actively engage in dialogues with shareholders and investors as well.
Hitachi organizes stakeholder dialogues to invite opinions on social challenges from stakeholders representing specialized knowledge platforms, and it ensures that their insights are reflected in
the business activities. In fiscal 2021, Hitachi, Ltd. held stakeholder dialogues on the theme of “materiality” in Japan and Europe with the formulation of the Mid-term Management Plan 2024. We received
feedback on Hitachi’s proposed materiality and measures for each materiality from disclosure experts, leading sustainability companies, the European Commission, NGOs, international organizations, andinstitutional investors.
Investor Relations

Disclosure Policy

https://www.hitachi.com/IR-e/index.html

https://www.hitachi.com/IR-e/corporate/disclosure/index.html

Stakeholders

Main Roles

Customers

Creation of better products andservices, response to complaints,
appropriate disclosure of information
on products and services

Quality
Assurance/
Sales· Customer satisfaction activities· Marketing· Website

Public Relations
and IR· Financial results briefings (quarterly)· One-on-one meetings with institutional
investors and analysts (approx. 710 meetings)· General shareholders’ meetings (annual)· IR event “Hitachi Investor Day” (annual) · IR tools: Integrated Report, business reports,
etc.
· Stakeholder dialogues (annual)· Information disclosure on website forstakeholders and investors

Stakeholder Engagement P020-021

Shareholders
and Investors

Timely and proper information
disclosure, obtaining fair recognitionand support from capital markets,reflection of shareholder andinvestor viewpoints in corporate
management
Building fair and sound business
relations, smooth information
sharing toward better partnerships

Procurement· Procurement activities· Sustainability monitoring
Note: Sustainability monitoring in fiscal 2021 was focused on human rights and environmental
risk assessment. (Human rights: 2,524 companies, Environment: 708 companies)· Sustainability audits (25 companies)· Sustainable procurement seminars (359 companies)

Responsible Procurement P132-136
Respect for Human Rights Throughout the Value Chain
P123-129

Proper treatment, promotion ofoccupational health and safety ofhuman capital, increasing employee
engagement

PublicRelations/
Human Capital· Intranet, in-house newsletters· Training· Town hall meetings between senior management and employees(President & CEO: 7 meetings, Vice Presidents: 19 meetings)· Employee survey (annual)· “Make a Difference!” idea contest

Stakeholder Engagement P020-021
Global Human Capital Management P091-094
Diversity, Equity and Inclusion P100-105
Work-Life Management P106-110
Occupational Health and Safety P111-119
Freedom of Association and Collective Bargaining P120-121

Procurement
Partners

Employees

Main Divisions

P017 Stakeholder dialogue about the materiality

Means of Engagement (FY 2021)· Advertising activities· “Global Brand Campaign” (14 countries)· Hitachi Social Innovation Forum (2 countries)

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Pages
Quality and Product Safety Management P137-139
Personal Information Protection P188-189
Customer Satisfaction (CS) P140-141

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

021

Assurance

Stakeholders

Main Roles

Main Divisions

Means of Engagement (FY 2021)

Pages

National Governments,
Municipalities,
Industrial Associations

Compliance with domestic and foreign laws andregulations, policy recommendations, participation
in industry-government-academia collaborative
projects

Government andExternal Relations· Academic research for policy recommendations to internationalorganizations and national governments, lobbying activities· Policy council participation· Participation in business and industry associations (Japan)

Stakeholder Engagement P020-021
Main Initiatives and Groups Hitachi Is Involved with P022
Industry Leadership and Policy Recommendations P023

Fulfillment of responsibilities as a corporate citizen,
involvement in local communities

SocialContributions/ All
Business Divisions· Contribution to local communities through business· Participation in volunteer activities

Social Contribution Activities P143-146

Local Communities
Academic Associations
and ResearchInstitutions

Promotion of technological innovations,participation in industry-government-academia
collaborative projects

Research andDevelopment· Open innovation (joint research)Innovation Management P079-080

NGOs and NPOs

Incorporation of diverse public opinions, promotionof stakeholder-focused management, social
contributions through nonprofit activities

Sustainability
Promotion· Stakeholder dialogues (annual)· Dialogue through collaboration

Stakeholder Engagement P020-021
Social Contribution Activities P143-146

The Environment

Realization of a decarbonized society, a resource
efficient society, a harmonized society with nature

Environment/All
Business Divisions· Participation in COP26

Environmental P041-066

ESG Disclosure Study Group

Kyoto University and Hitachi Joint Project

How to address the rapidly changing global trend in ESG disclosure is a major challenge
for many corporations and institutional investors in Japan. Hitachi, Ltd. is responding
to this issue through co-creation with stakeholders. In June 2020, Hitachi took the leadin establishing the ESG Disclosure Study Group to explore ways of disclosing ESG
information that contribute to long-term corporate value enhancement while also keeping
an eye on global trends. The study group initially started with 19 companies, and as ofJune 30, 2022, more than 100 companies, institutional investors, auditing firms and publicorganizations are participating.
Study group activities are divided into phases according to themes, and in June 2022,
the “ESG Disclosure Study Group Report 2022” was published including the results ofthese activities. This report contains ESG disclosure recommendations for corporations,institutional investors and standard-setting bodies and is disseminated to relevantorganizations within and outside Japan. Hitachi, Ltd. serves as the co-chairman andsecretariat of this study group, and leads these activities.

One of the key initiatives for the evolution of sustainable management is to quantitatively
clarify the financial impact of non-financial values such as environmental and social
values created by business activities, as well as intangible asset measures such as
human resource policies. This is expected to further advance management and improveengagement with stakeholders.
Since 2021, Hitachi, Ltd. has engaged with these challenges through experimental
research conducted in collaboration with Graduate School of Management, Kyoto
University. Through academic and other approaches, it was quantitatively confirmed that
Hitachi’s initiatives toward the environment and human resources could have a positive
impact on financial indicators (ROIC and WACC). In the future, we will clarify the causal
relationship between non-financial and intangible asset measures and financial indicators,
as well as employee survey results, to identify measures with a high degree of causal
influence and lead them to measures to improve financial performance through nonfinancial and intangible asset measures.

General Incorporation Association of ESG Disclosure Study Group / EDSG
https://edsg.org/en/Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Main Initiatives and Groups Hitachi Is Involved withSocialActivities

Governance

Assurance

022

GRI 102-11 102-12

Based on its corporate mission of “contribute to society through the development of superior, original technology and products,” Hitachi promotes its Social Innovation Business with the aim of contributing to
the realization of a sustainable society. As part of this, to play its proper role as a global corporation, Hitachi actively participates in international initiatives and groups addressing social issues on a global scale.

Initiative or Group

Activities

United Nations Global
Compact (UNGC)

Became a participant in 2009.
Joined workshops organized by
the Global Compact Network
Japan (GCNJ) on nine different
topics in fiscal 2021, including
ESG, SDGs, and WEPs (the
Women’s Empowerment
Principles)

World BusinessCouncil for Sustainable
Development (WBCSD)

Became a member in 1995
Adopted SOS 1.5 project in 2020

Business for Social
Responsibility (BSR)

Became a member in 2007 andhas participated in the Human
Rights Working Group (HRWG)
since 2016

World Economic Forum

Participated in Davos Forum since
2014

Task Force on Climaterelated Financial
Disclosures (TCFD)

Announced support for TCFD
in 2018 and disclosed climaterelated information based on the
TCFD recommendationsーInitiative or Group

Activities

Japan Climate Initiative(JCI)

Became a member in 2018 andjoined the JCI Race to Zero Circle
established in 2021

The Science Based
Targets initiative (SBTi)

Obtained accreditation of“Targets for 1.5°C ” in 2020

Business Ambition for
1.5°C

Became a member in 2020, alongwith SBT1.5°C certification

Race To Zerocampaign

Joined in 2020, along with
Business Ambition for 1.5°C
commitment

The Valuable 500

Became a member in 2021

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Industry Leadership and Policy Recommendations
As part of developing Hitachi’s Social Innovation Businesson a global scale, Hitachi views government institutions andprivate bodies in each country and region of the world asimportant partners. Our Government & External Relations
Group leads our efforts to strengthen ties with thesebodies. The Hitachi Group collaborates with each site in theworld to seek to develop a mutual relationship with local
communities by making efforts to work with governments
and international organizations in each country. At thesame time, the Group also works to discover new business
opportunities for Hitachi, and to create value based on thevarious regions’ social issues and policies.
We are also more frequently being asked for opinions
by governments. By making requests directly as well as
proposing solutions through discussions in economic
organizations and industrial bodies, we contribute to building
a better society.

SocialActivities

Governance

Assurance

023

GRI 102-13 203-2

Major Participation in Government Councils/Business and Industry Associations
Council/Group

Participant

Activities

Panel discussion regarding
Infrastructure System International
Expansion Strategy 2025 (Cabinet
Secretariat of Japan)

Executive Chairman Toshiaki Higashihara(attended as a private sector member)· Proposals regarding appropriate concrete measures to betaken based on the Japanese government’s Infrastructure
System International Expansion Strategy 2025

Japan Business Federation(Keidanren)

Executive Chairman Toshiaki Higashihara(attended as the Vice Chair)· Disseminating opinions on important issues such as digitaltransformation (DX) and green transformation (GX) toaccelerate Keidanren’s efforts under the theme of “Society
5.0 for SDGs” and to establish sustainable capitalism

Japan Electronics and Information
Technology Industries Association(JEITA)

President & CEO Keiji Kojima(attended as the Vice Chairman)· Examining and making proposals on the promotion ofdigital technology, data use, and market creation underthe mission to achieve Society 5.0· Offering insights into paradigms of international legislation,agreements, and standards to develop digital trade andstrengthen international competitivenessJapan Electrical Manufacturers’
Association (JEMA)

Vice President Kenji Urase(attended as the Director)· Promoting the sustainable development of electricalmanufacturing by submitting opinions on various
governmental and administrative policies and promoting
product safety awareness, international standardizationand compatibility evaluation, statistical research work, andthe development of human capital for STEM fields

Japan Machinery Federation (JMF)

Executive Chairman Toshiaki Higashihara(attended as the Chairman)· Providing opinions to the Diet and the government,
conducting surveys and research on the machineryindustry, and promoting international standardization
activities for the comprehensive progress and developmentof the machinery industry

World Economic Forum (WEF)

Executive Officers centered on Executive
Chairman Toshiaki Higashihara andPresident & CEO Keiji Kojima· Contributing to improve world affairs through discussions
toward solving global, regional, and industrial challenges
by cooperating with leaders from economics, politics, andacademia participating in the forum

Japan-U.S. Business Council

Executive Chairman Toshiaki Higashihara(attended as an Executive Committee
member)· Exchanging opinions and proposing policies regarding
various issues with Japan-U.S. economic relations fromthe point of view of the Japan-U.S. business community
as a whole

National Association of
Manufacturers

Hitachi Corporate Office in Washington DC· Lobbying and making policy proposals, as the largest
association of manufacturers in the United States, tosupport the international competitiveness of member
corporations

Japan Business Council in Europe(JBCE)

Hitachi Europe Government Relations
Office· Making policy proposals to contribute to the further
development of EU-Japan relations and the EU economy
as the body representing Japanese corporations in the EU

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

024

Leadership in International Standardization Activities
Approach to International Standardization
Approach

In order for Hitachi to contribute to the achievement ofSDGs through promoting its Social Innovation Business,
we believe it is extremely important to work toward theresolution of social issues from a global perspective throughthe collaborative creation of new social norms together witha diverse range of stakeholders, including governments andmunicipalities throughout the world, academic and research
institutions, companies, non governmental organizations(NGOs), non profit organizations (NPOs), and users.
In our view, international standardization activities
are global initiatives appropriate for the realization ofa sustainable society, being based on explicitly statedstandards, formulated on the basis of fair discussions
involving members representing specialized fields, withinternational consensus, and an accurate grasp ofsocial issues facing the world. Accordingly, we consider
international standardization activities to be of importancealong with research and development work and intellectual
property-related activities. In order to contribute to theresolution of social issues on a global scale with a diverse
range of stakeholders, Hitachi actively engages in activities
with international standardization organizations, including
IEC*¹, ISO*², and ITU-T*³.
In the environmental domain, we are engaged in efforts
concerning the circular economy (ISO/TC*4 323) and theenvironmental standardization for electrical and electronic
products and systems (IEC/TC 111), and, with regard tosocial issues, Society 5.0 (ISO/IWA*5 39), smart community

infrastructures (ISO/TC 268/SC*6 1), and unmanned aircraft
systems (ISO/TC 20/SC 16).
Additionally, by contributing to international
standardization efforts by various consortia and otherbodies, and providing solutions consistent with international
standards, we support the development of sound global
markets and facilitate innovation to resolve social issues.
*1 IEC: International Electrotechnical Commission. An international organization
composed of member countries and regions.
*2 ISO: International Organization for Standardization. An internationalorganization composed of member countries and regions.
*3 ITU-T: International Telecommunication Union Telecommunication
Standardization Sector. A specialized agency of the United Nations.
*4 TC: Technical Committee*5 IWA: International Workshop Agreement*6 SC: Subcommittee

External Recognition of Hitachi’s International
Standardization Activities
Activities

In fiscal 2021, we received two 1906 Awards from the IEC,
an Award for Contributors to Standardization Activities
from the Railway Technology Standardization Investigation
Committee (Engineering Planning Division, Railway Bureau,
Ministry of Land, Infrastructure, Transport and Tourism),
an Encouragement Award from the ITU Association ofJapan, and two Awards for Distinguished Service from the
Telecommunication Technology Committee (TTC).

Structure for Promoting International
Standardization Activities
Structure

Hitachi personnel participate as members in many technicalcommittees maintained by international standardization
organizations, including IEC and ISO, and have been
appointed to key positions, such as committee chairs andcommittee managers and secretaries, as well.
Furthermore, in order to make efforts concerned withinternational standardization activities involving Groupwide cooperation, we have established the Hitachi Group
Standardization Committee.
The Steering Committee*¹ for the Standardization
Committee selects themes for Hitachi to prioritize in themedium- to long-term with regard to important issues.
Detailed discussions are held in working groups for eachtheme to promote standardization activities. In fiscal 2021,
Hitachi Energy joined the Standardization Committee.
*1 Steering Committee: Headed by the executive officer overseeing R&D, thisentity includes chief technology officers of Hitachi business units and key
Group companies. The committee is responsible for decisions on crossdepartmental and companywide standardization projects.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

025

Hitachi Group Standardization Committee

Achievements in Fiscal 2021
One of the principal themes selected was Society
5.0, an initiative spearheaded by the Japanese
government aimed at the realization of a humancentered, sustainable society. In order to create
venues in which discussions can be conducted
to attain consensus among various countries andmajor standardization organizations looking towardrealization of Society 5.0, Hitachi has actively
engaged in activities related to ISO/IWA 39 (gapanalysis for standardization on sustainable andhuman-centered societies enabled with cyber
physical systems) and contributed to the completionof the IWA 39 agreement based on international
consensus.

President & CEO
Hitachi Group Standardization Committee

Global Intellectual
Property Group

GlobalStrategy
Department

Steering Committee

Liaison committee

Head: Hitachi, Ltd. executive
officer in charge of R&D

Members: International
standardization
promoters in BUs, key
Group companies,
Group corporate
divisions, the R&D
group, etc.

Members: International
standardization
officers (CTO, etc.)
in BUs, key Group
companies, Group
corporate divisions,
the R&D group, etc.
Secretariat

Rule-making
PromotionGroup

Planning Working Group
Priority Theme 1 Working Group
Priority Theme 2 Working GroupHitachi Sustainability Report 2022

Contents

Introduction

Management

External Assessments and Awards

Environmental

SocialGovernance

026

Assurance

Activities

As a corporate group that promotes sustainable management, the Hitachi Group has earned high marks from numbers of external assessment organizations.

Inclusion in ESG Indices (Hitachi, Ltd.)

External Assessment of ESG (Hitachi, Ltd.)
Hitachi, Ltd. was selected for the A List, the highest rating
given by the CDP for companies, in the two areas ofclimate change and water security. It was also selected as a
Supplier Engagement Leader, the highest rating for supplierengagement.

(Continued inclusion in 2022)
MSCI Japan ESG Select Leaders Index
https://www.msci.com/our-solutions/japan-esg-select-leadersindex
THE USE BY HITACHI, LTD. OF ANY MSCI ESG RESEARCH LLC OR
ITS AFFILIATES ( MSCI ) DATA, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION,
OR PROMOTION OF HITACHI, LTD. BY MSCI. MSCI SERVICES AND DATAARE THE PROPERTY OF MSCI OR ITS INFORMATION PROVIDERS, AND
ARE PROVIDED AS-IS AND WITHOUT WARRANTY. MSCI NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI.

(Continued inclusion in 2022)
FTSE4Good
https://www.ftserussell.com/products/indices/ftse4good

FTSE Blossom Japan(Rated in 2021)

https://www.ftserussell.com/products/indices/blossom-japan

CDP
https://www.cdp.net/ja

Hitachi, Ltd. has also been certified as Prime in the ESG
Corporate Rating by ISS ESG.
(Selected in 2022)(Continued inclusion in 2022)
S&P/JPX Carbon Efficient Index

FTSE Blossom Japan Sector Relative Index

https://www.jpx.co.jp/english/markets/indices/carbon-efficient/index.html

https://www.ftserussell.com/products/indices/blossom-japan(Continued inclusion in 2021)
ISS ESGhttps://www.issgovernance.com/esg/

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Social

Hitachi, Ltd. has been selected by Corporate Knights andEruboshi Certification

the NGO As You Sow for the Carbon Clean200 (Clean200),
the largest 200 public companies ranked by clean revenue.

Hitachi, Ltd. promotes diversity as an important componentof its management strategy and strives to create work
environments that enable its diverse talent to play an activerole. In recognition of these initiatives, we received Eruboshi
certification, which is conferred to companies that are
implementing exceptional measures under Japan’s Act on
Promotion of Women’s Participation and Advancement in
the Workplace. In addition to Hitachi, Ltd., several Group
companies in Japan, including Hitachi High-Tech, Hitachi
Systems, and Hitachi Solutions, have received Eruboshi
certification.

(Continued inclusion in 2022)
Clean200
https://www.asyousow.org/clean200

Human Resources Awards and Recognition
Kurumin Certification
Hitachi, Ltd. received Kurumin certification from the Ministryof Health, Labour and Welfare in 2011. This was granted
under Japan’s Act on Advancement of Measures to Support
Raising Next-Generation Children, in recognition of its
achievements in developing and implementing action plans
supporting child care so that employees can work with thepeace of mind that comes from a good work-life balance. In
addition to Hitachi, Ltd., several Group companies in Japan,
including Hitachi High-Tech, Hitachi Systems, and Hitachi
Solutions, have received Kurumin certification.

Assessment of Reporting
The Hitachi Integrated Report 2021 received the SilverAward in the WICI Japan Integrated Reporting Awards 2021
organized by the World Intellectual Capital/Assets Initiative(WICI Japan). The report was evaluated as sufficiently
incorporating important details of financial and non-financial
information and having a high degree of completeness. The
report was also selected as an Excellent Integrated Reportby the Japanese Government Pension Investment Fund’s(GPIF) Japanese equity managers.

Governance

Assurance027

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

028

028 Environmental
029 Executive Summary

031 Advancing Our Environmental Vision andLong-Term Environmental Targets

031 The Environmental Vision and Hitachi Environmental
Innovation 2050

033 Environmental Action Plan

036 Environmental Governance036 Framework for Promoting Environmental Governance
038 Environmental Management System

Environmental

041 Achieving a Decarbonized Society
041 Efforts to Achieve a Decarbonized Society
042 Contributing to a Decarbonized Society Throughthe Decarbonization Business

045 C ontributing to a Decarbonized Society at
Business Sites (Factories and Offices)

049 C limate-related Financial Information Disclosure(Based on TCFD Recommendations)

056 Achieving a Resource Efficient Society
056 Efforts to Achieve a Resource Efficient Society
057 Building a Water Efficient Society
059 Building a Society That Uses Resources Efficiently

062 Achieving a Harmonized Society with Nature
062 Efforts to Achieve a Harmonized Society with
Nature064 Managing and Reducing Chemical Substances
066 Preserving Ecosystems

067 Environmental Data
067 GHG Emissions Throughout the Value Chain
069 Environmental Load from Operations
074 Environmental Management Data
075 Environmental Accounting

Hitachi Sustainability Report 2022

Contents

Introduction

Environmental
Why
ー Why it matters ーManagement

Governance

Assurance

029

GRI 103-2

Hitachi’s Mission is to “contribute to society through the development of superior, original technology and products.” We seek solutions to environmental issues, which are of serious
concern to society, through our business operations and promote environmental management from a long-term perspective. Meeting society’s expectations with innovations that mitigate
environmental issues also presents major business opportunities. Hitachi’s Environmental Vision states that “Hitachi will resolve environmental issues and achieve both a higher qualityof life and a sustainable society through its Social Innovation Business in collaborative creation with its stakeholders.” To uphold this vision and work toward achieving a decarbonizedsociety, a resource efficient society, and a harmonized society with nature, we have established a set of long-term environmental targets looking toward 2050 and 2030 called Hitachi
Environmental Innovation 2050, and have been promoting Group-wide environmental activities in line with our Environmental Action Plan, which is updated every three years. To help
build a decarbonized society, we aim to achieve carbon neutrality at our business sites (factories and offices) by fiscal 2030 and throughout our value chain by fiscal 2050.

How

What

・	Enhancing environmental
governanceー How we are doing it ー

Promotion structure

Important matters related to the environment are monitored by the Sustainability Promotion Meeting, discussed or decided on by
the Senior Executive Committee, and presented to the Board of Directors.

・	Enhancing environmental
management system・	Reducing environmental
burdens through “EcoFactories & Offices Select”
certification
・	Implementing
environmental educationfor employees・	Ensuring environmental
compliance

Achievements in FY 2021

Environmental management system

Environmental human capital development

Rolled out climate change e-learning materials globally (attended by 132,773 people)

Voluntary environmental audits

Implementation rate of voluntary environmental audits of business sites outside Japan by business units and Group
companies (number of sites audited/number of sites): 56%

Howー How we are doing it ーLong-term
environmental targets· Achieve carbon neutrality by fiscal 2050 through the value chain and reduce CO2 emissions 50% by fiscal 2030 (compared to fiscal 2010)· Achieve carbon neutrality at business sites (factories and offices) by fiscal 2030
Achievements in FY 2021

・	Expanding thedecarbonization business・	Reducing CO2 emissions
and achieving carbon
neutrality at business sites(factories and offices)A total score of 269 GPs in the GREEN 21 evaluation of our Environmental Action Plan
Under “Eco-Factories & Offices Select,” of our approximately 1,500 facilities, recorded two new certifications, and 48
renewed certifications (total certified facilities: 50)

What・	Reducing CO2 emissions
and achieving carbon
neutrality throughout ourvalue chain

Registered data from about 1,500 business sites in 67 countries in the Environmental Data Collection System (Eco-DS) to estimate environmental load

“Eco-Factories & Offices Select” certification

ー What we are doing ーAchieving a
DecarbonizedSocietySocialRelevant SDGs

ー What we are doing ーEnvironmental
Governance

Environmental

Reduction rate of CO2 emissions per unit of products and services (Compared to FY2010): 28% (FY 2021 reduction target: 21%)

Reduction of CO2 emissions

Formulated a roadmap to achieving carbon neutrality at business sites (factories and offices) by fiscal 2030
Reduction rate of CO2 emissions per unit at business sites (factories and offices) (Compared to FY2010): 6% (FY 2021
reduction target: 9%)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Governance

Assurance

030・	Introducing the HitachiInternal Carbon Pricing(HICP) framework

Promotion of the HICP framework

Implemented investment in energy-saving equipment in 59 cases totaling 1.46 billion yen through HICP・	Introducing renewableenergyIntroduce renewable energy

Increased by 56% the amount of renewable energy-derived electricity produced by in-house power generation facilities, andincreased by 36% the amount of renewable energy-derived electricity purchased, as compared to FY 2020 for both

How

What

ー What we are doing ーAchievinga Resource
EfficientSocietySocial・	Building a water efficientsociety

ー How we are doing it ーLong-term
environmental targets

・Build a society that uses water and other resources efficiently with customers and society
・50% improvement of efficiency in use of water/resources by fiscal 2050 (compared to fiscal 2010 in the Hitachi Group)・	Responding to water risks

Achievements in FY 2021

・	Building a society thatuses resources efficiently

Reduction of water use per unit

Reduction rate in water use per unit (Compared to FY2010): 36% (FY 2021 reduction target: 26%)

・	Transitioning to a circular
economyRespond to water risks

Promoted measures based on water risk survey results

Build a society that uses resources efficiently Promoted eco-designs for each product
Reduction of waste and valuables generation
Reduction rate in waste and valuables generation per unit (Compared to FY2010): 18% (FY 2021 reduction target: 12%)
per unit
Plastic recycling activities

Set a target for reduction of waste plastics by fiscal 2030 (effective utilization rate: 100%)

How

What

ー What we are doing ーAchieving a
HarmonizedSociety with
Nature・	Promoting initiatives
to minimize impact onnatural capital・	Managing chemical
substances in products・	Managing chemical
substances in business
operations
・	Promoting initiatives topreserve ecosystems

ー How we are doing it ーLong-term
environmental targets

Minimize impact on natural capital
Achievements in FY 2021

Reduce the rate of chemical atmosphericemissions per unit

Reduction rate in chemical atmospheric emissions per unit (Compared to FY2010): 35% (FY 2021 reduction target: 18%)

Promote ecosystem preservation efforts

Joined the 30by30 Alliance for Biodiversity

Calculation of positive and negative impact
on natural capital

Calculated positive impacts (e.g., benefits of forest conservation activities) and negative impacts due to business activities byusing data from the Environmental Data Collection System (Eco-DS)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

031

Assurance

Advancing Our Environmental Vision and Long-Term Environmental Targets
The Environmental Vision and Hitachi Environmental Innovation 2050
Taking into account the growing urgency of environmental issues in
the world and the management policies of Hitachi, we formulated an
Environmental Vision that clearly outlines our vision for society froma long-term perspective. In working toward achieving this vision, we
have established a set of long-term environmental targets aimed
at building a decarbonized society, a resource efficient society,and a harmonized society with nature under the banner of Hitachi
Environmental Innovation 2050 and are working to advance them.
With regard to achieving a decarbonized society, we originally
set a target of reducing CO2 emissions by 80% throughout thevalue chain by fiscal 2050 (compared to fiscal 2010) in responseto the adoption of the Paris Agreement and the UN Sustainable
Development Goals (SDGs) in fiscal 2016. However, in considerationof the IPCC Special Report on Global Warming of 1.5ºC, and inrecognition of the corporate social responsibility Hitachi is expected
to fulfill, we raised our targets. In fiscal 2020, we revised our target
to achieve carbon neutrality at Hitachi business sites (factories andoffices) by fiscal 2030. And then in fiscal 2021, we revised our target
again to achieve carbon neutrality in our value chain by fiscal 2050.
In seeking to realize a resource efficient society, we aim to
improve the usage efficiency of water and other resources by 50%
by fiscal 2050 (compared to fiscal 2010 levels). And in aiming tobuild a harmonized society with nature, we are advancing initiatives
to minimize our impact on natural capital by reducing our negative
impacts and maximizing our positive impacts across the value chain.
Hitachi s environmental initiatives, including the achievement ofthese long-term environmental targets, are mandated by the shortterm Environmental Action Plan which is updated every three years
and pursued Group-wide.

PolicyTargetGRI 102-11/102-15/103-2

Environmental Vision and Long-term Environmental Targets: Hitachi Environmental Innovation 2050

Environmental Vision
Hitachi will resolve environmental issues and achieve both a higher quality of life and a sustainable
society through its Social Innovation Business in collaborative creation with its stakeholders.
The aim of Hitachi’s environmental management

Decarbonized Society

Resource Efficient Society

Harmonized Society with Nature

Climate Change Mitigation/Adaptation

Saving and Recycling Resources

Preservation of Ecosystems

Long-term Environmental Targets
Hitachi’s resolution looking toward 2050 and 2030

Hitachi Environmental Innovation 2050
For a decarbonized society

For a resource efficient society

For a harmonized society with nature

Achieve carbon neutrality
by FY 2050 through the value chain

Build a society that uses water andother resources efficiently withcustomers and society

Impact on
natural capital

Reduce CO2 emissions 50%

by FY 2030 (compared to FY 2010)

Achieve carbon neutrality
by FY 2030 at business sites(factories and offices)

Efficiency in use of water/resources

FY 2050

50

Minimized% improvement(compared to FY 2010 in Hitachi Group)

Environmental Action Plan
Set environmental action items and targets every three years in order to achieve the long-term targets
P041 Achieving a Decarbonized Society
P062 Achieving a Harmonized Society with Nature

P056 Achieving a Resource Efficient SocietyContents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialProgress in Reaching Hitachi Environmental Innovation 2050 Targets
TargetActivities

We are making progress with major Hitachi Environmental Innovation 2050 targets, as shown in the table below. We are generally
on track, and we will continue strengthening our environmental activities to achieve these targets. Regarding the achievementof our long-term value chain target to help build a decarbonized society, we are developing activities which help to reduce CO2
emissions by providing products with top-tier environmental performance.

Efforts to Achieve a Decarbonized Society
Reduced CO2 Emissions at Business Sites (Factories and Offices)

Reduction rate of total CO 2 emissions(compared to FY 2010)

FY 2021 target

FY 2021 result

FY 2030 target

FY 2050 target

20％

37％

100%
(carbon neutrality)(Maintain 100%)

Efforts to Achieve a Resource Efficient Society
Enhanced Efficiency in the Use of Water at Business Sites (Factories and Offices)

Reduction rate in water use per unit
(compared to FY 2010 Hitachi Group)

FY 2021 target

FY 2021 result

FY 2030 target

FY 2050 target

26％

36％

―

50%

Enhanced Efficiency in the Use of Waste and Valuable Generation at Business Sites (Factories and Offices)

Reduction rate in waste andvaluable generation use per unit
(compared to FY 2010 Hitachi Group)

FY 2021 target

FY 2021 result

FY 2030 target

FY 2050 target

12％

18％

―

50%

Note: See the referenced pages for details on the figures cited.

Governance

Assurance032

Hitachi Sustainability Report 2022

Contents

Environmental Action Plan

Introduction

Management

Environmental

SocialGovernance

033

Assurance

To achieve its Environmental Vision and the Hitachi Environmental Innovation 2050 long-term environmental targets, Hitachi draws up
an Environmental Action Plan containing indicators and targets for the three-year period covered by the Mid-term Management Planand steadily promotes its implementation.

Environmental Action Plan for 2021 (Fiscal 2019–2021)
TargetActivities

Hitachi has promoted environmental activities under the Environmental Action Plan for 2021 (Fiscal 2019–2021) that were based on the 2021 Mid-term Management Plan. The targets set for fiscal
2021, which is the final year, as well as the actual results are as follows. GREEN 21 is used as a tool for evaluating and managing our achievements made over three-year periods toward the targets set.
◆◆◆：Achieved

Environmental Action Plan for 2021

Our environmental activities and targets are updated every three years with a view to achieving our long-term environmental targets.
Items

Environmental
Management

A DecarbonizedSociety

A Resource
Efficient Society

A HarmonizedSociety with
Nature◆◆：Partially achieved

Indicators

FY 2021 targets

FY 2021 results(achievement level)

Promote environmental human capital development

Environmental human capital development of the Hitachi Group

Enhance global environmental management

Implementation rate of voluntary environmental audits (number of
implementing sites/number of sites outside Japan)

80%

56% ◆◆

Reduce CO2 emissions of products and services

Reduction rate of CO2 emissions per unit (compared to FY 2010)21%

28% ◆◆◆

Address climate change risks and opportunities

Identification and review of risks and opportunities

Reduce CO2 emissions of business sites (factories and offices)

Reduction rate of CO2 emissions per unit*1 (compared to FY 2010)

9%

6% ◆◆

Reduce CO2 emissions from transportation (shipping)

Reduction rate of transportation energy consumption per unit (Japan)*2(compared to FY 2010)11%11% ◆◆◆

Reduction rate in water use per unit (compared to FY 2010)26%

36% ◆◆◆

Water circulation(factories and offices)Enhancing efficiency in the use of water
Respond to water risks

Promotion of measures based on water risk survey results

Resource circulation(factories and offices)Enhance efficiency in the use of resources
Reduce and recycle waste materials

Reduction rate in waste and valuables generation per unit
(compared to FY 2010)12%

18% ◆◆◆

Chemical substances(factories and offices)

Reduce chemical emissions

Reduction rate in chemical atmospheric emissions per unit
(compared to FY 2010)18%

35% ◆◆◆

Ecosystem
preservation

Reduce impact on natural capital
Contribute to ecosystem preservation

Calculation of negative impacts (environmental impact assessment of business activities)
Calculation of positive impacts (forest conservation activities)
Promotion of ecosystem preservation activities

Environmental Action Plan Achievement Evaluation System*1 Reduction rate of CO2 emissions per unit refers to reductions in CO2 emissions from just Hitachi’s consumption of energy.
*2 This is a target for Japan only. Targets in other countries are set on a voluntary basis.

GREEN 21

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

034

Assurance

Environmental Action Plan for 2024 (Fiscal 2022–2024)
TargetActivities

Hitachi has established a new Environmental Action Plan for 2024 (Fiscal 2022–2024) based on the 2024 Mid-term Management Plan as an initiative beginning in fiscal 2022. We will strengthen ourefforts further in working to achieve the Hitachi Environmental Innovation 2050 long-term environmental targets.

Environmental Action Plan for 2024
Items

Environmental
Management

Environmental
human capitaldevelopment

Factories andoffices

A DecarbonizedSociety

Final FY (2024) targets

Total CO2 reduction

Total CO2 reduction (compared to FY 2010)

32%

35%

50%

Improvement oftransportation energy
consumption per unit
(Japan)Improvement rate of transportation energy consumption per unit
(Japan) (compared to FY 2010)

2%

3%

4%

Reduction rate of CO2 emissions (compared to FY 2010)

12%

13%

14%

Promote eco-design

A HarmonizedSociety with
NatureFY 2023 targets

Promote environmental human capital development

Reduce CO2 emissions of
products and services

Factories andoffices

FY 2022 targets

Promote environmental
human capital development

Products andservices

A Resource
Efficient Society

Indicators

Enhancing efficiency in theuse of resources

Environmental human capital development mindful of changes in personnel
composition, including generational shifts

Contribution to CO2 emissions reduction

Contribution to CO2 emissions reduction of 100 million t per year (FY 2024)

Environmentally conscious design assessments and LCA application
rates for newly developed and designed products

100% (FY 2024)

Number of sites achieving zero landfill waste*1

90

124

158

Reduction in waste and valuables generation per unit
(compared to FY 2010)

14%

17%

20%

Reduction rate in water use per unit (compared to FY 2010)

22%

23%

24%

Effective utilization rate of plastic waste

77%

81%

85%

Water risks

Respond to water risks

Respond to water risks

Chemical
substance

Reduce chemical emissions

Reduction rate in chemical atmospheric emissions per unit
(compared to FY 2010)

Ecosystem
preservation

Impact on natural capital

Calculation of negative impacts (business unit/Group company-level LCA implementation) / Calculation of positive impacts (forest conservation activities)*1 Pursued in assumed conformance with regulations, conditions, etc. and less than 0.5%

Minimization of business impacts regarding water risks

5%

6%

8%

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialEnvironmental Action Plan Achievement Evaluation System: GREEN 21
SystemActivities

GREEN 21 is used as a system for evaluating and managing
our achievements made over three-year periods toward thetargets set in our Environmental Action Plan.
GREEN 21 converts the level of achievement toward
the Environmental Action Plan targets at each of theapproximately 160 major sites classified as category A
into green points (GPs) and then makes an evaluation
on a category-by-category basis. A perfect score for any
category is 100 GPs. Points are awarded for meeting theEnvironmental Action Plan’s annual targets and as an added
incentive for particularly ambitious activities. Representing
progress in terms of GPs shows how much each site hasachieved in each category and also enables sites to becompared with each other. The results are also used in theEnvironmental Action Plan’s PDCA (plan-do-check-act)
cycles.
The Sustainability Promotion Division also uses theresults of the GREEN 21 evaluation as a condition forawarding its Eco-Factories & Offices Select certification forbusiness sites that promote activities demonstrating a highlevel of environmental consciousness and produce notable
results in that area.

Achievements in FY 2021
The overall evaluation, which is the sum of theevaluation scores for each category, was 269 GPs
which is lower than the reference score of 320 GPs
in fiscal 2021. Due to the impact of the COVID-19,
business trips outside of Japan were restricted andthere was a decrease in production. The scores forenhancing global environmental management andreducing CO2 emissions per unit of business sitecame in below the targets.

GREEN 21: Fiscal 2021 Evaluation Results (Hitachi Group)
FY 2021 reference score: 320 GPs
FY 2021 result: 269 GPs

Environmental management

66GPs
100
80
60

A harmonizedsociety withnature66GPs

40

A decarbonizedsociety20
0

A resource
efficient society

63GPs

74GPs

Governance

Assurance035

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

036

Assurance

Environmental Governance
Framework for Promoting Environmental GovernanceTo achieve our Environmental Vision and reach our long-term environmental targets called
Hitachi Environmental Innovation 2050, Hitachi, Ltd. has built a global structure to support
environmental decision making and implementation at Hitachi, Ltd. and consolidated
subsidiaries (a total of 854 companies as of March 31, 2022).
In fiscal 2022, we established a new Sustainability Promotion Meeting, with members that
include the Chief Sustainability Officer, business promotion division heads at business units and
key Group companies, and RHQ Sustainability Officers, to discuss important measures concerning
sustainability, including the environment, conduct monitoring of progress in reaching targets, andmore. Important matters related to the environment, including decarbonization and resource
circulation, that are aimed at achieving the Mid-term Management Plan are also discussed or
decided on by the Senior Executive Committee and presented to the Board of Directors. At theBoard of Directors in fiscal 2021, a report on Hitachi’s participation in COP26 and the revision of
long-term environmental targets was provided, affirming Hitachi's efforts toward the environment
including carbon neutrality.
For important themes such as carbon neutrality and the circular economy, we are working
to promote environmental activities throughout the Hitachi Group by setting up separate
meetings composed of the heads of responsible personnels from individual BUs and majorGroup companies to consider Group-wide policies, share information, and so on.
With regard to the Hitachi GX Strategy, a set of comprehensive efforts aimed at realizing
decarbonization and resource circulation within the Hitachi Group and in the value chain, we have
newly constructed a framework for its implementation and are working to effectively promote it under
the guidance of the Global Environment Division, which is managed by the Chief Sustainability Officer.
Hitachi, Ltd., a company with Nominating Committee, etc. under the Companies Act, has adopted
a committee system to separate the responsibilities for management oversight from the executionof business operations. Under this system, the Audit Committee of independent directors conducts
an audit of sustainability-related operations once a year. Reports on climate change and otherenvironment-related material issues are made to the committee by executive officers of Hitachi, Ltd.
P018 Framework for Promoting Sustainability Strategy

GRI 102-11/102-29/102-31

Structure

Framework for Promoting Environmental Governance
Board of Directors
Senior Executive Committee
Sustainability Promotion Meeting
Environmental Value
Promotion Meetings

Internal Environment Initiatives Division Progress Meeting

Carbon Neutrality (CN)Procurement related Meeting(Group Procurement Strategy
Meeting etc.)

CN2030
Promotion
Project Meeting

Circular Economy (CE)Eco-Management
Meeting

3R Promotion
Project Meeting

Environmental Value Promotion Meetings
Meeting

Attendees

Sustainability
Promotion Meeting

Chief Sustainability Officer,
Business promotion division heads
at BUs & key Group companies and
RHQ Sustainability Officers

PurposeFrequency

Deliberation, implementation andmonitoring of material sustainability
initiatives

Twice peryear

Internal Environment
Initiatives Division
Progress Meeting

Heads of Business promotion/
Environment-related/ MONOZUKURI(production)/Procurement divisions
from BUs and key Group companies

Formulating and implementing plans basedon the environmental action plan

Twice peryear

Eco-Management
Meeting

Heads of Environment-related
divisions from BUs and key Group
companies

Deliberation and implementation of actual
action plan to achieve Hitachi Environmental
Long-term goals

Twice peryear

CN2030 Promotion
Project Meeting

Heads and members ofEnvironment-related/ MONOZUKURI(production) divisions from BUs and
key Group companies

Monitoring and implementation of CN action
plan and discussion of acceleration

Every quarter

3R Promotion ProjectMeeting

Heads and members ofEnvironment-related/ MONOZUKURI(production) divisions from BUs and
key Group companies

Promotion of actions for 3R activities towardrealizing CE

Every quarter

Procurement related
Meeting (Group
Procurement Strategy
Meeting etc.)

Chief Procurement Officer, heads ofthe procurement divisions at BUs
and key Group companies

Disseminating Hitachi group global
procurement policy and strategy, anddiscussion on the framework of Sustainable
Procurement

Twice ormore per yearHitachi Sustainability Report 2022

Contents

System for Executive Compensation
Incorporating Environmental Value
SystemIn fiscal 2021, Hitachi introduced evaluations that takeenvironmental value into consideration in the executive
compensation system for the first time with the aim ofaccelerating the creation of environmental value. All executive
officers, including the CEO, set targets for environmental
value and were evaluated for their achievement of individual
targets.
 xamples of Environmental Targets Reflected in Fiscal 2022
E
Compensation Evaluations
Sustainability Targets

Decarbonization

Resource efficiency• Efforts to realize carbon neutrality*1 in business sites(factories and offices) by fiscal 2030
• Efforts to achieve carbon neutrality*1 by fiscal 2050
throughout the value chain• Efforts related to resource efficiency*1 Regarding fiscal 2030 and fiscal 2050 decarbonization targets, single-yeartargets are set Groupwide and for each BU.
P166 Reflecting Sustainability Targets in Executive
Compensation Evaluation

Introduction

Management

Environmental

SocialGovernance

Assurance

037

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

038

Environmental Management System
Enhancing Our Environmental Management System

Environmental Data Collection System
Activities

SystemHitachi has globally applicable criteria for environmental management classification to conduct environmental management properly
and efficiently in accordance with the environmental load and compliance risk levels of Group business sites, both large and small.
We assign a score for each classification item, such as the amount of power consumed, the volume of waste generated, water
usage, and whether or not legal restrictions apply. All Group business sites are classified into one of three categories: A, B, or C,
and environmental management is then conducted based on the respective level of risk. Of our approximately 1,500 businesssites, about 160 major sites are classified as category A currently. Among acquired Group companies, business sites with a large
environmental load (equivalent to category A) are classified as category A after a few years of adjustment during which they adapt
to Hitachi's environmental management.
The business units and Group companies that manage A sites participate in drawing up the Eco-Management Meeting’s
Environmental Action Plan, setting targets based on it and striving to achieve these targets. The Environmental Action Plan isdisseminated throughout the entire Hitachi Group by environmental strategy officers, chosen from among the heads of environment
divisions of those organizations.
In addition to adhering to the in-house environmental management system, our main global category A manufacturing sites
have acquired third-party certification, such as ISO 14001.
P074 Number of ISO 14001 Certified Companies

Categories by Criteria for Classification of Environmental Management
Setting targets based on theEnvironmental Action Plan andreporting environmental load data to
Hitachi, Ltd. headquarters

Reporting environmental load data toenvironmental strategy officers within
their own group

Responding to the managementclassification survey and reporting
violations of environmental laws andregulations to Hitachi, Ltd. headquarters

Category A

〇

〇

〇

Category B

−

〇

〇

Category C

−

−

〇

As part of its environmental management, Hitachi uses theEnvironmental Data Collection System (Eco-DS) to collectabout 20 categories of environmental load-related data
ranging from energy use, water use, and waste generation,
to whether an item falls under relevant environmental laws
and regulations, and environmental accounting. In fiscal
2021, data collection covered about 1,500 business sites in
67 countries. We are working to progressively expand thescope of collection to estimate the environmental load of theentire Hitachi Group. We have also set up an international
help desk to support the system’s operation and promote
understanding of environmental management, offering
support in Japanese, English, and Chinese.
The aggregated data is used to provide feedback to
improve environmental measures, such as in determining
business sites’ environmental management classifications;
identifying environmental management issues; and sharing
instructive examples within the Group, as well as to calculate
green points (GPs) in GREEN 21 evaluations. Approximately
160 major sites classified as category A aggregate data on
key items biannually.

Hitachi Sustainability Report 2022

Contents

Chemical Substance Management System
Hitachi manages data on chemical substances in procured
materials, parts, and products using A Gree’Net, a green
procurement system compatible with the chemSHERPA*¹
format, to grasp what chemical substances are used in our
products—from design and development, procurement,
and production to quality assurance and shipping—and torespond to export partners’ legal and regulatory frameworks.
To ensure proper use of chemical substances in ourbusiness operations, we operate a database for chemical
substance management called CEGNET, which keeps trackof the latest laws and regulations and our own voluntary
regulations and supports searches for new substancerisks. The system also registers chemical substances used
and aggregates data on amounts handled, emitted, andtransferred in our operations, helping to reduce their volume.
*1 chemSHERPA: A shared transmission scheme throughout the supply chain
to ensure proper management of chemical substances in products andcontinuing compliance with the ever-growing requirements of major global
laws and regulations like the REACH regulation (EU regulation of Registration,
Evaluation, Authorisation and Restriction of Chemicals) and RoHS directive(EU rules restricting the use of hazardous substances in electrical andelectronic equipment).

Achievements in FY 2021:
Briefings for Procurement Partners
Data regarding chemical substances contained inapproximately 1.35 million materials, parts, andproducts are registered in A Gree’Net as of theend of fiscal 2021. Each year, we hold briefings for
procurement partners on using A Gree’Net on using
the system, chemSHERPA, and regulatory revision
trends. In fiscal 2021, we held eight online briefings,
for a cumulative total attendance of 2,613 people.

Introduction

Management

Environmental

SocialGovernance

Assurance

039“Eco-Factories & Offices Select” Certification
SystemActivities

Hitachi recognizes business sites featuring high levels of environmental consciousness with Eco-Factories & Offices Selectcertification based on criteria that were developed for our manufacturing (factory) and non-manufacturing (office) divisions, making
evaluations for certification each fiscal year for all locations. Superior policies from certified factories and offices are shared with theentire Group, with other locations encouraged to implement them as well to raise levels of environmental awareness.
In fiscal 2021, of our approximately 1,500 facilities, two were newly certified, and 48 had their certifications renewed. The total
number of certified factories and offices was 50.
Certified Eco-Factories and Offices Selecthttps://www.hitachi.com/environment/select/list/index.html

Environmental Education for Employees
Activities

Training

Hitachi offers environmental education using e-learning for all Group employees, from new hires to executive officers. We provide
once a year specialized training on environmental risks and compliance with environment-related laws and regulations for workinglevel employees in charge of environmental management and internal environmental auditors. Particularly in China, where we havemore than 20 category A sites, we provide training focused on compliance with the country’s increasingly strict environmental laws
and regulations.
Environmental Education in Fiscal 2021
Contents of training

TargetNumber of participantse-learning material: Climate change

All employees in the Hitachi Group132,773 people (as of March 31, 2022)

Hitachi Group training on recent amendments tolaws and operational procedures as well as basic
environmental management

Employees working in air, water quality,
and waste management

Japan: 1,826 people from 64 companies (1,127
people in waste management, plus 699 people in
legal compliance)
China: 163 people from 59 companies

Environmental management training program to
reduce environmental risks in China and raise theknowledge of working-level employees

Working-level employees

191 people from 61 companies

Training for new employees

New employees in the China Hitachi Group17 people from 10 companies

Note: Hitachi normally refers to its suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialEnvironmental Compliance
Activities

In addition to ensuring compliance with the laws and regulations of each country and region, Hitachi strives to minimize
environmental risks by setting compliance with voluntary management criteria that are more stringent than regulatory requirements
and carrying out internal audits. We make periodic examinations of soil and groundwater for any contamination at business sites
where hazardous chemical substances are being or were once used. If contamination is found, we will conduct cleaning andmonitoring activities until decontamination is complete.
If we find a violation or receive a complaint, we take steps to share information about the causes and countermeasuresthroughout the Group and connect these efforts to the prevention of similar incidents. Business sites where legal or regulatory
violations have occurred in particular are designated as high-risk business sites for a three-year period as a corrective measure.
Appropriate guidance provided to such sites by business units and Group companies in charge of their management serves tostrengthen their compliance activities on an ongoing basis and prevent recurrences.

Implementation Status of Internal Environmental Audits
Implementing divisionCorporate division of Hitachi, Ltd.
(Sustainability Promotion Division)

TargetFrequency

Business units, headquarters of Group companies, andbusiness sites classified as category A in our environmental
management classification
Major business sites and subsidiaries of business units andGroup companies*¹

Corporate divisions of business units andGroup companies (environment divisions)

ISO 14001-certified sites (audit teams)

Usually every three years
Sites of business units and Group companies outside
Japan that are classified as category A in our environmental
management classification*²

Divisions within business sites*1 According to the Hitachi Group Global Audit Standards, which specify matters concerning internal audits conducted by business units and Group companies.
*2 According to the Environmental Action Plan.
P074 Number of Regulatory Violations and Complaints

Governance

Assurance

040

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

041

Assurance

Achieving a Decarbonized Society
Efforts to Achieve a Decarbonized Society
Hitachi has set out a target to achieve carbon neutrality
throughout its value chain by fiscal 2050 among its long-term
environmental targets called Hitachi Environmental Innovation
2050 in order to help build a decarbonized society.
In fiscal 2022, we have put in place two green
strategies—GX for GROWTH and GX for CORE—andare working to accelerate measures aimed at achieving
the target. Under GX for GROWTH, we contribute todecarbonization efforts by our customers and society
through the provision of products and services with a low
environmental burden. Further, under GX for CORE, weaccelerate measures aimed at achieving carbon neutrality at
Hitachi business sites (factories and offices) by fiscal 2030.
The majority of our value-chain emissions result fromthe use of our products and services after they are sold,making this stage of our value chain the key to reducing CO2
emissions.
 atio of CO2 Emissions at Each Stage of Hitachi Value ChainR
in Fiscal 2021

82.4%

Procurement of
Raw Materials Production
and Parts

9.8%

4.8%

Transport

0.1%

Use

Others
Waste
Disposal/(Capital
Recycling goods, etc.)

0.4%* Percentages may fluctuate due to changes in our business portfolios

2.5%

Approach

Environmental Strategy for Achieving a Decarbonized Society
TargetActivities

Toward a
DecarbonizedSociety• Achieve carbon neutrality by fiscal 2050 through the value chain and reduce
CO2 emissions by 50% by fiscal 2030 (compared to fiscal 2010)• Achieve carbon neutrality at business sites (factories and offices) by fiscal 2030

Initiatives for Achieving a Decarbonized Society(1) Achieve carbon neutrality at our own business sites and production activities(by fiscal 2030)• Introduce energy-saving and renewable energy equipment.
• Procure 100% non-fossil electricity across all business sites.
(2) Achieve the world s highest level of energy conservation in products• Achieve energy conservation by developing products that take the environment into
consideration from the design stage.
(3) Support businesses that contribute to the carbon neutrality of society as a whole• Power grids business to support the expansion of renewable energy.
• Provision of EV systems and related infrastructure and energy-efficient high-speed trains andstorage battery hybrid trains for the spread of carbon-free mobility.
• Provide Lumada solutions that support the realization of a decarbonized society throughdigitalization.
(4) Develop technologies to realize the transition to a decarbonized society• Development of high-efficiency products, energy management systems and hydrogen-related
technologies.
(5) Work with procurement partners toward a decarbonized society• Raise awareness, by distributing our Sustainable Procurement Guidelines and Green
Procurement Guidelines, and requesting 70% of our procurement partners (procurement
spending basis, excluding publicly listed subsidiaries) to formulate CO2 reduction plans

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

P042 E xpanding the
Decarbonization
Business
P045 C O2 Emission
Reduction at BusinessSites (Factories andOffices) and Hitachi
Carbon Neutrality 2030
P132 Responsible Procurement

Hitachi Integrated report
2022 / Green Strategy(P29-33)
https://www.hitachi.com/
IR-e/library/integrated/

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

042

Contributing to a Decarbonized Society Through the Decarbonization Business
Expanding the Decarbonization BusinessApproachExamples of Decarbonization Buisness: A Hitachi Focus

Activities

To help achieve a decarbonized society as set out in Hitachi’s
Environmental Vision, Hitachi provides value to customers
and society by pursuing a decarbonization business that
contributes to the reduction of CO2 emissions, leveraging
collaborative creation with our partners. Hitachi has threemajor sectors—Green Energy & Mobility, Digital Systems &Services, and Connective Industries—as well as the Hitachi
Astemo, automotive business area. We are developing thefollowing businesses that contribute to decarbonization:• Businesses that help to accelerate the energy shift aimed
at realizing decarbonization

Green Energy &Mobility

Digital Systems &Services• Businesses that provide safe, comfortable, and clean
mobility• Businesses that help to reduce CO2 emissions by using
cutting-edge digital technologies to improve the efficiency
of systems that underpin society

Power grid solutions

 nhancing efficiency of transformers, high voltage products, and power transmission/•E
distribution

Grid automation• A dvancing smart grid control, etc.

Power generation• P romoting power generation systems using wind and other non-fossil energy sources

Railways• Enhancing energy-saving features of rolling stock• Developing smart operating systems• Enhancing maintenance service efficiency through rolling stock monitoring

Finance and publicoriented solutions

 romoting digital solutions•P

Data centers• Developing smart data centers

Servers/storage• Enhancing energy-saving features of servers and storage

Smart logistics• Improving energy-saving features through fully IT-enhanced logistics

Factory automation• Enhancing energy efficiency through shorter lead times

Water business• Enhancing efficiency of water and sewage systems

Industrial products• Enhancing efficiency of industrial products

Smart cities• R educing CO2 through comprehensive urban energy management solutions

Home appliances nhancing energy efficiency of home appliances•E romoting connected home appliances•P

Smart therapies

 nhancing energy-saving features of medical devices•E• Businesses that contribute to the electrification andElevators

autonomous driving of vehicles
We will work to expand our decarbonization businessthrough the provision of these varied solutions, thereby
helping the world to mitigate and adapt to climate change.

 nhancing energy-saving features of elevators and escalators through replacement•E nhancing energy efficiency through total building solutions•E

Vehicle electrification• P romoting electrification through electric powertrain systems

AD/ADS (Automatic
Driving, Advanced
Driver-Assistance
Systems)• Reducing CO2 by improving operational efficiency through AD/ADAS solutions

Connective
Industries• Businesses that help to decarbonize industries and cities
by creating a resilient supply chain

Hitachi Astemo(Automotive business)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialEfforts to Reduce CO2 Emissions During the Use of Products and Services
Approach

Activities

To reduce CO2 emissions from the use of our products andservices, which make up the largest proportion of emissions
in our value chain, we have established target reduction
rates of CO2 emissions per unit based on fiscal 2010. For
each product or service subject to this initiative, we calculate
the reduction rate with CO2 emissions as the numerator andfunction size*¹ as the denominator. We will also help ourcustomers and society to reduce CO2 emissions throughthe products and services we sell. Hitachi aims to lead theworld in decarbonization by making a reduction contributionof approximately 100 million metric tons/year in fiscal 2024
through enhancing power grid resilience and promoting the
adoption of renewable energy and advancement of energy
conservation throughout society in our aim of realizing asustainable society.
Approach to Calculating CO2 Emission Reductions
The Guidelines on Calculating CO2 Emission Reductions for
Hitachi Group Products and Services*² specify the following
three methods for calculating different types of CO2 emission
reductions. Figures considered reductions for products andservices while in use under the GHG Protocol, a standard for
calculation and reporting of GHG emission, are calculated using
method (1). Methods (2) and (3) are for avoided emissions.

(1) Energy-saving feature enhancements
Set a reduction rate of CO2 emissions per unit (comparedto fiscal 2010) based on efficiency enhancements suchas energy-saving feature enhancement in products
and services. Every year, calculate reductions in CO2emissions considering the production volume of therelevant year.
(2) Reduction through new systems and solutions basedon technological innovation
Calculate avoided emissions as reductions in CO2emissions due to the dissemination of new systems andsolutions that emit less CO2 while providing equivalentvalue to existing products, services, and solutions.
(3) Reduction through the deployment of non-fossil
energy systems
Calculate avoided emissions as reductions in CO2emissions due to the introduction of renewable and othernon-fossil energy systems, as compared to existing gridsupplied electricity (using the average emissions factor of
the base year, fiscal 2010).
*1 Major functions of products correlated with CO2 emissions, such as their
output and volume*2 The Guidelines are based on various standards, including the Guidance on
Quantifying Greenhouse Gas Emission Reductions from the Baseline forElectrical and Electronic Products and Systems (IEC TR62726) issued by theInternational Electro-technical Commission (IEC), and calculation methods
established by governments or industrial associations.

Governance

043

Assurance

Achieving CO2 Emission Reductions During theUse of Products and Services
TargetActivities

GRI 305-4/305-5

Hitachi set a target for fiscal 2021 of a 21% reduction in CO2emissions per unit from products and services compared tothe base year of fiscal 2010 and achieved a 28% reduction.
The achievement of this target was driven by the introductionof new models of high energy-saving equipment used inindustrial equipment and social infrastructure.
Environmental Action Plan for 2021 Management Values
Reduction in CO2 Emissions per Unit (Hitachi Group)
FY 2010(base year)

FY 2021CO2 emissions
from use of products

CO2 emissions
from use of products

100%

72%
Function size

Function size*

1

Reduction in CO2emissions per unit
(Hitachi Group)

Frombase year

28 % reduction

FY 2021 reduction target rate: 21%

Hitachi Sustainability Report 2022

Contents

Improving the Environmental Performance ofProducts and Services Through Eco-designs
SystemActivities

For all products and services involving a design
process, Hitachi promotes eco-designs by applying ourEnvironmentally Conscious Design Assessments to steadily
improve environmental performance throughout the Group.
We identify 30 environmental impact items that may
cause climate change, resource depletion, and ecosystemdegradation across the entire life cycle of products andservices, assess the level of environmental burden reduction
across our business activities in multifaceted ways, andstrive to achieve further reductions.
Initiatives for Improving Environmental Performance ofProducts and Services• Promoting environmentally conscious processes: In
accordance with the IEC 62430*¹ criteria, promote
environmentally conscious processes in designing anddeveloping products and services including by meeting
environmental regulatory requirements and ascertaining
the environment-related needs of our stakeholders within
our existing management system.

• Implementing Life Cycle Assessments (LCAs): For ourmain, priority products, quantitatively evaluate their global
environmental burden in such areas as the consumptionof mineral resources, fossil fuels, and water resources, aswell as their impact on climate change and air pollution,
disclose the results to our stakeholders, and utilize them in
improving the design of next-generation products.
*1 The standard developed by the International Electrotechnical Commission (IEC)
concerning environmentally conscious design for electrical and electronic products.

Case studies of Reducing CO2 Emissions Throughout the Value Chain
https://www.hitachi.com/environment/casestudy/index.html#case01

Introduction

Management

Environmental

SocialGovernance

Assurance044

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

045

Assurance

Contributing to a Decarbonized Society at Business Sites (Factories and Offices)
CO2 Emission Reductions at Business Sites (Factories and Offices) and Hitachi Carbon Neutrality 2030
Activities

In working toward realizing a decarbonized society, Hitachi has set the goal of realizing carbon
neutrality by fiscal 2030 at all business sites (factories and offices) as part of its long-term
environmental targets called Hitachi Environmental Innovation 2050.
Our roadmap to achieving this goal sets targets of reducing CO2 emissions by 50%,
compared to the base year, by fiscal 2024 and 80% by fiscal 2027 toward realizing carbon
neutrality by fiscal 2030.
Approaches to reducing CO2 emissions include installing energy-saving and renewableenergy equipment (including PPAs*1) and purchasing electricity from renewable sources,
renewable energy certificates,*² and high-quality credits for neutralization (environmental value
obtained by removing carbon from the atmosphere). Among these, installing energy-saving
and renewable energy equipment is expected to incur high costs relative to the amountsof reduction. However, it will also lead to reduced risks associated with factors including
anticipated sharp rises in energy pricing and increased costs from carbon taxes and the
expansion of carbon tax transactions. It also aligns with our Corporate Mission—“To contributeto society through the development of superior, original technology and products”—and forthis reason as well, we are placing a priority focus on this approach. Currently, we have set thetarget at a 33% reduction to be made by fiscal 2030, however we are working to increase thatlevel to 50%.
*1 Power Purchase Agreement (PPA): An arrangement in which a company (PPA provider) that owns and manages solar power
generation equipment installs a solar power generation system in a space furnished by a facility owner, such as a lot or rooftop,
and the electricity generated by it is supplied to the facility for a fee.
*2 Renewable energy certificate: Accredits the environmental value associated with electricity generation from renewable energy
sources. Unlike the purchase of renewable electricity, acquisition of this environmental value, which is separate from the electricity
itself, is regarded as equivalent to reducing CO2 emissions.

GRI 305-4/305-5

CO2 reduction roadmap (as of Mar. 2022)
Reduction rate in CO2 emissions (%)

Policy0

TargetFY2024
Target50%+

50%

Purchasing
electricity fromrenewable sources
31%

FY2027
Target-50

80%

Purchasing
renewable energy
certificates 26%

Residual emissions

Neutralization 10%

-100
2010

2020

2021

2022

2023

Energysaving + RE
generation 33%

2024

2025

2026

2027

2028

2029

2030
（ year ）Concrete efforts to achieve carbon neutrality at business sites, categorized by location type(factories, offices), can be outlined as shown below.
Major Initiatives for Reducing CO2 Emissions at Business Sites (Factories and Offices)

Factories

Improve equipment efficiency by introducing and upgrading to high-efficiency equipment(Determine priority measures and manage introduction and upgrade rates)
Improve production efficiency and energy use efficiency during production through use of theLumada platform and production technologies cultivated from our long years of experience
Optimize equipment operations and reduce wasted energy by installing smart meters
Review product designs and processes
Optimize control of equipment operations in response to production conditions

Offices

Build/move to new facilities with high energy efficiency
Combine and integrate existing facilities
Install energy-saving equipment and optimize equipment operations incollaboration with building owners

Factories
andoffices

Install renewable energy systems
Use electricity from renewable sources
Adopt renewable energy certificate systems
Introduce off-balance-sheet solar power generation for self-consumption
Promote investment in carbon-reduction equipment through adoption of the HitachiInternal Carbon Pricing (HICP) framework

Hitachi Sustainability Report 2022

Contents

The Hitachi Internal Carbon Pricing Framework
SystemTo promote CO2 reduction at its business sites (factories andoffices), in fiscal 2019 Hitachi introduced the Hitachi Internal
Carbon Pricing*1 (HICP) framework.
Specifically, with reference to emissions trading andcarbon taxes globally, we establish company-internalcarbon prices, convert into monetary value the effect of CO2
reductions due to investment in equipment that contributes
to decarbonization, add this to the value of energy reduction
effects, and use the result to evaluate the effect of ourinvestment. By applying incentives like these, we aim tofurther expand our investment in equipment that contributes
to decarbonization.
Initially, we set the HICP rate at 5,000 yen/t-CO2 in
consideration of 2025 carbon taxes and carbon trading
prices (ETS*2). Subsequently, looking ahead to 2030, we
increased the rate to 14,000 yen/t-CO2 in August 2021
in consideration of anticipated carbon taxes and carbon
trading prices. We will leverage this framework to provide
early responses to future risks such as carbon taxes as wellas to actively promote the installation of energy-saving andrenewable energy equipment, our highest priority initiative
aimed at achieving carbon neutrality.
Increased burdens from carbon taxes and newemission regulations can be anticipated in the future. Taking
such risk factors into account from the stage of equipment
investment considerations and making investments that
contribute to decarbonization a higher priority will help
minimize the impacts of future climate change risks andmake our company more resilient. The introduction of the
HICP framework is instrumental in this process.
*1 Internal carbon pricing: An in-house tool for assessing in monetary terms theamount of carbon generated or reduced in order to voluntarily make investment
decisions and conduct risk management.
*2 Emission Trading Scheme

Introduction

Management

Environmental

SocialGovernance

Assurance

046

Achievements in FY 2021
As a result of Hitachi s creation and implementation of the HICP framework, we have made additional investmentsin equipment that was previously judged to be effective in reducing CO2 emissions for projects that had not originallyreceived sufficient investment due to their low levels of investment efficiency.
In fiscal 2021, we invested in 59 cases of energy-saving equipment with a total investment of 1.460 billion yen.
These investments contributed to an annual reduction of 1,230 metric tons of CO2 emissions. The annual amount of
CO2 emission reductions from our business sites improved 2% compared to the previous fiscal year.
With factors including the revised rate of 14,000 yen/t-CO2, 33% of overall investments contributing to decarbonization
were selected through the HICP framework. The scope of investments broadened to include categories such as reducing
energy use in production facilities in addition to conventional categories like upgrading to high-efficiency equipment.
Hitachi Internal Carbon Pricing (HICP) Framework
Approach to Assessing Investment Effectiveness with HICP
Investment effect inmonetary terms

CO2 reduction effects are converted intomonetary value and added virtually

Asset values
increaseCO2
reductioneffects

Virtualeffects are
realized wheninvestments
are assessed

Actions and Achievements
Activities

GRI 302-1/305-4/305-5

At Hitachi, the achievement of environmental targets forindividual business sites (factories and offices) set by theEnvironmental Action Plan for 2021 is measured by CO2emissions per unit. Because we conduct business in various
sectors, the KPI of CO2 emissions per unit for each businesssite is calculated using the site’s CO2 emissions as thenumerator and its activity amount*1 as the denominator.
In fiscal 2021, which was also the final year of theEnvironmental Action Plan for 2021, the reduction rate of CO2

EnergyreductioneffectEnergyreductioneffect

Beforeintroducing
HICP

After
introducing
HICP

CO2 reduction = cost reduction
Facilities that generate less CO2 have higher
asset values

emissions per unit was 6% against a target of 9% (comparedto the base year of fiscal 2010). Reasons for not reaching thetarget include an increase in the operation of equipment withhigh energy consumption in factories and lower production
efficiency due to the inability stemming from COVID-19 to
procure certain components.
Also, total CO2 emissions increased by approximately
2.6%, or 88 kt-CO2,*² compared to fiscal 2020. This was
influenced by an increase in operations by materials divisions.
* 1 Activity amount is a value closely related to CO2 emissions at each business site (forexample, production quantity, output, building floor space, and number of employees).
*2 The CO2 electrical power conversion factor for total CO2 emissions is market-based

Contents

Hitachi Sustainability Report 2022

Managementk t-（CO2）
6,000
5,433

CO2 emissions reduction rate per unit (Hitachi Group)

58
16
1,461

94%

CO2
emissions*1

3,834 kt-CO

2

Activity amount*2

Frombase year

6%

1,167
236

3,000
2,377

2

Notes:• As with the CO2 electrical power conversion factor in calculations of
CO2 emissions per unit, a unified factor of 0.530 kg-CO2 /kWh is applied
across the entire Hitachi Group.
• The Environmental Action Plan’s management values do not include
amounts for our power plants in fiscal 2010 (base year) or fiscal 2021.
Emissions, which provide the base for intensity metrics, are calculated
according to the boundary of environmental performance aggregation
data for fiscal 2021.
*1 CO2 emitted from the organization (SCOPE 1 and 2).
*2 Activity amount is a value closely related to CO2 emissions at each businesssite (for example, production quantity, output, building floor space, andnumber of employees).

572

2,285

1,500

0

FY 2021 reduction target: 9%

3,296

56
18

3,384

44
16

1,003

1,039

360
185

364
178

1,448

1,563

226

180

264

3,492kt-CO

reduction

83
30

540

283

2,030

739

CO2 emissions
reduction rate per unit
at Business Sites(Factories and Offices)

4,374

1,286
499

Activity amount*2

2017

Governance

Assurance

047

Introducing Renewable Energy

4,973 5715

FY 2021100%

SocialActivities

4,500

CO2
emissions*1

Environmental

CO2 Emissions(Hitachi Group’s factories, offices, and power plants)

Environmental Action Plan for 2021 Management Values

FY 2010(base year)

Introduction

554

2018

228

2019

2020

2021

（FY）

Hitachi is promoting the generation of power through solar,
wind, and other forms of renewable energy at its businesssites. We are advancing related efforts with the aim of raising
the share of this power in our total electricity consumption to
5% by fiscal 2030.
As well, for electricity we purchase, we are also
offsetting any CO2 emissions that cannot be reduced
through energy-saving and renewable energy equipmentby adopting the use of electricity from renewable sources.
Going forward, we plan to reduce the total amount ofelectricity acquired by promoting even greater energysaving. Renewable electricity used will be based on thestandards set by the GHG Protocol.

■ Power plants ■ Japan ■ China ■ ASEAN, India, and other Asian regions■ North America ■ Europe■ Other regions

Notes: • Regarding CO2 electrical power conversion factors: in Japan (including
power plants), adjusted conversion factors for individual powerbusinesses based on the Act on Promotion of Global WarmingCountermeasures are used; outside of Japan, the latest values foreach fiscal year supplied by the International Energy Agency (IEA) for
individual countries and by power supply companies are used.
• Energy-related CO2 emissions in fiscal 2021 were 1,245 kt-CO2 (SCOPE
1) and 2.139 kt-CO2 (SCOPE 2, market-based).
• In addition to this figure, the fiscal 2021 CO2 emissions of an energyrelated company and automotive business companies, which became
consolidated subsidiaries in fiscal 2020, were 175 kt-CO2 and 601 ktCO2, respectively. The companies’ CO2 emissions will be incorporated
into the Hitachi Group’s CO2 emissions from fiscal 2022.
• 3.2 kt-CO2 through the use of carbon-neutral city gas*1 and 3.6 kt-CO2
achieved with credits for neutralization are excluded from SCOPE 1.
*1 Carbon-neutral city gas: A type of liquefied natural gas for whichgreenhouse gasses generated through processes from theextraction to the combustion of the natural gas are offset with carbon
neutralization credits so that it can be regarded as equivalent togenerating no CO2 on a global scale.
P067 Calculating GHG Emissions Throughout the Value Chain (Fiscal 2021)
P069 Environmental Load from Operations

Achievements in FY 2021
Renewable electricity generation across the Hitachi Groupin fiscal 2021 increased by 56% compared to fiscal 2020,accounting for 0.7% of the electricity consumed by the entire
Hitachi Group. Also, the amount of purchased renewableelectricity used by the Hitachi Group in fiscal 2021 increased
by 36% compared to fiscal 2020, accounting for 3.4% of
the electricity consumed by the entire Hitachi Group.
Together, generated and purchased renewableelectricity accounted for 4.1% of the electricity consumed
by the entire Hitachi Group in fiscal 2021.
At ten sites in the United States, Europe, and Japan
all the electricity used came from renewable sources.
Moreover, three Hitachi High-Tech Group sites and one
Hitachi Industrial Equipment Systems Group site haveachieved carbon neutrality by promoting further enhancedenergy-saving and purchasing high-quality credits forneutralization.

Hitachi Sustainability Report 2022

Contents

Business Sites Fully Powered by Renewable Electricity
HitachiComputer
Products (US)

1 siteHitachi Rail Italy

3 sites

Hitachi Astemo(UK )1 siteHitachi HighTech Group(Japan)3 sites

11,263 MWh―(wind power)
31,635 MWh―(hydroelectric power, etc.)
3,954 MWh―(hydroelectric power,
etc.)
11,104 MWh (hydroelectriccarbonand wind power)

neutrality

Hitachi Industrial
Equipment
Systems Group(US)

1 site11,171 MWh(wind power)

HitachiConstruction
MachineryGroup(Japan)1 site11,702 MWh(wind and solar power)

Total

10 sitescarbonneutrality―

80,829 MWh

Case studies of Energy Savings in Eco-Factories & Offices
https://www.hitachi.com/environment/casestudy/index.html#case02

Introduction

Management

Environmental

SocialGovernance

048

Assurance

Reducing Transportation Energy Consumption
Activities

As part of its efforts to reduce energy output duringtransportation as well as at its business sites (factories andoffices), Hitachi has established targets for the reduction oftransportation energy use per unit for each business unit
and Group company in Japan.
Outside Japan these targets are voluntary. Our
business sites are promoting a modal shift to highly efficienttransportation methods by improving truck loading ratios,
taking other measures to reduce transportation energy
consumption and switching to the use of eco-cars for inhouse operations.
Eco Rail Mark Certification and Initiatives
Considering a modal shift from truck to rail transportationa high priority, we are working toward “Eco Rail Mark
company” and “Eco Rail certified product” certifications from
the Ministry of Land, Infrastructure, Transport, and Tourism.
Transitioning from truck to railway transportation is expected
to reduce CO2 emissions per unit to one-thirteenth of its
current level, and we plan to continue expanding our use ofrailways for long-distance transportation.
About the Eco Rail Markhttps://www.mlit.go.jp/tetudo/ecorailmark/ecorailmark-english.html

Eco Rail Mark Initiatives
Company
Hitachi, Ltd.

Hitachi Channel Solutions
Hitachi Industrial Equipment
Systems

Certification
Eco Rail Mark company*1
Eco Rail certified product*2
Eco Rail Mark company*1
Eco Rail certified product*2*1 A mark conferred on companies using
railways for more than 15% of freight landtransportation covering 500 km or more;for 15,000 metric tons or more in volume
per year; or for more than 15 million tonkilometers in volume × distance per year.
*2 A mark conferred on products using
railways for more than 30% of freight landtransportation covering 500 km or more interms of volume × distance.

Achievements in FY 2021
To reduce CO2 emissions in fiscal 2021, we focusedon improving efficiency when loading products fortransportation, increasing the use of coordinatedtransportation, and optimizing transport vehicles.
However, due to increased production by ourmaterials divisions and construction machinery
divisions, CO2 emissions from transportation within
Japan totaled 74.3kt-CO2, an increase of 5.4ktCO2, or 7%, compared to fiscal 2020.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

049

Assurance

Climate-related Financial Information Disclosure (Based on TCFD Recommendations)
In June 2018, Hitachi announced its endorsement of
the recommendations by the Financial Stability Board’s(FSB) Task Force on Climate-related Financial Disclosures(TCFD). The following contains key climate-related financial
information in line with the TCFD’s recommendations.

Governance
Structure

Hitachi sees climate change and other environmental issues
as important management issues.
Important matters concerning the Group’s sustainability
strategy, including climate change measures, are discussed
and decided on by the Senior Executive Committee and arepresented to the Board of Directors according to necessity.
Hitachi’s long-term environmental targets called Environmental
Innovation 2050, which include reducing CO2 emissions, werereviewed and approved by the Board of Directors when they
were established and revised, and then shared with the public.
In addition, the Audit Committee of independent
directors conducts an audit of sustainability-related
operations once a year, and Hitachi executive officers reporton climate-related issues to the committee during the audit.
As for TCFD initiatives outside the company, since 2019
Hitachi has participated in the TCFD Study Group on Green
Finance and Corporate Disclosures arranged by Japan’s
Ministry of Economy, Trade and Industry (METI). In addition,
we have participated in the TCFD Consortium, whichholds discussions on efforts to link companies’ effective
information disclosure and the information they disclose withappropriate investment decisions by financial institutions andothers, as a Steering Committee member and contributed totheir guidance formulation.
P018 Framework for Promoting Sustainability Strategy
P036 Framework for Promoting Environmental Governance

Strategy
Approach

GRI 102-11/102-15/102-29/201-2

We are responding to climate change by fulfilling our
responsibilities as a global company by helping to achievea decarbonized society. Under the RCP 2.6*¹ and RCP
8.5*² scenarios of the Fifth Assessment Report of theIntergovernmental Panel on Climate Change (IPCC),
we established long-term environmental targets called
Hitachi Environmental Innovation 2050―as a transition
plan to a decarbonized society―in fiscal 2016 under ourEnvironmental Vision. Moreover, in order to help limit the
global temperature rise to 1.5°C as recommended in the
IPCC Global Warming of 1.5°C report, in fiscal 2020 werevised our target to achieve carbon neutrality at Hitachi
factories and offices by fiscal 2030. And then in fiscal 2021
we revised our target again to achieve carbon neutrality in
our value chain by fiscal 2050.
Our aim is to help create a decarbonized society, andwe work to achieve the ambitious targets to realize that goal.
*1 A Representative Concentration Pathway (RCP) scenario under which, at theend of the 21st century, the increase in global temperatures from preindustrial
levels is kept below 2°C.
*2 An RCP scenario that assumes that emissions will continue to rise resulting in an
approximately 4°C rise in global temperatures compared to preindustrial levels.

Identification and Assessment of Climate-related Risks
and Opportunities
The Hitachi Group operates a broad array of businesses
around the world with each business having its own set ofrisks and opportunities. We are responding to the impact
of climate change by assessing climate-related risks andopportunities in accordance with TCFD classifications. We
make sector-specific assessments of risks and opportunities forimportant business sectors that have a relatively high likelihoodof being affected by climate change. Our assessments arealso categorized according to time span, namely short term,
medium term, and long term as defined below.
Time Spans for Assessing Climate-related Risks and Opportunities
Time span

Reason for adoption

Short
term

Over the next
three years
from fiscal 2022
to 2024

Corresponds to the three-year
management period covered by theEnvironmental Action Plan for 2024
established in line with the 2024
Mid-term Management Plan

Mediumterm

Through fiscal
2030

Time span of our fiscal 2030 longterm environmental targets

Long
term

Up to fiscal
2050

Time span of our fiscal 2050 longterm environmental targets

Degrees of Impact
ImpactDefinition

Major

Has an impact sufficient to disrupt business or cause it to
substantially decrease or increase

MediumPart of the business is impacted.

Minor

There is little impact.

P031 The Environmental Vision and Hitachi Environmental Innovation 2050
P041 Environmental Strategy for Achieving a Decarbonized Society
P045 CO2 Emission Reductions at Business Sites(Factories and Offices) and Hitachi Carbon Neutrality 2030

GRI 102-12

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

050

Responding to Climate Scenario Risks and Opportunities for Each Business
Hitachi operates a broad array of businesses with each business having its own set of risks and opportunities. We therefore selected businesses that have a relatively high likelihood of being affected byclimate change and conducted scenario analyses on them. In selecting the businesses, we took into account the factors of, high sales volume within the Group, and relatively high need for fossil fuels
when products and services are used, as well as high CO2 emissions.
The businesses we selected using these criteria were railway systems, power generation and power grids, IT systems, industrial equipment, automotive systems, and construction machinery.
For each of these businesses, we considered the business environment under the 1.5°C and 4°C scenarios and how we would respond.
• 1.5°C scenario As projected by the IPCC’s RCP 2.6 climate model, the IEA 450 Scenario, and other scenarios, we are anticipating a world where stringent measures and regulations will be
implemented to help realize a decarbonized society. Therefore, we investigated risks and opportunities on the premise of carbon neutrality by fiscal 2050.
• 4°C scenario We focused on there being increased climate-induced natural disasters as a result of lax regulations as projected by the IPCC's RCP8.5 scenario and other scenarios.
Our assessment of the major risks and opportunities for the selected businesses are outlined in the following table.
The Business Environment, Major Risks and Opportunities, and Strategies under the 1.5°C and 4°C Scenarios
Note: This table is divided into the following three pages.

Target businesses

Railway systems

Power generation and power grids

IT systems

Industrial equipment

Automotive systems

The businessenvironment andmajor risks andopportunities underthe 1.5°C scenario

Business environment Global demand fortransport systems that emit less CO2 per
distance covered will grow with tighter CO2
emission regulations in each country andregion.

Business environment Global demand forelectricity generated from renewableenergy, nuclear power, and other nonfossil sources will grow with tighter CO2
emission regulations in each country andregion. Power networks will increasingly
accommodate natural energy produced
through distributed generation.

Business environment Demand for energy-saving,high-efficiency IT solutions will grow with tighter
CO2 emission regulations in each country andregion. There will also be increased demandfor data centers and data analysis systems toaccommodate the expansion of financial services
such as investments and loans for decarbonization
businesses, green bond issues, and data utilization
businesses.

Business environment Global
demand for energy-saving
industrial equipment will growwith tighter CO2 emission
regulations in each country andregion.

Business environment Electric vehicles will rapidly
spread with tighter laws and regulations onfuel efficiency and environmental standards,
and increases in fossil fuel prices. Markets foralternative non-fossil technologies like hydrogenand biofuel vehicles will expand. The numberof countries and regions with near zero sales ofinternal combustion engine vehicles will increase.

Risks Competitiveness will decline if there
are delays in the development of innovativeemission-reducing technologies including
those to improve the efficiency of railway
services through digital utilization such as
dynamic headway (flexible operations in
response to passenger demand) and new
mobility services like MaaS.

Risks Delays in the construction of
power networks that would enable themass introduction of renewable energy
with large output fluctuations.

Risks Competitiveness will decline if there
is a lack of technological and human resource
development to provide energy-saving and highly
efficient IT solutions and also if decarbonizedmeasures for energy-intensive data centers aredelayed.

Risks Competitiveness will
decline if there are delays in thedevelopment of high-efficiency,
low-loss products.

Risks Delay transition to a new businessenvironment caused by rapidly developmentof internal combustion engine vehicles will
potentially decline sales.

Opportunities Demand will grow for
railways, which emit less CO2 per distancecovered. There will be a shift to energysaving railcars from conventional models,
and the efficiency of railway services will be
improved through digital utilization. Data
usage will also boost demand for new
mobility services.

Opportunities Business opportunities willgrow with rising demand for renewableenergy—the key to a decarbonized
future—and with the provision of grid
solutions, digital service solutions, andenergy platforms that can accommodate
the diversification of energy suppliers.

Opportunities Demand will grow for energysaving and high-efficiency information systems
that contribute to zero-emissions. There will also
be increased demand for environment-related
financial services as investments and loans for
decarbonization businesses and green bondissues.

Opportunities Utilization of IoT,
digitalization, and connected
systems to develop innovative
products and solutions that
contribute to CO2 emission
reductions without relying on
the energy-saving features ofindividual products.

Opportunities Expanding market for electric,hydrogen, and biofuel vehicles including
motorcycles to replace internal combustion
engine vehicles.

Hitachi Sustainability Report 2022

Environmental

SocialGovernance

051

Assurance

Industrial equipment

Automotive systems

Business environment Demand for electricpowered transport will gradually increase
even without tighter energy regulations.
Damage from typhoons, floods, and othernatural disasters caused by climate change
will rise sharply.

Business environment The cost competitivenessof non-fossil energy will increase, anddemand for renewable, nuclear, and othernon-fossil energy will increase as the
expansion of energy consumption pushes
up the price of fossil fuels. Natural disasters
caused by climate change will rise sharply.

Business environment Demand for new,high-efficiency technology will expand as
multiplex IT systems in response to natural
disaster BCPs will result in increased energy
consumption. Demand will also growfor social and public systems to reduce
damage from natural disasters.

Business environment Typhoons, floods, andother natural disasters caused by climatechange will rise sharply.

Business environment Fuel efficiency laws andregulations will remain lax globally, and internal
combustion engine vehicles will remain a major
mode of transport. The modal shift will be slow,
as conventional automobiles and motorcycles
will remain predominant. Typhoons, floods,
and other natural disasters caused by climatechange will rise sharply.

Risks The high frequency of natural
disasters will exacerbate damage to
production facilities, worsen working
environments, and disrupt supply chainsleading to delays in deliveries and the
procurement of parts.

Risks The high frequency of natural
disasters will increase damage to power
generation and transmission/distribution
facilities, hamper efforts to restore powertransmission/distribution, and disrupt supply
chains leading to delays in deliveries and the
procurement of parts.

Risks Natural disasters will exacerbate
damage to production facilities, worsen
working environments, and disrupt supply
chains leading to delays in deliveries and the
procurement of parts.

Risks Natural disasters will exacerbate
damage to production facilities, worsen
working environments, and disrupt supply
chains leading to delays in deliveries andthe procurement of parts.

Risks Natural disasters will exacerbate
damage to production facilities and disrupt
supply chains leading to delays in deliveries
and the procurement of parts. A breakdown
in one link of the supply chain will have an
increasing impact on overall production.

Opportunities Transport systems
more resilient to natural disasters canbe developed. Competitiveness can beenhanced by providing added value insuch forms as energy-saving railcars andadaptability to new technologies.

Opportunities Energy demand will growas warmer weather leads to increased useof air conditioning. Demand will increasefor disaster-resilient power generation andtransmission/distribution technologies.

Opportunities Demand will increase forsocial and public systems that help reduce
damage from natural disasters and for IT
systems required as part of BCP.

Opportunities Efforts to accommodate
IoT products will lead to higher demand forremote control and remote maintenanceduring natural disasters.

Opportunities Demand will grow fortechnologies to enhance the efficiency ofinternal combustion engines.

 conomic growth, urbanization, andE
population growth will push up demandfor energy, especially electricity, mainly indeveloping countries.
Energy supply and demand will diversify
due to various factors, such as CO2
emissions, the environmental burden,
economic performance, safety, andsupply stability.
Digital technology will be further applied
to enhance the stability and efficiency ofthe power supply.

 urther digitization globally willF
exponentially increase the volume of data
circulated, accumulated, and analyzed.
Experience with the global pandemic willprompt a shift to remote, noncontact,and online formats, both in our life andwork and will boost demand for digitalsolutions that facilitate such a shift.
New services and businesses utilizing big
data, IoT, AI, and other digital technology
will expand.

 igitalization, infrastructure renewal,D
population decline, and worker
shortages will expand the automation
market in industrial countries.
As the global pandemic forces people tostay at or work from home, demand willgrow for factory automation enabling ahandful of workers to operate a factory.
The industrial market in emerging
economies will grow due to a rise inproduction plants.

The businessenvironment andscenario

Non-environmental
market factors(neither the 1.5°C
nor 4°C scenario)

Management

IT systems

Railway systems

under the 4°C

Introduction

Power generation andpower grids

Target businesses

major risks andopportunities

Contents

 conomic growth will lead to urbanizationEand population growth around the world
which will drive the railway businessglobally as an efficient form of public
transport for large numbers of passengers
regardless of climate conditions. Market
size in Japan will remain flat, but the
Asian market overall will see substantial
growth.
Long-distance transport will decline going
forward as the global pandemic restricts
travel and encourages remote work.
Although the decline in demand will not
be as severe as that for air transport.
Competition will grow as major railway
manufacturers in various countries will
expand their businesses to meet global
demand.

 conomic growth, urbanization, populationEgrowth, and infrastructure development
like road construction will expand theglobal market for automobiles andmotorcycles as a flexible and personalmeans of transport.
The global pandemic may temporarily
dampen passenger vehicle sales due torestrictions on people’s movements, butcommercial vehicle sales appear to berising as the need for the delivery of goods
increases.
Businesses that offer greater safety,
security, and comfort, such as thosedeveloping autonomous driving andadvanced safety devices, will become
increasingly important.
Technological innovations in the connectedindustries will create new mobility service
markets.

Hitachi Sustainability Report 2022

Target businesses
Response to
future businessrisks (business
opportunities)

Financialinformation (sales
volume of eachtarget sector)

Contents

Introduction

Management

Environmental

SocialGovernance

052

Assurance

Railway systems

Power generation andpower grids

IT systems

Industrial equipment

Automotive systems

Response to business risks
under 1.5°C or 4°C scenarios

Response to business risks
under 1.5°C or 4°C scenarios

Response to business risks
under 1.5°C or 4°C scenarios

Response to business risks
under 1.5°C or 4°C scenarios

Response to business risks
under the 1.5°C scenario

 ontinue to strengthen the railway
Cbusiness as global demand for railways
will increase under either scenario.
Specifically, develop and market moreenergy-saving railcars and batterypowered railcars for non-electrified
sections. Strengthen railway services
through digital utilization such as dynamic
headway (flexible operations in response
to passenger demand) and new mobility
services like MaaS.
Given the increasing frequency ofnatural disasters, take risk aversion into
account when deciding the location andequipment layout of a new plant. Keep an
eye on the supply chain in strengthening
our ability to respond to businessdisruption risks in accordance with ourBCPs.

 ontinue to enhance the response toC
relevant markets in view of expected
higher demand for non-fossil energy
under either scenario.
Strengthen the provision of grid solutions,digital service solutions, and energy
platforms that can accommodate theincreased use of renewable energy anddiversification of energy supply anddemand management.
Given the increasing frequency ofnatural disasters, develop technologies
for disaster-resilient renewable energy
systems and disruption-resistant powertransmission/distribution systems. Takerisk aversion into account when deciding
the location and equipment layout of anew production plant. Keep an eye on
the supply chain in strengthening ourability to respond to business disruption
risks in accordance with our BCPs.

 ontinue to develop innovative digitalC
technologies, nurture necessary humancapital, and enhance digital service
solutions that generate new value inview of the expected growth in demandfor digital services and the subsequent
market expansion under either scenario.
Specifically, enhance competitivenessby providing energy-saving and highefficiency IT solutions that contributeto the following: zero-emissions;environment-related financial services
for decarbonization businesses; socialand public systems to prevent natural
disasters, reduce damage, and enhance
resilience; and IT systems for BCPs.
Given the increasing frequency of natural
disasters, strengthen our ability torespond to business disruption risks inaccordance with our BCPs.
Ensure competitiveness by decarbonizing
data centers actively.

 nder either scenario, continue
Udeveloping energy-saving, highefficiency products that use IoTtechnology. Focus particularly
on connected products with
communication features. Miniaturized,
high-efficiency, low-loss products canalso help reduce CO2 emissions.
Given the increasing frequency ofnatural disasters, take risk aversion into
account when deciding the locationand equipment layout of a new plant.
Keep an eye on the supply chain instrengthening our ability to respond tobusiness disruption risks in accordancewith our BCPs.

 romote R&D of electrification technologyPand other alternative technologies toenhance the response to new markets
such as electric vehicles.

Partial impact on the revenue of the railway
systems business, which accounted forapproximately 6.1% of Hitachi’s revenue at
628.3 billion yen in fiscal 2021

Partial impact on the revenue of the Energy
Sector, which accounted for approximately
14.1% of Hitachi’s revenue at 1,447.9 billion
yen in fiscal 2021

Partial impact on the revenue of the IT
Sector, which accounted for approximately
21.0% of Hitachi’s revenue at 2,153.6 billion
yen in fiscal 2021

Partial impact on the revenue of theIndustry Sector, which accounted forapproximately 4.0% of Hitachi’s revenue at409.4 billion yen in fiscal 2021

Partial impact on the revenue of theautomotive business (Hitachi Astemo),
which accounted for approximately 15.6%
of Hitachi’s revenue at 1,597.7 billion yen in
fiscal 2021

Note: The above scenario analyses are not future projections but attempts to examine our resilience to climate change. How the future unfolds may be quite different from any of these scenarios.

Response to business risks
under the 4°C scenario
 romote R&D and product development
Pin existing technologies, includinginternal combustion engines, to not only
improve energy efficiency but also nonenvironmental issues like safety, security,and comfort.
Given the increasing frequency of natural
disasters, take risk aversion into accountwhen deciding the location and equipmentlayout of a new plant. Keep an eye on the
supply chain in strengthening our ability
to respond to business disruption risks inaccordance with our BCPs.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

053

Climate-related Risks (Hitachi Group)
Based on a business-by-business review, Hitachi did not find any significant climate change-related risks that were difficult to respond to.
When considering whether existing businesses will be viable when a decarbonized society is realized, many businesses that use electricity as their energy source would be able to adapt to a
decarbonized society by replacing the electricity they use with electricity derived from non-fossil energy sources. On the other hand, it is expected that businesses that currently use fossil fuels willneed to adapt to a decarbonized society by adopting new technologies such as hydrogen and biomass, as well as various measures to offset CO2 emissions. Since many of Hitachi’s businesses use
electricity, it is clear that there is little significant risk arising from the unavailability of fossil fuels.
Below is a summary of Hitachi’s overall risks under the 1.5°C scenario and the 4°C scenario. Given Hitachi’s business form, we have determined that these risks related to climate change can beaddressed.
(1) Risks related to the transition to a decarbonized economy (applying mostly to the 1.5°C scenario)
Category

Major risksTime span

ImpactMain initiatives

Policy and legal

Increased business costs from the introduction of carbon
taxes, fuel/energy consumption taxes, emissions trading
systems, and other measures

Short to longterm

MediumShift from fossil fuel-using to non-fossil fuel-using businesses. Promote activities aimed at achievingcarbon neutrality
Avoid increases in business costs by further enhancing production and transport efficiency andpromoting the use of non-fossil fuel-based energy
Promote energy-saving equipment by introducing Hitachi Internal Carbon Pricing (HICP)

Technology

Loss of sales opportunities due to delays in technology
development for products and services for a decarbonizedsociety

Short to longterm

MediumContribute to reducing CO2 emissions by developing and marketing innovative products and services
that lead to the achievement of long-term environmental targets and expanding the decarbonization
business
Promote the development of energy-saving and low-carbon products by implementing Environmentally
Conscious Design Assessments when designing products and services

Market andreputation

Impact on sales due to changes in market values orassessment of our approach to climate issues

Medium to long
term

Minor

Established a goal of carbon neutrality in the Hitachi Environmental Innovation 2050 long-term
environmental targets; participated in COP26 and communicated to the world advanced technologies
and initiatives that support the realization of a decarbonized society(2) Risks related to the physical impacts of climate change (4°C scenario)
Category

Major risks

Acute andchronic physicalrisks

Climate-related risks to business continuity including
increased severity of typhoons, floods, and droughts (acuterisks), as well as rising sea levels and chronic heat waves(chronic risks)Time span
Short to longterm

ImpactMediumMain initiatives
Taking into account the possibility of flood damage when deciding on the location or equipment layoutof a new plant.
Measures tailored to the water risks of each manufacturing site will be strengthened in the future basedon the results of a water risk assessment now being conductedHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

054

Climate-related Opportunities (Hitachi Group)
To achieve the CO2 reduction targets set forth in our long-term environmental targets and 2024 Mid-term Management Plan, it is important not only to decarbonize our business sites (factories andoffices) but also to reduce CO2 emissions from the use of products and services sold, which account for a large portion of emissions in the entire value chain. Developing and providing products andservices that emit zero or very little CO2 during their use will not only satisfy customer needs but also help meet society’s demands for reduced emissions. This represents a business opportunity for us
in the short, medium, and long term and constitutes a major pillar of the Social Innovation Business that we are promoting as a management strategy.
Category

Major risks

ImpactMain initiatives

Acute and chronic
physical risks

Increased corporate value and revenue fromexpanded sales of products and services with
innovative technology that can contribute to themitigation and adaptation of climate change

MediumExpand business areas that contribute to decarbonization.
Promote decarbonized solutions and services through collaborative initiatives with customers.
Focusing on the fields of energy, mobility, and industry, we are promoting greater utilization of digital technology (Green by Digital) anddeveloping products that offer world-class efficiency.

Resilience

Provision of solutions to address climate-related
natural disasters

MediumProviding disaster prevention solutions such as high-performance firefighting command systems

P042 Expanding the Decarbonization Business

P057 Responding to Water Risks

Based on the various reviews, Hitachi did not find any significant climate change-related risks that weredifficult to respond to.
Hitachi believes that it has high resilience in the transition to a decarbonized society in the medium- tolong-term, as it closely monitors market trends and will develop its business flexibly and strategically underboth the 1.5°C and 4°C scenarios.

Hitachi Sustainability Report 2022

Contents

Risk Management
Structure

Hitachi evaluates and monitors climate-related risks for eachbusiness unit and Group company as part of a process ofassessing risks and opportunities. The results are tabulatedby the Sustainability Promotion Division of Hitachi, Ltd. andthose risks and opportunities perceived as being particularly
important for the Group as a whole are deliberated anddecided by the Senior Executive Committee and, if
necessary, deliberated by the Board of Directors.

Introduction

Management

Environmental

SocialGovernance

Assurance

055

Metrics and Targets
TargetHitachi defines medium- to long-term metrics and targets
in the Hitachi Environmental Innovation 2050 long-term
environmental targets. It also establishes and manages
short-term metrics and targets in detail every three years
through the Environmental Action Plan.
Metrics for climate change mitigation and adaptation
use total CO2 emissions and the reduction rate in CO2emissions per unit. Total CO2 emissions from the useof sold products in SCOPE 3, which account for mostof our emissions given the nature of Hitachi’s business,fluctuate greatly due to changes in sales volumes and ourbusiness portfolio. This has the disadvantage of making it
difficult to see the results of energy saving and efficiency
improvements. Therefore, we have established CO2
emissions per unit as a metric for providing customers andsociety with products and services that emit less CO2 forthose featuring equivalent value. We also set and manage ametric for avoided emissions that contribute to the realizationof a decarbonized society as a whole.
We continue to reduce CO2 emissions generated atour own business sites (factories and offices) by utilizing
the Hitachi Internal Carbon Pricing (HICP) system, which
provides incentives for capital investments that contribute to
CO2 reductions. The carbon price for HICP is set at 14,000
yen per ton-CO2.
In addition, in April 2021, Hitachi, Ltd. introduced
evaluations that take environmental value into account in theexecutive compensation system with a view to accelerating
the creation of environmental value toward achievement of
its long-term environmental targets. In addition, we plan toput approximately 500 billion yen toward the energy shift,
the electrification of vehicles, and so on over the next three

years from now to fiscal 2024 as R&D investments to create
green value.
P031 The Environmental Vision and Hitachi Environmental Innovation 2050
P033 Environmental Action Plan
P041 Achieving a Decarbonized Society
P042 Expanding the Decarbonization Business
P045 Contributing to a Decarbonized Society at Business Sites(Factories and Offices)
P067 Calculating GHG Emissions Throughout the Value Chain(Fiscal 2021)
P166 Reflecting Sustainability Targets in Executive Compensation
Evaluation

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

056

Assurance

Achieving a Resource Efficient Society
Efforts to Achieve a Resource Efficient Society
The issues of water and resource scarcity, triggered byincreasing water demand and population growth—resulting
in higher volumes of resources collected, extracted, used,and eventually emitted as waste—are common concerns
for the entire world. Uncertainty concerning natural disasters
and geopolitical situations is on the rise as well. Hitachi’sbusiness operations will respond to these issues by working
with our customers and society to help build a society thatuses water and other resources efficiently.

Approach

Initiatives to Achieve a Resource Efficient Society

Building a society that uses water efficiently

Building a society that uses resources efficiently

Long-term target

Long-term target

Improve water use efficiency
by 50% in FY 2050
(compared to FY 2010 level)

Initiatives in the Value Chain
Hitachi considers the circularity of resources across thevalue chain to be of key importance, as well as water usage
reduction that takes into consideration water risks on aregion-by-region basis at each stage of the supply chain.
Accordingly, we will optimize water use and wastewater
treatment in the supply chain, provide water-efficient
products and services, while pushing circular-design
initiatives, and develop tools, applications, and services toachieve a circular economy.
Initiatives at Business Sites
We have set a long-term environmental target of improving theusage efficiency of water and other resources by 50% by fiscal
2050 compared to fiscal 2010 levels. We will create higher
economic value using less water and other resources andpursue production activities with a low environmental burden.

Main initiatives at business sites
Responding towater risks

Enhancingefficiency in theuse of water

Achievinga Resource
EfficientSociety

Improve resource use efficiency
by 50% in FY 2050
(compared to FY 2010 level)

Main initiatives at business sites
Shifting to acircular economy

Enhancingefficiency in theuse of resources

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

057

Building a Water Efficient Society
Responding to Water Risks
GRI 303-1/303-2/303-5

ApproachSince Hitachi’s exposures to water risks in its businesses vary by region and the type of business, it is important to identify theirrespective risks and implement countermeasures. To facilitate risk response, we have compiled the procedures for water risk
identification and countermeasures into Water Risk Guidelines,*1 which are followed by some 140 manufacturing sites around theworld that are classified as category A in our environmental management classification.
We use our Environmental Data Collection System (Eco-DS) and various globally recognized tools for water risk assessment
as well as region- and operation-specific water risk identification checklists to identify and evaluate the water risks for eachbusiness unit and Group company, per country and region, and for the entire Group once a year.
We work to reduce water use according to the characteristics of local communities and businesses, comply with wastewater
standards and other water-related regulations, and strengthen water management with the aim of improving efficiency in the use ofwater by 50%, which we have set as a long-term environmental target.
Identification of Water Risks Using the Environmental Data Collection System (Eco-DS)
Regional water risks
Number of evaluation items related towater resources, water quality, water
damage, regulations, reputational risk,
etc.

Risk identification method

Approximately 70

Various water risk assessment tools, including Aqueduct,*2

Risks are identified from information suchas a business site’s volume of water
intake and effluents discharged, and its
water-related initiatives

Water Risk Filter,*3 Flood Hazard Map of the World,*4 are

Assessed using a five-level scale* from low to extremely5

highHigh at 4 sites

Risk results

In fiscal 2021, we assessed the water risks in eachregion and identified high regional water risks at a
total of four business sites operating in India andVietnam out of manufacturing sites that are classified
as category A in our environmental managementclassification. With this, we then assessed theoperational water risks, which were found to be “lowto medium-high at all business sites” including thefour business sites identified earlier. For this reason,
Hitachi does not consider that any of its businesssites face a comprehensively high water risk. The
water use at the four business sites is 0.3 million
m 3, accounting for about 1% of the 25.6 million m3 ofwater used in Hitachi’s main manufacturing processes.

Approximately 50

combined to identify risks based on the address information
Risk assessment

Operational water risks

Achievements in Fiscal 2021

Assessed using a five-level scale from low
to extremely highLow to medium-high at all sites, including
the 4 to the left

No business sites are facing a comprehensively high water risk.
*1 Prepared with reference to Setting Site Water Targets Informed By Catchment Context created by members of the UN Global Compact, the CEO Water Mandate, thePacific Institute, WRI, WWF, and other global institutions with the aim of helping companies set effective site water targets. In fiscal 2021, issued a revised version of Water
Risk Guidelines reflecting the revised content of Water Risk Filter 6.0 and with additional examples of measures.
*2 A water risk assessment tool developed by the World Resources Institute (WRI).
*3 A water risk assessment tool developed by the World Wide Fund for Nature (WWF) and the German Development Finance Institution (DEG)*4 Flood risk maps published by the European Union.
*5 Five-level scale: low, low-medium, medium-high, high, extremely-high

Water Resource Management System
SystemHitachi has set a long-term goal of improving efficiency inthe use of water and is carrying out activities in pursuit ofthis goal at major manufacturing sites that are classified as
category A in our environmental management classification.
The Water Risk Response Working Group (WG), consistingof members of major business units and Group companies,
discusses the formulation of water-related plans and theirlevel of achievement. These are then deliberated on andfinalized in the Eco-Management Meetings. Important items
related to environmental initiatives, including water risk,
are also discussed or decided on by the Senior Executive
Committee and presented to the Board of Directors.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialManagement of Water Use at Business Sites
Fiscal 2021 was the final year of the Environmental Action Plan for 2021 (fiscal 2019–2021), which set out a target of a 26%
reduction (over the base year of fiscal 2010) for water usage per unit in manufacturing processes. We achieved the target with a
36% reduction. The volume of water used declined by 30.9 million m3, equivalent to 59% from the base year. Our measures toreduce water usage include more stringent management of water intake using flowmeters, leakage control by installing aboveground water pipes, circular use of cooling water, and reuse of purified waste water.

水使用量＊の推移（日立グループ）
Environmental Action Plan for 2021 Management Values

Water Usage*1 (Hitachi Group)3（百万m(million m3）)

50

Reduction in Water Usage per Unit (Hitachi Group)
*1

38.54

40
30

FY 2021100%
Amount used

52.75million m

3

058

37.02

30.17

64%

0.26
0.04
2.45
3.93

36.41

1.34

0.35
0.28
2.36
4.09
1.32

29.00

28.01

10

Amount used

21.81million m

3

Activity amount

36% reduction
FY 2021 reduction target: 26%*1 Amount of water used in the manufacturing processes.
*2 Activity amount is a value closely related to water use at each business site(for example, output, sales, and production weight).

0

2017

■ Japan

Activities

Hitachi is committed to contributing to the effective use of limited
water resources. We will strive to solve numerous issues facedby customers that are involved in the water supply and seweragebusiness by combining our track record and know-how of operational
technology (OT) and products and services cultivated over many
years as a comprehensive water service provider with IT which Hitachi
possesses abundant experience and knowledge of in diverse fields.
Hitachi’s Water-related Products and Services

0.22
0.04
2.56
4.04
1.51

26.35

20

Activity amount*2

Reduction in water
usage*1 per unit
compared to base year

Assurance

Products and Services that Contribute to
Resolving Water Issues

Activities

FY 2010(base year)

Governance■ China

2018

2019

0.33
0.36
3.30
1.92
0.95
19.50

2020

26.03

0.32
0.21
3.68
1.88
0.87

Products or services (implementation to date)

Creating water
resources

Wastewater recycling systems(FY)
2021 （年度）■ ASEAN, India, and other Asian regions

Case Studies of Improving Water Use Efficiency
https://www.hitachi.com/environment/casestudy/index.html#case03

Seawater desalination systems
Water and sewage treatment, etc. (over 200 sites
in about 40 countries and regions)

19.08■ North America ■ Europe ■ Other regions*1 The total amount of water input in manufacturing processes and for otherpurposes, such as in offices.
Note: In addition to this figure, the fiscal 2021 water inputs of an energyrelated company and automotive business companies, which became
consolidated subsidiaries in fiscal 2020, were 4.75 million m3/year and 3.91
million m3/year, respectively. The companies' inputs will be incorporated
into the Hitachi Group's water input from fiscal 2022.

P069 Environmental Load from Operations

Activity field

Developing
water
infrastructure

Water purification plants (approximately 700
plants in Japan)
Sewage treatment plants (approximately 900
plants in Japan)
Comprehensive digital solutions for water andsewage treatment operators

We are also engaged in verification tests and joint research withnational and local governments, companies, and other organizations
in various countries to establish new technologies and systems
for the water business. In recent years, we have participated in averification project for an integrated seawater desalination and waterreuse system in the Republic of South Africa, a verification projectto optimize the operational planning of water pumps using a virtual
power plant in Japan, and joint research on the automation of water
purification plant operations through the use of AI.
Water Environment Solutions
https://www.hitachi.com/businesses/infrastructure/product_site/water_environment/index.html

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Building a Society That Uses Resources Efficiently

Assurance

059

Disposal

Procurement

Closed-loop
recycling,
remanufacturing

Closed-loop recycling,use of recycledmaterials

Recycling amorphous
metal materials (Japan)

SocialGovernance

GRI 417-1

Approach to Transitioning to a Circular Economy
Approach

To help build a recycling-oriented society, Hitachi will advance a shift from the conventional
linear economy to a circular economy. We strive to realize this goal with a dual approachof pursuing effective and sustainable use of resources and assets in Hitachi’s businessactivities and achieving the circularity of resources throughout the value chain.
Beyond the issues of the long-term use of products, and the reuse, repair,refurbishment, repurposing, and remanufacturing of products that are no longer neededin the course of our business activities, our customers’ needs are changing from goods
to experiences, or from ownership to leasing. Responding to such a society, we will
promote the effective use of resources and assets, such as with leasing, pay-per-use
systems, subscriptions, products as a service, reuse, and models for sharing. Also, inorder to support the business model described above, at the stages of procurement,
development, and design we will advance eco-designs. This includes ease ofdisassembly, adoption of mono-materials, durability, repairability, and resource saving aswell as greater use of recycled materials and environmentally friendly materials. Having
already been applying Environmentally Conscious Design Assessments and Life Cycle
Assessments (LCAs) for newly developed products, we have now set clear goals ofachieving 100% implementation and are working to promote it.
With regard to initiatives spanning the value chain, we feel it will be imperative toadvance the efforts together with a diverse range of stakeholders on a medium- to longterm basis. For example, if we introduce products as a service, we will not dispose ofold products ourselves, rather, we aim to reliably attain circularity by sharing goals andengaging in co-creation with a diverse range of stakeholders in the value chain in order torealize the effective and sustainable use of resources and assets.
Additionally, we will actively promote the research and development involving raw
materials, products, tools, applications, and services necessary for this and leverage theadvantages of Hitachi’s OT × IT × Products to support the achievement of circularity not
only in our value chain, but in our customers’ activities as well.

Efficient Use of Resources Throughout the Value Chain

Recycling plastics
from home appliances(Japan)Refurbishingstoragesystems (US)Use
Repair, reuse,refurbishing, sharing

Efficient Use of Resources
Throughout the Value Chain

Distribution &Sales
Reuse, rebuilding,servicizing

Recycling construction
machinery components(Japan, China, India, Indonesia, Netherlands,
Australia, Canada, US, Zambia)

Rebuilding electriccomponents fromautomobiles (Japan)

Development &DesignEnvironmentallyconscious design,
resource saving, longproduct life

Production
Closed-loop
recycling, effective
use of waste

Recycling metalmaterials fromautomobile castingparts (Japan)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

060

Assurance

廃棄物有価物発生量＊1 の推移（日立グループ）
Management of Waste Generated at Business Sites
GRI 306-1/306-2/306-3

Activities

For fiscal 2021, which is the final year of the Environmental
Action Plan for 2021 (fiscal 2019–2021), we set a targetof a 12% reduction (from a base year of fiscal 2010) for
waste and valuables*1 generated per unit, and bettered
this by achieving an 18% reduction. The amount of waste
and valuables generated was reduced by 241 kt or 18%
compared to the base year. We strived to reduce waste
by installing recycling facilities within our business sites aswell as through closed-loop recycling, whereby the byproducts and scrap from the production process are reusedas resources by other business sites, and repeated use of
packing and cushioning materials during transport.
Also, we are promoting activities to achieve the goalof the Zero Waste to Landfill*2 initiative, which seeks tominimize landfill disposal to realize the ongoing, sustainableutilization of resources we have used, and in fiscal 2021,
64 business sites out of 155 target sites achieved theirgoals. For hazardous wastes, we collect environmental load
data using the Environmental Data Collection System (EcoDS) to centrally manage the volumes of hazardous wastes
generated and exported by type, and to ensure thoroughcompliance with laws and regulations, as well as proper
disposal within the Group.
*1 Waste and valuables: Materials generated through business activities. Eachcountry has a legal definition of waste, and in Japan, the term refers torefuse, bulky refuse, ashes, sludge, excreta, waste oil, waste acid and alkali,
carcasses, and other filthy and unnecessary matter, which are in a solid or
liquid state according to the Waste Management and Public Cleansing Law.
Valuables, meanwhile, are those materials left over after business activities
other than waste, and can be sold or transferred free of charge to otherparties as items of value.
*2 Zero Waste to Landfill goal: Defined as a final disposal rate (landfill disposal/
waste and valuables) of less than 0.5% in any given fiscal year in the HitachiGroup. Pursued in assumed conformance with regulations, conditions, etc.

Sites Achieving Zero Waste to Landfill Goal
http://www.hitachi.com/environment/data/zerolandfill.html

Environmental Action Plan for 2021 Management Values

Waste and Valuables Generation*1 (Hitachi Group)（kt） eduction in Waste and Valuables Generation* per Unit
R
(Hitachi Group)
1

1,000

FY 2010(base year)

FY 2021100%
Amount generated

1,304 kt

Activity amount*

1,356

1,500

2

Reduction in waste andvaluables generation perunit compared to base
year

82%

500

0

1,384
12
4

12
4

1,302

14
10

713

722

656

117
55

130
55

148
56

455

461

418

2017

2018

1,061

2019

9
9

1,111

21
10

582

613

100
50

87
49

311

331

2020

(FY)
2021 （年度）

Amount generated

1,063 kt

Activity amount

18% reduction■ Japan■ China■ North America■ ASEAN, India, and other Asian regions■ Europe■ Other regions*1 The total amount of waste and valuables generated in manufacturing processes
plus that generated in offices and other nonmanufacturing businesses.
Note: In addition to this figure, the fiscal 2021 waste and valuables generated
by an energy-related company and automotive business companies,
which became consolidated subsidiaries in fiscal 2020, were 70,860 t and
58,549 t, respectively. The companies' waste and valuables generated
will be incorporated into the Hitachi Group's waste and values generated
from fiscal 2022.

FY 2021 reduction target: 12%

P069 Environmental Load from Operations*1 Amount of waste and valuables generated from the production process.
*2 Activity amount is a value closely related to waste and valuables generation ateach business site (for example, output, sales, and production weight).

Case Studies of Efficient Use of Resources
https://www.hitachi.com/environment/casestudy/index.html#case04

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialPlastic Recycling Activities
Activities

Hitachi Global Life Solutions, whose plastic consumption accounts for around 70% of the Hitachi Group’s total, uses recycledplastic in parts for washing machines and refrigerators and packing materials for ceiling lights. The company procures recycledplastic materials produced within the Hitachi Group using plastic parts recovered from end-of-life home appliances and plastic
containers as well as purchasing recycled plastics from materials manufacturers.
While large components in washing machines (such as enclosure bases in the lower parts of units) were previously made with
mixtures of new and recycled materials, a switch to almost 100% recycled plastics use has been achieved through the clearing oftechnical problems and handling of procurement issues.
Hitachi Global Life Solutions works to recycle four categories of end-of-life home appliances (air conditioners, TVs,
refrigerators/freezers, and washing machines/dryers) at 19 recycling plants as part of cooperative efforts among five companies*1
in response to the 2001 Act on Recycling of Specified Home Appliances. A total of 91,130 kt of recyclable materials*2 wererecovered in fiscal 2021 of which approximately 81,768 kt were recycled. By product type, the recycling rate for refrigerators andfreezers was 80%, exceeding the legal requirement of 70% by 10 percentage points, and for washing machines and dryers it was
94%, exceeding the legal requirement of 82% by 12 percentage points.
We are working to strengthen our activities from fiscal 2022 onward with the goal of achieving a 100%*3 effective utilization
rate of waste plastics throughout the entire Hitachi Group by fiscal 2030.
*1 Hitachi Global Life Solutions; Sharp Corporation; Sony Corporation; Fujitsu General Limited; and Mitsubishi Electric Corporation.
*2 Parts and materials recovered from four categories of end-of-life home appliances (air conditioners, TVs, refrigerators/freezers, and washing machines/dryers) and recycled
through in-house use, selling them, or transferring them free of charge to others who will use them. Data values are aggregated from Hitachi Global Life Solutions andJohnson Controls-Hitachi Air Conditioning.
*3 Effective utilization encompasses material recycling, chemical recycling, and thermal recovery. Pursued in assumed conformance with regulations, conditions, etc.

Governance

Assurance

061

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

062

Assurance

Achieving a Harmonized Society with Nature
Efforts to Achieve a Harmonized Society with Nature
To adequately preserve the ecosystem and achieve a
harmonized society with nature so that we may continue
to enjoy nature’s benefits, we have established targets tominimize our impact on natural capital as part of our longterm environmental targets.
We classify the emission of greenhouse gases
and chemical substances into the atmosphere and thegeneration of waste materials in the course of our businessactivities as negative impact activities. Providing products
and services that contribute to ecosystem preservation
and undertaking activities to preserve biodiversity andecosystems are categorized as positive impact activities.
We are working to quantify and minimize the gap between
positive and negative impacts by 2050.
A Timetable for Minimizing Impacts
Ecosystem
preservation activities

Impact (%)

100

Reducenegative
impacts

Contributions throughproducts and services

Activities to achieve
long-term targets
Decarbonized society
Resource efficient society
Harmonized society with nature
Increasepositive
impacts

0
2010

2020

2030

Minimize impacts
on natural capital

2040

2050 (Year)

Negative impacts
Positive impacts (ecosystem preservation activities)
Positive impacts (contributions through products and services)

Approach

Initiatives to Minimize Impacts on Natural Capital
Activities

Hitachi has identified the negative impacts that ourbusiness activities have on natural capital with the aim of
reducing such impacts and evaluated them using the latest
version of an inventory database (IDEA v2*¹). According
to our estimates, approximately 80% of our total negative
impacts on natural resources in fiscal 2021 were related
to climate change, ecotoxicity (air), urban air pollution, andresource consumption. With regard to climate change, wewill advance initiatives aimed at realizing a decarbonizedsociety. Regarding ecotoxicity (air), urban air pollution, andresource consumption, in consideration of the findings
coming to light in impact assessments concerning raw
materials procurement, we will accelerate the pace of efforts
intended to achieve a resource efficient society. Also, we
found negative impacts were reduced by 15% in fiscal 2021
from fiscal 2020. To further reduce our environmental load
to minimize our impact on natural capital, we will enhancea wide range of activities such as increasing the energy
efficiency of our products and services, advancing factory
efficiency, using resources more effectively, and properly
managing chemical substances.
As for expanding our positive impact activities,
while advancing social contribution activities like forest
conservation and business activities that directly contributeto ecosystem preservation, such as building water treatment
plants, we are also looking into quantifying the impact ofthese activities on the environment.
We estimate the benefits gained through ourforest conservation activities (flood prevention, water
impoundment, water purification, soil loss prevention,and carbon fixation) on an ongoing basis using evaluation
methods commonly used in forestry-related public works
projects. We also collect data on forested areas targeted
for conservation activities using the Environmental Data
Collection System (Eco-DS). These data are needed toevaluate forest conservation efforts, and in fiscal 2021, we
surveyed 0.84 km² of such areas.
*1 IDEA v2: One of Japan’s leading inventory databases which is needed to
implement LCAs for calculating negative impacts.

Negative Impact on Natural Capital (FY 2021)
Other
Land use
Resource
consumption

13%

7%

22%

Climate change

14%
19%

25%
Ecotoxicity (air)Urban air pollution
Note: Calculated from version 2 of the Life-cycle Impact Assessment Method
based on Endpoint Modeling (LIME2) by using IDEAv2

Contents

Hitachi Sustainability Report 2022

100

100

92

85

80
60
40
20
0

2019

2020

Management

Environmental

Social30by30 Alliance for Biodiversity Approved by Ministry of

Negative Impacts on Natural Capital（%）

Introduction

2021

(FY)
（年度）

Scope of Negative Impact Calculations
https://www.hitachi.com/environment/data/method.html

Signing the Call to Action Statement, Initiated byBusiness for Nature
In 2020, the global Business for Nature coalition issued aCall to Action*1 statement. The aim is to encourage policy

the Environment (MOE), JapanThe 30by30 target aims to conserve or protect at least
30% of the land and sea areas in Japan by 2030 to achieve
nature-positive goals of curbing biodiversity loss andpromoting restoration by the same year.
The 30by30 Alliance for Biodiversity was establishedto promote achievement of the 30by30 target agreed toat the G7 Summit 2021 and consists of governments,
companies, and NPOs. Its goals are expanding nationalparks, registering in an international database areas such as
rural satochi-satoyama landscapes and commercial forests
for which biodiversity preservation is planned by variousorganizations, promoting the conservation of such areas andactively sharing information concerning these activities.
Hitachi supports this mission and will work to advance
related efforts.

makers around the world to adopt policies to “to reverse
nature loss in this decade.” Hitachi agrees with this goal andhas signed the statement.
*1 The Call to Action states that healthy societies, resilient economies andthriving businesses rely on nature. It urges governments to adopt policies
to reverse the loss of nature, and calls for the protection, restoration, andsustainable use of natural resources.

Business for Nature´s Call to Action
https://www.businessfornature.org/call-to-action

30by30 Alliance (In Japanese only)
https://policies.env.go.jp/nature/biodiversity/30by30alliance/

Governance

Assurance063

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

064

Managing and Reducing Chemical Substances
Managing Chemical Substances
Approach

Hitachi believes that the control and reduction of chemical
substances like volatile organic compounds (VOCs), one of thecauses of urban air pollution, are important not only for reducing
discharge of pollutants into the air and water environment but
also for properly managing chemical substance usage, in orderto minimize our impact on natural capital.
Based on this belief, Hitachi formulated the Environment
and CSR-Based MONOZUKURI Standards to manage
chemical substances at all stages of its operations—fromdesign and development, procurement, and production
to quality assurance and shipping. Chemical substancesin our products are divided into two categories, prohibited
substances and controlled substances, for separate
management to respond to legal and regulatory frameworks
at shipping destinations. With regard to chemical substancesused in our business operations, we reduce risk by assigning
three ranks to the use of such substances: prohibited,
reduced, and controlled, as well as by educating chemical
substance handlers and managers on laws and regulations
and on proper risk assessment.

Managing Chemical Substances in Our Products
SystemActivities

Hitachi designates the chemical substances in our products
requiring management as Voluntarily Controlled Chemical
Substances. With the basic principle of taking as our model
the standards of the EU, where regulations are stringent,
we determine and manage controlled chemical substances

regardless of export destination, type of industry, or purposeof use.
The list of managed substances and managementlevels is revised when necessary based on updates tothe EU’s REACH*1 and other regulations, with the aimof adding substances to our list of Voluntarily Controlled
Chemical Substances six months before they are officiallyregulated. For instance, we have revised this list to include
perfluorocarboxylic acids containing 9 to 14 carbon atoms
in the chain (C9-C14 PFCAs), their salts, and their related
substances due to new EU REACH regulations having beenplaced on them effective February 2023.

Classification Examples
Prohibited Substances (Level 1)
Substances for which use is generally prohibited inside andoutside Japan in products (including packaging) but whichmight be found in products from suppliers.
Controlled Substances (Level 2)
Substances we are required to track and manage theuse of and substances requiring attention to recycling or
appropriate disposal methods.
*1 REACH: The European Union regulation of Registration, Evaluation,
Authorisation, and Restriction of Chemicals.

Hitachi Group's voluntarily controlled chemical substances inour products
https://www.hitachi.com/environment/data/chemical.html

Managing Chemical Substances in Our Business
Operations
SystemActivities

GRI 305-7

Hitachi has been cutting emissions of chemical substancesfrom its factories and other sites through stricter
management, such as by expanding the number and scopeof controlled chemical substances.
Case studies for reduction have been translated into
English and Chinese and shared globally among HitachiGroup companies. We also follow legally prescribed
procedures in measuring and managing emissions*1 ofsulfur oxides (SOx) and nitrogen oxides (NOx), whose
measurement is required under the laws and regulationsof our business site locations, and are advancing efforts tofurther restrict emissions.
We comply with Japan’s Pollutant Release and Transfer
Register (PRTR) Law*2 through Group-wide monitoring ofchemical substances released into the atmosphere or into
public waters, removed outside our plants as waste, ordischarged into sewage systems, reporting the results tolocal governments for each office or plant. Although some
substances are exempt from reporting due to their small
quantities, our policy is to aggregate and manage data on
the handling, emission, and transfer of all PRTR substances
totaling 10 kilograms or more per year.
*1 Emissions of SOx and NOx: Calculated from data by business site (measured
values, exhaust volume, content rate, etc.).
*2 PRTR Law: Act on Confirmation, etc. of Release Amounts of SpecificChemical Substances in the Environment and Promotion of Improvements to
the Management Thereof.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialIn fiscal 2021, which is the final year of the Environmental Action Plan for 2021 (fiscal 2019–2021), toward the target of
reducing atmospheric emissions of chemical substances per unit by 18% from the base year 2010, we achieved a reduction rateof 35%. To reduce the emissions, we are switching from paints containing VOCs to water-soluble and powder paints as well as
expanding their use and altering the painting and washing processes.
Environmental Action Plan for 2021 Management Values eduction in Atmospheric Emissions of ChemicalR
Substances per Unit (Hitachi Group) educing Atmospheric Emissions of Chemical Substances
R(Hitachi Group)
（t）
5,000

4,472 1392
165

FY 2010(base year)

4,000

Emissions

3,863 tActivity amount*1

65%
Emissions

2,499 t

65
130

898

FY 2021100%

4,389 12
3,882

966

245

184

3,000

52
57
197

754
125

93
35
158
439
83

2,000
3,059

Activity amount

3,032

35% reduction
FY 2021 reduction target: 18%*1 Activity amount is a value closely related to atmospheric emissions ofchemical substances at each business site (for example, substances handled,sales, and output)

1,563

0

2017

■ Japan2018■ China■ North America

2,499

73
27
150
343
55

2,697

1,000

Reduction in atmosphericemissions of chemical
substances per unit

2,373

2019

2020

1,851

(FY)
2021 （年度）■ ASEAN, India, and other Asian regions■ Europe■ Other regions

Notes: Atmospheric emissions of VOCs and other chemical substances arecalculated from the content rate included in the ingredients
P069 Environmental Load from Operations

Case Studies of Reducing Chemical Substances in Our Business Activities
https://www.hitachi.com/environment/casestudy/index.html#case05

Governance

Assurance065

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

066

Preserving Ecosystems
Ecosystem Preservation Activities Menu

Initiatives to Preserve Ecosystems
Approach

Activities

Category
GRI 304-3

At Hitachi, we seek to reduce negative impacts on natural
capital caused by business activities and to promote positive
impacts, such as by undertaking social contribution activities
to protect nature and providing products and services that
help preserve the ecosystem, thereby minimizing our impact
on natural capital by fiscal 2050.
Hitachi created an Ecosystem Preservation Activities
Menu citing the specific activities to be undertaken to
promote the preservation of the ecosystem, including
activities that are difficult to quantify but are nonethelessimportant, such as the protection of rare species and efforts
to make biodiversity a criterion when making investment
decisions. Each business site sets its goals and promotes
initiatives based on the Ecosystem Preservation Activities
Menu and helps realize a harmonized society with nature.

Business sites

Value chain

Community

Water use thattakes watershedecosystems into
consideration

Activities taken

No. of menu items

Production

Reducing use of resources that cannot be reused

4

Transportation

Using packaging that takes ecosystem into consideration

7

Collection, disposal, andrecycling

Reducing hazardous materials in products

2

Product planning,development, and design

During R&D, estimating impact on biodiversity during a product’s life cycle andimplementing, if needed, mitigation measures

3

Site management

Using native species, setting up biotopes

17

Water use

Using rainwater1

Investment and acquisition

Confirming impacts on biodiversity when investing in or acquiring a business, andimplementing measures to minimize such impacts

1Market entry andexpansion

Including biodiversity as an investment criterion

1

Business development

Developing products and services to purify water, air, and soil and expanding suchbusinesses

1

Procurement

Preferentially procuring paper and other office supplies that take biodiversity into
consideration

17

Transportation

Implementing ballast water measures during marine transportation

2

Sales

Implementing sales expansion of products that take biodiversity into consideration

9

Collection, disposal, andrecycling

Reusing and recycling components

7

Entire value chain

Promoting the use of renewable energy

1

Engagement

Promoting employee activities outside the company

3

Social contribution

Implementing desert greening and afforestation activities

12

Water intake

Observing and collecting biota information (impact on ecosystem depending on
intake volume)

14

Water discharge

Setting up biota management indicators and making observations (species andnumbers of inhabiting organisms)

14

Case Studies of Promoting Ecosystem Preservation
https://www.hitachi.com/environment/casestudy/index.html#case06

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

067

Assurance

Environmental Data
GHG Emissions Throughout the Value Chain
Calculating GHG Emissions Throughout the Value Chain (Fiscal 2021)
Hitachi calculates greenhouse gas (GHG) emissions throughout the value chain in
conformance with GHG Protocol standards. This gives us a good grasp of emission
hotspots in our value chain with which we can establish effective targets and reduction
measures. Energy-related CO2 accounts for almost all of Hitachi’s GHG emissions, withthere being negligible releases of other gases, making it all the more important to focus on
CO2 reduction efforts.
An extremely high share of our value chain emissions comes from the use of the
products and services we sell. We thus believe that we can make a major contribution to
decarbonization through our businesses by giving priority to enhancing the efficiency andenergy-saving features of our products and services.

GRI 302-2/305-1/305-2/305-3/305-4/305-5

Procurement of Raw Materials and Parts

Production

Transport, Use, Waste Disposal/Recycling

SCOPE 3SCOPE 1

Upstream

Direct emissions

SCOPE 3

1 Purchased goods andservices

Direct emissions fromin-house fuel use andindustrial processes

Suppliers, etc.

Construction
companies, etc.

SCOPE 2

Direct emissions from in-house
fuel use and industrial processes

Indirect emissions from productionof electricity and heat purchasedby the company

1.27Mt-CO e [1.8 ]
%

2

70.75

SCOPE 3:

Downstream

Mt-CO e2

Other indirect emissions notcovered by SCOPE 1 and 2(Emissions by other entities related
to the company’s activities)

58.59Mt-CO e
2[82.8%]

Total GHG
Emissions2.14 Mt-CO e [3.0 ]%2

SCOPE 3:
Upstream

1.9 %3 Fuel- and energy-related
activities not included in
SCOPE 1 and 2

0.3 %4 Upstream transportationand distribution
Shipping companies

2

0.0 %

Processors of intermediate products

SCOPE 2
Energy-related
indirect emissions
Indirect emissions fromproduction of electricity
and heat purchased by
the company

5 Waste generated in operations

0.1 %
0.1 %

7 Employee commuting

Product end users

N/A

82.4

Waste treatment companies%

Waste treatment companies

11 Use of sold products%

12 End-of-life treatment of sold products

3.0

0.1 %

6 Business travel

8.75 Mt-CO e [12.4%]

Shipping companies%

10 Processing of sold products

Transportation companies, etc.

Other indirect emissions notcovered by SCOPE 1 and 2(Emissions by other entities related
to the company’s activities)

9 Downstream transportation anddistribution

1.8

2 Capital goods

Extraction
companies, etc.

SCOPE 1

9.8 %Downstream

13 Downstream leased assets
Users of leased assets

0.3 %
0.0 %

14 Franchises
Franchise members

15 Investments
Investment destinations

N/A

0.1 %

0.1 %

Transportation companies, etc.

8 Upstream leased assets
Leasing companies
Included in
SCOPE 1 and 2

In-house: Within the scope of the company’s organizational boundaries. In principle, all business activities of the company itself andactivities within or controlled by its consolidated subsidiaries.
Upstream: In principle, activities related to products and services that are purchased.
Downstream: In principle, activities related to products and services that are sold.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

068

Assurance

Detailed Data on GHG Emissions Throughout the Hitachi Value Chain (Hitachi Group, Fiscal 2021)
Category

Description

ReportingBoundary

Emissions (Mt-CO2e)

Percentage(%)

Total of SCOPE 1, 2, and 3

Hitachi Group

70.75

100

SCOPE 1 and 2 total

Hitachi Group

3.41 ＊ 1

4.8

Hitachi Group

1.27

1.8

SCOPE 1*2
Direct emissions

Direct emissions from in-house fuel use and industrial processes

SCOPE 2*3
Energy-related indirect emissions

Indirect emissions from the use of electricity and heat purchased by the company

SCOPE 3 total

Hitachi Group

2.14

3.0

Hitachi Group

67.34

95.2

SCOPE 3: Upstream (other indirect emissions)1

Purchased goods and services

Emissions from the resource extraction stage to the manufacturing stage, including raw materials, parts, supplied
products, and sales

6.91

9.8

2

Capital goods

Emissions generated in the construction, manufacture, and shipping of the company’s own capital goods, such as
equipment, devices, buildings, facilities, and vehicles

1.36

1.9

3

 uel- and energy-related activities notFincluded in SCOPE 1 and 2

Emissions from procuring the fuel necessary for electricity and other energy production, including resource extraction,
production, and shipping

0.18

0.3

0.07

0.1

Hitachi Group4

Upstream transportation and distribution

Emissions from the distribution of raw materials, parts, products supplied, and sales prior to the delivery of materials
to the company, as well as other distribution activities of products for which the company bears the expense

5

Waste generated in operations

Emissions from the transportation, disposal, and treatment of waste generated from the company’s operations

0.08

0.1

6

Business travel

Emissions generated from the fuel and electricity used by employees for business travel

0.05

0.1

7

Employee commuting

Emissions generated from the fuel and electricity used by employees commuting

0.10

0.1

8

Upstream leased assets

Emissions from the operation of assets leased by the company, excluding those counted in SCOPE 1 and 2

Included in SCOPE 1 and 2ーEmissions from the transportation, storage, loading and unloading, and retail sales of products

0.01

0.0

10 Processing of sold products

Emissions by downstream companies during the processing of intermediate products

N/A*4

ー

11 Use of sold products*5

Emissions from the use of products by end users, such as consumers and businesses

58.30*6

82.4

12 End-of-life treatment of sold products sold*5

Emissions from the transportation, waste disposal, and treatment of products by end users, such as consumers andbusinesses

0.20

0.3

13 Downstream leased assets

Emissions from the operating of assets owned by the reporting company as the lessor which are leased to other entities

0.02

0.0

14 Franchises

Emissions by franchises under SCOPE 1 and 2

N/Aー

15 Investments

Emissions related to the management of investments

0.06

0.1

SCOPE 3: Downstream (other indirect emissions)9Downstream transportation and distribution

Hitachi Group*1 In addition to this figure, the fiscal 2021 CO2 emissions of an energy-related company and automotive business company, which became consolidated subsidiaries in fiscal 2020, were 175 kt-CO2 and 601 kt-CO2, respectively.
*2 Including SF6, PFC, HFC, N2O, NF3, and CH4. The gas and fuel oil conversion factor is based on the list of emissions and calculation methods*3 CO2 emissions were calculated using the 2019 CO2 electrical power conversion factor for countries (in CO2 per kWh) in Emission Factors (2021 edition), published by the International Energy Agency (IEA).
*4 Cannot be determined due to insufficient information about the processing.
*5 CO2 emissions per unit is based on the Inventory Database for Environmental Analysis (IDEA), developed by the National Institute of Advanced Industrial Science and Technology (AIST) and the Japan Environmental Management Association for Industry (JEMAI).
*6 In addition to this figure, the fiscal 2021 CO2 emissions of an energy-related company, which became a consolidated subsidiary in fiscal 2020, was 66,907 kt-CO2.

Contents

Hitachi Sustainability Report 2022

Introduction

Environmental Load from Operations
Overview of the Environmental Load from
Business Operations (Fiscal 2021)

Management

Environmental

SocialGovernance

069

Assurance

GRI 301-1/301-2/302-1/302-4/303-1/303-2/303-3/303-4/303-5/305-4/305-5/305-6/ 305-7/306-1/306-3/306-4/306-5

The following is an outline of total resource inputs (energy, raw materials, etc.) and the environmental load (greenhouse gas
emissions, waste generation, etc.) of Hitachi Group operations during fiscal 2021.

Total Volume of Products Shipped:2,256kt

INPUT

OUTPUT

Total Resource Inputs
Fuel oil

Total Energy Input(crude oil equivalent)

1.61

Gas

5%

14%

3%

3,412

Electricity

3,235kt

Plastics2%

Ozone-depleting
substances handled

Total Chemical
Substances Handled

0%

61kt

Greenhouse gas
substances handled

2%

Groundwater, etc.

Total Water Input

25.61

million m3

32%

Metals95%

Waste
reduction

1,111

Operations

Chemical Substances
Discharged orTransferred3kt

Tap water

18%

Ozone-depleting
substances emitted(CFC-11, etc.)

Water recycling

53.36 million m*2 PRTR substances: The 462 chemicals designated in Japan’s Pollutant Release and Transfer Register (PRTR) Law.

3

25.61

0%

NOx
(nitrogen oxides)

25%
SOx (sulfur oxides) 7 %Total Volume ofWater Effluents Discharged

20%

7%

Landfill

kt

98%

48%

1%

kt-CO2e＊1

Total Volume of Waste
and Valuables

PRTR
substances
handled* 2

Industrial
water, river
water

Other
GHG
emissionsGreenhouse Gas Emissions

Other materials

Raw Materials Input*1 CO2e: CO2 equivalent.

7%

74%

GL

Total Environment Load

Solid fuelUndergroundinfiltration,
evaporation, etc.

million m3

21%

Sewerage19%

CO 2
emissions

99%

Recycle75%

PRTR
substancesdischarged ortransferred*²

68%

Public water60%

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

070

Assurance

Detailed Data on Resource Input and Environmental Load Output
Energy Inputs and GHG Emissions During Business Operations
The following is an outline of the energy consumed during Hitachi’s business operations and the part of our environmental load consisting of greenhouse gas (GHG) emissions.
Energy Inputs

Renewable energy

Non-renewable energy

FY 2021

Hitachi GroupPJ (GL)

91(2.35)88(2.27)81(2.07)61(1.51)

Hitachi GroupGWh (PJ)

3.2(0.012)

7.1(0.026)

18.0 (0.065)

138.2(0.498)

Self-generated
amountHitachi GroupGWh (PJ)

3.2(0.012)

7.1(0.026)

18.0 (0.065)

22.0(0.079)

34.0(0.122)

Purchased amount

Hitachi GroupGWh (PJ)―――

116.2(0.418)

158.6(0.571)

Total Electricity

Hitachi GroupGWh (PJ)

6,020(58.4)

6,021(58.4)

5,992 (58.2)

4,498 (43.9)

For heating

Hitachi GroupGWh (PJ)

130(1.3)

128(1.3)

128(1.3)

96(1.0)101(1.0)

For cooling

Hitachi GroupGWh (PJ)

277(2.7)273(2.7)273(2.7)

208(2.0)214(2.1)

To generate steam

Hitachi Groupkt (PJ)

3.2(0.008)

3.2(0.008)

3.2(0.008)

3.2(0.008)

4.6(0.011)

Hitachi Group

Billion m (PJ)

0.19(8.6)

0.18(8.4)

0.15 (7.0)

0.11 (4.8)

For heating

Hitachi Group

Million m3 (PJ)

18.4(0.9)

18.6(0.9)

18.6(0.9)

14.2(0.6)

14.6(0.7)

For cooling

Hitachi Group

Million m3 (PJ)

10.3(0.5)

10.5(0.5)

10.5(0.5)

8.0(0.4)

8.2(0.4)

To generate steam

Hitachi Groupkt (PJ)

291(0.68)

268(0.63)232(0.54)

161(0.38)

165(0.39)

Hitachi Groupkt (PJ)

269(14.5)

251(13.5)

150 (8.0)

111 (5.9)

118

(6.3)

Fuel oil (heavy oil, kerosene, etc.)

Hitachi Group

ML (PJ)

117(4.5)87(3.3)75 (2.9)61 (2.3)

47

(1.8)

Solid fuel (coke)

Hitachi Groupkt (PJ)

179(5.4)

188(5.5)

162 (4.8)

137 (4.0)

156

(4.6)

Electricity

Electricity

Gas

Total Electricity

Natural gas

LPG, LNG, etc.

3

FY 2018

FY 2020

Unit

Total energy consumption (crude oil equivalent)

FY 2017

FY 2019

Reporting Boundary62(1.61)
192.6(0.693)4,584(44.7)

0.11

(4.9)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernanceGreenhouse Gases Emitted
Total GHGs*

CO2 emissions

Other GHGs

FY 2019

FY 2018

FY 2020

FY 2021

Reporting Boundary

Unit

Hitachi Group

kt-CO2e

5,488

5,026

4,415

3,313

3,412

Total CO2 emissions

Hitachi Group

kt-CO2e

5,433

4,973

4,374

3,296

3,384*²

Direct emissions

Hitachi Group

kt-CO2

2,062

1,869

1,489

1,202

1,245*²

1

FY 2017

071

Assurance

Energy-related indirect emissions

Hitachi Group

kt-CO2

3,371

3,104

2,885

2,094

2,139

SF6 (sulfur hexafluoride)

Hitachi Group

kt-CO2e

40

35

24

11

20.4

PFCs (perfluorocarbons)

Hitachi Group

kt-CO2e

4

5

4

0

1.9

HFCs (hydrofluorocarbons)

Hitachi Group

kt-CO2e

7

3

3

1

3.3

N2O, NF3, CH4 (dinitrogen monoxide, nitrogen
trifluoride, methane)

Hitachi Group

kt-CO2e

1

3

2

2

2.5

CO2 from non-energy sources

Hitachi Group

kt-CO2e

3

7

8

3

0.1

Notes: • CO2 emissions indicate the total of SCOPE 1 and SCOPE 2 emissions which are associated with those emerging from energy use. Those emissions emerging from renewable energy are considered zero.
• CO2 emissions from electricity consumption is calculated using a market-based calculation method. Regarding CO2 electrical power conversion factors: In Japan (including power plants), adjusted conversion factors for individual power businesses based on the
Act on Promotion of Global Warming Countermeasures are used; outside of Japan, the latest values for each fiscal year supplied by the International Energy Agency (IEA) and by power supply companies as conversion factors for individual countries are used.
• The gas and fuel oil conversion factor is based on the list of emissions and calculation methods published by Japanʼs Ministry of the Environment.

• In addition to this figure, the fiscal 2021 CO2 emissions of an energy-related company and automotive business company, which became consolidated subsidiaries in fiscal 2020, were 175 kt-CO2 and 601 kt-CO2, respectively.

*1 Total GHGs: SCOPE 1 and 2 total*2 3.2 kt-CO2 through the use of carbon-neutral city gas and 3.6 kt-CO2 achieved with credits for neutralization are excluded from SCOPE 1.

Raw Material Inputs and Waste and Valuables Generation During Business Operations
The following is an outline of the raw materials used during Hitachi’s business operations and the part of our environmental load consisting of the generation of waste and valuables.
Raw Material Inputs
Reporting Boundary

MetalsPlastics

Other materials

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Hitachi Group

kt

3,797

4,403

3,776

3,066

3,235

Total metals

Hitachi Group

kt

3,388

4,031

3,454

2,861

3,083

New materials

Hitachi Group

kt

1,571

1,624

1,372

1,075

909

Recycled materials, etc.

Hitachi Group

kt

1,817

2,407

2,082

1,786

2,175

Total plastics

Hitachi Group

kt

151

165

147

115

74

New materials

Hitachi Group

kt

150

163

143

113

72

Recycled materials, etc.

Hitachi Group

kt

1

2

4

2

2

Total other materials

Hitachi Group

kt

258

207

175

90

77

New materials

Hitachi Group

kt

250

201

173

89

76

Recycled materials, etc.

Hitachi Group

kt

8

6

2

1

1

Total amount of raw materials
Raw materials

UnitHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

072

Assurance

Waste and Valuables Generated
Reporting BoundaryUnit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Total waste and valuables generated

Hitachi Group

kt

1,356

1,384

1,302

1,061

1,111

Waste reduction

Hitachi Groupkt (kt＊1)

83(9.0)94(5.6)101(17.5)75(9.8)74(10.5)

Reuse

Hitachi Groupkt (kt＊1)

1(0.4)

1(0.0)

5(2.2)

35(11.4)

36(18.7)

Materials recycled

Hitachi Groupkt (kt＊1)

1,038(20.2)

1,044(25.6)

919(25.3)740(17.6)784(19.3)

Thermal recovery

Hitachi Groupkt (kt＊1)11(1.4)13(1.4)21(4.9)11(5.4)13(6.5)Landfill

Hitachi Groupkt (kt＊1)

223(5.2)

232(3.7)

256(6.1)

200(4.9)204(5.7)

Nonhazardous (hazardous)

Hitachi Groupkt (kt＊1)

1,320(36)1,348(36)1,246(56)1,012(49)1,050(61)

RecycleNote: In addition to this figure, the fiscal 2021 waste and valuables generated by an energy-related company and automotive business company, which became consolidated subsidiaries in fiscal 2020, were 71 kt and 59 kt, respectively.
*1 Figures in parentheses are the generation of waste defined as hazardous under the Basel Convention.

Inputs, Discharges, and Transfers of Chemical Substances During Business Operations
The following is an outline of the chemical substances handled during Hitachi’s business operations and the part of our environmental load consisting of chemical substance discharges and transfers.
Chemical Substances Handled
Reporting Boundary

Unit

Hitachi Group

kt

212

196

186

56

61

PRTR substances handled

Hitachi Group

kt

205

189

177

51 ＊ 160

Ozone-depleting substances handled

Hitachi Group

kt

1

1

0

0

0

Greenhouse gas substances handled

Hitachi Group

kt

6

6

9

5

1

Reporting Boundary

Unit

Hitachi Group

kt

5.5

5.3

4.5

3.1

3.0

PRTR substances discharged or transferred

Hitachi Group

kt

4.3

4.1

3.4

2.1

2.1

SOx (sulfur oxides)

Hitachi Group

kt

0.3

0.3

0.3

0.2

0.2

NOx (nitrogen oxides)

Hitachi Groupkt

Ozone-depleting substances emitted (CFC-11, etc.)

Hitachi Groupt (t-ODP＊1)

Total amount of chemicals handled
Chemical Substances
HandledFY 2017

FY 2018

FY 2019

FY 2020

FY 2021*1 Due to deconsolidation of material company, the handling volume decreased.

Chemical Substances Discharged or Transferred
Total Amount of Discharges and Transfers
ChemicalSubstances
Discharged orTransferred

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

0.9

0.9

0.8

0.7

0.8

24(0.61)27(0.70)9.8(0.28)

0.06(0.002)

0*1 ODP (ozone depletion potential): A coefficient indicating the extent to which a chemical compound may cause ozone depletion relative to depletion by CFC-11 (trichlorofluoromethane, ODP = 1.0). The conversion factor uses the ODP and global warming potential
published by Japan’s Ministry of the Environment.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

073

Assurance

Water Inputs and Effluent Discharges During Business Operations
The following is an outline of the total amount of water resources used during Hitachi’s business operations and the part of our environmental load consisting of effluent discharges.
Water Input
Unit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Hitachi Group

Million m

38.54

37.02

36.41

26.35

25.61

Tap water (water for drinking and other household uses)

Hitachi Group

Million m3

7.4

7.61

7.95

5.10

5.01

Industrial water, river water3

Total water use
Surface water

Reporting Boundary

3

Hitachi Group

Million m

17.46

16.63

15.58

12.62

12.43

Groundwater

Hitachi Group

Million m3

13.56

12.74

12.84

8.60

8.16

Rain water

Hitachi Group

Million m

3

0.02

0.01

0.02

0.01

0.01

Recycled water (recycled from the wastewater of other organizations)

Hitachi Group

Million m3

0.1

0.03

0.02

0.01

0.00

Note: In addition to this figure, the fiscal 2021 water inputs of an energy-related company and automotive business company, which became consolidated subsidiaries in fiscal 2020, were 4.75 million m3/year and 3.91 million m3/year, respectively.

Water Effluents Discharged
Reporting BoundaryUnit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Total water effluents discharged

Hitachi Group

Million m

35.13

34.1

33.41

23.25

25.61

Public water

Hitachi Group

Million m3

23.12

22.44

22.46

15.29

15.40

Sewerage

Hitachi Group

Million m

3

8.62

8.18

7.74

5.44

4.99

Underground infiltration, evaporation, etc.

Hitachi Group

Million m3

3.39

3.48

3.21

2.52

5.22

Water quality

BOD (biochemical oxygen demand)

Hitachi Group

t

399

392

232

204

156

COD (chemical oxygen demand)

Hitachi Group

t

587

1,657

400

406

301

3

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

074

Assurance

Environmental Management Data
Number of ISO 14001 Certified Companies (as of March 2022)
Reporting Boundary

Unit

Hitachi Group*1

Companies

FY 2020

FY 2021

202

185

Japan

85

66

China

43

43

ASEAN, India, and other Asian regions

42

43

Total

North America

Hitachi Group*1

Companies

109Europe17

15

Other regions

5

9

Note: In addition to this figure, in fiscal 2021 there were additional 106 ISO 14001-certified companies, comprising an energy-related company that became a consolidated member of theGroup in fiscal 2020 and its subsidiaries. These companies will all be incorporated into the Hitachi Group’s number of ISO 14001 certified companies from fiscal 2022.
*1 Companies with at least one certified business site.

Number of Regulatory Violations and Complaints
Reporting Boundary
Regulatory violations

Unit

FY 2018

FY 2019

FY 2020

FY 2021

Water quality

3

4

4

5

2

Air quality

1

2

0

0

0

0

3

0

4

3

4

4

1

1

3

5

3

5

3

3

Waste materials

Hitachi Group

Cases

Hitachi Group

Cases

Other (equipment registration, etc.)
Complaints

FY 2017

Hitachi Sustainability Report 2022

Contents

Environmental Accounting

Introduction

Management

Environmental

SocialGovernance

075

Assurance

GRI 201-1

Environmental Protection Costs
Unit

Hitachi Group

Billions of yen

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

92.46

94.16

105.71

86.62

79.97

Business area

Maintenance costs for equipment with low
environmental loads, depreciation, etc.*1

22.17

23.57

22.62

19.14

19.56

Upstream/Downstream

Green procurement expenses, recovery and recycling ofproducts and packaging, recycling expenses

0.72

0.68

0.68

0.62

0.64

Administration

Labor costs for environmental management and theimplementation and maintenance of environmental
management systems

5.69

6.72

4.98

5.88

5.40

62.55

61.86

77.01

60.64

53.79

Total
Expenses

ReportingBoundary

Hitachi Group

Billions of yen

Research anddevelopment

Costs of research and development and product designs
to reduce the environmental burden caused by products
and production processes

Social activities

Planting, beautification, and other environmental
improvement costs

1.00

0.93

0.25

0.22

0.26

Environmental mitigation costs, contributions, and charges

0.33

0.40

0.17

0.12

0.32

Environmental
remediation*1 Equipment depreciation costs are calculated using the straight-line method over five years

Environmental Protection Effects
Economic Effects*1
Major FY 2021 Activities
Total
Net income effects

Recovering value from waste by sorting and recycling

Cost reduction effects

Installing high-efficiency equipment (lighting, power supply, etc.)

ReportingBoundary

Unit

Hitachi Group

Billions of yen

Hitachi Group

Billions of yen

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

21.44

16.05

18.62

14.28

19.20

6.90

8.35

12.42

9.66

15.15

14.54

7.70

6.20

4.62

4.05

*1 Economic effects include the following:
Net income effects: Real income from the sale of valuable materials and environmental technology patents.
Cost reduction effects: Reductions in electricity, waste treatment, and other expenses through activities that reduce environmental loads.

Environmental Liability
As the amounts that we can reasonably project as future environmental liabilities as of end of March 2022, we have appropriated 5.34 billion yen in costs for the disposal of waste containing PCB and1.19 billion yen to clean up contaminated soil.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

076

077 Innovation Management
077 Executive Summary
079 Innovation Strategy
081 Research and Development
085 Intellectual Property

088 Human CapitalSocial088 Executive Summary
091 Global Human Capital Management
095 Talent Development
100 Diversity, Equity and Inclusion
106 Work-Life Management
111 Occupational Health and Safety
120 Freedom of Association and Collective Bargaining

122 Human Rights
122 Executive Summary
123 R espect for Human Rights Throughout the Value
Chain

130 Value Chain Management

130 Executive Summary
132 Responsible Procurement
137 Quality and Product Safety Management
140 Customer Satisfaction (CS)142 Community
142 Executive Summary
143 Social Contribution Activities

147 Social Data
147 Innovation Management
148 Human Capital
156 Value Chain Management
157 Community

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Innovation ManagementWhy
ー Why it matters ー

Innovation
Strategy

Governance

Assurance

077

Relevant SDGs
GRI 103-2

Throughout its history of over 100 years, Hitachi has pursued its Mission “to contribute to society through the development of superior, original technology and products”
aiming at creating innovation leading into the future. We view the approach of leveraging data and technology even further to produce strong, robust products, solutions,and business models as essential in realizing a sustainable society and business amid the increasingly diverse and complex social issues we face. Accordingly, we arebackcasting from 2050 to bolster research and development aimed at creating radical innovation and working to protect and effectively utilize intellectual property (IP).

What

How

ー What we are doing ーー How we are doing it ー・Expanding Investments in
Innovation
・Generating digital service
businesses with theLumada growth model・Backcasting from 2050 tocreate radical innovation・Accelerating outside-ininnovation through startup
investments

ResearchandDevelopment

SocialPolicy and promotion
structure

The newly established Innovation Growth Strategy Division will formulate innovation investment strategies that will inspire thenext growth for customers, and under this strategy, promote the creation of digital service businesses and radical innovation.
We are also working to build an innovation promotion structure fully leveraging Hitachi Group’s technology platforms, humancapital, and customer network to achieve growth worldwide.
Achievements in FY 2021

Backcasting from 2050 to create
radical innovation

Identified three social issues, “an environmentally-neutral society” “a society which supports an active 100-year lifespan ofits citizens” and “the co-evolution of digital technologies, people and society”, that must be resolved by 2050 and strived tocreate radical innovation to help resolve them

Accelerating outside-in innovation
through startup investments

Launched a second fund and invested in a total of 17 startup companies

What

How

ー What we are doing ーー How we are doing it ー・Accelerating value cocreation
・Creating growth drivers

Policy and promotion
structure

In April 2022, the Global Center for Social Innovation and the Center for Technology Innovation were integrated and reorganized
as the Center for Digital Services and the Center for Sustainability. We are working to enhance value creation through DX/GX topromote worldwide business growth.

・Evolving Lumada further

Achievements in FY 2021

・Creating the next pillars
of growth

R&D investment

Hitachi Group R&D expenditure: 317.3 billion yen (R&D expenditure as a percentage of revenue: 3.1%)

・Bolstering recruitment anddevelopment of digitaltalentAccelerating value co-creation

Promoted activities, including holding forums and roundtables with universities in and outside Japan, to identify signs ofchange in society and customers, formulate visions and design business scenarios.

Bolstering recruitment anddevelopment of digital talent

Digital talent: Approx. 67,000 people
Target 98,000 people by fiscal 2024

AI ethics observance

Published a special issue of Hitachi Review, “AI Governance and Ethics in Social Innovation Business”

・Observing AI ethics

Hitachi Sustainability Report 2022

Intellectual
Property

Contents

Introduction

Management

Environmental

SocialWhat

Howー What we are doing ーー How we are doing it ー・Deploying IP activities
globally based on our IP
strategy・Engaging in IP activities
aimed at creating
environmental value
・Enhancing our reward
system for employee
inventions
・Promoting design andbrand protection activities

Policy and promotion
structure

Governance

Assurance078

In fiscal 2022, the name of the Intellectual Property Division was changed to the Global Intellectual Property Group with theintention of strengthening collaboration with companies outside of Japan and promoting further global deployment of our IP
activities. We also created the position of Chief Intellectual Property Officer (CIPO) to strengthen our global intellectual property
management framework.
Achievements in FY 2021

Global deployment of IP
activities based on our IP
strategy
IP activities aimed atcreating environmental
valueAwards for IP

Globally implemented an intellectual property strategy comprising three pillars: Competition, Collaboration, and IP for society.

Established the new Environmental IP Enhancement Center and began considering measures to contribute to the improvement ofenvironmental value from the perspective of intellectual property
Newly registered our wind-generation technology that contributes to resolving climate change issues with WIPO GREEN, a platform
for environmental technology operated by the World Intellectual Property Organization (WIPO)
Selected for inclusion in Clarivate Plc’s Derwent Top 100 Global Innovators (2021) list for the 11th consecutive yearHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

079

Innovation Strategy
Approach to Generation of Innovation
Approach

Over a history of more than a 100 years, Hitachi has pursued
the company Mission “to contribute to society through thedevelopment of superior, original technology, and products,”
and generating innovation for the future by pursuing cuttingedge technologies.
During the Mid-term Management Plan 2021, we
opened Kyōsō-no-Mori and expanded co-creation withcustomers, while reorganizing technology platforms andacquiring business models through startup investment andcollaborations. To further accelerate these initiatives, thenewly established Innovation Growth Strategy Division in
April 2022 will formulate innovation investment strategies
that will inspire the next growth for customers, and under
this strategy, promote the creation of digital service
businesses and radical innovation.

Strategies for Generation of Innovation
Strategy

Expanding Investments in Innovation
Under the Mid-term Management Plan 2024, we will expand
investments in innovation across the entire Hitachi Group for
further growth. A cumulative total of 100.0 billion yen will be
invested in advanced research during the three-year plan,
expanding Group-wide R&D investment to 1.1 trillion yen.
We will also invest an additional 50.0 billion yen in corporate
venturing (CV). Through these investments, Hitachi aims tocreate radical innovation to solve future societal issues.

Generating Digital Service Businesses with the Lumada
Growth Model
Under the Mid-term Management Plan 2024, we will further
develop the Lumada growth model to co-create innovation
together with customers, and promote digital services that
address our customers’ next management challenges. To
ramp up the Lumada growth cycle, we will deepen our
understanding of captured signs and changes in society andcustomers, draft together with our customers visions for new
growth, and provide innovations to realize that growth. In the
Lumada growth model, we will promote the categorizationof business segment characteristics and operations as well
as work with the global front teams to strengthen marketing
activities, to materialize and scale up through co-creation.
Backcasting from 2050 to Generate Radical Innovation
In formulating the 2024 Mid-term management plan, we
explored future social issues through repeated discussions
with international organizations, universities, customers, andstartups. Based on these discussions, we understood thatthe societal challenges that need to be addressed as weapproach 2050 are: “an environmentally-neutral society,”“a society which supports an active 100-year lifespan ofits citizens,” and “the co-evolution of digital technologies,
people and society,” and set them as areas of focus. We
are addressing these concerns through such initiatives as“energy storage and supply” and “direct air capture” torealize a carbon negative society; “minimally invasive cancer
treatment” and “designed cells” to overcome cancer andintractable and infectious diseases; and “Ultra Big DataManagement” and “silicon quantum computers” to facilitate

a data economy and computing innovation. Hitachi will betaking on the challenge of creating radical innovation toresolve future issues by backcasting from 2050.
Accelerating Outside-in Innovation through Startup
Investments
Through investments and collaborations with startup
companies, Hitachi will achieve radical innovation andacquire groundbreaking business models contributing to the
expansion of the Lumada business. In 2019, we established
Hitachi Ventures GmbH (HVG) and launched the first fund.
We have now launched a second fund and invested in 17
companies.
Under the Mid-term Management Plan 2024, we will
expand innovation ecosystems with customers, startup
companies, academia and others. Specifically, we will
focus on three areas identified in backcasting from 2050:“achieving a decarbonized and carbon-negative society,”“overcoming cancer and intractable and infectious diseases,”and “promoting the co-evolution of digital technologies,
people and society.”

In May 2022, HVG CEO Stefan Gabriel was ranked 19th
on the Top 50 Powerlist by Global Corporate Venturing.

P081 Research and Development
P085 Intellectual Property

Hitachi Sustainability Report 2022

Contents

Innovation Promotion Structure for DX/GX
Global Growth
Structure

Fully leveraging the Hitachi Group’s technology platforms,
human capital and the customer network, we will create
DX/GX innovations under a global structure. The Research& Development Group with a highly diversified workforceof 2,300 people, will be leading the creation of innovation
through digitalization and other technologies. Together
with Hitachi Ventures GmbH (HVG), we will work to create
innovation that will solve issues faced by customers andsociety through collaborations with leading startups ina wide-range of fields. The Global Intellectual Property
Group is promoting the establishment of a new intellectual
property platform to provide value to global customers underexperienced global leadership. We will accelerate global
business growth together with Hitachi Energy, GlobalLogic,
and business units in each region.

Introduction

Management

Environmental

SocialInnovation Growth Strategy Division
Formulate and execute innovation investment strategies that
stimulate further customer growth
Keiji Kojima, President & CEO

Research & Development Group2,300 people

Drive innovation with digitalization and technologies toprovide value through co-creation
Norihiro Suzuki, CTO and GM of the R&D Group

Global Intellectual Property Group

200 people

Establish intellectual property platform to provide value toglobal customers
Stephen Manetta, CIPO

GovernanceEuropeChina

Create the environment
business in collaboration with
Hitachi Energy and Hitachi RailParticipate in the European
Environment ecosystem

Expand Industrial GX/DX
business in collaboration
with local Group companies
Strengthen decarbonization
efforts

Hitachi Energy: Gerhard Salge, CTO

India: Strengthen digital engineering
APAC: Focus on green buildings and smart cities
DX: Digital Transformation, GX: Green Transformation

Hitachi China: Yasushi Harada, CTO

North America

Japan

Enhance creation of digital
service businesses throughcooperation with GlobalLogic,
Hitachi Vantara and Hitachi
DigitalPromote customer cocreation targeting DX/GX,
establish world-leading
technology platforms, create
radical innovation addressing
planetary boundaries andwellbeing

GlobalLogic: Sunil K. Singh, CTO

Asia

080

Assurance

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

081

Assurance

Research and Development
Approach to R&D
PolicyApproach

Hitachi’s R&D strength is that it has established a value
creation cycle based on owning platform technologies for OT× IT × Products, and know-how, and pursuing technology
development through co-creation with customers andpartners, adding to greater know-how.
Under the Mid-term Management Plan 2024, Research& Development will work closely with Hitachi Digital, theGlobal Environment Division and the Innovation Growth
Strategy Division that are leading the growth strategy acrossthe Hitachi Group. We will accelerate initiative for the cocreation of value to further advance the Social Innovation
Business, focusing on “Digital,” “Green” and "Innovation” as
the growth drivers. By generating innovation which will drive
the Lumada growth model, we will contribute to the growthof our global business as well as create the next pillars ofgrowth through radical innovation backcasted from 2050.
In fiscal 2022, R&D will be conducted under thefollowing policy.
R&D Policy for Fiscal 2022

Basic Policy: “Generate innovation through ‘Digital’and ‘Green’ solutions for global business growth”· Accelerate co-creation of value: Create OT × IT × Products
value through digital technology· Create growth drivers: Contribute to global business growththrough Innovative products × Digital· Establish the next pillars of growth: Generate radical
innovations by backcasting from 2050

Structure to Promote R&D
Structure

R&D Investment
Activities

To execute on the R&D policy, the Research & Development
Group was reorganized on April 1, 2022. The Global Center
for Social Innovation, which was responsible for generating
value-driven innovation, together with front line Business
Units (BUs), and the Center for Technology Innovation,
which was responsible for development of world-leading
technology to support value creation, were integrated andreorganized as the Center for Digital Services and the Center
for Sustainability, to enhance value creation through DX/
GX. Together with the Center for Exploratory Research,
responsible for laying key stones for the future, and researchlaboratories in North America, Europe, China, India, andAsia-Pacific (APAC), we will work as one global organization
to drive innovation.

Hitachi is actively investing in R&D. We are strengthening
our Digital systems & Services, Green energy & Mobility, andConnective industries businesses, and working to reinforce
mid-to long-term initiatives for future growth. With regard to
the Research & Development Group, a corporate division,
it is expanding digital technology platforms and enhancing
research resources outside of Japan to expand the Lumada
business, Hitachi’s growth engine and global deployment,
as well as investing in co-creation to resolve issues facedby customers and society and the creation of world-leading
technology and radical technology. In fiscal 2021, the R&D
expenditure of the Hitachi Group was 317.3 billion yen, andR&D expenditure as a percentage of revenue was 3.1%.
Investment in R&D

Global R&D Structure (As of April 2022)
Research &Development Group

Drive innovation with digitalization andtechnologies to provide value through co-creation

Technology
Strategy Office

Formulate R&D strategy for the entire Hitachi
Group

Center for Digital
Services

Oversee creation of innovation throughevolution of Lumada CPS (Cyber-physicalsystems) for digital service business growthCenter for
Sustainability

Oversee creation of innovation throughInnovative products × Digital to realize adecarbonized society

Center for
Exploratory
Research

Lay key stones for the future to realize asustainable society within planetary
boundaries and wellbeing

Research & Development

Regional laboratories North America Europe China India APAC

https://www.hitachi.com/rd/index.html

BU R&D (GlobalLogic, Hitachi Energy, Hitachi Astemo, and others)（％）(billion yen)

5

500
400

3.6%

3.4%

3.4%

3.4%

3.1%

332.9

323.1

293.7

293.5

317.3

3.6%

4
3

300

3,400
340.0

200

2

100

1

0

2017

2018

■ R&D expenditure (left scale)

2019

2020

2021

2022

(FY)

0

(planned)⃝ R&D expenditure as a % of revenue (right scale)Hitachi Sustainability Report 2022

Contents

Accelerating Value Co-creation
Activities

Hitachi considers its most important issue to be realizing asustainable society, while respecting planetary boundaries
and human wellbeing. Aiming to realize societal andeconomic development that protects the Earth, Hitachi will
deliver “Green,” “Digital,” and “Innovation” as the solutions
for future growth to society and customers to realize asociety and economy that protects the Earth, and to achieve
happiness in everyday life and workstyles. We will develop
Hitachi's unique co-creation approach, NEXPERIENCE, intoa methodology to resolve societal issues and deploy theLumada growth model. Through activities such as those in
our university joint laboratories, we are capturing the kizashi(signs) of change in society and customers, to develop
visions and business scenarios.
About NEXPERIENCE

Introduction

Management

Environmental

SocialGovernance

Assurance

Creating Growth Drivers
Strategy

Activities

Hitachi is developing data-driven solutions under the Lumada growth model. By implementing the Lumada four-quadrant value
co-creation cycle, our goal is to create growth drivers that support customer businesses. In Research & Development, we arefurthering our understanding of customers' next business challenges while promoting the co-creation of innovations and digital
services to resolve these issues. The Lumada growth model will be deployed worldwide together with GlobalLogic and others.

MAINTAIN
MAINTAIN

Digital engineering

Managed services

Managed services

Understandcustomer
Digitalengineering

PLAN

PLAN

management challenges
Understand our customers’
management challenges
Operate, maintain,
Develop solutions withmove to next challenge
IT/OT/Products
Operate, maintain,
Develop solutions withand assess for the next step AI tools / Methodologies / Customer Cases / Solutions
IT/OT/Products
Implement solutions

OPERATEOPERATE

Implement
solutions
Connected
products

Connected products

System integration

BUILD

BUILD

System integration

https://www.hitachi.com/rd/research/design/nexperience/

Achievements in Fiscal 2021
Hitachi participated in the Transition to Zero Pollution
panel discussion hosted by Imperial College London
in the United Kingdom to promote consensusbuilding on expectations and issues regarding adecarbonized, recycling-oriented society. Transition to
Zero Pollution aims to achieve net zero emissions by
2050 (the state where the amount of CO2 produced
is equivalent to that removed from the atmosphere).
Additionally, forums and roundtables were held at the
H-UTokyo Lab. and Tsinghua University in China todiscuss the realization of a carbon neutral society ineach region.

082

Examples of Value Co-creation in Finance and Public Services

Current issue: Operational excellence

Next challenge: Create new demand

PLAN

Optimize work processes with design thinking

Design cross-industry financial and public
service products based on OT know-how

BUILD

Increase work process system efficiency using“AI (RPA, dialogues, automated responses),”awarded first place in an international competition(SemEval2020)

Launch of Sustainable Finance Platform as inter-industry
coordinated services using IoT and blockchain
technology, implement an inter-industry coordinated
IoT information distribution system

OPERATE

Hitachi’s “Explainable AI” analyzes and evaluates
operational data, and supports the implementation of
AI in work systems, continuous operations
and improvements

Data analysis with assured security in DFFT and
Blockchain/NFT discussed at first GTGS hosted
by the World Economic Forum

MAINTAIN

Hitachi’s sensitivity analysis service automatically analyzes
the voice of customers, and provides customer service
improvements through product planning, sales strategies,
risk countermeasures, and so on.

Offer value distribution services leveraging
metaverse and Web 3.0

A：
I Artificial Intelligence, RPA: Robotics Process Automation, GTGS: Global Technology Governance Summit,
DFFT：Data Free Flow with Trust, NFT: Non-Fungible TokenHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialExamples of the Value Creation Cycle in the Fields of Energy, Railway and Transport
Current issues: Innovations in asset management

Next challenge: Promote user transition to CN

PLAN

Optimize facility costs with design thinking

Consider asset optimization, including gas and hydrogen,based on a CN scenario created through shared understanding ofissues with stakeholders in an industry-academia co-creation
forum hosted by H-UTokyo Lab.

BUILD

Deploy Hitachi’s digital maintenance platform and digital twin
equipment diagnoses and management systems to maintain andimprove analysis accuracy in line with changes in equipment status

Co-create and verify using the area energy management verification
environment created at Kyōsō-no-Mori by combining Hitachi power
generation, power storage, and equipment maintenance technologies

OPERATE

Implement remote and automated equipment inspections using“image diagnostics AI technology” that has achieved the highest
level in an international competition (TRECVID2020)

Introduce DERMS to implement grid-edge control systems
using technology such as Hitachi’s grid edge solution for
distributed energy sources

MAINTAIN

Provide condition-based services with Hitachi’s APM which wasselected as a Leader in the IDC MarketScape 2020–2021
Vendor Assessment

Provide multi-energy optimization service with EaaS and MaaS

APM：Asset Performance Management, CN: Carbon Neutrality, DERMS: Distributed Energy Resource Management System,
EaaS：Energy as a Service, MaaS: Mobility as a Service

Hitachi Product Strengths
Hitachi is promoting the provision of value to customers
through OT x IT x Products. In terms of products, during the
Mid-term Management Plan 2021, we were able to establish
the top global technologies, winning prominent awards
for high-speed railways, in-vehicle inverters, particle beamcancer treatment systems, and biochemical immune-assay
systems.
In the Automotive System business, we are working
on gearless, high-efficiency drive systems and multiport EVs realizing the industry's most substantial size andweight reductions. Regarding the drive system (in-wheel
motor), we aim to reduce energy loss by 30% compared toprevious motors, and have been selected for support by theJapanese government's Green Innovation (GI) Fund, aiming
for even higher efficiency.
In the measurement and analysis systems business(Hitachi High-Technologies), we will enhance thecompetitiveness of our semiconductor inspection andmanufacturing equipment while integrating and analyzing
data generated from equipment in processing, inspection,measurement and analysis to provide feedback on
manufacturing processes and products to realize customer
process innovations. Through co-creation with customers,
we will use the data generated from products for predictive
diagnostics, analytics visualization and optimizing operating
conditions to contribute to reduced development time,
improved yields in manufacturing, and increased productivity
for customers.

Further Evolution of Lumada
In conducting R&D to further evolve Lumada, Hitachi isengaged in the creation of Lumada cyber-physical systems(CPS) that link the digital and physical spaces in real time.
We are also focusing on the key technologies of AI, 5G,
beyond 5G, security, electrification, metaverse/Web 3.0.

Governance

Assurance083

For the area of security, we are developing Public Biometric
Infrastructure (PBI) technologies realizing data free flow withtrust (DFFT) and promoting enhanced security for crypto
assets. Regarding metaverse/Web 3.0 which will support
future societal infrastructure, we will accelerate co-creations
with startup companies.

Creating the Next Pillars of Growth
Activities

By backcasting from 2050, Hitachi is taking on the challenge
to generate radical innovation for the next pillars of growth:“an environmentally-neutral society,” “a society which
supports an active 100-year lifespan of its citizens,” and “theco-evolution of digital technologies, people and society.”
Toward the realization of an environmentally-neutral
society
To realize a decarbonized and carbon negative society,
we are working to realize a large-scale, low-cost hydrogenproduction system, high-efficiency artificial photosynthesis,
and a fuel production cycle fed directly by CO2.
Toward the realization of a society which supports anactive 100-year lifespan of its citizens
For “overcoming cancer, intractable and infectious
diseases,” we are working to develop even more advanced
cancer therapy through technology such as automatedpositioning of particle beam radiotherapies. Furthermore, weare developing designed cells based on genetic modificationand cell measurement technologies.

Hitachi Sustainability Report 2022

Contents

Toward the realization of the co-evolution of digitaltechnologies, people and society
We will further enhance ultrahigh-speed database engines
to realize data extraction performance speeds more than
100-times faster than conventional systems.
We are also accelerating developments for bio
transformation (BX) and quantum transformation (QX), which
will follow DX and GX.

Digital Human Resource Development
Activities

To respond to the recent progress of digitalization, Hitachi
is strengthening our digital human resources, including topclass AI experts. In the Research & Development Group,
we are placing particular emphasis on developing top-class
AI researchers*1 and established the Lumada Data Science
Lab. to bring together digital human resources to foster anddevelop them. This helped us to realize our target (350 topclass AI researchers by fiscal 2021) ahead of schedule, withcurrently 399 at the end of fiscal 2021.
*1 Top-class researchers who use AI/analytics, and data scientists who received
internal certification.
P097 Bolstering Recruitment and Development of Digital Talent

Introduction

Management

Environmental

SocialAI Ethics
Activities

In February 2021, Hitachi released Principles guiding the ethicaluse of AI in Social Innovation Business and a white paper on
Hitachi’s activities in the area of AI ethics. Its goal is to ensure
human-centric AI development and societal implementation.
Since then, we have striven toward the development,
societal implementation, and proper utilization of human-centric
AI that is safe and secure. And in the AI development stage, we
are working to curb the various risks that arise when using AI.
In fiscal 2021, we checked approximately 800 AI
projects in the planning phase, identified risks and took
measures against them.
Hereafter, we will continue to promote theestablishment of AI governance, and help to stimulate
discussions throughout society. We are continually working
to improve the substance and operation of this effort, while
incorporating the opinions of stakeholders and changes inthe external environment.

Achievements in Fiscal 2021
In fiscal 2021, we published a special issue of
Hitachi Review, AI Governance and Ethics inSocial Innovation Business. It provides an in-depth
explanation of Hitachi’s approach to AI ethics andgovernance for AI implementation in research, PoC,
and product development.
AI Governance and Ethics in Social Innovation Business
https://www.hitachi.com/rev/archive/2022/r2022-sp/
index.html?WT.mc_id=XR-E101

Governance

Assurance

AI Ethics White Paper
https://www.hitachi.co.jp/products/it/lumada/about/ai/ldsl/
document/ai_whitepeper_en.pdf

Major External Recognitions in Fiscal 2021
In the environmental sector, we received the 68th
Okochi Memorial Prize and the 2021 Commendationfor Science and Technology by the Minister of
Education, Culture, Sports, Science and Technology
Awards for Science and Technology (Development
Category) for the development of a compact and highpower density inverter for EVs and PHVs, together
with Hitachi Astemo. In the digital sector, together with
the National Research Institute for Earth Science andDisaster Resilience, we were awarded the R&D World
Magazine’s R&D100 Award for the SIP4D: Shared
Information Platform for Disaster Management,
together with the National Research Institute for Earth
Science and Disaster Resilience, Japan.
With regard to products, Hitachi’s Urban Ace
HF standard elevator was recognized in Nikkan
Kogyo Shimbun’s 64th (2021) Best Ten Greatest New
Products Award, and the EMU3000 rolling stock
built for Taiwan Railways Administration, MOTC, wasawarded the Good Design Award 2021, Best 100.
Recognition was also given by the Japan
Association of Technology Executives to Dr. Shizu
Takeda, Corporate Chief Scientist, for outstandingachievement in training female engineers andresearchers with the 7th Distinguished Service Awardfor fostering female technologists.

Principles guiding the ethical use of AI in Social Innovation Business
https://www.hitachi.co.jp/products/it/lumada/about/ai/ldsl/
document/ai_document_en.pdf

084

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

085

Intellectual Property
Approach to Intellectual Property
Approach

Hitachi has positioned intellectual property (IP) activities as
one of its key business strategies, and has established abasic policy for the protection of IP and brand in the HitachiGroup Codes of Conduct. Under the Mid-term Management
Plan 2021, in line with the stated vision of becoming a
global leader driving enhanced value through the use of
intellectual property and the goal of realizing IP-driven social
innovations, we engaged in value-based (Environment,
Safety & Security, Resilience) intellectual property activities.
In the Mid-term Management Plan 2024, we establisheda new vision to become a global leader that resolves
societal issues and grows our DX and GX businesses using
intellectual property. We will achieve further advances andgrowth in the our Social Innovation Business through theprotection and use of intellectual property centered on
Green, Digital and Innovative initiatives.

Intellectual Property Strategy
Strategy

Hitachi has formulated and implemented an IP strategy thatconsists of three pillars: Competition, Collaboration, and IP
for society.
IP Strategy for Competition
The IP strategy for Competition is centered on acquiringand utilizing patents and other IP rights. “IP Master Plans”
customized for the nature of each business are formulated
and implemented to enforce competitiveness.
IP Strategy for Collaboration
As opportunities for co-creation with our customers andpartners increase through the use of our IoT platform,

OT (Product/ Operations and Maintenance)

Competition stage(Competition)

Collaboration stage(Collaboration)
Close

IP for societyOpen

IP for customer/partner

IP for Hitachi

Hitachi

IP Master Plan

Hitachi

Promote partnership

Enhance competitiveness

HitachiOpen

Design future society/
Progress social modelIoT (Digital Solution)

https://www.hitachi.com/corporate/about/conduct/index.
html#ank8071860

IP for society
Hitachi is strategically engaged in IP activities that contributeto solving social issues. In fiscal 2019, we introduced the“IP for society” concept, in which we promote the use of
IP in certain highly public domains to maintain and evolvesocial norms. We will work in cooperation with externalorganizations (national governments, municipalities,
universities, organizations in the United Nations, international
standards organizations, etc.) through the use of IP to makecontributions to businesses aimed at achieving SDGs.

IP strategy for new era

IT (System Integration)

The Hitachi Group Codes of Conduct

Lumada, we are expanding the scope of our IP activities toinclude not only copyrights, patents, and trade secrets aswell as information assets such as data and information, andare using IP to promote partnerships and build ecosystems.

CustomerPartner

Co-creation IP activity

CustomerPartnerStandardization
International
Government
University
organization
agencyHitachi Sustainability Report 2022

Contents

Introduction

Management

Global Deployment of Intellectual Property
Approach

Structure

Environmental

SocialGovernance

Assurance

086

Intellectual Property Activities Aimed at Creating Environmental Value
Activities

We are contributing to the globalization of Hitachi’s business by strengthening international
patent applications (PCT applications) that cover inventions that were developed throughopen innovation with our customers and partners in addition to inventions from our own R&D
activities. We will work to promote further globalization of our IP by working in cooperation withnew members of the Hitachi Group, including Hitachi Energy and GlobalLogic.

We are working to create solutions that utilize IP to enhance environmental value.
In fiscal 2021, we newly established an Environmental IP Enhancement Center within theIntellectual Property Division. With it, we have begun considering policies (solution creation
contributing to environmental value realization, construction of IP libraries, etc.) aimed at
improving environmental value from the perspective of IP. In order to maximize Hitachi’sbusiness—especially environmental value—by accumulating and utilizing knowledge of the

Framework to Promote Global Deployment
In fiscal 2022, we changed the name of the Intellectual Property Division to the Global
Intellectual Property Group. Our intent was to strengthen collaboration with companies outsideof Japan and promote further global deployment of our IP activities.
Moreover, we have created the new role of Chief Intellectual Property Officer (CIPO) toserve as the Hitachi Group's metaphorical control tower with regards to IP. We have alsoestablished a new CIPO Office within the Global Intellectual Property Group that will work
to support the formulation and execution of CIPO strategy. The highly experienced Stephen
Manetta, who comes from outside the company, has been appointed CIPO to hasten theenhancement of our system for global IP management (which promotes the protection andutilization of global IP, including at group companies outside of Japan).
Specifically, we cover our globalized business in collaboration with our IP offices in the
United States (Santa Clara and Farmington Hills), China (Beijing), United Kingdom (London),Singapore, Switzerland, and India.

results of IP activities that contribute to improving environmental value, Hitachi establishedguidelines and deployed them internally. With regard to IP libraries in particular, our hope is tolink the IP we possess internally with the environmental value that the utilization of such IP may
bring about, to visualize them and promote their use both within the company and externally.

Achievements in Fiscal 2021
Hitachi has registered our wind-generation technology that contributes to solving
issues of climate change with WIPO GREEN a platform for environmental technology
operated by the World Intellectual Property Organization (WIPO). We also share ourambition to inspire innovation by accelerating the application of environmental IP throughcollaboration with WIPO GREEN, and have shared this message in a video.
Contribution to Environment through Intellectual Property - Hitachi
https://www.youtube.com/watch?v=sk18jbfqqSk

New Initiatives Linked to Innovation
Activities

Hitachi is promoting activities that contribute to innovation by analyzing IP information. In theEnvironment field, for example, we analyze the degree of market maturity for each theme. This
involves estimating the market’s scale and growth potential based on the compound annual
growth rate of the most recent inventions worldwide. We also use IP information and other data
to estimate and analyze the degree of technological superiority Hitachi has for each theme.
We contribute to innovation through these processes by identifying markets with high growthpotential, areas where we have the greatest technological advantages, and providing our
findings to business divisions.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Achieving Visualization and Scaling Beyond the Company with IP Libraries that Link IP with Environmental Value

Hitachi’s Environmental Vision
Hitachi Environmental
Innovation 2050

High-speed battery
deterioration diagnosis(Hitachi High-Tech)*¹

Visualization of green
energy*²

Environmental value

Environmental value

Registration

Utilization

IP

IP

Solutions

Environmental
value

IP

Visualization ofgreen energy

CO2 reduction

IP (A)

High-speed battery
CO2 reduction
deterioration diagnosis

IP (B )

Optimization ofEnergy savings
production management

IP (C)

Optimization of
CO2 reductionbuilding management

IP (D)

Contributing to society
Realization of SDGs, Society 5.0, and thecircular economy
Environmental
value

ScalingEx.: Home appliance recycling(Taiwan)Environmental
value

Scaling
IP

SocialGovernance

Assurance

087

Internal Rewards for Inventors
Invention Information System

System allowing inventors to check the evaluation standards used to
calculate rewards for inventions

Arbitration Committee for Invention
Rewards

Committee to which inventors can appeal if they disagree with theamount they have been awarded

Business Contribution Awards
Annual Top 100

President’s awards to the top 100 inventors based on patent rewards received

Patent Contribution Awards Top 50

Ranking of the top 50 young inventors (under 35 years of age) based on
patent rewards received within five years of their joining HitachiAwards for Intellectual Property
Activities

We are proud of Hitachi, Ltd.’s inclusion in Clarivate Plc’s Derwent Top 100 Global Innovators
list for the past 11 years consecutively.

IP

IP

Environmental

Homeappliance
recycling

High-efficiency
seawaterdesalination
systemAppropriate
registration
WIPO GREEN
in IP
marketplaces (Environmental technology transfer platform)

Constructing IP libraries (ex.)*1 PCT application JP2020/028961*2 Patent application 2019-073173

Reward System for Employee Inventions

Organizer

Award

Object of Award
The most innovative
companies and institutions in
the world

FY 2021

Clarivate Plc

Selected for inclusion in Derwent Top
100 Global Innovators (2021) list (for 11th
consecutive year)

FY 2020

Japan Patent Office,Ministry of Economy,
Trade and Industry

Award from Minister of Economy, Tradeand Industry at the Intellectual Property
Achievement Awards

Excellent company thatutilizes the IP rights system

Imperial Invention Prize (top prize) at the
National Commendation for Invention

Designs concerning UK highspeed rail vehicles

The Japan Patent Attorneys Association
Chairman Award at the National
Commendation for Invention

Inventions concerning x-ray
fluoroscopy systems

Imperial Invention Prize (top prize) at the
National Commendation for Invention

Inventions concerning particle
beam therapy systems

FY 2019
FY 2018

FY 2017

Japan Instituteof Invention andInnovation

System

We motivate employees in the R&D field with an ample reward system for new inventions. To
make this reward system as fair and transparent as possible, we set standards to evaluate
inventions and disclose these standards to employees. We also have a mechanism for receiving
inquiries about the rewards that was paid to employees, as well as opinions on the reward
system.
We have established a special department within the Intellectual Property Division to planand operate this system, while an internal Invention Management Committee made up of
R&D, legal affairs, personnel management, and IP experts ensures that the system operates
effectively across the whole Group.

Protecting Our Designs and Brand
Activities

To protect Hitachi’s designs and brand, we take resolute measures against such infringements
as making and selling counterfeit goods, copying our designs or carrying the Hitachi brand, andillegally applying for or registering trademarks of such goods.
In recent years, we are intensifying our efforts to identify counterfeiting networks, whose
manufacturing methods and sales channels have become more sophisticated and diverse. We arealso working with e-commerce site operators on countermeasures against online counterfeit sales.

Hitachi Sustainability Report 2022

Contents

Introduction

Human CapitalWhy
ー Why it matters ーManagement

Environmental

Assurance

088

GRI 103-2

Hitachi prioritizes human capital. In other words, Hitachi believes that employees are the source of value. As such, we aim to leverage the combined power of our global
network of employees to provide value to our customers and society and contribute to achieving a sustainable society. In working toward these goals, we are committed torespecting the fundamental rights of employees, providing equal opportunities, and ensuring occupational safety and health. We will strive to build favorable relationships
between employees and the company, including creating work environments conducive to feelings of pride and happiness concerning working at Hitachi, and actively engaging
in dialogue regarding the treatment of employees and career advancement opportunities. We will further work to strengthen our recruitment and development of digital humancapital, which is vital for implementing our growth strategy, and to promote Diversity, Equity and Inclusion (DEI) throughout our global operations.

How

What

・Putting the right person in
the right place
・Ensuring fair evaluationand compensation
・Improving employee
engagement
・Fostering a global Hitachi
cultureー How we are doing it ー

Policy and promotion
structure

We have set the vision of becoming the employer of choice in global markets to attract human capital eager to make social
contributions and create an organization where everyone can play an active role. We are working to further enhance our humancapital based on the three key pillars of People, Mindset, and Organization, along with their underlying Foundation of the HR strategy.
Achievements in FY 2021

Put the Right Person in the Right
Place

Introduced formal job descriptions aimed at transitioning to job-based HR management

Improve employee engagement

Percentage of positive responses to employee engagement questions in global employee survey: 65%
Target 68% by fiscal 2024

Foster a global Hitachi culture

Opened a corporate museum, Hitachi Origin Park, to introduce the corporate philosophy and founding spirit that Hitachi
has passed down since its founding in 1910

How

What

ー What we are doing ーTalentDevelopment

GovernanceRelevant SDGs

ー What we are doing ーGlobal Human
CapitalManagement

Social・Fostering autonomy of theindividualー How we are doing it ー

Policy and promotion
structure・Developing managementlevel leadership・Bolstering recruitment anddevelopment of digitaltalent・Utilizing a common global
learning platform
・Supporting careerdevelopment

Hitachi aims to develop human capital that can contribute resolve social issues. In addition to on-site work-task instruction,
we are expanding training programs globally across the Group to improve individual capabilities, skills, and specialties.
Achievements in FY 2021

Develop management-level leadership Number of participants in management-level leadership training and management training programs: 3,976

Bolster recruitment anddevelopment of digital talent

Brushed up our DX training system consisting of more than 100 courses, and widely expanded the program to Group
companies outside Japan
Cumulative total attendance: Approx. 24,000
Digital talent: Approx. 67,000 people
Target 98,000 people by fiscal 2024

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

・Accelerating theadvancement of DEI basedon our DEI policy andstrategy

Governance

Assurance

089

How

What

ー What we are doing ーDiversity,
Equity andInclusion

Socialー How we are doing it ー

Policy and promotion
structure

We are working to advance DEI with global and regional perspectives under the leadership of the Chief Sustainability Officer
based on a newly formulated DEI policy and strategy. Our Global DEI Council meets to discuss specific activities concerning
DEI strategy pursued by Group companies around the world and throughout our global operations. In our aim to be adiverse, inclusive company, we have also established DEI promotion leaders in each region and are striving to promote DEI
in ways that take into account individual regions’ characteristics and business strategies.
Achievements in FY 2021

Promote diversity among
executives

Ratio of female executive and corporate officers: 12.2%, ratio of non-Japanese executive and corporate officers: 17.6%(as of June 2022)
Target 30% by fiscal 2030 respectively

Accelerate the advancement of
DEI based on our DEI policy andstrategy

Set targets for Business Units (BUs), corporate function, and Group company in line with our three global DEI themes:
Gender-balance, Cultural diversity, and Multi-generation, and promoted related efforts

Enhance employees’
understanding of DEI

Promoted training, etc. at each Group company worldwide to enhance employees’ understanding of DEI

How

What

ー What we are doing ーWork-LifeManagement

・Promoting work-stylereform・Introducing and expanding
support systems forbalancing work and childcare/nursing care
・Developing support
systems and measuresthat meet diverse
employee needs
・Preventing long working
hours and overwork
・Promoting diverse work
styles in the “new normal”

ー How we are doing it ー

Policy and promotion
structure

We believe that practicing work-life management will enrich employees’ work and private lives, enhance professionalism,
and build personal character resulting in both individual and organizational growth sustainably. Based on this philosophy, we
have established systems to support work-style reforms and a balance between employees’ work and private lives.

Achievements in FY 2021

Introduce and expand support
systems for balancing work andchild care/nursing care

Promoted efforts aimed at transforming our corporate culture, including conducting manager-oriented training andexpectant-father/expectant-mother seminars concerning the balancing of work and childcare/nursing care

Develop support systems andmeasures that meet diverse
employee needs

Reviewed the Cafeteria Plan program to be able to provide a fair system not dependent on working location choices in
conjunction with the expansion of working from home

Hitachi Sustainability Report 2022

Occupational
Health and
SafetyContents

Introduction

Environmental

SocialWhat

Howー What we are doing ーー How we are doing it ー・Establishing occupational
health and safety
management systems

Policy and promotion
structure・Conducting occupational
health and safety risk
assessments

・Ensuring the occupational
health and safety ofcontractors

Number of fatal accidents *1*2: 2 (Hitachi Group), 0 (Hitachi, Ltd.)
Initiatives for preventing workrelated accidents

Target0

Number of lost-time accidents *1: 434 (Hitachi Group), 3 (Hitachi, Ltd.)
Target 253 which is half the number recorded in 2018 (Hitachi Group),
3 which is half the number recorded in 2018 (Hitachi, Ltd.)*1 Figures are calendar year-based (January–December)

Globally expanded our processes of identifying, assessing and mitigating the risks of high-risk activities and equipment
Conducted independent outside safety diagnoses when fatal accidents occurred at Group companies outside of Japan,
worked to strengthen health and safety systems in the relevant region, reviewed action plans, and strived to improve safety
awareness
Percentage of employees with high stress according to the stress-check: 12.8%
Target 10% decrease from fiscal 2020 (less than 10.4%)

Employee health promotion

Percentage of employees who have received special health guidance: 40.3% (estimate)
Target 40% of employees

What

How

ー What we are doing ーー How we are doing it ー

Policy and promotion
structure

The Hitachi Group Codes of Conduct call for the upholding of the fundamental rights of employees in line with theprinciples of the United Nations Global Compact. We also actively pursue dialogue with individual labor unions and theirrepresentatives in accordance with the laws and regulations in each country and region to deepen mutual understanding of
employee working conditions and treatment as well as business conditions.

・Providing notifications ofwork-related transfers andreassignments
・Promoting labormanagement cooperation
toward improving
occupational health andsafety levels

090*1 Figures are calendar year-based (January–December) *2 Including contractors

Occupational health and safety
risk assessment

・Communicating mutually
between employees andmanagement

Assurance

Achievements in FY 2021

・Implementing initiatives toimprove employee health・Respecting the rights of
employees

Governance

The Hitachi Group Health and Safety Policy is shared with Group companies worldwide as part of our efforts to create
safe, secure, comfortable and healthy workplace that are accident-free. We are working to continuously improve Groupwide occupational health and safety management systems under the Health and Safety Management Division, which is
responsible for promoting occupational health and safety in the Hitachi Group.

・Carrying out appropriate
occupational health andsafety training

Freedom of
Association
and Collective
Bargaining

Management

Achievements in FY 2021

Japan: Held Hitachi Group management meetings four times a year (once a quarter)
Deepen mutual understanding
through dialogue between
employees and management

China (Hitachi China): Held management information round-table meetings with labor unions
Europe (Hitachi Europe): Held annual labor-management meetingHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

091

Assurance

Global Human Capital Management GRI 404-2
Approach to Global Human Capital Management
Approach

Hitachi has welcomed around 100,000 new members withdiverse backgrounds onboard through a number of major
mergers and acquisitions in recent years. Contributing tosociety through our Social Innovation Business will requirebuilding inclusive organizations in which diverse humanresources are able to play active roles. We must also
encourage a mindset where employees perceive social
issues as matters of personal concern and strive to resolve
them. We are working to promote a variety of HR-related
measures aimed at attracting diverse human resources
who aspire to contribute to society, and to creating anorganization where everyone participates enthusiastically.
By putting these initiatives into practice, we further aim tobecome an “Employer of Choice” in the global markets.

Global Human Capital Management Strategy
Strategy

To advance the Social Innovation Business, Hitachi must
explore customer and social issues and engage in cocreation with customers to devise unique new solutions.
Human capital is the key to achieving this. In order to create
new value worldwide through the Social Innovation Business,over the past 10 years we have focused on securing anddeveloping a diverse range of human resources—thedriver of sustainable growth—and on relevant organizationbuilding. Over the next 10 years, we will marshal thestrengths of our more than 300,000 employees, including

new members we have welcomed onboard through mergers
and acquisitions, and work to further enhance our humancapital. Through this, we will continuously provide value toour customers and society and accelerate our global growth.
The 2024 HR Strategy, formulated based on Hitachi’s
Mid-term Management Plan 2024, sets forth our visionof becoming an “Employer of Choice” in the global
marketplace, a vibrant organization where individuals
aspiring to make social contributions gather and participate

Mid-term Management Plan 2015

enthusiastically. To this end, we are advancing a variety ofmeasures around the three key pillars of People, Mindset,
and Organization, along with their underlying Foundation.
Diversity, Equity, and Inclusion are at the core of
our efforts to promote HR strategy. We aim to build anorganization in which diverse employees respect eachother’s differences and are able to innovate.
P100 Diversity, Equity and Inclusion

Mid-term Management Plan 2024 and beyond

Mid-term Management Plan 2021

Autonomous, decentralized
growth in each business field

Transformation toSocial Innovation Business

Next 10 years of growth─Sustainable growth with assets by acquisition─

Major initiatives and achievements up to now
DEI promotion
Regularly conducted Women’s Summits
Held DEI strategy and media briefng sessions
Increased ratio of female and non-Japanese
executive and corporate offcers

Talent acquisition anddevelopment
Management leader selection
and development
Digital specialist acquisition anddevelopment

Development of global HR foundation
Hitachi Global Grade (HGG),
Global Performance Management (GPM), Hitachi University, others

Beyond2024

Global HR
management 3.0

Global HR
management 1.0

2011

Global HR
management 2.0

Launch of global HR initiatives

2024 Human Resources Strategy

Become the employer of choice with diverse talents, equitable
opportunity and an inclusive organization to contribute to growth
by Green, Digital and Innovation

Hitachi Sustainability Report 2022

Contents

2024 HR Strategy

MissionContribute to business through diverse
talents, equitable opportunity, and inclusive
organization

VisionあWe lead transformation
into “Employer ofchoice” in global market to become a vibrant“Talent Destination” that contributes to society

Pillars
People (Talent)
Maximize talent(human capital andindividual capabilities)
engagement for growth

HR Strategy

Mindset ( Culture)
Fostering a mindset andculture for growth

Organization

Promotingcollaborations between
divisions for growth
and the realization of
global productivity andefficiency

Foundation

Key Initiatives
1. Acquire, retain, develop andallocate global leaders and digitaltalent to maximize their potential
2. Placement the right people in
the right places (matching) at the
optimal timing in the Hitachi Group
3.Enhance employee wellbeing andengagement
4. Embody Hitachi’s founding spirit
and cultivate global Hitachi culture
to realize sustainable growth
5. Promote a growth mentality(ongoing, autonomous skills
development, including upskilling
and reskilling)
6. Promoting innovations andtransformations: Ensure
psychological safety and encourage
the taking on of challenges
7. Breakdown organizational silos
and collaborate to enhancecustomer value
8. Create new workstyles
9. Utilize digital technologies totransform HR with the provisionof higher quality HR services andsolutionsEnsure physical and mental
wellbeing and safety
Strengthen exhaustive risk
management (compliance, prevent
incidents and accidents, respond todisasters, etc.)

Introduction

Management

Environmental

SocialInitiatives to Put the Right Person 		in the Right Place

Governance

Assurance092

can assign the right people to the right jobs according to

Hitachi Global Grade (HGG)
In order for diverse human capital to advance our business,
job and task-oriented HR management is needed. Hitachi
Global Grade (HGG) is one way to realize this. This system
has been adopted for all positions in all our organizations.
The system consists of 11 grades, and each position isevaluated based on the global common standards of theentire Hitachi Group.

their personal abilities and motivations, regardless of their
attributes such as nationality, gender, or age. The aim of ourjob-based HR management is to produce organizations andhuman resources that generate innovations by maximizing
individual and organizational performance and by improving
engagement. To achieve this, Hitachi, Ltd. has been devising
ways to make its jobs and human resources more visible.
Specifically, in fiscal 2020, we adopted a talent review
system to investigate placement and training based oneach individual’s aptitude and career goals. In fiscal 2021,
we introduced formal job descriptions. Through repeateddiscussions with the labor union, we have also focused on
employee communication to encourage understanding of
the need for job-based HR management and to update
their thinking and behavior. The majority of Hitachi, Ltd.
employees now understand the need for job-based HR
management and proactive career building. In the future, wewill do more to encourage each employee to change his or
her behavior, and we will review our systems, transforming
our entire HR management system to a job-based approach.
As part of these efforts, Group companies in Japan arecarrying out similar measures. By transforming to job-based
HR management, Hitachi aims to enhance employee selfmotivation, create a stronger sense of unity between thecompany and its employees, and promote both personaland organizational growth.

Transformation to Job-Based HR Management
Hitachi is accelerating the shift to job-based HR
management. This involves clarifying the duties andnecessary skills and experience and assigning humanresources based on their desires and abilities to perform therequired duties.
Through job-based HR management in Hitachi, we

Promoting People Analytics
Hitachi’s People Analytics initiative involves gathering andanalyzing data about regular employee awareness andbehavior and putting it to use in human resources andmanagement policy.
Quantifying the effect of human resources initiatives has
always been difficult. Evaluations have tended to be based

Approach

Structure

Activities

Hitachi has been building a global human capitalmanagement platform to attract, deploy, and develop thebest most talented team members on a global basis.
Integrated Platform for Human Capital Management
Through this platform, up-to-date and specific humanresource information, such as professional skills and career
preferences, is shared via a cloud system. The platform
enables centralized management of various processes
including searching for talent and accessing human capitalfrom across the Group, utilizing that information for teammanagement, performance management, development
planning, and career development. The platform is gradually
being expanded throughout the Group globally.

Hitachi Sustainability Report 2022

Contents

on the experience of the evaluator. With the introduction of
People Analytics, however, it is now possible to implement
more effective and precise human resources initiatives basedon objective indicators and analysis. This includes thosethat encourage a change in behavior by providing insights
while following the development of each and every individual
employee.

Utilizing Survey Analysis Results for Human
Capital Management
We conducted a survey based on a uniquepsychological analysis developed under the academic
guidance of the University of Tsukuba. The results
are analyzed using IT, including AI and data analysis.
The awareness of individuals as well as data on job
assignments and behavior arising from the survey’s
results are used to assign and develop employees
and to maintain and improve organizational healthand productivity. This strengthens our human capitalby energizing talent and organizations.

Integrated Platform for Human Capital Management

Managers

HR Dept.

Organizational
restructuring/human capital
placement

Training/learning

Performance

Evaluation/compensation

Cultivation plan

CareerDevelopment

Employee

Introduction

Management

Environmental

SocialEnsuring Fair Evaluation and Compensation
SystemHitachi believes that a fair global system of employee
evaluation and compensation is essential for attracting
diverse and highly engaged human capital regardless ofnationality. Accordingly, we have established a Global
Compensation Philosophy: A management framework
shared by all Group companies based on the principlesof “ensuring market competitiveness,” “paying based on
performance,” and “maintaining transparency.”
We have developed a performance-based
compensation system for regular employees that is fairand competitive in the context of the labor market for eachnational or regional industry. Each employee’s compensation
is based on an annual performance review. Feedback on
this review helps further development.
We ensure compliance with the laws and regulationsof each country and region in which we operate when
determining compensation. For instance, in Japan, toensure compliance with minimum wages, etc., we conduct
comprehensive and periodic checks through our system toconfirm that there are no violations.
Global Performance Management (GPM)
Global Performance Management (GPM) forms thefoundation for business management and performanceenhancement with the aim of promoting the sustainablegrowth of organizations and individuals. There are fiveitems including the perspective of corporate ethics andcompliance that are particularly important for Hitachi tobecome a global leader in the Social Innovation Business.
They have been set as common competencies (behaviors)for the Hitachi Group and are applied to all employees.
Supervisors provide coaching and feedback to their staff toGovernance

Assurance093

help them achieve their targets. They encourage continuous
performance improvements which lead to the medium- andlong-term development of employees. By clarifying the skills
and behaviors that individuals need to demonstrate, while
explaining how their actions contribute to the success ofthe business, we cultivate employee fulfillment at work andencourage employees to take ownership over their work andself-development.
Common competencies of Hitachi Group
Competencies

Common Definition

Safety & Integrity

Be bold to do the right thing for yourself andothers.

Challenge(Pioneering spirit)

Be agile, and learn from failures to succeed.

Customer Focus(Sincerity)

Empathize with customers, and collaborate tocreate innovation.

Collaboration(Harmony)

Speak up and listen respectfully to others.

GrowthBe hungry to grow yourself, other, and theorganization.

Improving Employee Engagement
Targets

Activities

Employee wellbeing is critical to Hitachi’s sustainable growth.
Accordingly, as part of our human capital management, wehave set improvement in employee engagement*1 as a KPI.
We monitor employee engagement annually through Hitachi
Insights, a global employee survey, and work to plan andpromote human capital management measures aimed atmaking relevant improvements.
Specifically, senior management and managers sharethe survey results for their own organizations with workplace

Hitachi Sustainability Report 2022

Contents

members to identify organizational issues. Actions are thenplanned and implemented as countermeasures through the
PDCA cycle, leading to improvements.
Also, with regard to the content of the fiscal 2022
survey, questions related to wellbeing, such as thoseconcerning psychological safety and feeling connected
to others, and questions related to environmental andsustainability awareness and behavior have been expanded
based on the 2024 HR Strategy. In addition, the numberof languages available has been expanded from 14 to 20,
and improvements have been made to its usability. We
will continue to enhance our use of the employee survey
to provide more appropriate management of employees
worldwide.
*1 Employee engagement: Hitachi uses the term “engagement” to refer to
employees’ understanding of the company’s strategies and policies as well as
their job satisfaction and desire to take actions on their own initiative to bringabout results.

 lobal Result and Target of the Global Employee Survey
G
Hitachi Insights in Fiscal 2021
Number who took survey(response rate)

Approx. 210,000 people (86%)

FY2021 result
Percentage
of positive
responses
to employee
engagement
questions*1

2024 target

65%+3% YoY

68%+12% from FY 2013 (1st survey)*1 Employee engagement in fiscal 2021 is measured in terms of four factors:
pride in working for Hitachi; whether it is a great place to work that one would
recommend to others; feeling of personal accomplishment in work; andintention to continue to stay at Hitachi for the foreseeable future.

Introduction

Management

Environmental

Social

100

82.0
65.0

56.2

60

68.0
60.0

40
20
0
■ Japan2021■ Overseas

094

Colleagues in the Hitachi GroupIn July 2021, a town hall meeting was held at GlobalLogic, a
new member of the Hitachi Group, with approximately 6,000
participants. Participants were extremely positive as the
Executive Chairman, President & CEO, and other executives
shared their thoughts on creating future synergies andanswered questions from employees.

（%）

80.0

Assurance

Communication to Fuse Corporate Cultures with New

Employee engagement (positive response rate)

80

Governance2024(Targets)(FY)■ TotalFostering a Global Hitachi Culture
Activities

Hitachi has welcomed approximately 100,000 new
employees through several large-scale M&As in recent
years. We share Hitachi’s Mission and Values (Founding
Spirit) with these new colleagues, and are working to fostera global Hitachi culture that achieves growth and innovationby combining the strengths and advantages of employees.
Town Hall Meetings
Senior management continues to hold town hall meetings
with employees to deepen mutual understanding throughdirect dialogue. In fiscal 2021, 26 town hall meetings
with the President & CEO and Vice Presidents were held,counting meetings in and outside Japan.

“Make a Difference!” New Business Proposal and Job
Improvement Idea Contest
Since fiscal 2015, Hitachi has been running the “Make a
Difference!” employee idea contest to create a stronger
culture based on an “I will” mindset. The number of entrants
has expanded across the Group globally, and members ofHitachi Energy and GlobalLogic, who are new to the Group,
are participating actively.
P095 Make a Difference!

Establishment of Hitachi Origin Park
In November 2021, Hitachi opened a corporate museum,Hitachi Origin Park, in Hitachi City, Ibaraki Prefecture, where
the company was founded. Hitachi Origin Park introduces
the corporate philosophy and founding spirit that Hitachi
has passed down since its founding in 1910, along with
examples of how the company has solved social issues. It
is a place where Hitachi Group employees can learn about
Hitachi’s origins and deepen their understanding of ourcorporate philosophy and founding spirit. It is also a place
to create new dialogues with local communities and ourbusiness partners around the world.
Hitachi Origin Parkhttps://origin.hitachi.co.jp/en/

Hitachi Sustainability Report 2022

Talent Development

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

095

GRI 404-2

Approach to Talent Development
Approach

Hitachi has traditionally placed great emphasis on
developing human resources, including the establishment of
the Apprenticeship Training School, a predecessor of today’s
Hitachi Industrial Skills Academy, in 1910, the year of Hitachi’s
own founding. The pedagogical principles established in
1959 as our Educational Guidelines emphasized the spiritof yu– eki (guidance through assistance) and jikyo– (endeavorthrough one’s own efforts).
That spirit has been maintained to the present day. In
addition to on-site training through work tasks, we are also
expanding training programs globally across the Group to
improve individual capabilities, skills, and specialties. We willcontinue to support the growth of each and every individual
employee with the goal of developing employees who cancontribute to resolving social issues.

Fostering Autonomy of the Individual
Approach

Activities

Hitachi recognizes the diversity and independence of individual employees. We work to create an organizational culture that makes
the most of individuality, thereby fostering autonomy and support individuals who demonstrate career ownership.
Since fiscal 2015, we have implemented the “Make a Difference!” employee idea contest on the theme of “I will” mindset
transformation. Employee support is being expanded for personal development, including subsidies under the Cafeteria Plan andrecommendations relating to materials for self-development. We are also continuing to provide regular education so that each
employee can acquire the skills they need.

Fiscal 2021 Make a Difference! Winning Idea
In fiscal 2021, out of 457 applications received from around the world, five teams made it to the final round of judging andgave presentations to a panel of executive judges. Two teams received the Gold Ticket, awarded to the best and mostfeasible ideas, and three teams received the Outstanding Spirit Award, recognizing their endeavors taken with an “I will”
mindset. One new business idea that won the Gold Ticket was praised for its focus on people, especially women anddiversity, and its initiative to provide useful information combining career development, health information, and life events.
The other Gold Ticket award was for a job improvement idea submitted by a team from GlobalLogic, which participated in
the contest for the first time this year. The team’s unique idea to focus on the engagement of Hitachi employees and use an
app to reach out to employees not only in terms of their individual careers, but also with respect to social aspects (hobbies,
volunteer work, self-development activities, etc.) to lead them to success was evaluated highly. Since both ideas are aimed
at employee retention, which is a top priority for the company, the two teams will collaborate to implement and realize theseprojects.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

096

Assurance

Management-Level Leadership Development
Approach

SystemActivities

Training

Hitachi takes a medium- to long-term approach to developing management-level leadership that will drive transformation with top
management and the Nominating Committee playing a central role.
When developing candidates for appointment in the next and subsequent term to executive positions including CEO,CXO, and division heads several hundred candidates are selected from the Hitachi Group’s human capital around the world
and given both on-the-job training (OJT), including tough assignments,*1 and off-the-job training (Off-JT) such as external
training and coaching.
We also select around 50 outstanding emerging employees as candidates for management-level leadership as membersof the “Future 50” program. By giving this Future 50 members tough assignments opportunities for direct discussions withindependent directors and so on, we perform their development with focused educational activities.

 umber of Participants of Leadership and Management
N
Training Programs(people)
5,000

3,821

3,844

2017

2018

4,063

4,000

3,559

3,976

3,000
2,000
1,000

*1 Assigning highly demanding tasks.
0Leadership and Management Training (Global)
Training

Overview

FY 2021 results

Global Leadership Acceleration Program for Key
Positions (GAP-K)

Selective training held for five months to accelerate thedevelopment of future management-level leaders

Global Advanced Program for Leadership
Development (GAP-L)

Training held twice a year for local leaders expected toperform well in subsidiaries outside Japan with the aimof developing the superior leadership, mindset, and skills
necessary to drive Hitachi’s global growth business

Global Group Executive Development Course（Global GEC）

E-learning course to give leaders of Hitachi subsidiaries
outside Japan a basic understanding of Hitachi’s
management and provide the latest information to leadSocial Innovation Business

49 participantsfrom five regions

Global Leadership Acceleration Program forManagers (GAP-M, Ready to Lead)

Leadership training with global common content forsenior managers and new managers

2,921 participants, classes
in eight regions

33 participantsfrom 12 countries

43 participantsfrom 13 countries

2019

2020

2021

(FY)

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Introduction

Management

Environmental

SocialGovernance

097

Assurance

Bolstering Recruitment and Development of Digital Talent
Approach

TargetActivities

Training

To accelerate our Social Innovation Business using digital technologies and realize Hitachi’s growth strategy, we are working tosecure and develop human capital (digital talent) that can lead a digital transformation (DX).
In fiscal 2021, we increased our digital talent to approximately 67,000 people. This was achieved with the addition of
GlobalLogic, a leading digital engineering services company, to the Hitachi Group, as well as the hiring of outside talent that cancontribute immediately and the development of internal talent through DX training and other programs. We also increased our data
scientists with specialist knowledge of data analysis including AI, IoT, and the utilization of big data to approximately 10,000, up
from around 2,000 at the end of April 2020.
We have set a target of increasing our digital talent to approximately 98,000 people, mainly outside Japan, by fiscal 2024. We
will accelerate our efforts to bolster our digital talent needed for business growth by acquiring talent globally through GlobalLogic
and other means, and by developing internal talent through expansion of training programs and other measures.

Digital Talent: Past and Target(People)98,000100,000
80,00067,00060,00030,00040,00011,00020,0000■ In Japan

Achievements in Fiscal 2021
Aiming to further develop and strengthen our digital talent, we consolidated our various training institutes into the Hitachi
Academy in April 2019. We also have constructed a DX training system that organizes, categorizes, and systematizes theprocesses and tasks needed for digital transformation.
Every year, we brush up our DX training system consisting of more than 100 courses, which were taken by a cumulative
total of approximately 24,000 employees in fiscal 2021. In addition, we are enhancing the development of individuals who
can apply DX to their own work by developing training courses for each skill required of digital talent. Furthermore, in fiscal
2020, we began an e-learning basic training program to improve DX literacy among all Group employees in Japan. In fiscal
2021, we widely expanded the program to Group companies outside Japan to foster a common understanding of digitalbusiness promotion throughout the Group worldwide.
At the same time, we are training the people in the leadership class who are in charge of DX projects by providing themwith on-the-job training in actual projects and other practical experience.
We will continue to strengthen our digital talent development with broader fundamental training aimed at acquiring
basic knowledge and skills by participating in training, and specialized education to develop the leader class and specialists.

59,00038,00035,00012,00019,00023,00029,000

2019

2020

2021

39,0002024 (Target)(FY)■ Outside Japan

Note: A cumulative total number of people categorized into twelve groups by
their skill (An employee with several skills is counted multiple times basedon the number of skills)

Total Number of Participants in DX Training(People)30,000Approx.
19,000Approx.
23,000Approx.
24,0002020

2021

20,00010,000

0

2019

(FY)

Note: A cumulative total number of paticipants in Japan by end of each fiscal year
P084 Digital Human Resource Development

Hitachi Sustainability Report 2022

Contents

Utilizing a Common Global Learning Platform
Activities

Training

At Hitachi, all employees can use Hitachi University, acommon global learning platform, to check their pastlearning progress and take necessary training in a timely
manner to achieve their business goals and develop
their future careers in consultation with their managers.
This promotes autonomous, workplace-based talentdevelopment. In addition, the HR department utilizes training
transcripts to implement effective talent development
measures.

Introduction

Management

Environmental

SocialCareer Development Support
Activities

Training

Hitachi, Ltd. has developed a broad range of careerdevelopment support that focuses on “internal careers,”
namely, employees’ individual values and rewarding
activities, as well as their views on the meaning of theirwork. In a career development program to provide direct
support for individual career development, we hold the
Hitachi Career Development Workshop (H-CDW). Throughself-analysis work, participants consider the direction theyshould proceed in, their career goals, and their career path,and then engage in self-directed efforts to develop theircareer and abilities. Around 15,300 people have participatedin the program so far (as of March 31, 2022) with a focus on
assistant manager-rank personnel working as technicians,
researchers, and administrative office workers in their thirties.
In addition to those programs, Hitachi also offers programs
targeting specific age groups such as career education foryoung groups and training for middle-aged or older groups
to help them prepare for the changes ahead in their careers.
We also operate a Career Consultation Room so that
employees can speak with professional counselors about
any challenges they have regarding their work, their career, orinterpersonal relationships in order to help them find a solution.
We will continue to promote self-understanding while
respecting each employee’s individuality and personal
aspirations. By doing so, we will develop individuals withautonomy to think and act for themselves, promote mutual
understanding as a way of fostering a sense of unity andteamwork while capitalizing on individuals’ engagement
and motivation within the organization. We provide support
and create mechanisms to link individual abilities andcreativity to the enhancement of organizational strength andperformance.

Governance

Assurance098

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Introduction

Management

Environmental

SocialGovernance

Assurance

099

Initiatives at Regional Headquarters to Develop Employee Skills
Hitachi is a company with global operations, so its skills development programs are implemented primarily by its regional headquarters in keeping with the focus of each region’s business
operations and cultural environment.
Through these efforts, we seek to identify and nurture the human capital who will become Hitachi’s leaders globally across the Group.

Hitachi America, Ltd.
For employees in the Americas aspiring to become global leaders, in addition to a global
management training program, the company provides a variety of learning and individual
training options utilizing the Hitachi University. Specifically, the company encourages
employees to take e-learning courses on topics such as DX and AI/data science. To
develop leadership, it also actively encourages employees to participate in training
programs for management-level leaders.
Hitachi Asia Ltd.
Once a year, key business leaders meet to formulate a plan for training tailored to the skills
required and business trends, thereby strengthening the alignment of talent development
policy and business. The company provides global management training courses and an
environment where employees can independently learn needed skills online, making fulluse of an e-learning platform for employees.
Hitachi (China) Ltd.
The growth of all employees is promoted through a training system catering todifferent levels of development which enables workers to develop the specialized andcomprehensive skills they need to perform their jobs. In addition to global common training
through Hitachi University and an e-learning platform for employees, the company provides
specific content to allow employees to acquire the skills and knowledge required forbusiness activities in China. It also supports the development of Hitachi’s Social Innovation
Business by strengthening training for talent development related to digital business.

Hitachi Europe Ltd.
Employees in Europe can develop their skills through classroom lectures and online classes
enabling them to acquire professional qualifications in cultural awareness, presentation
skills, and IT skills. Global management training and other programs bring together Hitachi
leaders in Europe which helps to build an important network in support of “One Hitachi.”In addition, the company also provides education and training to transform employees into
smart workers who can make choices and deliver results in a limited amount of time.
Hitachi India Pvt. Ltd.
The Learning and Development Committee consists of senior executives and meets twicea year to discuss training programs. Another mission is to promote building skill sets bymaking full use of global management training courses and the e-learning platform for
employees. In addition, to enable an effective learning and development, the company
provides annual development roadmap and educational programs to Group companies
located in India.

Hitachi Sustainability Report 2022

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Introduction

Management

Environmental

SocialGovernance

Assurance

100

Diversity, Equity and Inclusion
Committed to Diversity, Equity and Inclusion (DEI)
Approach

PolicyHitachi aims to be a diverse company where everyone iswelcome, everyone is treated equitably, and everyone feels
included.

Diversity, Equity and Inclusion open our
futureDiversity, Equity and Inclusion are the source of ourinnovation and growth.
Hitachi has a place for everyone, welcoming
differences in colleagues’ background, age, gender,
sexuality, family status, disability, race, nationality,
ethnicity and religion.
We respect and value these and other
differences because only through difference can weunderstand our markets, create better ideas anddrive innovation which contributes to society.
At Hitachi we treat everyone fairly, recognizing
difference to allow everyone to contribute.
With a diverse workforce, broad experience,
and an inclusive culture we will meet ourcustomers' needs and drive our company’ssustainable growth.

Diversity:
Diversity refers to the various differences that exist within
individuals and groups.
In Hitachi, Diversity means that there is a place foreveryone, regardless of background, age, gender, sexuality,
family status, disability, race, nationality, ethnicity, religion
and many other characteristics.

voices and varied perspectives that diversity brings enables
us to reach better decisions and unlock innovative ideas.

Equity:Equity means fairness of treatment, making adjustments toaccount for imbalances.
In Hitachi, Equity means we treat everyone fairly.
Treating people “fairly” is not the same as treating them thesame. We recognise that each of us is different, and eachof us needs different conditions to thrive. We put in placepolicies, tools and adaptations to allow everyone to accessthe same opportunities.

Enable Hitachi to better serve global customers, improve
our footprint and open new markets

Inclusion:
Inclusion is a state in which the uniqueness of each person
is recognized and enabled to contribute to the organization
at their best.
In Hitachi, Inclusion means that everyone feels
respected, heard, and involved.
For colleagues to feel included means being acceptedand valued, able to speak up and to contribute. It implies anopen, empathetic culture and attitude. Including the different

In line with this commitment, all of our initiatives toenhance Diversity, Equity and Inclusion (DEI) share thesebasic goals:
Make Hitachi a truly global company, with talent from allover the world

Drive innovation and creativity
Support attraction and retention of talent
Allow employees to feel more engaged and connected,
to be a part of Group strategy and actively contribute to it
Hitachi Group Diversity, Equity and Inclusion Policy
https://www.hitachi.com/sustainability/download/pdf/
Global_DEI_policy_EN.pdf

Hitachi Sustainability Report 2022

Contents

Global DEI Strategy
Strategy

Under the leadership of the Chief Sustainability Officer
and Chief Diversity & Inclusion Officer (CDIO), Lorena
Dellagiovanna, in fiscal 2020 we conducted a gap data
analysis, looking at external assessments and working with
the Business Units (BUs), corporate functions, and Group
companies to review their current status and businessstrategies. Based on this analysis, we formulated our global
DEI strategy for the medium to long term.
Diversity refers to all the different characteristics that
distinguish people one from another. Some of these differences
are immediately visible, but many more are intrapersonal—
for instance thinking styles, personality type, and backgroundexperiences—at least until people really get to know each other.
Hitachi commits to tackle all dimensions of diversity,
however we identified three themes that are common in
every region and business.

Introduction

Management

Pillars​
Leadership
Commitment​

Culture​Recruitment​

Environmental

Description
President & CEO and other senior stakeholders
show their clear commitment to the DEI vision​
Leaders are accountable for DEI progress​
Improving workplace culture and cultural focus on
inclusion are a business mandate​
We attract and hire diverse people​
We conduct diagnostic analysis and review ourrecruiting channels and practice, monitoring therecruiting funnel

Retention​

We provide different benefits and support robust
Employee Resource Groups (ERGs), driving
cultural relevant programming​

Advancement​

We produce diverse leaders
We promote diverse individuals based oncompetency

Global DEI Management Structure
Structure

Our global DEI themes:
1. Gender-balance: More women across the business,
especially within leadership roles
2. Cultural diversity: A team which reflects the global natureof our company

Global DEI Management Structure (FY 2022)
Board of Directors

Senior Executive Committee

3. Multi-generation: Colleagues are recognized based oncompetence, not on age
In line with the above three global DEI themes, we set
targets for BUs, corporate functions, and Group companies.
The procedure to define the targets included individual
meetings, where discussions focused on how DEI efforts
can help to address issues in the business, since Hitachi
operates in a variety of industries and markets.
These targets are promoted through the “five pillars of
implementation”:

SocialSustainability Promotion Meeting

Global DEI Council

Governance

Assurance

101

To achieve our aspirations, Hitachi has created a structure tolead its global and local initiatives.
At a global level, DEI themes are discussed both at
the executive level and the implementation level, in order topromote the Group’s policies and initiatives.
The Global DEI Council is aligned with the global DEI
strategy and conducts discussions on specific actions inpartnership with the HR departments of Group companies
around the world. Material matters are reported anddeliberated on in the Senior Executive Committee, and arereported to the Board of Directors when necessary.
Regional DEI lead positions have been created to drive
initiatives aligned to local needs and business strategies.
The Global DEI team supports the implementation of
global and regional initiatives, promoting the DEI strategy tofoster an inclusive culture. The team implements a thoroughset of DEI performance indicators .
To promote communication among all functions, BUs
and Group companies, the Global DEI team facilitatesworking group sessions. These sessions involve all key
internal stakeholders, and participants discuss specific DEI
topics, seeking to share best practices, identify common
issues, and find practical solutions.

Contents

Hitachi Sustainability Report 2022

DEI Global Target
TargetGRI 405-1/405-2

Activities

 atio of Female and Non-Japanese Executive andR
Corporate Officers (Hitachi, Ltd.)(people)
15

13

5

7
4

8.8

5.0
0

June 2019

5

6
8.6

7

8

9

30.0
30.0

（%）
30.0

17.6
20.0

11.6

10.1

12.2

10.0

7.1
June 2020

Management

Environmental

SocialGovernance

102

Assurance

Initiatives to Support Our Global DEI Themes

We have set the strengthening of diversity in management
as a global DEI target, with a KPI of the ratio of executive
and corporate positions held by women and non-Japanesepersons.
As of June 2022, 12.2% of executives and corporate
officers were women, compared to 10.1% as of June 2021.
Furthermore, 17.6% of executives and corporate officers
were non-Japanese persons, compared to 11.6% as of thatsame date. By 2030, our target is for 30% of our executives
and corporate officers to be women and 30% to be nonJapanese persons.

10

Introduction

Activities

To advance DEI across our three global themes, the Hitachi
businesses have a range of ongoing initiatives. These
initiatives champion the global themes and enable Hitachi tomeet its global DEI Policy.

 asic Salary and Total Individual Compensation for Female
Band Male Managers (Fiscal 2021) (Hitachi, Ltd.)

Global DEI Theme 1: Gender-balance
Improving our gender balance means empowering womenacross the business. Starting with giving broader access to
all roles through recruitment, we are offering opportunities
for their progression into leadership positions and providing
support to ensure a workplace where women can thrive.
Our goal is that all women at Hitachi feel that they havea place, have a clear and distinctive voice, and enjoy the
freedom to contribute to our innovation. Furthermore, inregards to employee compensation, it is set according toeach individual’s role and achievements, with no divisions or
differences based on gender or age.

Note: Benefits for male and female employees are identical. Differences between
male and female employees’ salary and compensation are due to age
distribution, grade distribution, etc.

June 2022

End of FY
2030 (Target)■ Number of female executive and corporate officers (left scale)■ Number of non-Japanese executive and corporate officers (left scale)● Ratio of female executive and corporate officers (right scale)● Ratio of non-Japanese executive and corporate officers (right scale)0

Total Individual Compensation

100:105

100:107

Initiatives of Hitachi, Ltd.
Hitachi, Ltd. supports women in thinking about theirown career paths. The seminar is aimed at womenwith 3-4 years’ experience at Hitachi and gives themthe opportunity to better understand their career andconsider their future. The seminar includes lectures on
the environment surrounding working women, panel
discussions by women in senior roles, and discussions
among participants. The seminar was held online 2 times
in FY 2021.

Ratio and Number of Female Managers (Hitachi Group)(people)July 2021

Basic Salary

5,000
4,000

7.3

4,762

4,641

4,302

3,975

(%)

9.8

9.5

8.9

8.3

10.0
8.0

3,325
3,000

6.0

2,000

4.0

1,000

2.0

0

2017

2018

2019

2020

2021

(FY)

■ Number of total female managers (left scale)● Ratio of total female managers (right scale)Note: The figures are based on enrolled employees with employment contract
including those seconded from Hitachi Group to other companies and thosetaking leave, and excluding those seconded from other companies to HitachiGroup (as of March 31). Rising numbers of female managers in part reflect
improved coverage of our human capital databases.

0

Initiatives of Hitachi Energy
Within Hitachi Energy’s diversity strategy, one opportunity
focus area is “women’s acceleration,” with a management
commitment to increase women’s representation at
three levels of the organization to achieve 25% women in
management by 2025.
Hitachi Energy’s Female Talent Development Programis an acceleration program including mentoring for middle
managers, and to date 60 female leaders have graduated.
Hitachi Energy incorporates DEI into all policies related tothe employee life cycle such as equal pay, flexible working,and Employee Resource Groups (ERGs) global and locally.

Hitachi Sustainability Report 2022

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Introduction

Management

Environmental

SocialGovernance

Assurance

103

Initiatives of Hitachi Vantara

Initiatives of GlobalLogic

shares religious and holiday observance messages

Hitachi Vantara is committed to providing opportunities forthe advancement of women in the technology sector andproviding career development opportunities for existing
employees and future candidates. The company also offersa “returners” program with the Mom Project to support
women returning to work after a career break. The businessis working in partnership to place returners in the US, into
key roles to support them continuing their career pathand are looking to expand the program if this initiative issuccessful.
The business has also seen its Women of Hitachi
ERG grow and expand globally. The Group’s mission isto help advance the development and advancement of
women across all sectors. Members of this ERG are actively
engaged in mentoring one another and hosting panel
discussions with guest speakers to inspire and motivate all
employees who identify as women and their allies.

GlobalLogic offers opportunity through its Women
Influencers Program. High-potential women in senior
management positions participate in a multi-month careerdevelopment program. This rigorous program employs
training, mentoring, and coaching to support senior
managers’ advancement into the decision-making tier. The
first “proof of concept” cohort earned 60% advancements
and 40% role enhancements to date. The program will be
expanding globally from 2022.

globally, to further respect cultural diversity. In addition
to that, its leadership teams continue to participate inintercultural training courses to help further strengthen theirunderstanding of cultures around the world.

Initiatives for LGBTQ+For 2022, Hitachi Vantara scored a 100 on the
Human Rights Campaign’s Corporate Equality
Index, a national benchmarking tool on corporate
policies, practices, and benefits for the LGBTQ+
community. This score was a result of the recentchange to supplier selection, where Hitachi Vantara
partners with diverse suppliers with minority,
women, LGBTQ+ or person-with-disability owners.
Other programs to fulfill the DEI programs
regionally and locally include employee resourcegroups such as LGBTQ+ (Rainbow Connection).
We also have LGBTQ+ healthcare concierge
services and DEI global compliance training.

Global DEI Theme 2: Cultural Diversity
Being culturally diverse is about creating a team whichreflects the global nature of our company. Hitachi has growninto a global innovation business from its Japanese roots,
and our aspiration is to see the global and diverse nature ofour business portfolio reflected in our people, particularly at
the decision-making levels, and supported by an inclusive
culture.
By providing the opportunity for more individuals fromdifferent nationalities to progress into leadership, we create
opportunities for Hitachi to access new markets and sustain
our global growth.
Initiatives of Hitachi Astemo
Hitachi Astemo organized its very first Diversity Month in
May 2021. To highlight the cultural diversity of the company,
employees were invited to share their favorite recipes, alongwith their favorite memories of cooking them.
Initiatives of Hitachi Vantara
To celebrate diversity in the workplace, Hitachi Vantara
leverages spotlight months, such as Black History and
Hispanic Heritage month, to invite employees to sharestories of their heritage and culture. The company also

Global DEI Theme 3: Multi-generation
Technology and society change quickly, and the voiceof younger colleagues is essential in Hitachi’s approach
to innovation. We seek to attract young people to our
workplaces and ensure they contribute to our thinking, while
also being sure to foster positive collaboration and dialogue
among different generations. We recognize the value that
all individuals can bring, and so we strive to recognize
colleagues based on competence, rather than age.
Initiatives of Hitachi Energy
To attract and retain future talent, Hitachi Energy has set
targets in the early career space to see 40% of early career
positions filled by women and 20% of external hires be early
career by 2025, partnering with university relations and ourPower+ trainee program (a program to build solid foundation
for fulltime position).
Hitachi Energy also works to ensure that its recruiting
policy contributes to an inclusive workplace by examining
areas such as the office infrastructure and embedding
flexible working practices.
The company has also trained more than 3,500
leaders in a leadership model designed by employees tostrengthen leadership capabilities of tomorrow.

Hitachi Sustainability Report 2022

Contents

Initiatives of Hitachi High-Tech
To support its talent, Hitachi High-Tech America has an
Employee Mentorship Program (EMPower). This aligns
with the company’s goal to develop individuals within theorganization with the skills and knowledge to achieve personal
and professional growth. The company’s diverse professional
mentor/mentee relationships strengthen its ability to provide
global customers with the solutions they need. This, in turn,helps ensure client satisfaction and strengthens long-term
relationships.

Introduction

Management

Environmental

SocialLegally required employment rate*²

4,000

2.43

3,500

2.33

3,000

2.23

2.26

2,403

2.37

2,767

1,899

1.9

1.85

Activities

GRI 405-1

Hitachi Group joined The Valuable 500, a global CEO
community launched at the World Economic Forum topromote the inclusion of people with disabilities by providing
business leadership and other opportunities. By joining
this worldwide movement, Hitachi seeks to accelerate theinclusion of people with disabilities internally and externally.
Initiatives of Hitachi, Ltd.
Hitachi, Ltd. and its Group companies in Japan are actively
recruiting people with disabilities via online recruiting fairs andby partnering with special subsidiaries. As of June 2022, theemployment ratio of people with disabilities was 2.43% at Hitachi,Ltd. and 2.51% for the entire Group in Japan. These figures
exceed Japan’s legally required employment ratio of 2.3 %.

1.8

2000

104

Hitachi Energy has ensured disability inclusion in the HR
processes and policies within the Group. This includes equal
employment opportunity policies, induction programs for
onboarding, and buddy programs as part of retention andsupport. The business is also currently making its website
more accessible and will continue to improve the application
process for people with disabilities.

2.0

981

1,000

0

2.4

2.1

500

Disability Inclusion

2.5

2.2

1,848

2,000
1,500

(%)

2.3

2,575

2,500

Assurance

Initiatives of Hitachi Energy mployment of People with Disabilities and Employment
E
Ratio (Hitachi, Ltd.)*1(people)Governance2018■ Employment of people
with disabilities (left scale)

2019

2020

2021

2022 (FY)0● Employment ratio (right scale)*1 Includes special subsidiaries and related Group companies. (One special
subsidiary and 25 related Group companies in June 2022. Figures include
Hitachi, Ltd.)*2 The legally required employment rate was 1.8% up through fiscal 2012, 2.0%
from fiscal 2013 through fiscal 2017, 2.2% in fiscal 2018, and 2.3% in fiscal 2021.
Notes: • Data compiled on June 1 of each fiscal year.
• The employment ratio is calculated according to methods prescribed in
the relevant laws.

Hitachi, Ltd. has also implemented “Working Together with
People with Disabilities,” an e-learning course introducing
non-discriminative policies and accommodations designed
for people with disabilities. Some 168,000 employees
have attended the course across the Japan-based Group
companies (95% attendance rate).
In addition, “Hitachi You and I”, a special subsidiaryestablished in fiscal 2020, created the Recruitment
Retention Support Division. The division supports the longterm employment of people with disabilities and seeks tocreate a work environment where employees enjoy high job
satisfaction.

Initiatives of GlobalLogic
The vision for the diversity and inclusion program at
GlobalLogic is to contribute to society and create equal
opportunities for all. The business has been recognized as
an “Emerging Employer” by ASSOCHAM and Sarthak NAAI
(National Abilympic Association of India) for empowering the
lives of persons with disabilities.

Hitachi Sustainability Report 2022

Contents

Enhancing Employee Understanding of DEI
Training

Hitachi Group is working on initiatives to enhance employee
understanding of DEI.
Initiatives of Hitachi Astemo
To make managers the best possible ambassadors of DEI,
Hitachi Astemo is rolling out an e-learning program covering
the topic of unconscious biases. Addressing managers in
its first phase, the material will be translated in 2022 and beoffered to all indirect employees in a second step. Amongother topics, this online course tackles the importance ofdiversity in the business, and equips managers to bettersupport DEI. A toolbox was distributed to managers in
March 2022 to raise awareness about unconscious biases
that may be at work during employee performance reviews.
Initiatives of GlobalLogic
GlobalLogic is now designing its own unconscious bias
training, based on storytelling (“Let me explain what it means
to be the only woman in the room”). These are customized
by region in terms of the content and format.
Initiatives of Hitachi High-Tech
Hitachi Hi-Tech hosts the “Hitachi High-Tech WAY” a series
of inclusive gatherings consisting of 25 town hall meetings
per year with a total of 4,000 people. These meetings
provide an opportunity for all employees to speak up
about any work or nonwork matters in an environment withguaranteed psychological safety.
The business recognizes the links between DEI andinnovation and works to address “Workstyle Improvement,”“Diversity & Inclusion Acceleration,” “People Development,”“Women at Hitachi,” and “Employee Mentorship” at a
global level.

Introduction

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Environmental

SocialGovernance

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Hitachi Sustainability Report 2022

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Management

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106

Assurance

Work-Life Management
Approach to Work-Life Management
Approach

Hitachi goes beyond “work-life balance,” in which employees
are simply balancing work and private life, to promote“work-life management” which encourages employees toproactively take charge of improving the quality of both theirwork and private lives. We believe that practicing work-life
management will enrich employees’ work and private lives,enhance professionalism, and build personal character,
resulting in both individual and organizational growthsustainably. Based on this philosophy, we have establishedsystems to support work-style reforms and a balance
between employees’ work and private lives.

Promoting Work-style Reform
Approach

SystemActivities

Hitachi, Ltd. promotes the companywide work-stylereform initiative, Hitachi Work-style Innovation, to develop
workstyles allowing talent from diverse backgrounds to workwith enthusiasm and demonstrate strong performance.
Today, approximately 95% of all regular employees
may take advantage of our programs to work from homeor satellite offices, including managerial-level employees,
discretionary labor system workers, and regular employees
who need to balance work with child care, nursing care,or medical treatment. This provides regular employeeswith flexibility concerning where and when they work.
The programs do not require the applicants to come into

the office for a certain amount of time nor are there any
limitations on the number of times for doing so, which allows
regular employees to work from wherever they need to
be for child care or nursing care. If posted away from theirfamilies, they can work from their family home. We are also
rolling out location-free work for managerial-level employees,
which allows them to perform their duties from anywhere
when approved by the company.

Coverage of working from homeand satellite office programs

95%

Approx.

Work-style Innovation Initiatives at Hitachi, Ltd.
Activity

Key components

Top commitment

Send message within company

Review of operations andprocesses

Reform administrative operations at headquarters
Clarify rules for outgoing email
Use support tool designed to optimize meeting durations and participant numbers and improve meeting efficiency

Strengthening workplace
management

Increase operational transparency using in-house consultants
Improve attendance management system for firm compliance
Offer training to learn effective organizational management in remote workplace (Target: 8,000 managers at
Hitachi, Ltd.)

Promotion of time- and locationindependent work practices

Expand working from home program
Create environments where internal networks can be accessed safely
Distribute around 30,000 IT tools to support paperless and online meetings
Roll out location-free work for managerial-level employees
Expand satellite office network (232 sites as of March 2022)
Reform administration by promoting electronic signatures and paperless systems

Companywide promotional
tactics

Share on Hitachi's intranet site
Raise employee ideas about work-style reforms and share them

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107

Introducing and Expanding Support Systems for Balancing Work and Child Care/Nursing Care
System

Support Systems for Balancing Work and Child Care
Hitachi, Ltd. and certain Group companies in Japan are
working to introduce and expand various programs to help
employees balance work and child care, and to createeven more supportive workplaces. Specifically, we haveprovided an allowance to support child care and work;
launched Hokatsu Concierge child-care matching service,an information-providing service for finding nurseries; andprovided a child-care matching service in collaboration withcompany-led nurseries. To create an environment in which
both men and women can balance work and child care,from fiscal 2022 we offer “e-learning for managers” to help
managers understand management and other issues related
to the revised Child Care and Family Care Leave Act. We
also offer “expectant-father and expectant-mother seminars”
to promote understanding of child care and child-careleave systems among employees who themselves or theirspouses are expecting a baby.
To help employees balance work and child care,
Hitachi, Ltd. has established an in-house child-care facility
with a capacity of approximately 70 children at its Yokohama
Office in cooperation with the labor union and 17 Group
companies.

GRI 401-2/401-3

Support System for Balancing Work and Nursing Care
As Japan’s population ages, the number of employees
facing the challenge of providing nursing care for elderlyfamily members is growing. Consequently, Hitachi, Ltd.
regularly conducts employee awareness and internal
fact-finding surveys concerning nursing care. Based on
the results of these surveys, the company is working tocontinually enhance measures to help employees balance
their work and home nursing care responsibilities.
Specifically, Hitachi, Ltd. has been offering financial
support for these employees by establishing programs
such as work-caregiving balance support points under the
Cafeteria Plan. Through seminars for all employees 40 yearsof age and older on how to balance work and nursing care
responsibilities, the company provides useful informationthat raises their awareness of the work-life balance. This

includes learning about the significance of continuing towork while fulfilling nursing care responsibilities along withexpert information on how to achieve this balance.
Hitachi, Ltd. and certain Group companies haveintroduced a service that warmly supports employees
dealing with nursing care concerns. In addition to helping
employees apply for public programs and find care-giving
facilities, it established services that arrange counseling tohelp employees cope with the emotional challenges.
The understanding and cooperation of others, including
superiors and workplace colleagues, is essential forbalancing work and nursing care. Accordingly, we aremaking efforts to reform our organizational culture, including
by holding management e-learning for all managers andseminars by experts in fiscal 2021.

New Measures in Fiscal 2021
Balancing Work, Child Care and Nursing Care
MeasuresMain Details and Purpose

Expectant-father and expectant-mother seminars(pilot conducted in March 2022, and started fullscale in FY 2022)

Conducted for regular employees who are expecting a baby or whose spouse is expecting ababy, to promote understanding of child care and child-care leave systems and to encourage
regular employees to use the necessary leave and work systems

E-learning for managers on balancing work andchild care (April 2022)

Conducted to help managers understand basic knowledge for management and promotion ofmale employees to take child-care leave in accordance with the revised Child Care and Family
Care Leave Act

E-learning for managers on balancing work andnursing care (September 2021)

Conducted to help managers understand the knowledge necessary to manage subordinateswith nursing care situations and to be able to respond appropriately

Seminar by an expert on the state of nursing care in
Japan (February 2022)

Provided various perspectives on the nursing care situation in Japan, with the aim of fosteringawareness and an organizational culture that considers nursing care issues from viewpoints ofboth the company and individuals

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialW ork-Life Management Support System at Hitachi, Ltd.
Nursing-Care Support System

For men
Work/leave system enabling flexible work styles

Pregnancy

Fertility treatment leave (1 year total)
Expectant-father and expectant-mother seminars
Leave for prenatal medical
appointments, pregnancy
problem leave, etc.

ChildbirthMaternity leave (8 weeks before
and 8 weeks after childbirth)Child-careleaveChild-care leave (up to 3 years, until the child completes the first grade ofelementary school; can be taken nonsequentially)

Return towork·Flexible working hours·Shorter working hours(generally 6, 6.5, or 7 hours)·Working from satellite offices·Working from home
·Elimination of posting of
employees away from family·Annual paid leave (in hours)·Half-day leave·Family-nursing leave·Child-nursing leave

Paternity leave (5 days total)·Leave for overseas spousetransfers (3 years or less)·Allowance for Balancing Child
Care and Work (up to 100,000 yen
per year per child; until the childcompletes the third grade ofelementary school)·Hokatsu Concierge·Child-care matching service incollaboration with company-led
nurseries·Pre-maternity leave and return towork support seminar·Flexible working hours ·Half-day leave·Shorter working hours·Family-nursing leave(generally 6, 6.5, or 7 hours) ·Child-nursing leave·Working from satellite·Annual nursing-care
officesleave (5 days per person
receiving care per year)·Working from home
·Elimination of posting of ·Nursing-care leave(1 year in total, can be
employees away fromtaken nonsequentially)family·Annual paid leave (in hours)
Financial support·Work-caregiving balance support points (1,000 points[100,000yen] per person receiving care per year)·Work-caregiving balance support points (3,000
points [300,000yen] per person receiving care)
Consultation services and information provision·Nursing Care Concierge (consultation service)·Distribution of Handbook on Balancing Work andCaregiving·Holding seminars on how to balance work andnursing care responsibilities

Cafeteria Plan (child-care and nursing-care menu)

Support Systems and Measures that Meet Diverse Employee Needs
SystemHitachi, Ltd. and the Hitachi Group companies in Japan are
working to meet the needs of employees as their lifestyles
become more diverse. Through domestic Group-wide lifestylesupport programs and measures, we have implemented
systems that provide the necessary level of support basedon the business environment of each company and theneeds of employees. These measures include the following:a Cafeteria Plan program, housing support such as dormitory

Assurance

108

employees. Based on Japanese laws with bearing on equalChild-Care Support System
For women

Governance

GRI 401-2/404-2

and family housing and a housing allowance system, systems
for balancing work with child and nursing care, retirement andpension plans, a consolation payment system, an employee
stock ownership program, Hitachi Group insurance, aproperty accumulation promotion system, internal sales, anda Health Insurance Society.
In the past, these lifestyle support programs andmeasures were only available in principle to regular

pay for equal work that came into effect in 2020, somesystems have been updated so that they also cover limitedterm contract employees. In addition, for those measuresthat are unsuitable for limited-term contract employees dueto the purpose and nature of the program concerned, we
provide support to employees regardless of their employment
type. This includes the provision of welfare allowances as analternative measure.
With regard to retirement benefit programs, HitachiGroup companies in Japan have partially or fully implemented
defined benefit pension plans, defined contribution pension
plans, and lump-sum retirement allowance plans. These
plans respond to the diverse needs of people in old age
by providing supplementary benefits in addition to public
pensions and play an important role in allowing retired people
to live more affluently.

Achievements in Fiscal 2021
With the expansion of working from home, Hitachi,Ltd. has restructured its lunch allowance, which waspreviously provided on the premise that employees
come into an office to work, to make it fair regardlessof where they choose to work. The company decided
to grant an additional 60,000 yen worth of points perperson per year through the Cafeteria Plan starting inJanuary 2022, in part to subsidize the cost of working
from home. Equivalent support is provided to limitedterm contract employees who are not eligible for the
Cafeteria Plan. Through such efforts, we will promote
more flexible work styles and encourage the active
participation of diverse talent.

Hitachi Sustainability Report 2022

Contents

Prevention of Long Working Hours and Overwork
Approach

Activities

Hitachi complies with the laws and regulations of eachcountry and region concerning long working hours andoverwork.
With a view to maintaining employee health andimproving productivity through a balanced work schedule,
Hitachi, Ltd. sets companywide KPIs for work-style reform inJapan each fiscal year, and works to strengthen workplace
management and review business processes. The company
provides e-learning programs to ensure compliance withlaws and regulations related to working hours and the takingof annual paid leave. Projects with issues that lead to long
working hours are managed individually. In addition, forworking-hour management, we have introduced a systemthat links PC on/off times to an attendance management
system to check actual operating hours. We also provide
a labor management dashboard*¹ and send out alerts
to help supervisors monitor the working conditions of
their subordinates in a timely manner, thereby supporting
appropriate management in the workplace.
We communicate with employees by sending out
messages that promote positive working habits and informthem of their actual total monthly hours worked. Through thiscommunication, we encourage individuals to reflect on theirworkstyle and autonomously increase productivity. In thisway, we are trying to change work culture to that of working
efficiently (producing results in less time) and taking breaks
after working (maintain high performance by recharging andpreparing for the next workday).
*1 Labor management dashboard: A business tool that integrates and visualizes
information and data related to labor management

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Management

Environmental

SocialGovernance

Assurance

109

Working in the New Normal in the Pandemic
Approach

Activities

In the new normal following the spread of COVID-19, we are accelerating the shift to working from home as the standard way ofworking in a wide range of positions, further evolving the diversification of employee workstyles with working from home as a driverof change.
Hitachi strives to prevent the spread of the virus, placing the safety and health of all employees first and foremost. As well as
promoting working from home for, in principle, all positions except those requiring a physical presence for society to function, we
are undertaking initiatives to protect employees from infections and support working from home. With the evolving diversity of ouremployees’ work styles, we are further promoting the creation of a rewarding workplace where each employee can play an active
role.
COVID-19’s impact is global, and our countermeasures in each region are informed by the conditions at regional
headquarters. Hitachi Europe asked employees working from home what they needed, and developed an action plan to provide
it. At Hitachi India, an e-learning course on COVID-19 was created and shared to raise awareness of the virus and how employees
can prevent its spread.
Hitachi Ltd.’s Main Measures Supporting New Workstyles for the New Normal

Flexible working hours

Promote and realize autonomous and flexible workstyles by eliminating
the minimum daily work hours for discretionary work and flextime work bychoosing their own start and finish times, and allowing employees to set“non-working days”

Flexible work locations

Give employees greater flexibility to choose time- and location-free work byallowing work at locations such as travel destinations or parents’ homes, torealize autonomous workstyles and further improve productivity

Appropriate health support for long-term
workers from home

Remote counseling by occupational physicians and other medical staff,
provision via intranet of information for staying mentally and physically
healthy, etc.

Provision of communication activation tools

Using Hitachi’s unique indicator “Happiness Level,” which measurespeople’s feelings of contentment, to stimulate communication

Support for flexible
workstyles

Main policies
for supporting
working fromhome medium- tolong-term

P118 Measures to Prevent Infectious DiseaseHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

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110

Initiatives at Regional Headquarters to Create a Good Working Environment
Hitachi supports workstyles that are conducive to each employee achieving their full potential. Region-specific policies are also implemented by our regional headquarters.

Hitachi America, Ltd.
Various systems and measures are in place to improve employee wellbeing. There is amonthly No Meeting Day for individuals to focus on their work. There is a hybrid and flexible
work hour system, and a system for individuals to switch to permanent working from homeat their discretion, creating a more comfortable work environment for employees.

Hitachi Asia Ltd.
Efforts to make Hitachi Asia the best place to work in Asia include providing equal
opportunities for all employees and creating workplaces that foster and retain outstanding
human capital. The company provides opportunities for recreation in order to further
enhance communication among employees and boost engagement. It has also introduced
staggered work hours and provides more flexible ways of working to create new workstyles
and enhance employees’ work-life balance.

Hitachi (China) Ltd.
In order to improve productivity and support diverse workstyles, work-style reform is
promoted, and working from home has been introduced in addition to flexible work
hours. Emphasizing work-life balance, average overtime hours are well below the legally
mandated maximum, and employees are encouraged to take annual leave. Town hallmeetings are held with executives, and interdepartmental business exchange meetings areheld to continuously enhance vertical and horizontal communication within the workplace.
The network built through these activities contributes to a sense of unity in the company, acomfortable work environment, and smoother business operations.
Hitachi Europe Ltd.
Hybrid working arrangements have been instituted to protect the health and safety of
employees and to support diverse workstyles. In addition, staggered work hours and othersystems are used to encourage a better work-life balance and help employees balance
their work and private lives.

Hitachi India Pvt. Ltd.
For every employee to work in a style they are most comfortable with, Hitachi India
introduced a hybrid style of working. Employees can come to the office whenever required
and utilize to the utmost working from home for a suitable work life balance.

Hitachi Sustainability Report 2022

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Management

Environmental

SocialGovernance

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111

Occupational Health and Safety
The Basic Principle for Occupational Healthand Safety
Approach

PolicyGRI 403-1“Health and Safety Always Comes First.” is the basic
principle underlining the Hitachi Group Health and Safety
Policy which is shared by all Hitachi Group companies
around the world. Employees work together with all
related companies, including contractors and procurement
partners, to develop a safe, secure, comfortable and healthy
workplace for everyone involved in our business activities.
Moreover, we communicate our belief to everyone whoworks at the Hitachi Group that occupational injuries andillnesses can be prevented and that each of us is responsible
for our own safety and health. We also strive to actively
adopt practices to protect our own health and safety andfoster a culture of raising mutual awareness.

Hitachi Group Health and Safety Policy“Health and Safety Always Comes First”
Policies
In accordance with our mission, “Contribute to society through thedevelopment of superior original technology and products,” theHitachi 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. Continuously be involved in taking health and safety activities
in order to prevent occupational injuries and illnesses
through designating 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 byencouraging employees to maintain their own health and taking aproactive stance on health and safety activities in the workplace
4. Require an understanding of Hitachi’s principles and thepromotion of health and safety awareness from all the business
partners of the Hitachi Group (contractors, cooperatingcompanies, procurement partners, etc. involved in the HitachiGroup's business activities)
5. Contribute to the creation of a safe and pleasant society byemphasizing activities that make health and safety a top priority
in all of Hitachi’s business activities

Establishing Occupational Health and Safety
Management System
Structure

SystemGRI 403-1/403-2/403-3/403-4/403-8

In April 2021, the Hitachi Group established the Safety and
Health Management Division to promote occupational health
Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

and safety, and oversee our global occupational health andsafety management system.
Every other month, the Safety and Health Management
Division holds a Health and Safety Leaders Meeting
attended by the officers in charge of health and safety ateach Group company, and those responsible for health andsafety in each division. The meeting checks the progressof each division's efforts toward targets and sets Groupwide KPIs. Participants also work to continually improve
our occupational health and safety management system byanalyzing the factors behind accidents and implementing
thorough measures to prevent recurrence, sharing bestpractices, and promoting training. The number of accidents
and responses to occupational health and safety risks
are reported and deliberated on in the Senior Executive
Committee, and are reported to the Board of Directors.
In Japan, each business site (BU) or other location
convenes a monthly health and safety commission, which
is attended by the business operators, labor union, andemployees. Participants analyze the factors leading toaccidents and develop countermeasures, share information,and discuss health and safety activities considering thesituation regarding employees who have taken sick leave. If
serious injuries or fatal accidents occur at worksites outsideof Japan, depending on the circumstances, the Safety
and Health Management Division gets directly involved insupporting improvement activities.
The Hitachi Group has also obtained international
certifications such as ISO 45001 at multiple sites.
P121 L abor-Management Cooperation toward Improving Occupational
Health and Safety Levels

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialReporting/deliberating of HitachiGroup activities policies/strategies/
initiatives/results

Audit Committee
Senior Executive Committee

Monitoring of KPIs, risk
assessment, andmeasures/activities for
major incidents

Safety and Health Management Division
Health and Safety Leaders Meeting
Attended by health and safety managers andexecutive officers (CHRO, etc.) from each BU/Group company

BUs/Groupcompanies

Group-wide
BUs/Works

Sharing of activities policies/
strategies/initiatives in each
BU/Group company

Instructions/communicationof HitachiGroup activities
policies/
strategies/
initiatives

Reporting of KPIs, risk
assessment, major incidents,
and results of activities

Unfortunately, we were not able to meet our safety targets
for 2021. We deeply regret that two fatal accident occurred
within the Hitachi Group (including contractors) in 2021, andthere were 434 lost-time accidents Group-wide. While theoccurrence rate decreased from the previous year, there is
still room for improvement.
In 2019 and 2020, there have been multiple casesof employees and contractors being fatally electrocutedin work conducted outside of our sites during businesshours. So, we recognize the need to strengthen integrated
safety management systems in order to identify risks andimplement countermeasures for employees and contractors
working on tasks and equipment that pose a high risk ofelectric shock.
 afety Targets and Achievements in 2021, and Targets forS
2024

Initiatives to Prevent Occupational Accidents
OutlineKey Safety
Management
Designation
SystemGroup companies and
BUs that have experienced
serious occupational
accidents

⿟ Under the leadership of top executives, target companies and BUs take on managementdriven initiatives to formulate specific plans, and the progress of these plans is monitored by the
Occupational Health and Safety Officer, who also lead initiatives to prevent recurrences.

Incident
Investigation
Database

Entire Group⿟ An Incident Investigation Database was built to analyze accidents and formulate futurecountermeasures in accordance with the Incident Investigation System established in 2019.
Implementation began in Japan in 2020, and we now intend to roll it out globally.



HitachiGroup

Hitachi,Ltd.

Global Occupational Health and Safety Targets
Activities

2021
targets

Scope

TargetTarget112

Assurance

Safety Targets and Progress Achieved in 2021

Occupational Health and Safety Management Structure
Hitachi, Ltd.
headquarters

Governance

GRI 403-9

Hitachi aims to create a safe workplace, free of accidents, and has set a global goal of zero fatal accidents. To achieve this target,
we have set up and deployed an occupational health and safety management system tailored to each company's business,
conduct periodic risk assessments and audits, and are working to expand training related to occupational health and safety
globally.

2021
achievements

2024
targets

Fatal
accidents *1

0

2 (Target notachieved)

0

Lost-time
accidents

Halvedcompared
to 2018(253 cases)

434 (Target
not achieved)

Halvedcompared
to 2021(20% annual
reduction)

Fatal
accidents *100 (Targetachieved)

0

Lost-time
accidents

Halvedcompared
to 2018(3 cases)

3 (Targetachieved)

Halvedcompared
to 2021(20% annual
reduction)

Note: Since safety-related targets are generally based on calendar year statistics,
numerical targets are established and managed on a calendar year basis,
instead of on a fiscal year basis.
*1 Including contractors

Contents

Hitachi Sustainability Report 2022

We carried out the following action plans in fiscal 2021.
Based on our awareness of these issues, we continue
striving to enhance occupational health and safety.

Introduction

Management

Environmental

Social

Hitachi Group’s Global Safety Figures (Occurrence Rate*2)
100

Fiscal 2021 Action Plan60

1. Effectively utilize risk assessment

Build a framework for identifying and mitigating risks

management system
Clarify rules and processes
3. Education and training
Transform ways of thinking to encourage voluntary occupational
health and safety behaviors
4. Utilize IT and digital tools
Measures to digitize and improve data reports
P147 Societal Data

40

20

0

2017

2.0
1.5

1.66
1.02

1.0

0.45
0.5

2019

2020

2021

24.33

27.96

20.76

18.98

18.46

1.62

0.44

0.57

2.12

1.69

■ Europe

10.82

6.08

4.78

3.09

3.71

■ India

1.44

1.44

1.63

1.07

0.53

■ China

1.53

1.46

1.17

1.12

1.06

4.41

3.34

2.63

1.55

1.30

■ Oceania

24.41

21.94

29.07

12.95

5.32

■ Africa

9.93

11.76

9.72

25.37

1.43

■ Overseas total

7.42

7.43

5.78

4.90

3.80

■ Japan

1.85

1.64

1.53

1.34

1.20

■ Global total

4.22

4.20

3.45

2.89

2.69

1.83

1.80

1.20

1.20

1.20

1.31

0.58

0.54

0.52

0.54

■ Asia (excluding

0.20

0.17

0.17

0.17

India, China,
and Japan)

2018

2019

2020

(year)
2021（年）

0.25
0

2017

All industries

2.09■ Manufacturing industries

Electrical machinery sector⃝ Hitachi Group*¹

Note: Occupational accidents are defined as those involving fatality or work-timeloss of one day or more.
*1
Hitachi Group figures for Japan including Hitachi, Ltd., are; for 201 Group
companies in 2017; for 188 Group companies in 2018; for 169 Group
companies in 2019; for 136 Group companies in 2020; and for 131 Group
companies in 2021.

（年）
2021 (year)

2020

2018

South America

1.95

2019

2017

■ Central and

2.5

2018

(year)■ North America

Occupational Accident Frequency Rate

Assurance

113

Occupational Health and Safety Risk Assessment
Activities

80

2. Build and operate an global occupational health and safety

Governance*2 Occurrence rate is the rate of workplace accidents per 1,000 directly
contracted employees (including cases without lost workdays).

Hitachi sets and operates its own standards for high-risk
activities and equipment as a common global measure. We
also promote occupational health and safety activities that
fit each company's business. We have also built a system
for globally monitoring risk identification, evaluation, andcountermeasure implementation. We conduct internal audits
into the status of risk assessment for locations that are
determined to have significant risks through this monitoring.
And we are working to improve safety measures in both
hard and soft aspects using IT and digital technologies
for accident prevention. Moreover, since July 2020, we
have increased the frequency of global accident statistic
reporting from twice a year to once a month. This acts asa mechanism for getting an accurate handle on informationsuch as accident statistics.

Risk Assessment for High-risk Activities andEquipment
Since 2021, we have been advancing efforts to identify andevaluate the hazards in high-risk activities and equipment,
and implementing measures to reduce risk, on a global scale.
We also have been working to modify high-risk
activities*¹ and equipment, including strengthening the
response to risks of electric shock in all our BUs globally.
Thus, we have formulated measures to prevent accidents
which clearly designate the accountable person in chargeof safety at each BU, and we are carrying out physicalmeasures and investment to this end.
*1 Examples of high-risk activities and equipment: (1) electric shock (highvoltage), (2) work at height (3) industrial vehicles (4) heavy lifting (5) machineryand equipment (6) confined space (7) toxic gases (8) fires and explosions

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialInternal Audits

External Audits

The Audit Committee holds annual deliberations on thepolicies, plans, and results of our occupational health andsafety activities. It also reports at least once a year to the
Senior Executive Committee, meetings of Group company
presidents, and other bodies, about important issues
such as fatal accidents and potentially serious events. For
measures and activities that require particular improvement,
the results of monitoring are reported at the above relevant
meetings.

In fiscal 2018, the Hitachi Group commissioned independent
external audits on safety diagnostics at four of our BUs in
Japan. The auditors identified issues that we needed toaddress in order to implement out Hitachi Group Health and
Safety Policy; we are making improvements in response toeach of these issues (See the table below).

Issues Identified

Establishment ofGroup-wide safety
management
systems

Raising safety
awareness of
employees bystrengthening
leadership at theorganization’s top
management
Clarifying theaccountability
for implementing
safety activities andexpanding basic
countermeasuresin the event of an
accident

During fiscal 2019 and 2020, we focused on activities
that built a foundation for understanding the current
situation and solving problems. In fiscal 2021, we performed
independent outside safety diagnoses when fatal accidents
occurred at Group companies outside of Japan and arestrengthening the health and safety systems in the relevant
region, reconsidering our action plans, and working to
improve safety awareness.

Items to deal with

Concrete actions taken⿟ Build and operate
an occupational
global health andsafety management
system⿟ Clarify rules andprocesses⿟ Ascertain capacity for global safety governanceConduct survey and interviews with business entities involved in building occupational health andsafety management systems⿟ Create rules, documents, and regarding occupational health and safety management systems (inJapan)
Publish occupational health and safety management system guidelines
Health and Safety Action Principles⿟ Formulate common standards for Hitachi Group occupational health and safety management
systems (Begin implementation in Japan in 2022, and outside of Japan from 2023)

⿟ Transform waysof thinking toencourage voluntary
health and safety
behaviors throughtraining⿟ Begin specialized safety training by grade (Japan)(By grade: Executives, line managers, the person in charge of safety)
For executives, training was held a total of 13 times, with 240 people participating(Heads of BUs, presidents of Group companies, etc.)⿟ Established training management methods (Japan)⿟ Introduced awards system (Safety Spot Award)⿟ Held senior management discussion between the General Manager and Deputy General Managerof the Safety and Health Management Division, and heads of BUs

⿟ Effectively utilize risk
assessment⿟ Build a framework
for identifying andmitigating risks⿟ Digitize and improvedata reports using
IT/digital technology⿟ Shared report on risk assessment for high-risk activities and equipment, and progress made invarious meetings⿟ Conducted audit of measures for handling high voltage
⿟ Checked measures meant to reduce the risks of important work⿟ Began monthly reports of global accident statistics⿟ Set global KPIs for occurrence rate, near-misses, etc. (Starting from 2022)
⿟ Considered use of security camera systems, and expanded use of vehicle dash cams to prevent
accidents⿟ Promoted proper use of accident investigation system/accident investigation database

Governance

Assurance

114

Carry out Appropriate Health and Safety Training
Training

GRI 403-5

To prevent occupational accidents, Hitachi aims to rebuild
its safety culture by implementing appropriate occupational
health and safety training for all executive officers andemployees. Each Hitachi Group company distributes work
guidelines and procedures relating to their own business andindustry. We also conduct safety-focused training to eachorganizational level, as well as education and drills tailoredto each organization and business type, for line managers
and safety staff, and workers engaged in specific hazardous
activities in the field. We provide individual guidance to newhires and temporary workers in particular, as they are at ahigher risk of injury. This is accomplished through on-the-job
training to increase awareness and understanding of work
procedures and dangers before engaging in work.
Since fiscal 2020, we have carried out safety-focusedleadership training for managerial staff, with the goal ofstrengthening awareness of, and building commitment to,their roles and responsibilities concerning safety. Following
training, we also evaluate their changes in awareness andbehavior through one-on-one interviews with external
consultants. As of fiscal 2021, we had held 13 training
sessions attended by 240 people.

Ensuring the Occupational Health and Safety ofContractors
Approach

Activities

Hitachi conducts gap analysis for its safety management
systems, rules, and operations both within inside and outside
its factories. This is based on the occurrence of accidents
in which contractors were injured during construction,
installation, service, and maintenance work outside of ourContents

Hitachi Sustainability Report 2022

plants. We are also working to formulate common HitachiGroup guidelines and manuals for safety management
systems, and evaluation methods for integrated safety
management that includes contractors.
Hitachi Group Sustainable Procurement Guidelines
https://www.hitachi.com/procurement/csr/EN_HG_SPG.pdf

Introduction

Management

Environmental

Activities


Targets

GRI 403-6/403-10

Hitachi believes that the wellbeing of its employees are
essential for its sustainable growth. So, we are working tocreate a workplace in which all Group employees can worksafely and be healthy in both mental and physical health.
In fiscal 2020, we added questions relating to wellbeing
to our annual Global Employee Survey, and we expanded
these questions from fiscal 2021 onward. Going forward,
we will evaluate the effectiveness of measures related to
employee wellbeing.
In Japan, we will steadily implement health management
measures, strengthen mental health support in accordancewith new workstyles, and work to thoroughly prevent
lifestyle-related diseases. Over the medium and long term,
we will implement measures based on a Group-wide Healthand Hygiene Policy after ascertaining the actual conditionsof occupational health measures globally and identifying
issues.
P.093 Global Employee Survey

Governance

115

Assurance

Fiscal 2021 Targets and Results for Health Management and Fiscal 2022 Targets
Scope

FY 2021 Targets

FY 2021 Achievements――

Rate of mental illness
Percentage of employees with high stressaccording to the stress-check

Hitachi Group(Japan)Percentage of employees who havereceived special health guidance

Initiatives to Improve Employee HealthSocial

FY 2022 Targets
Less than 0.7%

10% decrease from fiscal
2020(less than 10.4%)

12.8%

Less than 10%

40% of employees

40.3% (estimate)

50% or more of employees

Health Support Initiatives in Japan
Occupational healthcare provided by occupational physicians, nurses, and other occupational healthcare personnel locatedboth on-site and at regional health-management centers serving multiple business locations
Health maintenance measures provided based on periodic medical exams and other examinations to prevent serious disease
Medical interviews and advice to prevent mental and physical disorders among employees working long hours
Consultations and guidance by occupational healthcare workers to address employees’ health concerns and encourage regularexercise
Qualitative improvement of occupational healthcare activities and the human capital development of occupational healthcare
workers through regular meetings, study groups, and training sessions attended by both occupational healthcare workers andhuman resources staff
Prevent mental health problems by promoting consultations and interviews with internal and external consultation services(in addition to the interviews with doctors required by law), as a proactive approach to employees who have been identified
through the stress check system as having high stress
Provide opportunities to help employees quickly resolve a wide range of concerns by creating an environment in which
employees can consult internal and external EAP*¹ consultation service*1 Employee Assistance Program

Absences Rate Trend
2017

2018

2019

2020

2021

Mental

0.60

0.64

0.65

0.62

0.66

Physical

0.26

0.24

0.25

0.22

0.21

Note: Percentage of employees taking sick leave for seven or more consecutive days and formally taking leaving system (Number of employees taking sick leave per month/
Number of employees per month × 100)
P.155 Social Data

Hitachi Sustainability Report 2022

ContentsManagement

Environmental

SocialAssurance

116

Line care (superior)

Human resources
division

GovernanceInitiatives Addressing Mental Health at Hitachi

Addressing Mental Health
Activities

Introduction

Occupational physiciansand occupational
healthcare workers

GRI 403-6

Stress-check system specified in law

Preventive management(while healthy)

Health improvement
activities (Seminars andhealth guidance fromoccupational physicians)(4) Individual interviews with employees who are stationed atcustomer company(5) Tips for working from home posted on the intranet(6) Identification of health issues using a survey of employees
working from home(7) Sending emails promoting non-statutory interviews(consultations) to employees identified through a stresscheck as highly stressed

Condition management(at beginning of andduring absences andleave)
Management to prevent
recurrence (fromdecision to return toafter returning to work)

Mental healthconsultations during
medical exams•EAP corporate
diagnosis•Line care training•360FBP*¹

e-learning; “Thinking about
mental and physical health”
versions 1–3

Workplacemanagement

Healthconsultations

Workplacemanagement
Promotion of various
types of health exams

Health consultations

Health exams ofvarious types

Regular consultations

Leave system

Support for returning towork
Programs supporting
return to work

Trial return system

Handbooks for employees
taking leave

Indicator management(while mentally
unhealthy)•Stress coping seminars•External and internal EAP
consultations and otherconsulting services•Stress-check approach forhighly stressed employees

Regular consultations(8) Providing a handbook for care by line managers whenworking from home
We will also clarify which target levels require special attention
based on our survey of employees working from home, a global
employee survey, and the opinions of occupational physicians.
And we will promote taking an effective and active approach.

Regularconsultations
Repetition management(during repetition after
return to work)*1 360FBP: 360-degree Feedback Program.

Workplacemanagement
guidance
Reduction oflong working
hours

Managementof thoseworking
extensive
overtime

Regular consultations

Managementof employees
on leave

Consideration of tasks upon
returnRegular consultations

Programs
supporting
return to work

Follow-up status checks after
return to work

Regularconsultations

Collaboration to support return to work
Guidance to external
facilities supporting return
to work

Promotion oftraining andeducation

Training for human resources staff(2) Expansion of a system for remote consultations withaddition to our internal one

Working environment improvement
workshops, etc.

Mental health education(1) Regular one-on-one interviews
occupational physicians(3) Introduction of an external EAP consultation service in

Self-care (individual)

Handbooks for managers
e-learning for managers

Hitachi has established measures addressing mental
health to be taken by employees, workplace managers,
occupational healthcare workers, and human resources
divisions. We are working to spread basic mental healthknowledge and understanding of ways to deal with stress aswell as reinforcing the ability of those in positions of authority
to respond to these issues. The mental illness incidence
rate among employees in fiscal 2021 was higher than in
the previous year, therefore we have continued to take aproactive approach to increases in mental strain such asthat caused by the prolongation of the pandemic.

Hitachi Sustainability Report 2022

Contents

Promoting Collabo-Health*¹
Activities



Introduction

Management

Environmental

SocialGovernance

117

Assurance

Encouraging Employees to Receive Medical Exams and Quit Smoking
GRI 403-6

As well as carrying out individual health improvement
initiatives according to their own unique characteristics,
Group companies in Japan strive to maintain and improve
the health of employees by taking full advantage of theservices offered by the Hitachi Health Insurance Society.*²
Hitachi is also working to ensure that all Group companies
are certified under the Health and Productivity Management
Organization Recognition Program by Ministry of Economy,
Trade and Industry. Health promotion initiatives are also
evaluated on an annual basis with recognition of the mostaccomplished companies and BUs within the Groupheightening the motivation among business owners andemployees to pursue such activities.
*1 Collabo-Health: A concept involving insurers like the Health Insurance Society
proactively working with business owners, with a clear division of labor and agood working environment, to effectively and efficiently improve the health of
insured persons (employees and their families), including preventive strategies.
*2 Hitachi Health Insurance Society: Hitachi Group employees and theirfamilies are members of this organization which is one of Japan’s largest
health insurance associations. As of the end of March 2022, there were 197
participating corporations and 409,943 insured persons (206,301 membersand 203,642 dependents).



Activities

In Japan, Hitachi has established a system offering financial
support for medical exams by the Health Insurance Society
and encourages employees aged 35 and over, to receive thegeneral physical and other exams specified in law as well as
targeted screening based on age, in order to promote early
diagnosis and treatment such as for lifestyle related diseases
and cancers.
Furthermore, as a response to the rise in metabolic
syndrome, and in addition to special health guidance madecompulsory for the Health Insurance Society, we actively
promote policies to prevent and control conditions such as
diabetes, cerebral strokes, and myocardial infarctions.
Hitachi has also continued its online quit smoking
program so that employees do not need to visit a clinic
during the pandemic. This helps employees to stop smoking
while working from home. Of the approximately 360
employees who signed up, more than 70% have succeededin stopping smoking.

GRI 403-6

Medical Exam and Screening Attendance Rates
(%)
100.0
90.0
80.0

93.2

92.9
81.4

80.7

78.5

81.3

80.6

79.3

98.0

95.8

96.8

83.5

82.7 83.0

81.2

81.1

80.6

56.3

56.6

57.1

82.2

85.5
84.7

70.0
60.0

51.1

53.2

50.0
40.0

35.6

37.1

38.7

39.1

39.3

2017

2018

2019

2020

2021 (FY)30.0
0General physical exam*¹■ Breast cancer screening*²▲ Uterine cancer screening*³ ● Stomach cancer screening*4
Intestinal cancer screening*4
Lung cancer screening*5*1 Men and women aged 35 and over *2 Women aged 30 and over
*3 Women aged 25 and over
*4 Men and women aged 30 and over*5 In fiscal 2016–2017, men and women aged 50 and over; from fiscal 2018,it changed to men and women aged 35 and over

Smoking Rate Trend umber of Hitachi Health Insurance Society Member
N
Corporations Certified Under the Health and Productivity
Management Organization Recognition Program
Category

FY 2020

FY 2021Large
companies

58(Including seven with
“White 500” status)

75(Including four with
“White 500” status)

Small-andmedium-sizedcompanies

41(Including three with
“Bright 500” status)

66(None with “Bright500” status)

(%)
40.0

31.5

30.9

29.8

28.4

27.6

2018

2019

2020

2021 (FY)

30.0
20.0

10.0
0.0

2017

Note: Employees aged 35 and over (results of specific medical examinations)Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Social

Measures to Prevent Infectious Disease
Activities

GRI 403-6

In addition to measures to prevent the spread of COVID-19, we have been vaccinating employees against hepatitis A, tetanus, andcholera to prevent them from contracting infectious diseases during business travel outside Japan.
In Japan, the Health Insurance Society has established an incentive point system to reward influenza vaccine recipients,
including employee family members, with the aim of preventing influenza outbreaks in the workplace. As an initiative to prevent
catching influenza, we recommend employees get vaccinated before the flu season gets underway. The program is used by about
120,000 employees and their families every year.
From fiscal 2019 to fiscal 2021, we introduced an incentive point system in cooperation with the Health Insurance Society to encourage
applicable employees to receive an antibody test for and vaccination against measles and rubella—both of which are now free of charge. Thisis part of our efforts in Japan to target male employees of the generation not covered by the national MR vaccination program as children.

Promoting Measures to Prevent the Spread of COVID-19
As a measure to prevent the spread of COVID-19, we ask all employees to checktheir temperature and physical condition before leaving for work, and to always stayhome if they have a fever or feel unwell. We encourage the full implementation of
the government’s infection prevention guidelines. We have implemented full-scale
infection prevention measures according to the type of work. This includes providing
disinfectant and masks to employees engaged in the maintenance of social
infrastructure. Hitachi has taken a whole range of other preventive measures suchas mandatory mask wearing at all sites as well as thorough temperature checks andworkplace disinfection based on the installation of thermal cameras, non-contact
thermometers, and automatic sanitizer dispensers at building entrances.
We have also spaced-out seating in offices, employee cafeterias, andconference rooms, installed droplet blocking partitions, limited the number ofpassengers in elevators, suspended the use of smoking rooms and ensured physicaldistancing in common areas.
The Hitachi Group recommends that employees get vaccinated against
COVID-19 to prevent infection and serious illness. In Japan, we conducted workplacevaccinations, and offered vaccination to the families of employees at some of our
locations. Altogether, we have vaccinated approximately 75 thousand people.
Hitachi Group’s General Policies in Response to COVID-19
https://www.hitachi.com/information/ImportantNotices/management.html

Helping to Protect Employees
Against COVID-19
We are providing a wide range of
support to address a broad array ofmental and physical health concerns
among long-term workers from home.
For example, we provide remotehealthcare counseling, offer tips on
staying healthy while working from
home, support foreign employees
seeking medical services in Japan,
and ensure the human rights of
COVID-19 infected employees.
Hitachi Group companies
outside Japan have also been
supporting employee health during
the pandemic. Their efforts include
holding mental health workshops andproviding EAP consultation services.

Governance

Assurance

118

Health Promotion Initiatives for Employees andTheir Families
Activities

GRI 403-6

To encourage healthy lifestyles among employees andtheir families, the Hitachi Health Insurance Society has
established a portal site for individuals entitled MY HEALTH
WEB. By providing information on health exam results anda system of incentive points allowing employees to receive
rewards for entering health-related activities, the site raises
health awareness, helps employees understand the state of
their own health, and offers a range of support for adopting
a healthier lifestyle.
In fiscal 2021, we completely overhauled MY HEALTH
WEB and increased the employee utilization rate to 80%
through various promotional activities.

Achievements in FY 2021
In fiscal 2020, in order to encourage regularcheckups, Hitachi added an online service that allows
employees and their families to make appointments
for medical examinations using MY HEALTH WEB.
Furthermore, in fiscal 2021, to support employees’
health management in the COVID-19 pandemic, we
held our first “Autumn Walking Campaign” in two
years, with about 50,000 participants.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialHelping Employees in Japan Stay Healthy and Promote Further
Initiative

OutlineRemote counselingby occupational
physicians

Established remote counseling by occupational physicians and nurses as an early-response measure to address the mental andphysical health concerns of employees working long-term from home

Tips on staying
healthy whileworking from home

The website provides advice for maintaining physical and mental health as well as contact information for health consultation
providers. It provides information on ways to keep mentally and physically fit—such as stress-coping strategies and simple, athome exercises—and links to career, family-health, and other counseling services

Inbound Medical
Assistance
Services

A 24-hour year-round call center offering medical assistance in 16 languages for foreign employees and their families in Japan,
including referrals and appointments to medical facilities and arrangements for emergency transport and hospitalization, andother services

Supporting the Mental Health of Employees Outside Japan
RegionOutlineEurope⿟ Establishment of a mental health consultation service
⿟ EAP consultation services
⿟ Mental health workshops for managers and employees
⿟ Health resilience training⿟ Providing information on mental health measures through in-house newsletters⿟ Virtual sessions on topics such as team leadership while working from home as well as workstyles and work lifestyles toimprove productivity, etc.

United States⿟ EAP consultation services
⿟ Wellness programs (virtual yoga and wellness workshops)⿟ Setting recommended dates for taking leave

Asia⿟ Virtual engagement activities (dialog between top management and employees, recreation, etc.)
⿟ Wellbeing programs (Build Mental Resilience)⿟ Structured 1-on-1 communications
⿟ Daily team communication and health status management by managers

Governance

Assurance

119

Health and Safety Considerations for Nuclear
Businesses

GRI 403-7

Since 2008, Hitachi has been working with the world’s
leading nuclear power plant vendors to develop
voluntary, private principles of conduct covering theexport of nuclear power plants and reactors. The
Nuclear Power Plant and Reactor Exporters’ Principles
of Conduct were formally revealed on September
15, 2011. They were adopted by all involved intheir development, and we have also indicated ouradherence to them.
Regarding our employees and other persons
employed at nuclear sites under the Hitachi Groupumbrella, we have performed thorough exposure
management based on our internal management
systems and performed evaluation of radiation damage(dose management).
For health management in particular, ourmanagement indicators for radiation exposure arestricter than those set by Japan’s Ministry of Health,Labour and Welfare. We monitor physical and mental
health along with exposure doses even for employeesof partner companies, and an occupational physician
from Hitachi visits sites to perform examinations andoffer health advice.

P118 Measures to Prevent Infectious Disease

Nuclear Power Plant and Reactor Exporters’ Principles of Conduct
https://www.hitachi-hgne.co.jp/en/principle/index.html

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

120

Freedom of Association and Collective Bargaining
Respecting the Rights of Employees
Approach

GRI 102-41

Hitachi respects and supports human rights as recorded in
the ILO Declaration on Fundamental Principles and Rights
at Work. And the Hitachi Group Codes of Conduct call forthe upholding of the fundamental rights of employees inline with international standards and in accordance with thelaws of each country and region. In addition, we have signed
the United Nations Global Compact, which states that,“businesses should uphold the freedom of association andthe effective recognition of the right to collective bargaining”
of employees.
Hitachi Group Codes of Conduct
https://www.hitachi.com/corporate/about/conduct/index.html

Mutual Communication Between Employees
and Management
SystemThe relationship between employees and management at
Hitachi, Ltd. and Group companies in Japan is stable withhealthy ongoing dialogue.
In Japan, the Group companies espouse the threefundamental rights of labor unions (to organize, to bargain
collectively, and to act collectively), and we are working topromote mutual understanding through Dialogue between
employees and management throughout the entire Group.
Plus, the Central Management Council, the Business UnitsManagement Council, and the Business Sites Management
Council work to enhance mutual communication between

employees and management. This contributes to smoothmanagement and business development and helps
improve working conditions for union members. We usuallynegotiate with the Hitachi Workers Union, from February
to March each year, to determine wages, bonuses, andcollective agreements for the next fiscal year. We have alsoestablished 13 committees, advisory panels, and roundtable conferences, including the Next 100 Labor andManagement Committee, the Central Wages Committee,
and the Employment and Work Style Advisory Panel . These
committees each meet one to four times a year to share
information, exchange opinions, and hold discussions.
All Hitachi, Ltd. all employees, with the exceptionof management, can join the Workers Union, and themembership rate is approximately 96%, as of March 31,
2022.
At Hitachi, Ltd., we also hold quarterly Hitachi Groupmanagement meetings with the labor unions of groupcompanies in Japan that belong to the Federation of HitachiGroup Workers Unions (FHGWU), to share information andexchange views and opinions on Group business conditions.
In addition, we have established five round-table conferences
and committees, such as the Hitachi Group Health and
Safety Round-table Conference , which each meet once or
twice a year to share information and exchange opinions.
Group companies outside Japan also actively
pursue dialogue with individual labor unions and theirrepresentatives in accordance with the laws and regulations
in each country and region to deepen mutual understandingof employee working conditions and treatment as well as
business conditions.

Labor Management Dialogue at Regional
Headquarters in China and Europe
Hitachi (China) Ltd.
To maintain good communication with employees,
Hitachi China holds management roundtable meetings
with labor unions to share information on corporate
management conditions and issues. In fiscal 2021, the22nd meeting was held online.
Moreover, the company and its labor unions work to
deepen mutual understanding and protect the rightsof employees by forming contracts related to working
conditions, wage revisions, protection of female
employees, and the like.
Hitachi Europe Ltd.
Since 1996, our European labor management meetinghas been held every year as a place for senior
management and employees to exchange opinions on
the Group’s business environment and strategies.

Hitachi Sustainability Report 2022

Contents

Notification of Work-related Transfers andReassignments
SystemGRI 402-1

The collective agreement between Hitachi, Ltd. andthe Hitachi Workers Union states that any transfer orreassignment of an employee for work-related reasonsshould adequately take into consideration the situation of
the employee as well as requiring the company to promptly
inform the Hitachi Workers Union of the decision. Morespecifically, in cases of large-scale transfers, reassignments,
or moving the company will consult with the labor union
regarding the basic issues involved.

Labor-Management Cooperation toward
Improving Occupational Health and Safety Levels
SystemHitachi, Ltd. and the Hitachi Workers Union are dedicatedto improving occupational health and safety levels throughemployee management cooperation. This includes signinga collective agreement on the promotion of, among otherthings, occupational health and safety measures, a healthand safety committee, education and training programs, andhealth checks for employees.
The committee works to ensure a healthy and safe work
environment through their initiatives that include planningand tracking occupational health and safety activities eachyear, reviewing their measures to prevent occupational
accidents, and sharing information on whether employees
have received their annual health check-ups.
P.111 Occupational Health and Safety

Introduction

Management

Environmental

SocialGovernance

Assurance

121

Hitachi Sustainability Report 2022

Contents

Introduction

Human Rights
Why
ー Why it matters ーManagement

Environmental

Governance

Assurance

122

Relevant SDGs
GRI 103-2

Hitachi understands that respecting human rights in business activities is not only essential for corporate sustainable development but is also a responsibility that all companies
must fulfill. In 2013, to clarify corporate responsibility with respect to human rights, we established the Hitachi Group Human Rights Policy based on Hitachi’s Corporate
Mission and Group Vision and designated it one of the highest codes governing our internal regulations. Under the Hitachi Group Human Rights Policy, we pursue initiatives toensure respect for human rights including human rights due diligence (HRDD) to mitigate human rights risks, not just within Hitachi itself, but for everyone in our supply chain orotherwise involved with our business activities, products, or services.

How

What

ー What we are doing ーRespect forhuman rights
throughout thevalue chain

Social・Group structure forpromoting human rights
・HRDD initiatives

ー How we are doing it ー

Policy and promotion
structure・Working with procurement
partners
・Human rights education
and awareness raising for
employees and executive
officers

Hitachi is working to strengthen human rights risk management worldwide with efforts that include tasking the Chief
Sustainability Officer with Group-wide human rights promotion and determining policies based on a grasp of the status of
HRDD progress throughout the Hitachi Group. Also, HRDD Execution Managers Meetings are held once or twice a year as
occasions for Group-wide information sharing and deliberation.
Achievements in FY 2021

HRDD initiatives

Investigated the actual situation concerning potential forced labor and violations of migrant workers’ rights, which were identified ascommon priority risks for the Hitachi Group
Provided guidance to operational sites where there were issues to be improved based on the results of investigation of the actual
situation and implemented appropriate measures there

Working with procurement
partners

Conducted investigations of the actual situation concerning potential forced labor and violations of migrant workers’ rights for
procurement partners as well

Raise human rights
awareness among
executives and employees
and education

Continuously worked to raise human rights awareness among all Hitachi Group employees through opportunities such as trainings,
and message from the President & CEO on Human Rights Day
Carried out executive human rights training taught by an external lecturer

Global Group grievancemechanisms

The facts related to all reports, including those concerning harassment and human rights issues, are subject to thoroughinvestigation. Reporters are informed of the investigation results, and remedial action is taken when necessary.

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

123

Respect for Human Rights Throughout the Value Chain
Respecting the Human Rights of All People
Approach

At Hitachi, we believe that respecting human rights is our duty
as a global company, and essential to conducting business.
We are making continuous efforts not to engage in any actsthat may impair individual dignity or discriminate on bases such assex, sexual orientation, age, nationality, race, ethnicity, ideology,
belief, religion, social status, family origin, disease, or disability.
Engagement with stakeholders is vital to understanding
and managing our impact on human rights.

Hitachi Group Human Rights Policy
PolicyIn May 2013, we formulated the Hitachi Group Human
Rights Policy and positioned it as one of our highest internal
standards. This policy declares our respect for human rights
as recorded in the International Bill of Human Rights*1 andthe International Labour Organization (ILO) Declaration on
Fundamental Principles and Rights at Work. The declaration
stipulates the basic rights at work, including freedom of
association and the effective recognition of the right to collective
bargaining, the elimination of all forms of forced or compulsory
labor, the effective abolition of child labor, and the elimination of
discrimination in respect of employment and occupation. This
policy shapes Hitachi’s approach to meeting the responsibility
to respect human rights including implementing human rights
due diligence (HRDD)*² in line with the UN Guiding Principles on
Business and Human Rights,*³ providing appropriate education
to employees, adhering to laws and regulations in all theregions and countries where we operate, and seeking ways tohonor the principles of international human rights when facedwith conflicts between internationally recognized human rights
standards and national laws.
To formulate this policy, we invited representatives of theEuropean Commission, ILO, NGOs, corporations, and lawyers
specialized in human rights issues to take part in stakeholder
dialogues. We then incorporated their opinions and suggestions
into the policy that was discussed and approved by the Senior
Executive Committee.
Hitachi has been a member of the United Nations Global
Compact since 2009. We have declared our support for the
UN Global Compact, which outlines a set of universal principles
that companies should adhere to in the four areas of humanrights, labor, the environment, and anti-corruption. Accordingly,
we are promoting efforts in each area.
With respect to the human rights of children, we are
striving to ensure there is no child labor nor forced labor in
our company or supply chain. The Hitachi Group Codes ofConduct stipulates that consideration be given to human rights,
including those of children.
*1 International Bill of Human Rights: Collective name for the Universal
Declaration of Human Rights and International Covenants on Human Rights
adopted by the United Nations.
*2 Human rights due diligence (HRDD): An ongoing process to identify andassess potential and actual human rights negative impacts, take appropriate
action to prevent or mitigate potential impacts, track the effectiveness ofactions to address impacts, and communicate externally.
*3 Guiding Principles on Business and Human Rights: Included in the March2011 “Report of the Special Representative of the Secretary-General on theissue of human rights and transnational corporations and other businessenterprises, John Ruggie” (A/HRC/17/31).

Hitachi Group Human Rights Policy
https://www.hitachi.com/sustainability/esg_summary/pdf/human_rights_policy.pdf

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Group Codes of Conduct
https://www.hitachi.com/corporate/about/conduct/index.html

Hitachi Group Sustainable Procurement Guidelines
https://www.hitachi.com/procurement/csr/EN_HG_SPG.pdf
P127 Human Rights Awareness Initiatives Targeting Procurement Partners
and Procurement Personnel

Group Structure for Promoting Human Rights
Structure

GRI 406-1

Hitachi is working to strengthen human rights risk management
worldwide with efforts that include tasking the Chief Sustainability
Officer with Group-wide human rights promotion anddetermining policies based on a grasp of the status of HRDD
progress throughout the Hitachi Group. Also, we have set up a
project team (composed of members from the human resources,
procurement, and sustainability divisions) in the Hitachi, Ltd.
headquarters to promote HRDD. The team takes charge of core
promotion activities based on inter-divisional cooperation that
include investigating HRDD promotion measures for the HitachiGroup and its procurement partners, preparing implementationoriented manuals and guidelines, and responding to inquiries
from Business Units (BUs) and Group companies.
Hitachi comprises diverse business entities and must
manage human rights risks that take into consideration theindividual characteristics of each of their businesses andvalue chains. Accordingly, we are advancing the construction
and maintenance of a promotion framework with the aim of
responding to global human rights risks by making the headsof BUs and presidents of key Group companies responsible for
HRDD promotion, appointing managers to take charge of HRDD

Hitachi Sustainability Report 2022

Contents

implementation in respective business entities, holding HRDD
Promotion Meetings, and so on. Also, overseas subsidiaries
of BUs and key Group companies work closely with regional
headquarters outside Japan to share region-specific issues(cultural and religious backgrounds, legislative trends, etc.) anddiscuss ways of responding to them.
In addition to this, HRDD Execution Managers Meetingis held once or twice a year as occasions for Group-wide
information sharing and deliberation. Important matters
discussed by the meeting may also be deliberated anddecided on by the Senior Executive Committee andpresented to the Board of Directors as necessary inaccordance with the level of seriousness.

Introduction

Management

In line with the UN Guiding Principles on Business andHuman Rights, Hitachi manages human rights risks inaccordance with the following HRDD processes.
Business processgagEne stakeholdersCommunicate

AssessHitachi Group Human
Rights Due Diligenceprocess
Integrate and Act

Board of Directors

HRDD Execution Managers Meeting

Governance

Assurance

124

Activities

Track

Sustainability Promotion Meeting

Social

HRDD Initiatives

 ramework for Promoting Respect for Human Rights
F(Fiscal 2022)

Senior Executive Committee

Environmental

Source: Hitachi Group “Human
Rights Risk Management
Implementation Manual”
1st edition (partiallyrevised)Assess: Assessing actual and potential human rights impacts• Prioritizing Risks
In fiscal 2021, the entire Hitachi Group addressed theissues of forced labor and violations of the rights of migrant
workers, which the Group had defined as a common priority
risk for the Group. We identified these priority risks byanalyzing and reevaluating information such as the results of
our HRDD to date and feedback from human rights NGOson them, human rights issues identified in Hitachi rules andguidelines, information and observations by NGOs, experts
and the media, evaluation criteria for corporate efforts basedon international initiatives, the results of internal inspections
by procurement partners and Group companies, and trends
in international legislation.
P126 Our HRDD Initiatives to Date

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

• Understanding the Situation
To understand the actual situation surrounding these priority
risks, we created a priority risk questionnaire to assess thesituation within the Hitachi Group and procurement partners.
This questionnaire has been reviewed by the ASSC (The Global
Alliance for Sustainable Supply Chain), an NGO with experienceand expertise in supporting companies from the perspectiveof sustainability, including human rights and environmental
issues. They provided advice regarding questions to include,
and consistency with industry and international standards
such as those of the ILO. This questionnaire goes beyond
simply understanding the level of our efforts, and aims tolead to continuous improvement through consideration andimplementation of remedies and countermeasures based on theevaluation results for each BU or Group company.
We investigated the actual situations of manufacturing
workers (including temporary workers, technical interns)
working at operational sites with 300 or more employees fora total of 15 major BUs and Group companies. In Southeast
Asian countries, which are said to have challenges on forcedlabor and violations of migrant workers’ rights, as NGOs
and the media have indicated as well, we surveyed all
manufacturing workers at manufacturing sites regardless ofthe site’s size. The questionnaire was composed of about 30
questions relating to labor, occupational health and safety, andmechanisms for responding to grievances, with each offering
four choices to evaluate the level of efforts implemented. Eachchoice clearly specified the target conduct in objective terms
so that each operational site surveyed was able to understandwhat needs to be done to improve the current level of their own
business site.

Contents

Hitachi Sustainability Report 2022

 reakdown of Responses by Country/Region
B(205 Operational Sites Total)
Japan

64

Central, andSouth America

10Southeast Asia

35

Oceania2

Europe26

Middle East

2

China

24

Taiwan

2

India

20

South Korea

1

North America

18

Russia1• Summary of Investigation Results
The results concerning labor, occupational health and safety,
and the grievances mechanism were as follows.
Survey Results

1.9%
2.0%
9.7%

2.5%

1.8%
General

12.5%

83.2%
Labor

86.4%
0.2%
1.7%
2.0%

Occupational
health andsafety

0.2%
3.4%
1.3%

95.1%
Grievances
mechanism

96.1%

Introduction

Management

Environmental

SocialChoiceLevel

A

Efforts in accordance with international standards (best case)

B

Borderline acceptable for Hitachi efforts

C

Below the borderlines required by HitachiD

No efforts made on this matter

Assurance

125

Labor

useful for making corrections and improvements at each

We were able to confirm that most operational sites were taking
appropriate measures for areas such as proper conclusion of
employment contracts, proper payment of wages, provision ofholidays, and compliance with local labor laws. However, we
discovered that there were several operational sites that did notknow if there were recruitment fees to be paid by workers.

operational site.

Occupational Health and Safety
We were able to confirm that most operational sites werecarrying out occupational health and safety efforts inaccordance with standards. However, we discovered thatseveral operational sites did not provide multilingual safety
education for migrant workers.
Grievances Mechanism
Many operational sites had put in place policies and proceduresfor handling reporting and maintaining confidentiality. On theother hand, there were several operational sites that answeredthat there was no reporting mechanism in-place, or that
there was one, but it was not available in a language that theworkers could understand. We realized that we needed tofurther publicize the existence of the Hitachi Global Compliance
Hotline established in fiscal 2020 as a unified contact point for
consultation and reporting.

Breakdown of responses from operational site ■ A ■ B ■ C ■ DAnswer Choice Levels for the Questionnaire

Governance

In July 2021, ASSC, which was commissioned to review thepriority risk questionnaire, facilitated a workshop for BUs
and Group companies that were involved in the survey toanalyze the response results and consider countermeasures.
We also published the A Guide for Considering Measures
to Address Hitachi Group Priority Risks (Forced labor andviolations of the rights of migrant workers). This guide isIntegrate and Act: Integrating and acting upon the findings
In response to the results of this survey, each BU and Group
company is working to make improvements and provide
guidance for issues to operational sites where there were
issues to be improved. Examples of the primary measurestaken by operational sites are listed below:
Key Countermeasures Implemented by Operational Sites
Item

Example Countermeasure

Control ofidentification
documents, etc.

•B
 ecause some sites were keeping IDs, the sites
changed the rules to ensure the documents beretained by workers.
• Installed a personal safe for each employee, so thatthey can manage these documents themselves.

Recruitment fees
borne by directly
employed
workers•C hanged the rules so that recruitment expenses
borne by workers will be instead borne by thecompany.
•D irected operational sites not to use referral
agencies that push costs onto workers.

Recruitment
fees paid bytemporaryworkers• Requested that staffing agencies refund workers.

Collective
bargaining•D eveloped guidelines that stipulate that if an
employee requests to negotiate, the company will
accept the request, and ensure that site managers
are aware of these guidelines. (Malaysia)

Entering provided
housing•D irected operational sites to install locks on rooms
for the sake of employees.

Health & Safety
Training•F or foreign workers (temporary workers), provide
work standards and safety training materials intheir native languages with the cooperation of
temporary staffing agencies.

Fire andemergency
response• Employed
diagrams and other tools so that all
workers could understand.

Grievancemechanisms•N otify operational sites that multilingual support isavailable through the Hitachi Global Hotline.

Hitachi Sustainability Report 2022

Contents

Track: Tracking responses
While majority of operational sites implemented theircountermeasures during fiscal 2021, several operationalsites carried implementation over into fiscal 2022, as
they were still developing internal rules. We will conduct afollow-up investigation on these operational sites during
fiscal 2022.
Communicate: Communicating how impacts are addressed
We disclose information on initiatives concerning respect forhuman rights, including HRDD, through our Sustainability
Report, websites, and other means. We also strive todeepen understanding of Hitachi's initiatives throughappropriate communication concerning questions,observations, and the like from investors, ESG evaluation
organizations, NGOs, and media outlets, and incorporate
opinions from inside and outside the company when
considering future countermeasures.
In fiscal 2021, we took measures to address priority
risks common to the entire Group. From fiscal 2022, wewill apply the knowledge gained through our efforts in fiscal
2021 to evaluate the human rights risks for each BU andGroup company, with consideration for the characteristics
specific to each business and value chain.
Our HRDD Initiatives to Date
Hitachi has engaged in HRDD since 2013, with thecooperation of NGOs, NPOs, and outside experts.

Introduction

Management

Environmental

SocialGovernance

Assurance126Implementation Status of HRDD
Initiatives
FY 2013

Implemented HRDD pilot program at specific Group companies with the support of the NPOs Shift and Business for Social Responsibility(BSR). Also analyzed and evaluated human rights risks in six ASEAN countries.

FY 2014Created guidance documents for implementing HRDD in collaboration with Shift.

FY 2015

Initiated HRDD in procurement divisions under the guidance of Shift. Headquarters, BUs and Group companies assessed and prioritized
human rights risks that employees are likely to confront in the supply chain and explored mitigation strategies. Identified priority items
and high-risk countries based on information concerning countries’ corruption-related situations published by NGOs and others, publicly
available information such as human rights-related reports, trading conditions, results of procurement partners’ sustainability audits, externallyindicated matters, and so on. Based on this, received feedback from Human Rights NGOs regarding priority issue identification methods
and future measures, led to revision of CSR Procurement Guidelines for procurement partners and checklists for sustainability monitoring,
expansion of the countries subject to audits, and holding of information sessions for procurement partners.

FY 2016

Initiated HRDD in human resources divisions under the guidance of Shift. Assessed and prioritized human rights risks for employees throughinterviews held with the human resources personnel of BUs and Group companies in Japan and subsidiaries outside Japan and explored
mitigation strategies. In HRDD efforts in human resources divisions in fiscal 2016, country-specific assessments of risks for employees were
performed. Although situations vary among countries, we identified the top risks as those concerning working hours, workplace health andsafety, harassment/discrimination, and freedom of association. Many of those items were already being addressed as human resources
measures, so we decided to continue them. Improving grievance mechanisms was another matter that came up and led to measures
including the improvement of Intranet-based guidance and integration with the Hitachi Global Compliance Hotline.

FY 2017

Incorporated results of HRDD in procurement divisions into the revision of CSR procurement guidelines for suppliers ; revised the checklist
used in procurement partners sustainability monitoring.

FY 2018

Assessed and prioritized human rights risks and considered medium-term action plans for several BUs and Group companies under theguidance of Shift. Also held workshops for the human resources division at headquarters, verified the results of HRDD in fiscal 2016, andconsidered countermeasures.
Used our checklist for procurement partners to perform self-checks of approximately 100 Group companies in Southeast Asia under theguidance of Verite Southeast Asia. The necessity of enhancing measures to prevent forced labor and respect the human rights of migrant
workers was observed at some operational sites.

FY 2019

Analyzed and reassessed results of HRDD to date to determine human rights risks that the Hitachi Group must address as a whole

FY 2020

Established the HRDD Promotion Project Team. Prepared and deployed a survey concerning priority risks common to the Hitachi Group(forced labor and violations of the rights of migrant workers) within the Group with the support of the NGO The Global Alliance for Sustainable
Supply Chain (ASSC). Created our Human Rights Risk Management Implementation Manual. This manual, incorporated Shift’s advice on
consistency with the UN Guiding Principles on Business and Human Rights and explanations of each step in HRDD.
Implemented measures to improve grievance mechanisms, such as consolidating the Hitachi Global Compliance Hotline.

FY 2021

Implemented countermeasures (provided corrective guidance, held workshops, published countermeasure consideration guide, etc.)
at each BU and Group company, based on the fiscal 2020 survey, to address the Group's common priority risks that are grounds forconcern.

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Sustainability Report 2022

Contents

Working with Procurement Partners
GRI 408-1/409-1

Activities

To ensure respect for human rights throughout our entire
supply chain, Hitachi is promoting understanding of Hitachi’s
policy with respect for human rights among procurement
partners by including the Hitachi Group Human Rights Policy
in our Hitachi Group Sustainable Procurement Guidelines.
And we are working to ensure they are put into practice.
Moreover, these guidelines make it clear that child laborand forced labor should be eliminated. We are working toensure complete awareness throughout our supply chain
through efforts such as distributing them to our procurement
partners, and holding sustainable procurement seminars.

Introduction

Management

Environmental

Social

FY
2019

FY
2020

127

importance of respect for human rights from the President &procurement partners using a survey similar to the survey on
forced labor and violations of the rights of migrant workers
that we used within the Hitachi Group.

CEO on Human Rights Day, and other efforts.
Annually in Japan, we aim for every employee to attend
group training, lectures, or video-based educational activities
held at each business site or Group company. Also, in aneffort to prevent harassment, we held video-based training on
the theme of harassment (in the workplace). The objective
was to increase the skills of those responsible for handlingharassment issues (counselors), including managerial
personnel. The training was attended by 1,200 employees
across the Hitachi Group. In addition to this, we use various
training and educational activities, such as onboarding training
directed at new hires, training for job positions, and training for
employees transferred abroad, to convey the significance ofrespecting human rights in their own work to every employee.
For Group companies outside of Japan, the regional
headquarters plays the role of promoting and supporting
collaboration. To this end, we invited lecturers from NPO
Shift to conduct implementation training for promotion
representatives.

P132 Responsible Procurement

Human Rights Education and Awareness Raising
for Employees and Executive Officers
Training

GRI 412-2

In accordance with the Hitachi Group Human Rights Policy,
Hitachi continually strives to familiarize all Hitachi Group
employees with human rights by conducting human rights
e-learning, distributing human rights messages on theTargetInitiatives

European Group companies

Procurement personnel from European Group companies formed the Responsible Supply Chain Working Group.

Procurement partners in China

Held CSR procurement seminars to explain Hitachi Group CSR policies and activities as well as the severity ofhuman rights risks.

European Group companies

Created a webinar titled “Implementing the UN Guiding Principles on Business and Human Rights” for procurement
personnel in the working group mentioned above.

Procurement partners in
ThailandHeld CSR procurement seminars to explain forced labor by providing case studies.

European Group companies

Introduced human rights risk analysis into the selection of procurement partners which should be included insustainability monitoring. The above-mentioned working group discussed the self-check results under the guidanceof Shift and explained the situation regarding the development of due diligence legislation in Europe.

Procurement partners in
China, Thailand, and other
Asian countries

Used e-learning to explain CSR measures to procurement partners in China during the COVID-19 pandemic. For
procurement partners in other parts of Asia, sustainability briefing webinars were held. By sharing the results ofprocurement partners’ sustainability monitoring in the region, we raised procurement partners’ awareness thereby
helping each company to enhance its sustainability activities.

European Group companies

Held a responsible supply chain working group. Together with the NPO, Shift, we investigated disparities between
European legislative trends and the laws of some member states, and the UN Guiding Principles on Business andHuman Rights. Conducted webinar targeted specifically at human resources and legal divisions. Began to consider
establishing an HRDD Secretariat including sustainability, procurement, human resources, and legal divisions.

Procurement partners in China
and other Asian countries

Held online information sessions in China and other Asian countries. In China, we explained our policy and activities
concerning sustainable procurement activities including HRDD. In other parts of Asia, we raised procurement partners
awareness by inviting outside experts familiar with environmental and human rights issues to provide training, andshared the results of monitoring, thereby helping each procurement partner to enhance its sustainability activities.

FY
2021

Assurance

In fiscal 2021, we ascertained actual conditions at our

Human Rights Awareness Initiatives Targeting Procurement Partners and Procurement Personnel

FY
2018

GovernanceNote: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Implementation Status of Activities to Raise Awareness of
Human Rights
TargetAll HitachiGroupexecutives
andemployees

Executive
officers ofHitachi, Ltd.

Details

Number of participants
in FY 2021

Distributed a human rights
message by President &CEO on Human Rights Day(every year)

Distributed to approx.
238,000 messages

E-learning course on
business and human rights(provided in 15 languages,
taken about once every
three years)

Not implemented in
FY2021 (A total ofmore than160,000 people took it
in FY 2019)

Lecture on human rights
by an outside expert (heldannually)

Attended by 27 people

Hitachi Sustainability Report 2022

Contents

Introduction

Management

SocialGovernance

Assurance

128

Handling Various Human Rights Issues

Achievements in Fiscal 2021

Activities

Every year, we provide human rights training to
executives of Hitachi, Ltd. In fiscal 2021, this training
was conducted by an external lecturer. He gave
lectures on changes in the social context that havemade human rights issues closely related to business,
how to enhance human rights risk management while
conducting business globally, and how it is essential
to always be aware of human rights risks when
making management decisions.

We are working to appropriately handle various human rights issues, including problems concerning the work environment offoreign technical interns in Japan, and global supply chain issues related to Uighurs.
P132 Responsible Procurement

Responses to Human Rights Issues
Human Rights Issue

Global Group Grievance Mechanisms
SystemEnvironmental

GRI 102-17

Hitachi has established a Group-wide internal reporting
system called the Hitachi Global Compliance Hotline. We
investigate all reports, including those concerning humanrights and harassment, and following verification of therelevant facts, inform those who submitted reports of theinvestigation results. We make every effort to deal withsituations as appropriate, including taking remedial action
when necessary.

Problems concerning
foreign technical interns

P173 Hitachi Global Compliance Hotline (Whistleblower System)

Timeline

Event/Handling2018

Hitachi, Ltd. and 10 Group companies received recommendations for improvement of practicaltraining from Japanese Organization for Technical Intern Training for alleged violations related to the Act
on Proper Technical Intern Training and Protection of Technical Intern Trainees.

September 2019

Hitachi. Ltd. received improvement orders from the Immigration Services Agency of Japan and theMinistry of Health, Labour and Welfare regarding establishment of its system for carrying out proper
technical intern training according to authorized plans.

October 2019

Each company that was subject to a recommendation for improvement or improvement ordersubmitted a report to the Organization for Technical Intern Training that it had completed improvements
according to the content of the improvement order, and all of them were accepted.

March 2020

Established Group-wide policies, guidelines, and check systems for conducting technical intern training

November 2020

The entire Group is thoroughly committed to preventing recurrence through internal audits and the like.
In accordance with the intent of relevant laws and regulations on the Technical Training Program aswell as the Hitachi Group Human Rights Policy, we continue striving to implement appropriate technicaltraining from the viewpoint of respect for human rights.

March 2020

A report by the Australian Strategic Policy Institute pointed out that one of our procurement partners
may be involved in forced labor of Uighur people.

December 2020

Hitachi, Ltd. conducted an audit through a third party based on international standards of the
management system of the procurement partner identified, particularly with respect to personnel
management. As a result, we found no issues related to forced labor. Hitachi will continue to strive,
through various forms of engagement, to ensure respect for the human rights of not only those within
our Group, but of our procurement partners as well.

Response to Issues
Concerning Uighurs

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialInitiatives to Promote Broad-Based Black Economic Empowerment (B-BBEE) in South Africa
As Hitachi conducts business in South Africa, it pursues activities aligned with the country's Broad-Based Black Economic
Empowerment (B-BBEE)*1 policy to create employment and economic development. As of August 31, 2022, Hitachi Energy
in Southern Africa has achieved level 1 on B-BBEE.
Hitachi Energy South Africa is obliged to meet the Employment Equity Act (EEA)*2 targets and plans, which arereviewed every 3–5 years with annual progress reporting. Its ultimate aim is to ensure that it maintains diversity in theworkforce, including gender diversity.
The company's training strategy is aligned with the Skills Development targets as linked to B-BBEE and the company
also invests in its current employees, in line with diversity and equity, to enhance the performance and promotability ofinternal talent. Hitachi Energy South Africa hires graduates and trainees with Historically Disadvantaged South Africans(HDSA) backgrounds annually.
Currently, employees with HDSA backgrounds comprise 26.4% of those in management/supervisory positions at
Hitachi Energy South Africa.
*1 B-BBEE: Companies and organizations in South Africa are scored on their B-BBEE approaches and contributions, and are rated on a scale from level 1 (the highest) to 8,
and “non-compliant.”*2 Employment Equity Act (EEA): A South African law that promotes fairness and equal opportunities in the workplace for all employees.

Governance

Assurance

129

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Value Chain ManagementWhy
ー Why it matters ー

Governance

Assurance

130

Relevant SDGs
GRI 103-2

With the globalization of the Hitachi Group’s businesses, procurement risks are also increasing in supply chains. That is why we are going beyond merely understanding
and mitigating supply chain risks to pursue sustainable procurement instead. We recognize that we must actively work with our procurement partners to improve social,environmental, and economic value for our customers, and we are working with procurement partners to achieve carbon neutrality throughout our value chain as well.
Hitachi was founded on the principles of “Harmony, Sincerity, and Pioneering Spirit.” We ensure product quality and safety by adhering to these principles, along with thebasics and ethics, and by putting right and wrong before profit and loss. All employees embrace our policy of making quality and reliability a top priority, and this strengthens
our quality assurance activities. By continuing to provide high-quality, thoroughly safe products, Hitachi will maintain the trust of customers and society.

How

What

ー What we are doing ーResponsible
Procurement

Social・Implementing sustainableprocurement
・Encouraging procurement
partners to reduce theirenvironmental load・Implementing
procurement BCP
initiatives
・Responding to the conflictminerals issue

ー How we are doing it ー

Policy and promotion
structure

Positioning the Hitachi Group Global Procurement Code as the highest code, Hitachi promotes sustainable procurement based on
the Hitachi Group Sustainable Procurement Guidelines and other accompanying guidelines. Also, our Value Integration Division,
which reports directly to the President & CEO, discusses sustainable procurement policies and initiatives, and the actions theydecide on are thoroughly disseminated throughout the Hitachi Group by the Sustainable Procurement Conference, which includes
the heads of procurement divisions at Business Units (BUs) and major Group companies. In fiscal 2021, we established the new
Sustainable Procurement Office to strengthen sustainability activities pursued in cooperation with our procurement partners.
Achievements in FY 2021

Raising awareness of the
Hitachi Group Sustainable
Procurement Guidelines

Revised the Hitachi Group Sustainable Procurement Guidelines and distributed them to procurement partners to raise awareness ofthem as a code of conduct for procurement partners

Sustainability monitoring of Assessed and analyzed the status of procurement partners’ sustainability initiatives through surveys with a focus on human rights
procurement partners
and environmental risk assessment
Conducting sustainability audits Conducted sustainability audits of procurement partners in China and other Asian countries (Target: 25 companies)
Holding sustainableprocurement seminars for
procurement partners

Held sustainable procurement seminars online on Hitachi Group sustainability initiatives for procurement partners (Target: 359
companies in China and the rest of Asia)

Encouraging procurement
partners to reduce theirenvironmental load

To coincide with COP26, organized “Towards Net Zero―Hitachi Value Chain Innovators,” an online event concerning value chains.

Responding to the conflictmineral Issue

Received the highest rating for CDP supplier engagement
Revised the Hitachi Group’s Conflict Minerals Procurement Policy to formulate the Hitachi Group’s Policy for Responsible Supply
Chain of Minerals in response to the expanded scope of responsibilities expected of companies in their procurement of minerals
Held the Hitachi Group Conflict Minerals Seminar for the sales, procurement, and sustainability divisions of business units and Group
companies (Number of participants: 270 people)

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

・Engaging in quality
assurance activities
・Commissioning external
audits concerning productquality assurance・Acquiring international
standards certification forour quality management
system・Providing quality andreliability education
・Acting to provide productsafety・Responding whenincidents occur

Policy and promotion
structure

improve communication
with customers

Achievements in FY 2021

Quality assurance activities

Ensured technical law compliancePursued thorough safety design and safety monitoring for products and services

External audits concerning
product quality assuranceCommissioned regular external audits concerning product safety

International standards
certification for our quality
management system

Surveyed the number of certified business sites

Quality and reliability
education

Provided various forms of training and education in accordance with the target recipientsHowー How we are doing it ー

Policy and promotion
structure・Conducting digital

activities

・Providing

comprehensive
customer support online

・Engaging in activities

to improve customer
satisfaction (CS)regarding home
appliances

Dedicated account managers serve as gateways for corporate customers to deal with Hitachi Group companies in Japan. The
entire Group works with these managers to build even closer relationships with clients and to improve customer satisfaction(CS).
Achievements in FY 2021

marketing・Engaging in advertising131

We are promoting quality and safety as part of the Hitachi Group Codes of Conduct, and our basic quality assurance
principles are outlined in the relevant section of the company rules. In order to thoroughly promote quality governance, we arestrengthening our promotion structure to put the safety and security of our customers first. This is being achieved by making
the quality assurance divisions of BUs and Group companies independent from the business divisions.

What・Implementing initiatives toAssurance

ー How we are doing it ーー What we are doing ーCustomer
Satisfaction

Governance

How

What

ー What we are doing ー

Quality andProduct Safety
Management

SocialInitiatives to improve
communication withcustomers

Held seminars and forums to improve CS

Advertising activities

Promoted communication activities based on our Advertisement Guidelines and Social Media Policy

Activities to improve CS
regarding home appliance

Conducted a CS survey using the evaluation survey for customer repair services (Satisfaction rate: 95.4%)

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

132

Assurance

Responsible Procurement
Basic Procurement Guidelines
Approach

PolicyGRI 102-9

We believe that putting sustainability at the core of ourbusiness throughout our value chain will lead to mutual
prosperity for procurement partners and the Hitachi Group.
We are also working to proactively identify and mitigate
procurement risks.
Hitachi instituted the Hitachi Group Global Procurement
Code. This is our highest code for procurement activities. It
calls on Group companies and procurement partners to givedue consideration to human rights, labor practices, safety,
ethics, quality, and security in the supply chain. Procurement
partners are also selected strictly in accordance with thecode’s provisions.
We also established the Hitachi Group Sustainable
Procurement Guidelines, which are a code of conduct
for procurement partners. We aim to develop sustainablebusiness and society together with procurement partners bypromoting procurement activities that adhere to this code.

Procurement Management Organizational Structure

Sustainable Procurement Management
Framework
Structure

GRI 204-1

Policies and initiatives related to sustainability are discussed
within Hitachi’s Value Integration Division, which reports
directly to the President & CEO of Hitachi, Ltd. Policies
and initiatives adopted after this discussion are thoroughly
disseminated throughout the Hitachi Group through the
Sustainable Procurement Conference, which includes
the heads of the procurement divisions at Business Units(BUs) and major Group companies. We established theSustainable Procurement Office in fiscal 2021 to strengthen
our sustainability activities in coordination with procurement
partners. This division takes the lead in planning andformulating sustainable procurement measures in close
cooperation with stakeholders both inside and outside of thecompany. It also promotes these activities by cooperatingwith Hitachi Group procurement divisions both inside andoutside of Japan.

President & CEO

Value Integration Division
Sustainable Procurement Office
Policy/strategy formulation for social,environmental, and economic value
improvement(Managers from each procurement division)
Group Procurement Strategy
Meeting (biannual)
BU Procurement
Meetings(annual)Regional procurement
conferences(Once or twice annually
per region)

Category Strategic
Conference(annual)Sustainable Procurement
Conference(biannual)

Sustainable Procurement
https://www.hitachi.com/procurement/csr/index.html

Hitachi Group Sustainable Procurement Guidelines
https://www.hitachi.com/procurement/csr/EN_HG_SPG.pdf

Incorporation/implementation in
procurement work/production lines(All procurement personnel)
BU
procurement members

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Major Group company
procurement members

Contents

Hitachi Sustainability Report 2022

Implementing Sustainable Procurement
Activities

GRI 308-2/414-2

Hitachi is implementing the following wide variety of initiatives
to promote and ensure sustainable procurement. And, when
we start to do business with new procurement partners,
we work to enhance risk management by making carefulselections based on the Hitachi Group Global Procurement
Code, and distributing the Hitachi Group Sustainable
Procurement Guidelines to each partner.
Making the Hitachi Group Sustainable Procurement
Guidelines Known to All
The Hitachi Group Sustainable Procurement Guidelines,
revised in July 2021, informs procurement partners what wewant them to comply with. The contents fall into seven major
categories: labor, health and safety, environment, businessethics, management system, product quality and safety, andprevention of personal and confidential information leakage.
It is also positioned as a communication tool to informprocurement partners about Hitachi Group initiatives, anddescribes our policies and initiatives related to sustainability.
We make these guidelines available in four languages(Japanese, English, Chinese, and Thai), and distribute them
to approximately 30,000 procurement partners. We also ask
for compliance and continually explain the contents throughsustainable procurement seminars.
Sustainability Monitoring of Procurement Partners
With the purpose of risk management and engagementwith procurement partners, the Hitachi Group evaluates andanalyzes the state of sustainability initiatives by procurement
partners through surveys. In fiscal 2021, we focused onhuman rights and environmental risk assessment.

Introduction

Management

Environmental

SocialGovernance

Assurance133• Human Rights Initiatives Survey

a number of procurement partners who are implementing

As part of human rights due diligence (HRDD) initiative in
fiscal 2021, we conducted a survey of efforts to addressforced labor and violations of the rights of migrant workers,
which we have defined as a human rights risk that theentire Hitachi Group should handle. In this survey, 2,524
procurement partners performed self-evaluations concerning
initiatives related to (1) labor, (2) health and safety, and (3)a point of contact for reporting. After analyzing the resultsof the survey, we provided feedback to the procurement
partners.

advanced initiatives, and encouraging lessons andsuccessful practices developed through this initiative to be
adopted and applied by our environmental focus partners.

Details of Feedback

Starting in fiscal 2022, we have adopted the EcoVadis*¹
third-party evaluation platform for monitoring and evaluating
the sustainability performance of our procurement partners.
We are working towards further strengthening engagementwith our procurement partners.
*1 EcoVadis: A comprehensive corporate social responsibility assessment
service platform. They conduct assessments of factors including environment,labor practices and human rights, ethics, and the impact of sustainableprocurement.
P126 Human Rights Due Diligence (HRDD) Initiatives(1) Introduction to Hitachi Group initiatives and approach tohuman rights (Familiarization with Hitachi Group Human Rights
Policy)(2) S urvey results and analysis(3) A pproach to measures addressing key points(4) R equest for efforts toward remedy and improvement• Environmental Initiatives Survey
In fiscal 2021, we selected approximately 1,000 procurement
partners which accounts for 70% of our procurement
spending (excluding publicly listed subsidiaries), to beenvironmental focus partners, then carried out a survey ofenvironment-related initiatives. We received replies from 708
companies about the status of: (1) establishment of a policy
on climate change, (2) efforts to reduce greenhouse gas
emissions, and (3) measurement of energy consumption.
Based on the information we obtained through this survey,
we intend to move forward with sharing issues and pursuingconcrete CO2 reduction measures through dialogue with

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Conducting Sustainability Audits
Hitachi, Ltd. has been auditing the manufacturing bases of
its and Group companies’ procurement partners in China
and other Asian countries. For these audits, we engaged
external evaluators such as auditing company Intertek
Certification.*¹ Our audits are based on the international
SA8000 certification standard developed by Social
Accountability International (SAI). These audits investigate
our workplace practices, and a Responsible Business
Alliance (RBA)-recognized auditor checks procurement
partners’ sustainability initiatives from the perspectives oflabor and human rights, health and safety, the environment,
and ethics. Procurement partners needing improvement
were requested to submit improvement action plans, andHitachi, Ltd., together with Group companies, will work withand advise the procurement partners until they complete theplanned improvements.
*1 Intertek Certification: With a presence in over 100 countries across the globe,
the Intertek Group provides a wide array of certification services in every
industrial field.

Hitachi Sustainability Report 2022

Contents

In fiscal 2021, audits were conducted of 25 procurement partners
in China and other Asian countries. Though there were no
significant violations, minor problems with the following issues
were identified for some procurement partners, which they wereasked to remedy accordingly.
◦ Provision of emergency exits◦ Management of overtime hours◦ Construction of frameworks for initiatives that promote
human rights◦ Identification of physically demanding tasks such as workthat requires standing for long hours

Holding Sustainable Procurement Seminars for
Procurement Partners
We held sustainable procurement seminars in an effort
to deepen procurement partner understanding of Hitachi
policies and the importance of sustainability.

Introduction

Management

Environmental

SocialGovernance

Strengthening Global Partnerships

Activities in 2021
To prevent the spread of COVID-19, in fiscal 2021 weheld these seminars online for partners in China andother Asian countries just as we did in fiscal 2020.
Our seminars in China were attended byapproximately 200 people from 133 companies.
We explained policies and measures for sustainableprocurement activities, including carbon neutrality and
HRDD. We also asked partners to comply with the
Hitachi Group Sustainable Procurement Guidelines.
Our seminars in other Asian countries wereattended by approximately 300 people from 226
companies. We shared the details of our Group-wide
sustainable procurement activities, and invited two
experts in human rights and environmental issues asguest lecturers to conduct training on the importanceof sustainability (latest trends, specific approaches
to human rights and environmental initiatives, etc.).
We also shared the results (average score) of thesustainability monitoring for each item, and worked
to raise awareness to strengthen the sustainability
activities at each company.

With the worldwide expansion of Hitachi’s business, ourprocurement partners have become increasingly globalized
as well, and we now have dealings with around 30,000
procurement partners in over 60 countries. Accordingly, we
have appointed procurement officers to oversee procurement
activities locally in China, other Asian countries, Europe, and theAmericas in order to encourage procurement from locally based
partners in line with the principle of promoting local production
for local consumption. These officers carry out activities such assustainability monitoring, sustainability audits, and sustainableprocurement seminars for procurement partners in theirrespective regions to strengthen sustainable procurement.
Local procurement officers in China are also responsible foraddressing environmental risks in China. Through the Instituteof Public and Environmental Affairs, an environmental NGO,
the officers obtain information about polluting enterprises madepublic by China’s central and regional government bodies. They
use this information not only for screening businesses whichhave transactions with these enterprises but also for urging theenterprises themselves to make improvements.
 ate of Local Procurement of Materials for Main Regions
R(Fiscal 2021)
Other Asian
countries

China

2,524

companies

Environmental initiatives survey

Sustainability audits

708

25

companies

87%

95%

Implementation Status of Sustainability Procurement Activities (Fiscal 2021)

Human rights initiatives survey

companies

134

Assurance

欧米

Sustainable procurement seminars

359

companies

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Europe83%

Americas83%Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialEncouraging Procurement partners to Reduce their Environmental Load
PolicyActivities

Sharing Our Green Procurement Guidelines and Related Initiatives
We distribute the Green Procurement Guidelines that define our basic position on procuring environmentally friendly partsand products as well as our requirements of procurement partners.The guidelines set out requirements, such as establishingenvironmental management and recommend obtaining environmental certificates. They also include environmental conservation—
reducing the impact of products supplied to Hitachi, such as conserving resources and energy, recycling, managing chemical
substances in products, and fully disclosing related information.
To address the issue of chemical substances in products, we recommend using chemSHERPA*¹ CI/AI, a standardized format
for communicating information on chemical substances in products throughout the supply chain.
*1 chemSHERPA: Developed by the Japanese Ministry of Economy, Trade and Industry to facilitate the management of chemical substances in products by creating astandardized format throughout the supply chain. The chemSHERPA-CI standard is applicable to chemical substances contained in chemical products and chemSHERPAAI to those contained in molded products.

Expanding Our Green Purchasing Rate for Office Supplies
We are working to expand the green purchasing rate*¹ for office supplies Group-wide. We are striving to increase the numberof items eligible for green purchasing, and encouraging our employees to purchase them.
*1 Green purchasing rate: The percentage, by monetary value, of products with the Eco Mark among all products purchased subject to the Act on Promoting Green
Procurement.

Green Procurement Guidelines

Green Procurement Guidelines Annex

https://www.hitachi.com/environment/library/pdf/green_en.pdf

https://www.hitachi.com/environment/library/pdf/green_annex_en.pdf

Governance

Assurance

135

Received the Highest Rating for CDP Supplier
Engagement
Hitachi, Ltd. was recognized for its
efforts to realize a net-zero society,including the reduction of CO2 emissions
throughout its supply chain. The CDP,
an international NGO working in theenvironmental sector, selected thecompany as a Supplier Engagement
Leader, which is their highest rating for
supplier engagement.*¹*1 Supplier Engagement Rating: Used to evaluate corporate supply chain
engagement on climate issues, and select companies with particularly
outstanding initiatives as Supplier Engagement Leaders.
P026 Status of Inclusion of External ESG Assessments and
ESG Indices

Procurement BCP Initiatives
Approach

Activities

We are working to enhance procurement-related business
continuity plans (BCPs) across Group companies worldwide
to ensure that significant incidents*1 do not disrupt our

Achievements in Fiscal 2021
To coincide with COP26, the Hitachi Group organized, Towards net zero—Hitachi Value Chain innovators, an online event
related to value chains. Through the event, our Group Chief Procurement Officer shared Hitachi's vision for carbon neutrality,
representatives from three partner companies delivered a presentation sharing their approach to best practice, andparticipants discussed future courses of action.
COP26: Uniting the World to Tackle Climate Change
https://www.hitachi.com/cop26/index.html

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

business and seriously impact society.
*1 Events such as natural disasters (including major earthquakes) serious enoughto disrupt business
P183 Procurement BCP Initiatives

Hitachi Sustainability Report 2022

Contents

Response to the Conflict Mineral Issue
PolicyStructure

Activities

In fiscal 2013, Hitachi formulated its Conflict Minerals
Procurement Policy, declaring its stance and commitments
regarding conflict minerals. The policy was revised in fiscal
2016 to explicitly lay out measures to be implemented toensure responsible procurement. Expanding the scope ofcorporate responsibilities for the procurement of minerals
is a global trend, with companies increasingly expected toaddress broader overall risks to human rights not limited
to the risk of being complicit in conflicts, and recognize
responsibilities that extend beyond the countries adjoining
the Democratic Republic of the Congo to a wider area where
the risks are high. In consideration of this, in fiscal 2021 werevised this policy to formulate the Hitachi Group’s policy for
Responsible Supply Chain of Minerals.

Introduction

Management

Social

Hitachi, Ltd. is a member of the Japan Electronics andInformation Technology Industries Association (JEITA)’s
Responsible Minerals Trade Working Group. This working
group has been addressing the issues of conflict minerals
with other members of the association. In June 2021, theworking group held an online information session targetedat personnel in-charge of investigation of conflict minerals
at companies and organizations that face common issues
related to Responsible Minerals. The working groupexplained the background behind responsible minerals to
1,700 people.
P023 Industry Leadership and Policy Recommendations

Hitachi’s Conflict Minerals Response Framework

Raising awareness/
information provision

Sustainabilityrelated
divisions

https://www.hitachi.com/procurement/csr/EN_HG_RSCM_1.pdf
Sustainability
division

SupportCoordination
Procurement
division

Governance

Assurance

In 2021, about 270 employees participated in the
Hitachi Group Conflict Minerals Seminar, which washeld for the sales, procurement, and Sustainability
divisions of our BUs and Group companies, withthe aim of enhancing our Group response to conflictminerals issues. A visiting lecturer gave talks to deepen
understanding of human rights violations in mineralproducing countries (which are the root cause of theconflict minerals problem), risk of corporate complicity,
regulatory trends relating to conflict minerals, theConflict Minerals Reporting Template (CMRT), and the
Hitachi Group’s Policy the Responsibility Supply Chainof Minerals.

Information
sharing

Customers
Sales divisions

Grasp national
regulatory trends
Grasp global
trends

Imformation Contacts in business groups/manufacturing
sharingand sales sites(technical divisions, etc.)

Coordination

Procurement divisions

Sustainable
Procurement
CouncilConsultation

Grasp national
regulatory trends
Grasp global
trendsUnderstandcustomer needs
Check specifications
Check for presence of
3TG*¹

Quality Assurance divisions/Design and
R&D divisions*²

Raising awareness/
information provision

SupportProcurement partners A

Procurement partners B

Procurement partner
investigation
Raising awareness of
procurement partners

Procurement partners C

Supply chain due diligence by individual BUs/Group companies

Headquarters

Individual BUs/Group companies*1 3TG: Collective term for four commonly used conflict minerals: tin, tantalum, tungsten, and gold.
*2 May differ depending on BU or Group company

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

136

Employee Education

Individual BUs/
Group companies

Headquarters

Hitachi Group’s Policy for Responsible Supply Chain of Minerals

System and Initiatives
Sales divisions, business groups, manufacturing sites,
procurement divisions, and other divisions within individual
BUs and Group companies work together to respondto investigation requests and inquiries relating to conflictminerals. We also strive to grasp developments in conflictmineral-related laws and regulations in each country andregion and what global society demands of enterprises, andwork to share information within the Group.
Each BU and Group company investigates its use of
conflict minerals and reports the results to customers whenrequested. Supply chain investigations are carried out withthe cooperation of the relevant BUs’ and Group companies’
sales, procurement, and Sustainability divisions. In addition,

Environmental

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Quality and Product Safety Management
Approach to Quality Assurance Activities
Approach

Hitachi was founded on the principles of “Harmony, Sincerity,
and Pioneering Spirit.” We ensure product quality and safety
by adhering to these principles, along with the basics andethics, and by putting right and wrong before profit andloss. We engage in quality assurance activities through ourunique practice of OCHIBO-HIROI, which means “gleaning”
in English and involves analyzing and learning from failure tofurther develop our technologies.
As stipulated in the Hitachi Group Codes of Conduct,
we aim to provide products and services that meet theneeds and requirements of our customers, complying with
relevant laws and standards and ensuring quality and safety
by setting additional standards of our own where necessary.
We strive to ensure quality and safety by setting independent
standards as necessary, in addition to complying withall relevant laws and standards. The Quality AssuranceStandards in our corporate regulations also set out ourbasic principles for quality assurance and aim to promote
employees’ awareness of them.
The Hitachi Group Codes of Conduct
https://www.hitachi.com/corporate/about/conduct/index.html

Framework for Quality Assurance
Structure

To ensure full control over quality governance, Hitachi has
made quality assurance divisions within business divisions
independent from product design divisions and manufacturing
divisions, creating a framework for activity in which thesafety and trust of customers are the top priorities. In orderto strengthen this framework further, we have made quality

Environmental

SocialGovernance

Assurance

137

GRI 417-1

assurance divisions independent of business divisions andreinforced the report line of the quality assurance divisions ofBusiness Units (BUs) and Group companies to the Corporate
Quality Assurance Group at Hitachi, Ltd., and establishedsystems for close information sharing between the two sides.
We are also strengthening governance by giving greater
authority to the Corporate Quality Assurance Group.
When a production incident occurs in the Hitachi Group,
the quality assurance division in the BU or Group company
that manages the company that caused the accident reports
it to the Corporate Quality Assurance Group. Then, weekly
reports are provided to management executives, including
the Executive Chairman, and the President & CEO at Hitachi,Ltd. Also, for a serious incident, the quality assurance
division in the BU or Group company reports the incident tomanagement executives, including the Executive Chairman,
and the President & CEO at Hitachi, Ltd. as soon as it is
known.
Quality Assurance Structure
Board ofDirectors,
Audit
Committee

Internal
Auditing
OfficeExecutive Chairman,
President & CEO
Vice Presidents
Executive officers(BU heads)/Group
company presidents

Business
divisions

Qualityassurance
divisions in
BUs/Groupcompanies

Executive
Officer incharge of
Quality
Assurance,
Corporate
Quality
Assurance
Group
Close
information
sharingGlobal Quality Assurance Framework
Against a backdrop of the increased number ofmergers and acquisitions outside Japan, in recent
years, we have been working to strengthen our
global quality assurance framework as a high-priority
initiative. Specifically, we are promoting awareness of
Hitachi’s basic principles of quality assurance globally,receiving incident reports from Group companies
outside Japan, and, as in Japan, we are alsoestablishing international quality assurance reportinglines that are independent of the business divisions,as well as practicing OCHIBO-HIROI.

Quality Assurance Activities
Activities

We are strengthening the organization and management,
technology, and human capital aspects of our quality
assurance activities in every process—from planning anddevelopment to design, manufacturing, testing, delivery, andmaintenance. Furthermore, under our approach of “making
prevention the duty of quality assurance,” we are going
beyond the strengthening of reoccurrence prevention andstriving to prevent incidents from occurring in the first place.
Technical Law Compliance Activities
Hitachi promotes internal awareness of product regulations,amendment trends, and enforcement dates in each country
and region. We also work to clarify product-specific laws (withour product-specific laws map) as well as promoting regulatorycompliance and implementing continuous process improvementswith our product compliance management system.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

138

Thorough Safety Design and Safety Monitoring for

certification, as well, to confirm the validity of their quality

safety of products and services, depending on the target

Products and Services
When developing products, Hitachi makes the safety of
our customers’ lives, health, and property the top priority inproduct design and works to ensure safety at every step,from development and production to sales and maintenance.
We strive to ensure safety through risk reduction according
to the following order of priority: design (fundamental
safety design), protective measures (safeguards), andusage information such as user instruction manuals. Also,
we conduct risk assessments from a wide perspective incollaboration with related BUs and research laboratories.

maintenance.

employees. In addition to implementing e-learning courses
on Hitachi’s philosophy regarding quality for all employees,
quality assurance is also featured as a theme in positionspecific and executive-oriented training, as well as new
employee education. In addition, we conduct field-specifictechnical lectures for engineers engaged in MONOZUKURI(manufacturing) at a range of levels from basic toexpert. Each BU also conducts specialized technicalcourses regarding manufacturing, quality assurance, andmaintenance at their quality assurance training centers.

Service, Software, and Security Quality
Enhancement Activities
For our services business, which continues togrow in scale, we have established a Service andSoftware Quality Enhancement Division and aresharing quality activities and current challenges. We
are also applying our solutions division’s softwaredevelopment capabilities and reliability enhancement
expertise to assist our product divisions (embedded
software development divisions) in enhancing thereliability of embedded software as the field becomes
more advanced and complex.

External Audits of Product Quality Assurance
Activities

For certified products and other products, Hitachi has beencommissioning regular external audits of product safety.
Relevant marks indicate products that have received
certification. Periodic external audits are conducted following

The S-Mark : Indicates third-party certification for electronics
based on a certification system administeredby the Steering Council of Safety Certification
for Electrical and Electronic Appliances andParts of Japan (SCEA).
The UL Mark : Indicates compliance with safety standards
established by UL Solutions, a safety
certification company.

International Standards Certification for Our
Quality Management System
Activities

Hitachi’s quality management system has acquired
certification from an external certifying organizations. We arecommitted to effectively applying the findings of third-party
evaluations to our activities as well.
We have also obtained quality management system
certification for each of our product categories worldwide.
The chart below shows a representative sample.
Category

Name of standard

Number of certified sites

Overall quality

ISO 9001

319 sites

Railway business

ISO/TS 22163

7 sites

Medical devices

ISO 13485

13 sites(Survey results as of the end of June 2022)

Quality and Reliability Education
Training

Hitachi regularly provides various forms of educationand training related to quality and reliability, including the

Product Safety Response when Incidents Occur
Activities

When an incident occurs, the division responsible acts
swiftly to resolve the problem. We not only investigate thetechnical causes, but also thoroughly discuss the process,framework, and motivating factors leading up to theoccurrence, along with ways to prevent reoccurrences, inorder to ensure product safety.
In the case of a severe incident, we work to provide
a prompt status report to top management, reports togovernment agencies in line with legal requirements, andrelevant information disclosure to customers on our website
and through other communication channels. At the sametime, we have a framework in place to ensure that fast andappropriate action is implemented at all companies acrossthe Group.
In the case we determine that retroactive action isnecessary, we notify customers via newspaper advertising
and websites in order to carry out the necessary repair or
replacement program.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialResponse Flow in the Event of Product Incident
Incident
occurrence

Hitachi Group
Information gathering
ReportCustomerliaisonCustomers,
Retailers

Quality
Assurance
Division

Emergency
response
authorities

Top management

Confirmation
Decision onof status
seriousness

Investigation of cause
On-siteinvestigation

Product
investigation

Investigationof the extent
of damage

ReportSeriousproduct
incident

Consumer
Affairs Agency,
etc.

Product recall
Notification
via web, media

Investigative
committee on
seriousproduct
incidents

Response and reporting

Reoccurrence Prevention Measures in Response to Inappropriate Conduct Discovered by Hitachi Astemo
Hitachi Astemo, discovered inappropriate conduct, such as issues involving periodic testing of some of the brake components
manufactured at its Yamanashi Plant (Minami-Alps City, Yamanashi Prefecture) and suspension components manufactured at
its Fukushima Plant (Koori Town, Date District, Fukushima Prefecture), based on information that was shared by an employee.
We sincerely apologize for the significant inconvenience we may have caused our customers and concerned parties.
At Hitachi Astemo, to ensure such incidents do not occur again, in April 2021, we established a new governanceoffice to function as a headquarters and strengthen risk management in addition to a dedicated auditing organization in the
Quality Management Division, and in December 2021, we established a special investigation committee through external
legal counsel to investigate the facts and root causes of the issue independently and objectively. We are working to enact
sweeping measures to prevent reoccurrences. Going forward, we are fully committed to strengthening compliance evenfurther to regain the trust of our partners and customers.
Notice of Inappropriate Conduct for Certain Products, Including Unperformed Periodic Tests
https://www.hitachi.com/New/cnews/month/2021/12/211222.pdf

Governance

Assurance

139

Hitachi Sustainability Report 2022

Contents

Customer Satisfaction (CS)Introduction

Management

Environmental

SocialGovernance

Assurance

140

GRI 103-2

Initiatives to Improve Communication with Customers

Advertising Activities

Activities

Activities

The sales and marketing divisions at Hitachi, Ltd. listen to customer voices when developing management, product, and solution
strategies. These divisions assign an account manager to each customer to help grow the business of the Hitachi Group. These
account managers serve as customers’ points of contact with Group companies in Japan, leading initiatives for improving
communication with customers while working to build closer relationships between customers and account managers.
Initiatives to Improve Communication with Customers
Initiative

OutlineExecutive seminars

Strengthen ties with customers through customer-oriented seminars and use theseopportunities to develop sales activity proposals that reflect customer needs.

Hitachi Social Innovation Forum

Encourage co-creation with customers and business partners worldwide with these
events, which consist of seminars and exhibits, with the aim of realizing a sustainable
society through our Social Innovation Business.

Technology Community program

Facilitate direct dialogue between researchers and customers regarding Hitachi’s diverse
range of advanced technologies and contribute to co-creation through new businesses
matching Hitachi technology with customer needs.

Digital Marketing
Activities

Based on strict personal information-protection rules, Hitachi collects and analyzes customer information acquired fromparticipants in various online seminars and events, and from website browsing-history data. Our digital marketing activities areused for product development, improvement of customer service, and sales promotion activities linked with a sales support
system (SFA).
P188 Personal Information Protection

Because Hitachi, Ltd. believes that advertising activities
must show proper consideration for society as a whole aswell as comply with laws and regulations, it has establisheda set of Advertisement Guidelines.
To ensure that these guidelines are strictly followed
at all business locations globally, even where languages
and customs may vary, an Advertising Material Checklist is
included. All items on the checklist are confirmed in multiple
languages when creating advertisements.
When conducting communications and promotional
activities on social media channels, we abide by the Hitachi
Social Media Policy, which consists of the Communication
Guidelines and the Guidelines for Employees, to not only
protect our brand, but also to avoid violating the rights ofothers. It stipulates our policies for social media use andspecific promotional methods.
To raise awareness of this policy among members of
the company, we carry out e-learning activities in Japanese,
English, and Chinese about the use of social media andaddressing associated risks.
Social Media Communication Guidelines
https://www.hitachi.com/utility/socialmedia/index.html

Hitachi Sustainability Report 2022

Contents

Comprehensive Customer Support Online
Activities

Hitachi offers comprehensive global customer support
on its website to respond to customer inquiries, opinions,requests, and complaints. Since fiscal 2009, we also haveconducted training courses, including our Web Inquiry
Responsiveness Improvement Course, to improve ourhandling of these inquiries. Going forward, the Hitachi Groupwill continue to work to strengthen and improve cooperation
among Group companies in order to respond more quickly
and accurately to customer feedback.
Customer Support Activities in Fiscal 2021
Web Inquiry ResponsivenessImprovement Course
attendees

Not held in fiscal 2021 due to thepandemic (858 attendees in total
since fiscal 2009)

Introduction

Activities

The Home Appliances Customer Satisfaction Division
provides services and solutions to improve the quality of life
for people of all ages and regions. In Japan, these initiatives
are carried out under the slogan, “360° Happiness: Moresmiles to life for one and all.”
The call centers and websites for the Customer Support
Center (no repair) and Repair Contact Center handle
about 2.09 million customer inquiries, repair requests, andcomplaints about washing machines, refrigerators, andother appliances per year. We have undertaken a numberof initiatives to better respond to inquiries and to reflect
customer feedback in our MONOZUKURI (Manufacturing),

Environmental

Socialincluding improving the call center call completion rate ustomer Contact Cases, Call Completion Rate*¹ at
CCustomer Support Center (12-Month Average)(Cases per month)(%)

100,000

100

82.3

82.3

82.0

80,000

77.1
80

62.3
38,81736,40732,26436,280

(%)
100
95

97.3

97.3

96.5

94.6

95.4

2020

2021

90
85
80
75
0

2017

2018

2019

(FY)

Notes: T arget scope: ustomers for whom repair services are provided
C(approx. 1.04 million cases a year)
Survey response rate: 32% (20,328 responded out of a total of 64,200)
Question:
How satisfied were you with the service from therepair request to completion?
Responses:
Satisfied/Somewhat satisfied/Somewhat
dissatisfied/Dissatisfied (4 levels)
Satisfaction level:
Percentage of respondents who answered“Satisfied” or “Somewhat satisfied”

Flow of Customer Service

38,474

20

2018

2019

2020

Customers

40

20,0002017

141

Assurance

60

40,0000

Governance

Results of Evaluation Survey for Customer Repair Services (CS)by using outsourcing; creating a database of customer
feedback, including consultations, inquiries, and complaints;
and enhancing our website’s FAQ section.
We also conduct semiannual customer service
evaluation surveys at approximately 90 service centers
in Japan. Based on the answers, we improve after-sales
services through CS training courses and other programs.
In fiscal 2021, more than 20,000 customers responded
to the questionnaire, and 95.4% of them expressedsatisfaction with our customer service.

60,000

Activities to Improve Customer Satisfaction
Regarding Home Appliances

Management

2021

(FY)

■ Electrical home appliances/other products, and electronic equipment(left scale)⃝ Call completion rate (right scale)0

Response

Inquiry

RepairCustomer Support Center

Repair request

Repair Contact Center

Input indatabase* 1 Call center call completion rate

Feedback on
improvements

Information
on repairservice

Feedback

Individual business division
Qualityassurance
division
Response activity

Designdivision
Flow of information

Manufacturing
division
Information sharingHitachi Sustainability Report 2022

Contents

CommunityWhy
ー Why it matters ー

Introduction

Management

Environmental

SocialGovernance

142

Assurance

Relevant SDGs
GRI 103-2

Hitachi considers social contribution activities to be of importance in contributing to the sustainable development of both society and business. We believe that Hitachi, as acompany seeking to resolve social issues through innovation, has an important mission to foster not only its own human capital but also the talent that will contribute to society
in the field of science and technology more broadly. We are focusing our efforts on activities related to science, technology, engineering, arts, and mathematics (STEAM*1)
education, which has gained attention as a tool for fostering human capital capable of using cutting-edge technologies to enhance their creativity, expressivity, and problemsolving skills. As a global company, we also support charitable and volunteer activities among employees, because it is essential for employees to actively volunteer their time
and to participate in charitable work to address local issues and needs if we are to build trust with local communities and grow together with them as a good corporate citizen.
*1 STEAM: Acronym for Science, Technology, Engineering, Arts and Mathematics

How

What

ー What we are doing ーSocialContribution
Activities

・Promoting social
contribution activities inthree areas of STEAM,
the environment, andcommunity support
・Social contribution
scheme enabling Hitachi
and its employees tomake donations together(matching funds)
・Providing donations
for humanitarian aid to
Ukraine・Contributing to society
through The Hitachi Global
Foundation
・Promoting COVID-19related support efforts

ー How we are doing it ー

Policy and promotion
structure

We adopt the social contribution statement, “Nurturing People, Connecting to the Future,” and are engaged in various
activities in three areas: STEAM, the environment, and community support.
Achievements in FY 2021

Social contribution activity
We provided 1,869.4 million yen in funding toward social contribution activities worldwide. Additionally, a total of 33,585 Hitachi
funding and number ofGroup employees (around 9.6% of the total) participated in social contribution activities.
participating employees
Social contribution
scheme enabling Hitachi
and its employees tomake donations together(matching funds)

Introduced a social contribution scheme (matching funds) through which donations made by employees will be matched by
the Group
A total of approximately 77.2 million yen in matching fund donations

Donations for humanitarian
Donated 360 million yen to the Japanese Red Cross Society and the Japan Committee for UNICEF
aid to Ukraine
Contributing to society
Developed activities centered on the three areas of “promotion of academic research, science and technology,” “humanthrough The Hitachi Global
development,” and “realization of an inclusive society”
Foundation

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

143

Assurance

Social Contribution Activities GRI 201-1
Approach to Social Contribution Activities
Approach

Hitachi regards social contribution as an important activity
that contributes to the sustainable development of bothsociety and business, and actively promotes social
contribution activities in regions where it operates. It ispeople themselves who create innovation to solve social
issues and bring about social impact and social good.
Based on this belief, we have adopted the social contribution
statement, “Nurturing People, Connecting to the Future,”
and are engaged in various activities in three areas: STEAM(Science, Technology, Engineering, Arts, and Mathematics),
the environment, and community support.
Policy on Social Contribution Activities
https://www.hitachi.com/sustainability/sc/vision/index.html

Funding for Social Contribution Activities and Number of Participating Employees
Activities

GRI 413-1

Hitachi and The Hitachi Global Foundation provided 1.8 billion yen funding toward social contribution activities worldwide,
including initiatives to cultivate a talented younger generation and financial donations and other support for disaster-struck
areas. A total of 33,585 Hitachi Group employees (around 9.6% of total employees) participated in social contribution activities.
Due to the impact of the continuous spread of COVID-19, we are shifting to online events.
 reakdown of Funding for Social Contribution ActivitiesB
in Fiscal 2021

27.4%

54.9%
Other
(including
7.7% fordisaster relief)

Human development(including10.8% for STEAM)

1,869.4

million yen*1

1.9%

Environment

Funding for Social Contribution Activities*1 and Number of
Employee Participations(million yen)
2,500

1,500

100,000

1,833 1,910

1,888

2,000

(people)88,134

2,195

1,869

80,00060,00054,62953,74939,982

1,000

40,00033,585

15.8%

Community support*1 Japan: Hitachi, Ltd., 103 Group companies, and the Hitachi Global
Foundation. Outside Japan: 252 companies.
Funding includes monetary and in-kind donations, independently organizedprograms, participation or dispatch of employees, community use of facilities,
and employee donations; excludes personnel costs incurred from theparticipation or dispatch of employees.

500
0

740

2017

383

278

325

324

2018

2019

2020

2021 (FY)20,0000■ Total Fund ■ Of Hitachi Group funding, amount related to STEAM⃝ Total number of employee participations*1 Fiscal 2017 Japan: Hitachi, Ltd., 141 Group companies, and The Hitachi Global
Foundation. Outside Japan: 196 companies.
Fiscal 2018 J apan: Hitachi, Ltd., 142 Group companies, and The Hitachi Global
Foundation. Outside Japan: 152 companies.
Fiscal 2019 Japan:

Hitachi, Ltd., 153 Group companies, and The Hitachi Global
Foundation. Outside Japan: 234 companies.
Fiscal 2020 J apan: Hitachi, Ltd., 119 Group companies, and The Hitachi Global
Foundation. Outside Japan: 209 companies.
Fiscal 2021 Japan:

Hitachi, Ltd., 103 Group companies, and The Hitachi Global
Foundation. Outside Japan: 252 companies.

Hitachi Sustainability Report 2022

Contents

Examples of Social Contribution Activities
Activities

Hitachi promotes human development activities centeredon fostering the next-generation of human capital. We are
actively working on a wide range of issues at global and local
community levels and implementing programs to support
development of next-generation leaders and science andengineering human capital.
The cultivation of talented IT professionals in particular
is a global challenge, especially with the rapid developmentof information technology, such as AI and big data. In recent
years, we have therefore been focusing on educational
activities related to STEAM, which has gained attention as atool for fostering human capital capable of utilizing cuttingedge technologies to enhance their creativity, expressivity,and problem-solving skills.

Fostering next-generation leaders in Asia
through the Hitachi Young Leaders Initiative
Hitachi Ltd. and Hitachi Asia have been supportingthe "Hitachi Young Leaders Initiative" since 1996
with the aim of developing young leaders who willlead the next generation in Asia. A four-day program
consisting of forums, workshops, and fieldwork areusually prepared for university and graduate students
from seven ASEAN countries and Japan. Participants
are to discuss and exchange opinions on social
issues facing ASEAN and on the final day of the
program, they make specific proposals for solving
such social issues. As of the end of July 2022, a
total of 405 program participants are each playing
an active part in various fields such as internationalorganizations, government, companies, and NPOs.

Introduction

Management

Environmental

SocialGovernance

144

Assurance

Examples of Social Contributions
Area

Activity
Activities to support online science education with electron microscopes

STEAM

https://www.hitachi-hightech.com/global/science-edu/

Initiatives to promote positive change in children
https://vimeo.com/677375595/5ba0de99b7

Environment

Science workshops at elementary schools as part of ecosystem conservation
activities in the IT Eco Experimental Village (In Japanese only)

BU/Group company
Hitachi High-Tech

Hitachi, Ltd. (United States)

Hitachi, Ltd.

https://www.hitachi.co.jp/products/it/harmonious/geoaction100/iteco/index.html

Community
support

Hitachi Young Leaders Initiative (next-generation leader development program foruniversity and graduate students in seven Southeast Asian countries and Japan)
http://www.hitachi.com.sg/about/hitachi/activities/hyli/index.html

Hitachi, Ltd.,
Hitachi Asia

Social Contribution Scheme Enabling Hitachi and Its Employees to Make Donations Together (Matching Funds)
In fiscal 2021, the Hitachi Group introduced a social contribution scheme (matching funds) through which donations made byemployees in response to disasters, accidents, disease outbreaks, and so on will be matched by the Group in full. This will serve toincrease employee engagement in social contribution activities as well as promote the embodiment of the Hitachi Group corporate
mission and further solidify the Hitachi Group identity. In fiscal 2021, Hitachi donated a total of approximately 77.2 million yen
through the matching funds.
Donations for Humanitarian Aid to Ukraine
The Hitachi Group donated 360 million yen to the Japanese Red Cross Society and the Japan Committee for UNICEF to provide
humanitarian aid to those affected by the situation in Ukraine and those who have fled to neighboring areas.
In addition, the entire Hitachi Group made donations to Red Cross and UNICEF around the world, and World Central Kitchen
through a scheme in which employees make donations and the company matches the amount.
(Fiscal 2021 results: A total of approximately 63.7 million yen was donated for humanitarian aid to Ukraine through thematching funds)
Hitachi to Donate toward Humanitarian Aid for Ukraine
https://www.hitachi.com/New/cnews/month/2022/03/220308.pdf

Hitachi Sustainability Report 2022

Contents

Contributing to Society Through The Hitachi Global
Foundation
The Hitachi Global Foundation was established in 2015
through the merger of five existing foundations, including
one for supporting scientists and another for supporting
the development of university lecturers in Southeast Asia.
The Hitachi Global Foundation conducts social contribution
activities centered on the three areas of “promotion ofacademic research, science, and technology,” “humandevelopment,” and “realization of an inclusive society”
in accordance with the intention of Namihei Odaira,the founder of Hitachi, to contribute to society throughbusiness activities.

Introduction

Environmental

SocialGovernance

Assurance

145

The Hitachi Global Foundation Activities
Area

Activity
The Kurata Grants
https://www.hitachi-zaidan.org/global/
activities/kurata/index.html

The Hitachi Global Foundation
Science and Technology Seminars
https://www.hitachi-zaidan.org/global/
activities/seminar/index.html

Promotionof academic
research,science andtechnology

A program supporting researchers who engage in the pursuit of solutions tosocial challenges, in the natural sciences and engineering, or in philosophicaland historical elements through research in the humanities and social sciences.
[Cumulative grants awarded by the end of fiscal 2021: 1,526]
An awareness-raising initiative providing opportunities for the public to learn
more about cutting-edge science technology topics, with the aim of supporting
people in discovering the fascinating fields of science.
[In fiscal 2021, a seminar was held regarding advanced engineering approaching
the world of science fiction, From Muscle-Covered Biohybrid Robots to Cultured
Meat]

https://www.hitachi-zaidan.org/topics/topics084.html

https://www.hitachi-zaidan.org/global/
activities/award/index.html

Hitachi Fund Support for Research Related
to Infectious Diseases
https://www.hitachi-zaidan.org/global/
activities/fundsupport/index.html

Hitachi Future Innovator Program
https://www.hitachi-zaidan.org/global/
activities/innovator/index.html

Humandevelopment

Details

The Hitachi Global Foundation Science and Technology Seminars(In Japanese only)

The Hitachi Global Foundation
Asia Innovation Award Program

Achievements in Fiscal 2021
In fiscal 2020, in the area of promotion of academic
research, science, and technology, Hitachi responded
to the issues created by the COVID-19 pandemic by
establishing the Hitachi Fund Support for Research
Related to Infectious Diseases with donations from
Hitachi, Ltd., its executives and employees, and Group
company executives. Five research projects have been
selected for funding from the Fund, which has been
providing research grants since fiscal 2021.
The Hitachi Global Foundation’s second Asia
Innovation Award was also held in fiscal 2021, andthe research findings of the award winners have beenshared publicly.
In the area of human development, the Hitachi
Future Innovator Program at elementary schools was
conducted fully online. With the aim of realizing an
inclusive society, Hitachi held workshops and forums,
and many people from all over Japan participated.

Management

Girls in science support project
https://www.hitachi-zaidan.org/global/
activities/girls/index.html

An initiative providing awards for achievements in research and developmentin science and technology innovation that help solve social challenges in the
ASEAN region.
[Cumulative awards given by the end of fiscal 2021: 24]
A research grant initiative aimed at promoting academic investigations, analysis,
and considerations based on data and evidence for issues that became
apparent through COVID-19 with the aim of sharing the findings and research
results internationally.
[Projects adopted in fiscal 2021: 5]
A program promoting the development of science and engineering humancapital targeting Japanese schoolchildren in the upper grades of elementary
school that is aiming to cultivate personality traits and abilities required for future
human resources in science and technology.
[Cumulative schools and students participating by the end of fiscal 2021: 16
schools and 1,151 students]
A program aiming to support science and engineering education for women byshowing the rewards of science and engineering careers to female junior andsenior high school students in Japan.
[In fiscal 2021, a dialogue was held with female role model from the fields ofscience and technology.]
PIONEER TALK (In Japanese only)
https://www.hitachi-zaidan.org/my-tomorrow/dialog/vol7/01.html

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

146

Hitachi Group’s COVID-19-Related Support Efforts
Area

Activity
Symposium on Realization of an
Inclusive Society
https://www.hitachi-zaidan.org/global/
activities/symposium/index.html

Realizationof aninclusive
society

Details
A program urging a new understanding among
citizens for the purpose of realizing an inclusive
society where people can accept various
positions and values.
[In fiscal 2021, a workshop to enhance
understanding toward LGBTQ+ was held,
and an online forum was held on the themeof developing the ability to participate actively
among Japanese high school students withforeign connections.]
LGBTQ＋: Changing the future withcorrect understanding of LGBTQ+(In Japanese only)
https://www.hitachi-zaidan.
org/activities/symposium/data/
symposium_20210817.pdf

Developing the "power to thrive"for high school students who haveinternational backgrounds(In Japanese only)
https://www.hitachi-zaidan.org/
topics/topics089.html

The Hitachi Global Foundation
https://www.hitachi-zaidan.org/global/index.html

Initiative

Details

Support for businessownersProvided US$ one million to support business owners impacted by COVID-19
through loans by the nonprofit organization Kiva.

Support for research

The Hitachi Fund Support for Research Related to Infectious Diseases wasestablished with a fund of 150 million yen from donations of Hitachi, Ltd., its
executives and employees, and Group company executives.

Donations for medical
professionals (funds andsupplies)

Medical supplies and equipment were provided free of charge, including
medical masks, face shields, and computed tomography (CT) equipment,along with financial donations.

Support for India

About 50 million yen was donated to the Japan Committee for UNICEF,
charitable organizations in India, and others. Also 500 oxygen concentrators(worth about 30 million yen) were provided to Hitachi Group companies inIndia, and employee-oriented support measures related to medical treatments
and so on were implemented.

Note: Initiatives in and after fiscal 2020

How Hitachi is responding to the Novel Coronavirus (COVID-19)
https://www.hitachi.com/information/ImportantNotices/index.html

Hitachi Sustainability Report 2022

Social Data

Contents

Introduction

Management

Environmental

SocialGovernance

147

Assurance

GRI 201-1

Innovation Management
Research & Development
R&D Expenditure
Reporting Boundary
R&D expenditure

Unit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Billions of yen

332.9

323.1

293.7

293.5

317.3

%

3.6

3.4

3.4

3.4

3.1

Hitachi Group
Ratio of R&D expenditure to revenue
P097 Digital Talent HeadcountP153 Talent Development

Intellectual Property
Number of Patent Applications
Reporting Boundary
Number of published patent applications *1

Hitachi Group*1 The total number of published patent applications within Hitachi Group-wide in one year.

Unit
Cases

FY 2017

FY 2018−−

FY 2019

FY 2020

Approx. 12,000

Approx. 10,000

FY 2021

Approx. 11,000

Contents

Hitachi Sustainability Report 2022

Human Capital

Introduction

Management

Environmental

SocialGovernance

148

Assurance

GRI 102-7/102-8/401-1/401-3/403-9/403-10/404-1/405-1/405-2

Employee Data
Reporting Boundary
Number of
employees

Hitachi Group

Unit

Total

People(By region)*

1

FY 2021350,864

368,247

Japan

168,086

162,083

162,100

158,194

156,768

China

44,08040,784

41,67351,90350,70744,53644,22945,114

61,411

69,876

21,884

20,98522,034

27,122

27,914

16,517

17,074

17,85032,44942,519PeopleOther areas
Total

PeopleMale

PeopleFemale(By age)* *FY 2020

301,056

Europe3

FY 2019

295,941

North America

2

FY 2018

307,275

ASEAN, India, and the rest of Asia

(By gender)*2

FY 2017

15-19 years old%
Japan
Outside Japan

20-29 years old

%
%

Japan
Outside Japan
30-39 years old

%
%

Japan
Outside Japan
40-49 years old

%
%

Japan
Outside Japan
50-59 years old

%
%

Japan
Outside Japan

%

12,172

10,786

12,285

19,785

20,463241,063

239,802244,962

279,659

283,020

199,193

196,221

199,603228,278

227,652

41,87043,58145,35951,381

55,368

0.4

0.5

0.5

0.5

0.4

0.3

0.4

0.4

0.4

0.3

0.1

0.1

0.1

0.1

0.1

15.6

15.4

15.7

14.9

15.2

10.6

10.0

9.8

8.6

8.2

5.0

5.4

5.9

6.3

7.0

26.9

27.5

26.7

27.5

27.8

18.7

17.8

16.5

13.9

12.7

8.2

9.7

10.1

13.6

15.1

32.1

30.8

30.4

29.1

28.5

26.9

25.1

23.8

19.4

17.5

5.2

5.7

6.6

9.7

11.0

23.6

24.3

25.1

25.6

25.6

20.9

21.3

21.5

19.6

19.1

2.7

3.0

3.6

6.0

6.5

*1 Regional classifications were changed from fiscal 2020. *2 Approximately 50,000 manufacturing workers not registered in the employee database and approximately 35,000 employees of some newly consolidated companies are not included. *3 Hitachi does not
employ 0-14 years old children.

Contents

Hitachi Sustainability Report 2022

Introduction

Reporting Boundary
Number of
employees

Hitachi Group(By age)*2 *3

60-69 years old

Outside Japan
Over 70 years old

Outside Japan
Total
Male
FemaleTotal
Male
FemaleTotal
Male
FemaleHitachi Group*2%

PeopleAge
Age(By gender)

Average service(years)%Age(By gender)

Hitachi, Ltd.

FY 2017People(By gender)

Hitachi Group*2

Unit

%
Japan

Average age

Environmental

%
Japan

Hitachi, Ltd.

Management

Age

1.6

2.4

2.4

0.6

0.6

0.6

0.6

0.9

0.9

0.9

1.8

1.8

0.0

0.0

0.0

0.1

0.1

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.1

0.1

34,92533,49031,442

29,85029,48529,22027,82825,628

24,10023,749

5,705

5,662

5,814

5,750

5,736

41.4

41.3

41.5

41.8

41.7

41.8

41.9

41.9

42.2

42.1

39.1

39.0

39.4

40.1

40.2

41.8

42.1

42.4

43.0

43.3

42.3

42.6

43.0

43.5

43.8

40.8

41.1
13.5

18.0

18.8

18.8

18.9

18.1

China

8.5

8.8

8.4

8.4

9.2

ASEAN, India, and the rest of Asia

7.5

7.4

7.4

7.2

8.2

8.7

7.1

7.2

6.4

7.5

8.4

7.6

8.3

6.0

5.7

Japan

Years

Other areas

7.3

6.4

7.6

7.5

5.7

Male

15.4

15.8

15.7

14.2

13.8

12.6

11.8

11.8

11.0

10.9

17.8

18.0

17.9

18.3

18.5

Years
Years

Male

Total

Years
%

(By region)*

1.5

0.5

13.6

Total

1

1.4

40.1

FemaleHitachi Group*2

FY 202115.0

FemaleTurnover rate*4 *5

FY 2020

39.5

Europe(By gender)

FY 2019

15.1

North America

Hitachi, Ltd.

FY 2018

149

Assurance

39.2

Years

(By gender)

Governance

14.9

Total
(By region)*1

SocialJapan
Outside Japan

%

18.3

18.5

18.5

18.8

19.0

15.5

15.6

15.6

16.0

16.2

5.5

6.3

5.2

4.3

7.5

2.1

2.2

2.5

2.0

3.3

13.4

15.4

10.9

7.4

13.1

*1 Regional classifications were changed from fiscal 2020. *2 Approximately 50,000 manufacturing workers not registered in the employee database and approximately 35,000 employees of some newly consolidated companies are not included. *3 Hitachi does
not employ 0-14 years old children. *4 The figures are based on enrolled employees with employment contract including those seconded from Hitachi Group to other companies and those taking leave, and excluding those seconded from other companies to HitachiGroup (as of March 31). *5 Figures include only voluntary resignations.

Contents

Hitachi Sustainability Report 2022

Introduction

Reporting Boundary
Turnover rate* *4

5

Hitachi Group*(By gender)

Hitachi, Ltd.

Total

2

Male
FemaleManagement

Environmental

Unit

FY 2017%%(By gender)

Male
Female%SocialGovernance

FY 2018150

Assurance

FY 2019

FY 2020

FY 2021

5.0

5.8

4.8

4.1

7.1

7.8

8.4

7.2

5.2

8.9

1.5

1.6

1.7

1.4

1.8

1.3

1.4

1.5

1.3

1.7

2.9

3.0

2.8

2.1

2.3

*2 Approximately 50,000 manufacturing workers not registered in the employee database and approximately 35,000 employees of some newly consolidated companies are not included.
*4 The figures are based on enrolled employees with employment contract including those seconded from Hitachi Group to other companies and those taking leave, and excluding those seconded from other companies to Hitachi Group (as of March 31).
*5 Figures include only voluntary resignations.

Diversity, Equity and Inclusion*1
Reporting Boundary
Number and ratio ofregistered employees

Hitachi Group*2

Total number of registered employees

FY 2020

FY 2021248,488242,994

251,016

285,857

291,028

45,580（18.8）

48,665（19.4）

54,719（19.1）

58,830（20.2）

Japan

24,754（14.2）

25,076（14.9）

26,203（15.6）

26,106（16.0）

26,773（16.5）

China

6,504（39.6）

6,733（39.5）

6,856（37.5）

7,232（34.1）

7,594（35.7）

5,918（24.3）

6,231（24.6）

6,828（25.3）

6,990（20.7）

9,120（20.6）

North America

People(%)

Total number of registered employees
Number and Ratio of female employees

2,635（24.2）

3,176（26.2）

3,955（24.9）

4,298（22.7）

4,954（25.7）

2,392（20.4）

2,348（21.5）

2,361（21.3）

6,903（22.0）

6,761（23.8）

3,005（27.9）

2,016（22.1）

2,462（23.4）

3,190（18.2）

3,628（23.4）

People39,36237,48934,99733,19832,713People(%)

6,768（17.2）

6,678（17.8）

6,649（19.0）

6,537（19.7）

6,595（20.2）

Other areas

Hitachi Group*2

Number of manager

People45,346

47,831

48,336

48,712

48,690

Number and Ratio of female managers

People(%)

3,325（7.3）

3,975
（8.3）

4,302
（8.9）

4,641
（9.5）

4,762
（9.8）

Hitachi, Ltd.

Number of manager

People13,737

13,332

12,694

11,881

11,584

Number and Ratio of female managers

People(%)

577（4.2）

635
（4.8）

700
（5.5）

768
（6.5）

785
（6.8）

128（3.2）

135
（3.4）

147
（3.9）

156
（4.5）

146
（4.3）

449（4.6）

500
（5.3）

553
（6.2）

612
（7.3）

639
（7.8）

100:104

100:105

100:106

100:106

100:107

100:102

100:103

100:104

100:104

100:105(By rank)

General manager or above
Section manager

Individual compensation
ratio of female to malemanagers*4

FY 2019

45,208（18.2）

EuropeNumber and Ratio ofmanagers*3

FY 2018

PeopleASEAN, India, and the rest of Asia

Hitachi, Ltd.

FY 2017People(%)

Number and Ratio of female employees(By region)

Unit

Hitachi, Ltd.

Total
Basic salary

People(%)

Female: Male

*1 The figures are based on enrolled employees with employment contract including those seconded from Hitachi Group to other companies and those taking leave, and excluding those seconded from other companies to Hitachi Group (as of March 31).
*2 Approximately 50,000 manufacturing workers not registered in the employee database and approximately 35,000 employees of some newly consolidated companies are not included. *3 Rising numbers of female managers in part reflect improved coverage of ourhuman capital databases. *4 Benefits for men and women are identical. Differences between male and female salaries and compensation are due to age distribution, grade distribution, etc.				

Contents

Hitachi Sustainability Report 2022

Introduction

Reporting Boundary
Number and Ratio of
new employees hired

Hitachi Group*2

Total

Environmental

Unit

FY 2017

SocialGovernance

FY 2018

151

Assurance

FY 2019

FY 2020

FY 2021People14,257

17,12014,997

17,96329,539People(%)

3,155（22.1）

4,574（26.7）

3,943（26.3）

4,269（23.8）

6,489（22.0）

Japan

1,087（19.4）

1,438（23.1）

1,372（23.0）

1,329（23.9）

2,051（15.7）

China

475（40.8）432（35.6）

400（30.9）

371（31.9）

449（38.3）

711（19.4）

793（25.3）

1,002（27.7）

595（22.2）

1,402（22.0）

446（26.2）

1,002（32.8）

635（29.7）

574（23.2）

927（27.9）

Europe290（19.6）

313（23.8）

147（22.9）

970（26.5）

971（27.9）

Other areas

146（22.8）

596（27.3）

387（28.9）

430（17.8）

689（27.4）

Number and Ratio of new female employees hired(By region)

Management

ASEAN, India, and the rest of Asia
North America

People(%)*2 Approximately 50,000 manufacturing workers not registered in the employee database and approximately 35,000 employees of some newly consolidated companies are not included.

Reporting Boundary
Number and Ratioof female and nonJapanese executive
and corporate
officers

Number of female executive andcorporate officers

Unit
Hitachi, Ltd.

June 2019

July 2020

June 2021

June 2022

People

2

4

5

7

9

%

2.6

5.0

7.1

10.1

12.2

Number of non-Japanese executive
and corporate officers

People

5

7

6

8

13

Ratio of non-Japanese executive
and corporate officers

%

6.4

8.8

8.6

11.6

17.6

Ratio of female executive andcorporate officers

Reporting Boundary
Number and Ratioof female and nonJapanese Directors

June 2018

Unit

Total
Male

Hitachi, Ltd.

FemaleJune 2021

June 2022

11

13

13

12

People

10

9

11

11

10

%

83.3

81.8

84.6

84.6

83.3

2

2

2

2

2

16.7

18.2

15.4

15.4

16.7

8

7

7

7

7

66.7

63.6

53.8

53.8

58.3

4

4

6

6

5

33.3

36.4

46.2

46.2

41.7

People%Outside Japan

July 2020

12

PeopleHitachi, Ltd.

June 2019

People%Japan

June 2018

People%Hitachi Sustainability Report 2022

Contents

Introduction

Reporting Boundary
Maternity/partner's

Hitachi, Ltd.

Utilization rate*

5

Management

Environmental

Unit

FY 2017

Male

leave

Governance

FY 2018

152

Assurance

FY 2019

FY 2020

FY 2021

32.7

37.8

38.1

33.8

32.9

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

99.7

100.0

98.4

99.7

96.9

97.7

97.5

99.2

100.0

100.0

99.7

98.5

2.2

2.7

4.0

7.3

9.9

99.7

100.0

99.6

99.6

100.0

100.0

94.3

100.0

100.0

100.0

98.5

97.4

97.4

98.9

100.0

96.6

90.9

84.8

71.4

94.4

98.0

99.4

95.5

98.0

96.6

%
FemaleReturn rate forrecipients*6

Male%
FemaleRetention rate
for recipients*7

Male%
FemaleChildcare leave

Social

Hitachi, Ltd.

Utilization rate*

8

Male
%
FemaleReturn rate forrecipients*9

Male%
FemaleRetention rate
for recipients*10

Male%
Female*5 Total number of employees who took maternity leave or partner’s maternity leaves/Total number of employees with newborn children*6 Total number of employees not resigning on the day after completing maternity leave or partner’s maternity leaves/Total number of employees who took maternity leave or partner’s maternity leave*7 Total number of employees who did not resign within one year after maternity leave or partner’s maternity leave/Total number of employees who took maternity leave or partner’s maternity leave*8 Total number of employees who took child-care leave/Total number of employees with newborn children*9 Total number of employees returning from child-care leave/Total number of employees who planned to return from child-care leave. Number of employees returning excludes those who planned to return and resigned voluntary without retuning*10 Total number of employees continuously working one year after returning from child-care leave/Total number of employees returning from child-care leave

Reporting Boundary
Employment of people with disabilities
Employment rate of people with disabilities

Hitachi Group companies in Japan*11

Unit

June 2018

June 2019

June 2020

June 2021

June 2022

People

1,848

1,899

2,403

2,575

2,767

%

2.23

2.26

2.33

2.37

2.43

*11 It includes special subsidiaries and related Group companies. (There were 1 special subsidiaries and 23 related Group companies in June 2022.)

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

Unit

FY 2017

SocialGovernance

153

Assurance

Global Human Capital Management
Reporting Boundary
Percentage of
positive responses
to employee
engagement
questions

Hitachi Group

Global average(By region)

%
Japan
%
Outside JapanFY 2018

FY 2019

FY 2020

FY 2021

58

60

60

62

65

ー

ー

ー

ー

56

ー

ー

ー

ー

80

Notes: 1. Questions change slightly each year. Above figures are not adjusted for changes in questions.
2. In fiscal 2021, the composition of questions measuring employee engagement was revised. The percentage was calculated from the average of the percentage of positive responses to the following four questions: pride in working for Hitachi; whether it is agreat place to work that one would recommend to others; job satisfaction and sense of accomplishment; and desire to continue working for Hitachi for the foreseeable future.

Talent Development
Reporting Boundary
Number of participantsof training programs

Hitachi Group

Training hours per
employee

Hitachi Group

Average amountinvested in education
per employee*1

For management-level leadership

Unit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021People

3,821

3,844

4,063

3,559

3,976

Hours

―

―

―

―

25.6

―

―

―

61,700＊2

57,700 ＊3

118,500＊4

127,800＊5

128,000＊6――

Hitachi GroupYen
Hitachi Group companies in Japan*1 The scope of data was changed from the Hitachi Group in Japan to the Hitachi Group from fiscal 2020.
*2 Hitachi, Ltd., 45 Group companies in Japan, and 78 Group companies outside Japan, total 124.
*3 Hitachi, Ltd., 44 Group companies in Japan, and 63 Group companies outside Japan, total 108.
*4 Hitachi, Ltd. and 14 major Group companies in Japan*5 Hitachi, Ltd. and 13 major Group companies in Japan*6 Hitachi, Ltd. and 12 major Group companies in Japan

Reporting Boundary
Digital talent
headcount*7

Hitachi Group

Total

Unit
PeopleJapan(By region)

PeopleOutside JapanFY 2017

FY 2018

FY 2019

FY 2020

FY 2021――

Approx. 30,000

Approx. 35,000

Approx. 67,000ーー

Approx. 19,000

Approx. 23,000

Approx. 29,000ーー

Approx. 11,000

Approx. 12,000

Approx. 38,000*7 Disclosures began in fiscal 2019. “Digital talent” is defined as those who possess any of the 12 capabilities required for digital business, such as data science and security. The digital talent accumulation is the total number of capabilities possessed by employees.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

154

Assurance

Occupational Health and Safety
Reporting Boundary
Number of fatal accidents

Hitachi Group (including
contractors)

Number of deaths

Hitachi Group

Employees

Hitachi, Ltd.

Employees

Contractors

Contractors

Lost-time accidents

Unit

2017

Cases

PeopleHitachi Group*2
Hitachi Group companies in Japan*²

Cases

Hitachi, Ltd.

2018

2019

2020

2021

4

0

5

3

2

5

0

4

1

1

0

0

0

0

0

0

0

1

2

1

485

506

396

314

434

92

64

57

52

54

11

6

6

4

3

Occupational accident severity rate*1

Hitachi Group companies in Japan*²

―

0.17

0.11

0.03

0.00

0.00

Occupational accident frequency
rate *1

Hitachi Group companies in Japan*²

―

0.25

0.2

0.17

0.17

0.17

Hitachi Group

Global total

―

4.22

4.20

3.45

2.89

2.69

(By region) Japan

―

1.85

1.64

1.53

1.34

1.20

Overseas total

―

7.42

7.43

5.78

4.90

3.80

North America

24.33

27.96

20.76

18.98

18.46

Central and South America

1.62

0.44

0.57

2.12

1.69

Europe

10.82

6.08

4.78

3.09

3.71

1.44

1.44

1.63

1.07

0.53

1.53

1.46

1.17

1.12

1.06

Asia
(excluding India and China)

4.41

3.34

2.63

1.55

1.30

Oceania

24.41

21.94

29.07

12.95

5.32

Africa

9.93

11.76

9.72

25.37

1.43

Hitachi Group’s Global Safety
Figures (Occurrence Rate)*3

India(By region)

China

―

Notes: The period for each year is from January to December.
*1 Occupational accidents are defined as those involving fatality or work-time loss of one day or more.
*2 Hitachi Group figures for Japan, including Hitachi, Ltd., are for 201 Group companies in 2017, 188 in 2018, 169 in 2019, 136 in 2020, and 131 in 2021.
*3 The occurrence rate is the rate of workplace accidents per 1,000 directly contracted employees resulting in injuries without lost workday or more.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Reporting Boundary

Unit

Hitachi Group companies （By health type） Mental
in Japan
PhysicalAbsence rate*4

Environmental

Social2017

Governance

2018

155

Assurance

2019

2020

2021

0.60

0.64

0.65

0.62

0.66

0.26

0.24

0.25

0.22

0.21

%

*4 The percentage of employees taking sick leave for seven or more consecutive days or formally taking leave (number of employees taking sick leave per month/number of employees per month × 100)Reporting Boundary
Medical Exam andScreening Attendance
Rates

Hitachi Group companies
in JapanUnit(By exam type) General physical exam*

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

78.5

79.3

81.2

81.1

80.6

51.1

53.2

56.3

56.6

57.1

35.6

37.1

38.7

39.1

39.3

Stomach cancer screening*8

80.7

80.6

82.7

82.2

84.7

Intestinal cancer screening*8

81.4

81.3

83.5

83.0

85.5

Lung cancer screening*

92.9

93.2

95.8

96.8

98.0

31.5

30.9

29.8

28.4

27.6

5

Breast cancer screening*

6

Uterine cancer screening*

7

%

9

Smoking Rate*

10

Hitachi Group companies in Japan*5 Men and women aged 35 and over
*6 Women aged 30 and over
*7 Women aged 25 and over
*8 Men and women aged 30 and over
*9 In fiscal 2016–2017, men and women aged 50 and over; from fiscal 2018, it changed to men and women aged 35 and over
*10 Employees aged 35 and over (results of specific medical examinations)%Hitachi Sustainability Report 2022

Contents

Introduction

Management

Unit

FY 2017

Environmental

SocialGovernance

156

Assurance

Value Chain Management
Responsible Procurement
Sustainable Procurement Activities
Reporting Boundary131

Sustainability monitoring
Hitachi Group

Sustainability audits

FY 2018

Companies

Sustainability Procurement Seminars

FY 2019

FY 2020

FY 2021271（Human rights）
2,524＊¹（Environment） 708＊¹

345

291

18

24

19

27

25

65

126

59

450

359

*1 Sustainability monitoring in fiscal 2021 was focused on human rights and environmental risk assessment.

Rate of Local Procurement of Materials for Main Regions
Reporting BoundaryUnit

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

China

78

88

90

98

95

Other Asian countries

71

71

71

80

87

70

81

78

77

83

57

66

69

70

83

Hitachi Group

Europe%AmericasGreen Purchasing
Green purchasing rate＊2

Reporting Boundary

Unit

Hitachi Group%FY 2017

FY 2018
86

FY 2019
86

FY 2020
84

FY 202183

83*2 The percentage, by monetary value, of products with the Eco Mark among all products purchased subject to the Act on Promoting Green Procurement.Act on Promoting Green Procurement.

Conflict Mineral Issue
Number of surveys on conflict minerals
conducted from customer requests

Reporting Boundary

Unit

Hitachi Group

Cases

*3

2017

2018
1,422

2019
1,874

2020
1,645

2021
1,836

ー*4

Note: Reported statistics is from January to December every year.
*3 Among all Business Units (BUs) and Group companies, there are a total of 20 BUs and Group companies that have a registered CSR manager. Among these 20, the boundary covered some BUs and Group companies that conducted the survey from customer requests.
*4 The data for 2020 are the most recent available, due to the timing of data compilation.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

157

Assurance

Community
Social Contribution Activities
Reporting Boundary

Funding for social

Hitachi Group andcontribution activities

The Hitachi Global Foundation*1

Unit

Total
(By area)

Million Yen
Human development
Of which, amount related to STEAM
Environment
Community support*1 FY 2017 Japan: Hitachi, Ltd., 141 Group companies, and The Hitachi Global Foundation. Outside Japan: 196 companies
FY 2018 Japan: Hitachi, Ltd., 141 Group companies, and The Hitachi Global Foundation. Outside Japan: 152 companies
FY 2019 Japan: Hitachi, Ltd., 153 Group companies, and The Hitachi Global Foundation. Outside Japan: 234 companies
FY 2020 Japan: Hitachi, Ltd., 119 Group companies, and The Hitachi Global Foundation. Outside Japan: 209 companies
FY 2021 Japan: Hitachi, Ltd., 103 Group companies, and The Hitachi Global Foundation. Outside Japan: 252 companies*2 Includes multiple activities by some individuals

FY 2019

FY 2020

FY 2021

1,888

1,833

1,910

1,869

983 (44.8)

931 (49.3)

744 (40.6)

850 (44.5)

512 (27.4)

740 (33.7)

383 (20.3)

278 (15.2)

325 (17.1)

201 (10.8)

64 (2.9)38 (2.0)51 (2.8)

23 (1.2)

36 (1.9)(%)

759 (34.6)

387 (20.5)477 (26.0)

206 (10.8)295 (15.8)

389 (17.7)

532 (28.2)

561 (30.6)

831 (43.5)

1,026 (54.9)

213 (9.7)

130 (6.9)

86 (4.7)

220 (11.5)

143 (7.7)

53,74954,62988,13439,98233,585

Of which, disaster relief
Hitachi Group and
The Hitachi Global Foundation*1

FY 2018

2,195

Million Yen

Other

Total employees
participating

FY 2017

Participants*2

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

158

159 Corporate Governance
159 Executive Summary
160 Corporate Governance

170 Business Ethics andCompliance

170 Executive Summary
171 B
 usiness Ethics and Compliance

177 Risk Management

Governance

177 Executive Summary
179 A ddressing Risks andOpportunities

182 B
 usiness Continuation Initiatives

184 Information Security
184 Executive Summary
185 Information Security
188 Personal Information Protections

190 Governance Data
190 Corporate Governance
191 Business Ethics and ComplianceHitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Corporate GovernanceWhy
ー Why it matters ー

Corporate
GovernanceSocialGovernance

Assurance

159

Relevant SDGs
GRI 103-2/103-3

Hitachi believes that promoting sound and highly transparent management is essential to achieving sustainable growth of corporate value. To this end, we take thestrengthening of corporate governance to be one of our most material management issues.
We are working to develop and further strengthen our corporate governance system by such means as thoroughly separating management oversight from execution andestablishing a system for prompt business execution.

What

How

ー What we are doing ーー How we are doing it ー・Implementing all of theprinciples of the Corporate
Governance Code・Conducting board meetings
in a way that sustainably
enhances corporate value
and shareholders’ common
interests
・CEO appointment,
dismissal, and succession
plan・Determining appropriatecompensation for directors
and executive officers
・Reflecting sustainability
targets in the executive
compensation evaluation
・Implementing internal
controls over financial
reporting・Enhancing collaboration
through tripartite audits
・Building a more effective
and efficient auditing
systemPolicy and promotion
structure

Hitachi, Ltd. adopted its current committee system in 2003 and has established an Audit Committee, Compensation
Committee, and Nominating Committee. Independent directors chair these committees and comprise the majority of themembers. The company has also created a system that enables sufficient exercise of supervisory functions by separating
the execution and supervision of business management.
Achievements in FY 2021

Administrative
performance of the Boardof Directors

To formulate the Mid-term Management Plan 2024, the Board of Directors held numerous discussions between executive officers
and directors on the plan’s direction and priority issues.

Ensuring legality, soundness,
Analyzed and evaluated the effectiveness of the Board of Directors
and transparency of
Hitachi’s businessIn addition to environmental targets such as decarbonization and resource efficiency, we introduced quantitative and qualitative
target setting for occupational health and safety and product quality in the compensation evaluation of all executive officers.
Reviewing executive
compensation systems
A restricted stock compensation unit system was introduced as compensation for non-Japanese executive officers and corporate
officers, and the scope of the system was applied to executives at some Group companies.

Hitachi Sustainability Report 2022

Contents

Corporate Governance

1999

Activities

2003

2010

 nhancement of Interactions with Capital Markets
E
Launched Hitachi IR Day(briefing on business strategy by division)
Clarified commitment of business unit top
management to capital markets

2010

Governance

160

Assurance

GRI 102-18/102-22/102-23/102-24
General Meeting of Shareholders
Senior Executive Committee
Appointment

Acceleration of Global ManagementIncreased number of independent directors, including
non-Japanese directors, to comprise a majority

2014

Development of Stewardship Code2015

Began Application of Corporate Governance Code2016

Enhanced Dissemination of Information about
Medium- to Long-term Sustainability
Published the Integrated Report

Accelerated the Social Innovation Businessacross Five Growth Fields
	Executive vice presidents were placed in five sectors
Held ESG briefing sessions		An independent director (chair of the Audit
Committee) and the CEO shared their remarks

2executive
members

members(including two women)
10 non-executive

1

1

1

Nominating
Committee

Compensation
Committee

Audit
Committee

4directors

ReportAppointment/
oversight

2 Board of DirectorsD emarcation of Management Oversight andExecution
Transitioned to a company with committees(currently a company with nominating committee, etc.)
Increased management speed and improved
management transparency

Development of Guidelines for Strengthening
Governance
Development of Corporate Governance Guidelines

2015

Social

Hitachi’s Corporate Governance Framework and Features (as of July 2022)

Introduction of Objective Perspective
Management Advisory Committees
Practical advice from experts in Japan andoverseas

Enforcement of Companies Act

2019

Environmental

Structure

2006

2012

Management

GRI 405-1

History of Hitachi’s Corporate Governance Reform

1999

Introduction

4 directors

President & CEO

Executive Vice Presidents
and Executive Officers/
Senior Vice Presidents andExecutive Officers/
Vice Presidents andExecutive Officers

5 directors*
3 Audit*One standing Audit
Committee member

Non-independent

3 Report

Internal
Auditing
OfficeExecutive
Officer
Department
in charge

3 AuditIndependent

Executive
Officer
Department
in charge

Department
in charge

Department
in charge

3 Audit
3 Report

3 AuditAccounting Auditors

POINT 1

POINT 2

POINT 3

Transparency in Management

Independence of the Board of Directors

Transitioned to a company with committees (currently
a company with a nominating committee, etc.) in 2003.
Hitachi established the Nominating Committee, theCompensation Committee and the Audit Committee, withindependent directors comprising the majority of members
and serving as chairpersons. This system ensurestransparency in management, separates the oversight andexecution of management, facilitates the full exercise ofoversight functions, and enables discussions and reports tobe conducted appropriately within these three committees.

Increased the number of independent directors,
including non-Japanese directors, in 2012.
The Board of Directors, which is chaired by an independent
director, has 12 members, including nine independent
directors, two directors who are also serving as executive
officers, and one director who is not serving as an executive
officer. The chairman of the Board is an independent
director. In addition, we have established a system thatfacilitates the full exercise of oversight functions by
maintaining a separation between management oversightand execution.

Enhanced Collaboration
through Tripartite Auditing
Hitachi’s Audit Committee
and internal audit sections
collaborate with thirdparty accounting auditors tostrengthen Tripartite Auditing
aimed at increasing theeffectiveness of internal controls.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

161

Assurance

Experience, Knowledge and Capabilities Required for Directors
Approach

GRI102-24

Hitachi Directors need to have a wide range of experience and knowledge in the global and diverse fields that are worthy of leading Hitachi's management to expand the Social Innovation Businessglobally, and have the qualities of a broad experience and expertise in management.
The experience, knowledge, capabilities and other qualities required for Hitachi directors are as follows.
Core Skills
Core qualities that ensure management oversight efficiency and decision-making functions

Professional Skills

Number ofapplicabledirectors

Number ofapplicabledirectors

Expertise and experience that enhances discussions pertaining to the promotion of theSocial Innovation BusinessCorporate
management

Corporate management experience and knowledge

12peopleGovernments
and internationalorganizations

Leadership experience in government, governmental agencies,
international organizations or economic associations that facilitate
an understanding of and response to regulations and social issues,
as well as practical experience at educational institutions

4
peopleGlobalbusiness

Business experience outside Japan or management
experience at a company that develops business globally

12peopleLegal affairs

Expertise and practical experience in legal affairs indispensablefor global business and the development of new business1
personRiskmanagement

Knowledge of risk assessment and management
necessary to maintain operations

12
peopleR&D andintellectual
property

Expertise and practical experience in R&D or intellectual property
facilitating the utilization of technology and the incorporation of
new technologies

2
peopleFinance andaccounting

Knowledge and management experience pertaining tofinancial accounting necessary for medium- to long-term
corporate value creation from a financial perspective

12
peopleDigitalPractical experience in industrial fields vital for promoting digitaltransformation (DX) in the Social Innovation Business4
peopleBoard of Directors Composition (As of July 2022)
Structure

Activities

Independence(ratio of independent directors)

Diversity(ratio of non-Japanese and female directors)

Diversity (by country of origin)
Germany: 1person
United Kingdom:
1personIndependent
directors
Nine people

75%

Non-Japanese
directors
Five people

United States:
2people41.7%

Japan:

Finance

India: 1person

Energy and resources

7peopleRetailMaterials andchemicals

Transportationand logistics

Automobiles
andtransportation

Electricity
and gas2 female directors(16.7% of overall
director total)

Industrial field

IT and services

Machinery
Electric andprecision instruments

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

162

Assurance

Highly Experienced Directors
Structure

Activities

GRI102-24

At Board of Directors, discussions are conducted from a variety of perspectives by directors possessing a wealth of experience and knowledge pertaining to management, legal affairs, accounting,capital markets, government agencies and digital initiatives at global corporations.
Name

Notes

Main industrial fields

Positions at Hitachi and responsibilities

Katsumi Ihara

Engaged in Sony Group management, possessing a wealth of experience and insight in the field of international
corporate management.

Electric and precision instruments,
finance

Independent director
Nominating Committee chairman
Audit Committee member
Compensation Committee member

Ravi Venkatesan

Possesses a wealth of experience and insight in international corporate management at Microsoft India and othercompanies, and in particular, the digital field and business in emerging markets.

IT and services

Independent director

Cynthia Carroll

Possesses a wealth of experience and insight as a manager of large international corporations including Anglo
American.

Materials and chemicals, energy andresources

Independent director
Nominating Committee member

Ikuro Sugawara

Held a leading position in the Ministry of Economy, Trade and Industry, and possesses a wealth of experience andinsight in the administrative field.

General industry

Independent director
Audit Committee member

Joe Harlan

Possesses a wealth of experience and insight in international corporate management, including at the Dow Chemical
Company.

Electricity and gas, energy andresources, materials and chemicals

Independent director
Compensation Committee member

Louise Pentland

Attorney licensed in New York and the UK possessing a wealth of insight into corporate legal affairs and corporate
governance cultivated through experience as a Legal Officer at PayPal Holdings and other large global corporations.

IT and services, finance and retailIndependent director

Takatoshi Yamamoto

Possesses extensive insight into business and management in the fields of corporate analysis and international
corporate management.

Finance

Independent director
Compensation Committee chairman

Hiroaki Yoshihara

Possesses a high degree of professional knowledge and a wealth of experience in the fields of international
corporate management, finance and accounting.

Finance, general industry

Independent director
Nominating Committee member
Audit Committee chairman

Helmuth Ludwig

Mainly engaged in Siemens Group management, possessing a wealth of experience and insight in international
corporate management and the digital field in particular.

Machinery, manufacturing

Independent director
Audit Committee member

Keiji Kojima

Engaged in R&D at Hitachi and its group companies, most recently in the Smart Life sector, possessing a wealth ofexperience and achievements, particularly in digital businesses related to Lumada global deployment.

IT and services

Director, Representative Executive Officer,
President & CEO
Compensation Committee member

Hideaki SekiEngaged in managing Hitachi and group company elevator/escalator and automotive systems businesses,
possessing a wealth of experience and achievements, including promoting the global expansion of these businesses.

Automobiles and transportation,
machinery

Director
Audit Committee member

Toshiaki Higashihara

Engaged in managing a wide range of fields at Hitachi and its group companies, including the social infrastructureand electric power system businesses, possessing a wealth of experience and achievements that include promoting
the global expansion of Hitachi Group business.

Transportation and logistics, IT andservices, energy and resources

Director, Executive Chairman, Representative
Executive Officer
Nominating Committee member

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialAdministrative Performance of the Board of Directors
Structure

Assurance

163

Providing Information to Independent Directors

Activities

Activities

The Board of Directors approves basic management policy for the Hitachi Group and oversees the execution of the duties ofexecutive officers and directors in order to sustainably enhance corporate value and the shareholders’ common interests. The
basic management policy includes the Mid-term Management Plan and annual budget compilation. The Board of Directors
focuses on strategic issues related to the basic management policy, as well as other items to be resolved that are provided in laws,
regulations, the Articles of Incorporation, and the Board of Directors Regulations.
Fiscal 2021 was a year in which we formulated the next Mid-term Management Plan, with the Board of Directors holding
numerous discussions between executive officers and directors on the plan’s direction and priority issues. At a Board meeting
held in October 2021, then CEO Toshiaki Higashihara (currently Executive Chairman of the Board) provided a progress report on
the 2021 Mid-term Management Plan, facilitating a common understanding among directors regarding issues that need to bestrengthened in the next Mid-term Management Plan. This process was aimed at sharing Hitachi’s aspirations as a Company
and examining specific plan details. In promoting the execution of management strategies, more time is spent discussing anddeliberating than is used to explain quarterly financial reports and business strategies. As for GlobalLogic, which plays a major rolein promoting Hitachi's digital strategy, the Board of Directors is informed of the post-acquisition PMI plan and progress, and thestatus of promotion is shared on a regular basis. In terms of environmental initiatives, a report on Hitachi’s participation in COP26
and the revision of long-term environmental targets was provided, affirming Hitachi's efforts toward the environment including
carbon neutrality.

 oard of Directors Meetings in Fiscal
B
2021
Fiscal 2021 Board of Directors Meeting
Results
Meetings held

GovernanceNine days

Average numberof agenda items

7.5 per meeting

Average meeting
length

3.5 hours (longest
meeting 5.7 hours)

Discussion of Major Themes
Discussions/deliberations

Explanations

FinancialreportingBusinessstrategy

Mid-term
Management Plan

0

25

50

75

100

Average time/meeting (minutes)

The Board of Directors holds individual meetings and site visits
to improve the effectiveness of the Board of Directors andincrease opportunities for information sharing. Site visits wereconducted on a limited basis in fiscal 2021 due to the impactof the COVID-19 pandemic, but through online participationin the Hitachi Social Innovation Forum, attendance at InternalBusiness Conference and Research Presentation Meeting held
at research institutes, we provided opportunities to deepen
understanding of the business and engage in dialogue withsenior management and front-line employees.

Activities of the Three Committees
Activities

Nominating Committee
The Nominating Committee has the authority to determine
proposals submitted to the general meeting of shareholders
for the election and dismissal of directors. The Nominating
Committee consists of four directors, three of whom are
independent directors. This committee determines director
candidates, holds preliminary discussions concerning
the appointment and dismissal of the CEO and receives
advance reports on the selection and dismissal of executive
officers.
In fiscal 2021, the Nominating Committee held meetingson 10 days.
Primary Activities
In addition to deciding upon the contents of proposals madeconcerning director appointments at the Annual General
Meeting of Shareholders, the Nominating Committee
confirmed and deliberated proposals for CEO appointments

Hitachi Sustainability Report 2022

Contents

and confirmed receipt of a preliminary report on theexecutive officer system implemented in fiscal 2022. In
addition, it promoted committee-related activities, including
discussions and individual interviews aimed at developing
candidates for future management and leadership positions.
Audit Committee
The Audit Committee has the authority to audit the executionof duties of directors and executive officers and to decide on
proposals submitted to the general meeting of shareholders
for the election and dismissal of accounting auditors.
The Audit Committee currently consists of five directors,
including four independent directors and one standing Audit
Committee member.
Hiroaki Yoshihara, the chairman of the Audit Committee,
has been involved in accounting and other business practices
at the KPMG Group for many years and possesses a
considerable wealth of knowledge concerning finance andaccounting.
In fiscal 2021, the Audit Committee held meetings on
15 days.
Primary Activities
The Audit Committee conducted activities that were focusedon its priority matters for consideration, which included
the strengthening of collaboration and the facilitation of
information sharing under a “Tripartite Audit” (audit by the
Audit Committee, internal audit and audit by accounting
auditors), and auditing of the establishment and operationof internal control systems from the perspective of risk
management and validity of execution of duties. In addition,a standing committee member worked to obtain information
as needed in a timely and accurate manner, mainly bycollaborating with the Internal Auditing Office, among otherdepartments, and attending important internal meetings

Introduction

Management

Environmental

SocialGovernance

Assurance

164

such as the Senior Executive Committee, and facilitated
information sharing with other committee members.

CEO Appointment, Dismissal, and Succession Plan

Compensation Committee
The Compensation Committee has the authority todetermine remuneration policies for directors and executive
officers and remuneration for individuals (including amountsof remuneration) based on them. Currently composed offour directors, including three independent directors, thecommittee strives to ensure objectivity, transparency, andfairness in the remuneration determination process. In
addition, the Compensation Committee verifies and reviews
details of the process used for determining remuneration
for individuals, including assessments concerning basic
remuneration amounts, evaluations of progress madetoward individual targets, and performance appraisals thatare tied to short-term incentive compensation.
In fiscal 2021, the Compensation Committee held
meetings on five days.

After a preliminary report to the Nominating Committee,
Hitachi’s Board of Directors decides upon the appointment
and dismissal of executive officers with the goal of
constructing an optimal business execution system for
management. As stipulated in our Corporate Governance
Guidelines, our basic policy concerning the CEO requiresthat individuals serving in the position of CEO have extensive
experience and achievements in the field of company
management. They must also be considered optimally suitedfor conducting management aimed at achieving Hitachi’s
goals of continuously raising its corporate value and further
serving the common interests of its shareholders. Decisions
regarding the appointment or dismissal of the CEO shall bemade based on prior deliberations and proposals by the
Nominating Committee.
Regarding our CEO Succession Plan, as the speed ofchange in the management environment accelerates, we are
striving to build a system that enables us to appropriately
and promptly secure and develop (both internally andglobally) necessary management personnel who will provide
leadership that will allow us to realize our growth strategies.
Accordingly, we are also concentrating on providing training
for selected employees while targeting the early developmentof candidates for future management positions. Moreover,
we are developing next-generation leaders capable of acting
authoritatively and resolutely by establishing forums whereparticipants can discuss what is necessary for Hitachi’s
future growth and make recommendations to management.

Primary Activities
The Compensation Committee determined remuneration
amounts for individual directors and executive officers
in accordance with established policies while verifying
and reviewing the processes and results of appraisals
for performance and individual targets tied to short-term
incentive compensation for executive officers.
In addition, the committee reviewed the executive
compensation system while giving due consideration tocompensation granted to managers at global companies
and the goal of sharing value with shareholders, anddecided upon policies covering remuneration for directors
and executive officers in fiscal 2022.

Activities

GRI102-24

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Analysis and Evaluation of the Effectiveness of the Board of Directors
Activities

GRI 102-28

Hitachi evaluates the effectiveness of its Board of Directors each year in a continuous effort tomaintain and improve its functions.
Fiscal 2021 Evaluation Process

1. Questionnaire-based
self-assessment by
each director(February–March
2022)

Points of evaluation

 omposition: Diversity on the Board, the number and proportion of Inside and OutsideC
directors, etc.
Visibility of responsibilities and roles of the Board
Meeting operation: Meeting frequency, deliberation time, agenda setting, quality ofdeliberation, Chairman’s role, etc.
Contribution: Contribution to strategy building and change of company culture,contribution to constructive discussions, utilization of Director’s knowledge andexperience, discussions contribution to CEO succession plan, etc.
Understanding of the Company: Hitachi Group Identity, risk factors, potential challenges
and opportunities.
Three committees: Composition, responsibilities and roles, coordination with the Board, etc.
Supporting system for the Board: Provision of necessary information such as the Board
materials, etc.

2. Discussions among
independent directors(March 2022)

Independent directors had a meeting and discussed the Board effectiveness there
referring to the Board’s activities in each evaluation items set out in the above 1.

3. Discussions at theBoard meeting(May 2022)

The Board analyzed and evaluated its effectiveness as a whole and confirmed the policy
on approaches to further enhance the Board’s effectiveness based on the results of thepreceding process, considering comparison to the evaluation results of the previous year
and measures taken for improving its effectiveness in fiscal 2022.

Evaluation Results and Future Initiatives

Overall evaluation in fiscal
2021

Environmental

Policy on listed company strategic shareholdings
Hitachi’s basic policy is not to acquire or hold other companies’ shares except in cases whereacquiring or holding such shares is necessary in terms of transactions or business relationships.
We will promote reducing shares already held unless significance of holding shares or economic
rationales of holding are confirmed.
The Board of Directors verifies the appropriateness of all stock holdings every year. To
this end, each individual stock was re-examined as to the purpose of holding the shares andwhether benefits from holding shares are in line with target level of capital efficiency. As theresult of verification, we promote the sales of shares for which significance of holding sharesand economic rationale are not confirmed. In the fiscal year ended March 31, 2022, we reduced
the number of shares held in 10 listed stocks (total amount sold: 47,750 million yen).
Strategic shareholding status
Number of stocks held*1500400

 ost COVID-19, increase opportunities for meetings with BU CEOs and others andP
restart Independent Director visits to Group sites.
Further improve structure and content of materials for Board meetings and ensure
provision of materials well in advance of meetings.

401

375

332

309

288

272

233

217

2018

2019

2020

2021

179,668

141,859

201,055

274,4702000Enhancement of theBoard support system
and improvement ofpractical issues inoperations

396

300

 he Board assessed that Board members are diverse and make use of their knowledgeTand expertise to speak out, having vigorous discussions especially on matters related tobusiness strategies such as the Mid-term Management Plan targeting the medium- tolong-term growth of corporate value. The Board concluded that the effectiveness of theBoard as a whole is maintained.

Further enhancement ofcorporate governance

165

Assurance

Activities100 rovide opportunities to freely discuss corporate culture and the overall future of thePbusiness portfolio to deepen discussions.
Discuss specific strategies including important themes (such as GX and DX) in eachsector and BU to confirm consistency with the Mid-term Management Plan.

Governance

Policy regarding strategic shareholdings

Evaluation results

Future initiatives

Social

2012

2013

2014

2015

2016

2017

198

Total amount recorded on balance sheet * (millions of yen)1

244,181353,957

334,617*1 Total of listed and unlisted shares

239,993324,323

270,336(FY)Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialDirector and Executive Officer Compensation
SystemGRI 102-35/102-36

Basic Policy• Compensation shall be such that it enables the Company to attract necessary personnel to achieve an improvement in corporate value through global
business growth.
• Compensation shall be commensurate with the roles and responsibilities of each Director and Executive Officer.
• Compensation for Directors shall be such that it enables them to the management oversight functions effectively.
• Compensation for Executive Officers shall be such that it enables them to contribute to sustained improvement in corporate value through the executionof business and employs an appropriate balance between short-term performance and medium- and long-term performance.
• The level of compensation shall be determined considering compensation levels at other companies as well as economic and market trends.
• The Compensation Committee utilizes external experts to gain expert advice and an objective viewpoint, if necessary, for considering the details andamounts of compensation.

Compensation Structure(1) Directors
Compensation for Directors is basic remuneration as fixed pay. The amount of basic remuneration is decided by adjusting a basic
amount to reflect fulltime or part-time status, committee membership and position, and travel from place of residence, etc. A
Director concurrently serving as an Executive Officer is not paid compensation as a Director.
(2) Executive Officers
Compensation for Executive Officers consists of basic remuneration as fixed pay and short-term incentive compensation andmedium- and long-term incentive compensation as variable pay.
The basic amount of basic remuneration, short-term incentive compensation and medium- and long-term incentive
compensation is set based on the ratio of 1:1:1 as the standard, taking into account the composition of executive compensation
for major global companies, in order to improve corporate value through the growth of global businesses. The higher the position
an Executive Officer holds, the greater the proportion of variable pay is set to the total annual compensation.
If it is found that an executive officer has engaged in misconduct during their term of office, any compensation already paid
shall be returned to the Company (clawback provision).
Please refer to Compensation to Directors and Executive Officers on page 96 of the Annual Securities Report(The 153rd Business Term)
https://www.hitachi.com/IR-e/library/stock/hit_sr_fy2021_4_en.pdf

Governance

166

Assurance

Reflecting Sustainability Targets in Executive
Compensation Evaluation
SystemGRI 102-35/102-36

In fiscal 2021, Hitachi introduced evaluations that takeenvironmental value into consideration in the executive
compensation system for the first time with the aim ofaccelerating the creation of environmental value. All executive
officers, including the CEO, set targets for environmental value
and were evaluated for their achievement of individual targets.
From fiscal 2022, in addition to environmental targets
such as decarbonization and resource efficiency, we
introduced quantitative and qualitative target setting foroccupational health and safety and product quality in thecompensation evaluation of all executive officers to further
advance sustainable management.
 xamples of Sustainability Targets Reflected in Fiscal 2022
E
Compensation Evaluations
Sustainability Targets

Decarbonization

 fforts to realize carbon neutrality*1 in businessEsites (factories and offices) by fiscal 2030
Efforts to achieve carbon neutrality*1 by fiscal
2050 throughout the value chain

Resource
efficiency

Efforts related to resource efficiency

Occupational
health and safety

Zero fatal accidents
Wellbeing initiatives

Product Quality

Efforts to enhance product quality*1 Regarding fiscal 2030 and fiscal 2050 decarbonization targets, singleyear targets are set Group-wide and for each BU.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

167

Assurance

Compensation to Executive Officers (Fiscal 2022)
SystemGRI 102-35/102-36

Activities

Basic remuneration: short-term incentive compensation: medium- and long-term incentive compensation = 1:1:1 ratio
Total remuneration
Fixed pay
1 Basic remuneration

1

Variable pay
2 Short-term incentive
compensation

3 Medium- and long-term
incentive compensation

Basic remuneration

Set according to the relevant position by adjusting that amount to reflect financial results andindividual performance.

2

Short-term incentive compensation

The amount of short-term incentive compensation is decided within a range of 0 to 200% of abasic amount set according to the relevant position by adjusting that amount to reflect financial
results and individual performance.
From fiscal 2022, we are also working to further strengthen accountability by linking theachievement of KPIs, including sustainability indicators specified in the Mid-term Management
Plan, to the performance evaluation of executive officers.

3

Medium- and long-term incentive compensation

Shares of restricted stock were introduced in fiscal 2019 as compensation for Japanese
executive officers and corporate officers (the executive positions next to Executive Officers)
to promote management from a medium- and long-term perspective and to provide
incentives to bring about a sustainable increase in enterprise value by further promoting senior
management’s shared values with shareholders through the holding of shares during theirterm of office. In fiscal 2020, a restricted stock compensation unit system*1 was introduced ascompensation for non-Japanese executive officers and corporate officers. In fiscal 2021, thescope of the restricted stock compensation unit system was expanded to executives at someGroup companies.

Shares of restricted stockThe restriction on transfers shall be lifted if executive officers resign from all of the positionsof the company’s executive officer, director, and corporate officer.
With regard to one-half of the granted shares of restricted stock, the number of shares forwhich the transfer restriction is lifted shall be determined after ex-post evaluation. In the expost evaluation, the total shareholder return (TSR) of Hitachi stock over the three years fromthe beginning of the fiscal year when the medium- and long-term incentive compensation is
granted is compared to growth rate of TOPIX over the same period.
TSR/TOPIX growth rate

Shares for which the transfer restrictions are lifted(Executive officers forming the Senior Executive Committee) *1(Other executive officers)

Linked to evaluations ofCompany-wide performance (80%)

Linked to evaluations ofdivisional performance (50%)
Evaluated referring to adjusted operating income
and operating cash flows for each division, among
other indicators, to measure the level of achievementof targets under the Mid-term Management Plan
and the annual budgets for divisions.

Linked to evaluationsof Company-wide
performance (30%)
Evaluated referring toconsolidated revenues, adjusted
operating income, EBIT, and net
income attributable to Hitachi,Ltd. stockholders in order tomeasure the level of achievementof consolidated financial forecasts
disclosed to stakeholders,
including shareholders andinvestors.

Linked to evaluations
regarding theachievement of
individual targets (20%)

120% or more

Transfer restrictions are lifted for all granted shares.

Between 80% or more but less than 120%

Transfer restrictions are lifted for part of granted shares*2.

Varies according to theevaluation of the level ofachievement of individual
targets for each Executive
Officer determined basedon his/her responsibility.

Less than 80%

No granted shares have transfer restrictions lifted.

*1 The rates used for “other executive officers” apply when “executive officers forming the Senior Executive Committee” are in
charge of sector or business unit.

*1 A system in which restricted stock compensation units are granted to the eligible persons, and over three years from the startof the business year in which the restricted stock compensation units were granted, one-third of the number of restricted
stock compensation units granted is paid in each fiscal year that passes, as Hitachi stock or cash.
*2 Number of shares for which the transfer restrictions are lifted = Number of granted shares × {(TSR/TOPIX Growth Rate Ratio
× 1.25) – 0.5}
Shares whose transfer restrictions are not lifted shall be acquired by Hitachi without consideration

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialInternal Control over Financial Reporting

Structure

Creation of a system focused on maintaining
transparency and a sense of urgency

Enhanced management of risk associatedwith global business expansion

Financial
Services
AgencyInternal Control Report

Internal Control Assessment Framework
Hitachi, Ltd. President
Chief Financial Officer

Audit
Committee

ReportCooperation

ReportReportReportJ-SOX Committee

Business Units andMajor Group Companies
ReportSubsidiary Companies

Accounting
auditors(accounting
audits)Tripartite
audit
approachInternal
Auditing Office(Internal Audit
Office)Execution

External Audit

Regulation

168

Structure

GRI 102-11

Ensuring transparency and a sense of urgency
and improving the effectiveness of internal controls

Sharing of risk information
and assessments of risk response•Sharing of risk information •Reciprocal reporting andevaluation concerning•Audit plans and resultsGroup audits•Internal audit results•Reporting on the quality
control system

Audit
Committee•Audit plans•Audit Policy and auditing
methods•Assessment and reporting ofaudit results•Methods and results of internal
audits•Evaluation of group audit system

Tripartite
audit
approachInternal
Auditing Office(Internal Audit
Office)GRI 102-11/102-19

Audit Committee
The Audit Committee formulates audit plans in accordancewith risk-based approaches and conducts audits for eachconsolidated business unit. Cooperating with the internal
audit section audits, Audit Committee members meet
directly with business unit heads. These members shareconcerns and issues related to the implementation ofbusiness strategies aimed at achieving sustainable growththat require attention with the internal audit section. At
that time, the committee also verifies matters that carryhigh levels of risk in terms of quality, measuring theserisks through employee awareness surveys and thoroughimplementation of business strategies.
Internal Audit Section

Enhanced Collaboration through Tripartite Audits
In pursuit of sustainable growth in corporate
value, Hitachi’s Audit Committee andinternal audit section collaborate with thirdparty accounting auditors to strengthen its“Tripartite Auditing,” which aims to increase
the effectiveness of internal controls. The
three parties communicate closely to sharerisk information and assessments concerning
risk response while securing transparency andensuring appropriate checks and balances.

Assurance

Building a More Effective and Efficient Auditing System

Structure

To ensure the reliability of its consolidated
financial reporting, the Hitachi Group isestablishing and implementing relevant internal
controls. We evaluate their effectiveness byadhering to standards for the evaluation ofinternal controls related to financial reportingthat are generally accepted as fair andreasonable.
Furthermore, we have established the
J-SOX Committee with the goal of raising
the effectiveness of these internal controls.
This committee evaluates internal control
effectiveness and establishes frameworks
designed to improve and strengthen them.

GovernanceAccounting
auditors(accounting
audits)•Exchange of information regarding audit plans,
auditing methods, and audit results•Sharing of risk information•Division of internal auditing duties and mutual
utilization of audit information

Hitachi’s internal audit section performs regular internal auditsof each business unit, business division and subsidiary. Thissection reports directly to the President and is independent
from organizations that are subject to its audits. The internal
audit section also formulates audit plans based on past audit
records and the most recent business circumstances. In
addition, this section performs audits while sharing information
with the Audit Committee, ensuring their effectiveness. Theinternal audit section at Hitachi is responsible for confirming thelegality and appropriateness of all business operations, including
those related to accounting, production management, sales,purchasing, IT systems, compliance, and human resources.
Furthermore, acting on behalf of our management team, theinternal audit section confirms whether employees are wellversed in the ideas and policies of management, whether
operations are being carried out based on these ideas andPolicies, and whether business strategies are being implemented
in a way that will efficiently lead to sustainable growth.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

Social

Accounting Auditors
Accounting auditors perform audits that focus on theaccuracy and reliability of our financial statements. First, they
adopt a risk-based approach in response to the group’s
overall financial status. Applying this approach, they thendetermine the scope and methods of the audit, formulate
an audit plan, and share opinions with the Audit Committee.
Next, based on the audit plan, they perform audits on eachof the five sectors and the business units that comprisethem, enabling effective and efficient understanding ofdata related to Hitachi’s finance department and each ofits business segments. If, during the auditing process, our
accounting auditors discover a degree of risk that could
impact future financial statements significantly or issues
that, even if monetarily small, could have a large qualitative
effect, they share related information regarding these risks
and issues and the progress on a response from the related
divisions with the Audit Committee and internal audit section.
They also work to improve and raise the effectiveness ofaudits by submitting “management letters” containing pointsof concern and improvement suggestions through the financedepartment. Recently, they have also been working to raise
the efficiency of checks on the accuracy of numerical figuresby using some IT systems to investigate all cases rather thanperforming test-checking through sampling.

Sector Corporate Auditor System
To further raise audit effectiveness, sector corporate
auditors were assigned in each core businessfield (sector) in April 2019. Through this action, we
expanded the internal control system spearheaded
by chief auditors and enhanced collaboration withexecutive vice presidents managing each sector, as
well as with the Audit Committee.
Although sector corporate auditors do not act asorgans under the Companies Act, they still assume
responsibility for governance in each sector. Statutory
auditors, which function as organs at Hitachi
subsidiaries under the Companies Act, also report tosector corporate auditors and work to improve theeffectiveness of Hitachi’s internal control systems.
IT Utilization
When conducting business audits, we use IT systems
to expeditiously search for reference information
contained within materials submitted prior to audit
in an attempt to improve efficiency. We are currently
enhancing a system that will allow our internal
audit section to share information with professional
accounting auditors using a data lake. When reading
audit reports submitted to the President by theinternal audit section, the President must be able
to quickly understand the issues identified by thesereports and make prompt judgments concerningwhether immediate action is required. In the future,
our internal audit section will continue to maintainits transparency and independence while working
to improve audit efficiency as one member of our
Tripartite Audit system.

Governance

Assurance

169

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernanceBusiness Ethics and ComplianceWhy
ー Why it matters ー

Relevant SDGs
GRI 103-2

With the globalization of the economy, overarching regulations and differences in governmental and economic frameworks, the importance of building a culture based on ethics,
honesty and integrity are key.
Today more than ever, corporations are called upon to be ethical, fair and transparent in the way they do business. This obligation is rightly front and center in the minds ofHitachi’s stakeholders.
Additionally, with stricter regulations in countries and regions around the world regarding important business practices such as bribery prevention and adherence tocompetition laws, Hitachi has formulated in-house regulations in line with international standards and is sharing these regulations and enforcing strict compliance with themthroughout the Group.

How

What

ー What we are doing ーBusiness Ethics
and Compliance

170

Assurance

・Complying with HitachiGroup Codes of Conduct
・Cultivating a Culture of
Ethics and Complianceー How we are doing it ー

Policy and promotion
structure・Ethics and Compliance
Risk Assessments
・Enhancing the Hitachi
Global Compliance Hotline
・Preventing bribery andcorrupt practices
・Complying withcompetition laws
・Carrying out strict export
controls

The Hitachi Group Codes of Conduct (including the Hitachi Group Code of Ethics and Compliance) spell out decision-making
procedures and actions for all Hitachi Group executives and employees. To promote compliance, the Hitachi Group Head of Ethics
and Compliance leads the One Hitachi Compliance Program, a program for global compliance initiatives. We work together with the
Ethics and Compliance representatives, located in group companies around the globe, to streamline business ethics standards todrive efficiencies and the effectiveness of the One Hitachi Compliance Program.
Achievements in FY 2021

Complying with HitachiGroup Codes of Conduct

Translated into multiple languages and shared with Hitachi Group executive officers and employees around the world.
Set a global target to measure and improve Hitachi’s ethical culture.

Cultivating a Culture of
Ethics and Compliance

Conducted ethics and compliance training for all executive officers and employees.
(Participation rate: 99.1% in the Hitachi Group globally)
Joined Ethisphere’s Business Ethics Leadership Alliance.

・Implementing thorough tax
compliance

Enhancing the Hitachi
Global Compliance Hotline
Implement preventionof bribery and corrupt
practices and compliancewith competition law

Received 1,023 reports from all Group companies worldwide.
Established Standards for the Value Limits and Frequency of Entertainment and Gifts Applicable to Commercial Parties and revised
the Approval Procedures on Donation Expenditures.
Revised guidelines for preventing cartel activity.

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

Assurance

171

Business Ethics and Compliance
Doing Business Ethically, Honestly andTransparently
Approach

GRI 102-17/406-1

Hitachi counts on employees – including supervisors,
managers, leaders – and business partners to know andfollow the ethical, legal, and policy requirements that apply
to their jobs and for reporting any suspected violations of law
or the Hitachi Group Codes of Conduct (including the HitachiGroup Code of Ethics and Compliance; the same shall apply
hereinafter) to help Hitachi create a work environment where
everyone is empowered to speak up, and to perform at
the highest standards. This is fundamental to consistently
delivering excellence to our stakeholders, while complying
with relevant laws and regulations.
Our focus on business ethics makes Hitachi stronger. It
helps us attract, retain, and engage the best employees andselect the right business partners. It protects our reputation
and relationships with stakeholders. It helps us deliver on
our Mission, Values and Vision—the Hitachi Group Identity.
Although the Compliance Division of Hitachi, Ltd. oversees
the One Hitachi Compliance Program, which is a groupwide initiative to enhance compliance, doing what is right iseveryone’s responsibility.
Additionally, we have formulated the Hitachi Group
Sustainable Procurement Guidelines in which we request
our procurement partners to share our commitment to doing
business with the highest levels of ethics and integrity andcomplying with applicable laws and regulations, as well as toshare our commitment to human rights.

Complying with the Hitachi Group Codes ofConduct
PolicyGRI 102-16/406-1

Hitachi has formulated the Hitachi Group Codes of Conduct,
which all executives and employees across the entire Grouppledge to uphold. The Hitachi Group Codes of Conduct istranslated into more than15 languages from Japanese andshared with Hitachi Group executive officers and employees
around the world.
The Hitachi Group Codes of Conduct explains ourstandards as well as our legal and ethical responsibilities
and provides guidance for expected behaviors. It covers a
range of topics such as business ethics, conflicts of interest,
fair competition, sustainability, human rights and care for ourcommunities.
The Hitachi Group Codes of Conduct is posted onGroup company intranet sites and the Hitachi, Ltd. website
to ensure that it is known and practiced by all officers,
employees and relevant stakeholders.
The Compliance Division will review annually the Codes
to ensure its effectiveness and that legislative and regulatory
updates as well as change in social conditions are reflected.
Hitachi Group Codes of Conduct
https://www.hitachi.com/corporate/about/conduct/index.html

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Ethics and Compliance Structure
Structure

The Hitachi Group Head of Ethics and Compliance leads
the One Hitachi Compliance Program and maintains areporting relationship to the Audit Committee of the Board of
Directors.
The global ethics and compliance team works with
Hitachi Group companies and more than 1,500 ethics andcompliance representatives located in Group companies
around the globe to streamline business ethics standards
in order to drive the efficiency and effectiveness of the One
Hitachi Compliance Program.
These ethics and compliance representatives are
key stakeholders in promoting ethics awareness among
management and employees, coaching colleagues throughethical dilemmas, raising concerns and potential risks totheir Compliance or Legal Division or the global ethics andcompliance team and responding to questions and concerns
from employees.
In regular meetings with ethics and compliance
representatives, the global ethics and compliance teamprovides updates on ethics and compliance initiatives,
trends, and additional resources to support them as they
fulfill the responsibilities of their role.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialCultivating a Culture of Ethics and ComplianceTargetTargetAt Hitachi, we encourage employees to apply high ethicalstandards in their day-to-day work as we strive to build ahighly ethical corporate culture. To measure and improve
Hitachi’s ethical culture, as part of the initiatives of theEthisphere’s Business Ethics Leadership Alliance, we started
conducting Ethisphere’s best-in-class the Ethical Culture& Perceptions Assessment in fiscal 2022 and 2023. The
results of this assessment will be monitored and used todevelop tailored KPIs to improve Hitachi’s ethical culture.
We aim to achieve a baseline score of 60 or above (out of100) in fiscal 2022, the first year, and to improve the score infiscal 2023 and each year thereafter.

Assurance

172

Ethics and Compliance Risk Assessments

Activities

The global ethics and compliance team develops andimplements strategy and initiatives to drive an ethical culture
throughout Hitachi’s 800+ Group companies. This is part ofHitachi’s effort to provide all employees with guidelines andresources that ensure they can understand and do what isright, make ethical decisions, and support compliance withcompany policies, procedures, and legal requirements.

Governance

Activities

Business Ethics and Compliance Training
Our annual ethics training on the Hitachi Group Codes ofConduct reinforces Hitachi’s commitment to business ethics
and keeps all executive officers and employees (including
part-time) informed and updated on our high ethicalstandards and obligations.

Achievements in Fiscal 2021
Our fiscal 2021 training course covered businessethics, bribery and corruption, gifts, travel andentertainment, anti-money laundering laws, fraud,
antisocial forces, fair competition, export control,
company assets, information owned by others, dataprotection, conflicts of interest, reporting and nonretaliation and Hitachi Global Compliance Hotline.
After completing the training, employees
acknowledge that they understand and agree tocomply with the Hitachi Group Codes of Conduct
and ethics-related policies and protocols.
In fiscal 2021, we reached 99.1% completion of
our annual ethics and compliance training.

Ethisphere’s Business Ethics Leadership Alliance
Hitachi became a member of Ethisphere’s Business Ethics Leadership Alliance in
October 2021. The Business Ethics Leadership Alliance (BELA) is a globally recognizedorganization leading companies collaborating to share best practices in governance, risk
management and ethics. Hitachi receives access to the BELA Member Hub, a repositoryof resources provided by BELA companies that are intended to cultivate the exchange ofideas and inspire companies.

Hitachi conducts ongoing and comprehensive risk
assessments including risks of bribery and corruption
practices at our Group companies every three to four
years to help assure that Hitachi’s Compliance Program
effectively mitigates and manages top risks. In cases wherethese reviews identify necessary improvements, corrective
measures are developed and implemented.
Due Diligence of Third Parties
From fiscal 2017, Hitachi Group has implemented acompliance due diligence program including the introductionof a third-party management system to identify reputationalrisks associated with bribery, corruption and other factors.
This has prevented Hitachi from engaging with parties thathave acted or are likely to act in a manner inconsistent with
Hitachi’s ethical culture.

Strengthening our Speak-up Culture
Approach

Hitachi believes that a speak up/listen up culture—where
employees are encouraged to raise concerns and feel
confident that they can do so without fear of retaliation—is essential to early detection and prevention of ethical andregulatory problems.
We are committed to ensuring our employees feel safeto speak up, to share ideas, and to challenge how businessis conducted without fear of retaliation. Employees may raise
concerns and ask questions through their managers, a nextlevel manager or any other manager, Human Resources,
Compliance or Legal team members, or using the Hitachi
Global Compliance Hotline, our whistleblower system.

Hitachi Sustainability Report 2022

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Management

Environmental

SocialGovernance

173

Assurance

We encourage employees to seek guidance on ethics

who can seek guidance on ethics questions including humanTo efficiently address and resolve contacts to the Hitachi

and business conduct questions and report possible
violations of the Hitachi Group Codes of Conduct, company
policy or the law.

rights and harassment issues and report any concerns or
actual or suspected breach of the Hitachi Group Codes ofConduct or any other improper or illegal conduct. Breachesof the Hitachi Group Codes of Conduct by any of Hitachi’scontracted third parties may also be reported.
Phone numbers for the Hitachi Global Compliance
Hotline are available for all employees to speak to arepresentative in their native language. The phone lines arestaffed by specially trained third-party representatives, withtranslators in more than 50 languages. Web-based reportingis also available to employees. Data supplied in a report ismaintained on secure servers maintained by the third party
who administers the hotline.

Global Compliance Hotline, we assign inquiries to a resource
who is a subject matter expert.
After a confidential review of the concern, theinvestigator determines which reports require an
investigation. If an investigation is needed, an appropriate
investigative resource is assigned. For concerns that aresubstantiated, disciplinary actions may be taken. Disciplinecomes in many forms from warnings to suspensions totermination.
In fiscal 2021, we received 1,023 reports from all Group
companies worldwide.

Hitachi Global Compliance Hotline(Whistleblower System)
SystemActivities

GRI102-17

The Hitachi Global Compliance Hotline is a 24/7, confidential
and anonymous helpline and online reporting system. It ismanaged by an independent third party and is available toall Hitachi Group employees, contractors, business partners(including procurement partners) and other stakeholders

1
HR issues (Labor management, travel
expenses, commuting costs, etc.)2Harassment

4
Procurement

5
Competitionlaw

Americas

64

104

3

6

—

3

58

238

Europe(including CIS)

26

12

—

2

—

4

54

98

Middle East
North Africa

16

4

—

—

1

1

32

54

Sub-Sahara

1

—

2

4

1

—

5

13

APAC
(excluding
Japan)

50

42

15

10

1

22

94

234

Japan

69

179

7

4

—

—

127

386

Total

226

341

27

26

3

30

370

1,023

Categories
Areas where
whistleblowing
cases occurred

3
Financial

P122 Human Rights
Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

6
Bribery

7
OthersTotal

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialAnti-Bribery and Anti-Corruption
PolicyAssurance

174

Fair Competition

Activities

We require all employees and those with whom we dobusiness to maintain the highest ethical standards in fullcompliance with all applicable anti-corruption laws. We
have zero-tolerance for bribes, kickbacks or any other illegal
business practices.
Hitachi has established the Hitachi Group AntiBribery and Anti-Corruption Policy, with associated rules,
and clarified the standards and procedures concerning
entertainment, gifts, and other arrangements provided to or
received from public officials and non-public officials alike.
Under the Policy, when providing or accepting
entertainment or gifts, or making donations or politicalcontributions, executive officers and employees must notexceed the scope of actions permitted by anti-bribery laws
and regulations and must comply with Hitachi’s internal
rules. These indicate specific spending limits in terms ofmonetary value and the number of times that entertainment,
gifts, and other arrangements may be provided to public
officials. We also have policies banning facilitation payments
and requiring due diligence procedures for business
partners. With anti-corruption regulations growing stricter
in recent years around the globe, we work hard to ensurethat we remain in strict compliance with the US Foreign
Corrupt Practices Act (FCPA) and all other relevant laws
and regulations in the countries and regions where we dobusiness.

Governance

GRI 205-2

Achievements in Fiscal 2021
In fiscal 2021, we established the Standards for the
Value Limits and Frequency of Entertainment andGifts, applicable to Commercial Parties regarding
Hitachi Group Gifts, Travel and Entertainment
Protocol and revised the guidelines for the
Hitachi Group Charitable Donations and PoliticalContributions Protocol. The revised guidelines
include, the prohibition of donations for illegal profit
acquisition and periodic risk assessments of theexisting beneficiary based on a risk-based approach.
By doing business in accordance with such
Protocols, Hitachi will develop fair and ethicalbusiness activities around the world.

Educational Activities for Preventing Bribery and Corrupt
Practices
To ensure awareness of the stipulations on prevention ofbribery and corruption spleed out in the internal HitachiGroup Anti-Bribery and Anti-Corruption Policy and BusinessConduct, we offer teaching materials for use by Group
companies worldwide.

PolicyActivities

Hitachi engages in business in accordance with the law
and with business ethics, and practicing fair and open
competition. Business standards and guidelines related tothese principles are included in the Hitachi Group Codesof Conduct as well as the internal Hitachi Group Fair
Competition Policy. In fiscal 2021, we revised the guidelines
for preventing cartel activity and improved the relevant forms
based on the revised guidelines.
Educational Activities for Preventing Violations ofCompetition Law
Paralleling our initiatives to prevent bribery and corrupt
practices, we are also rolling out global learning anddevelopment programs on competition law, while also
ensuring compliance with all related rules, businessstandards, and guidelines. To enhance awareness of ethicalprinciples and practices worldwide, we have issued a global
version of our standards on contact with competitors.

Hitachi Sustainability Report 2022

Contents

Prevention of Antisocial Transactions andMoney Laundering
Approach

Activities

To cut off all relationships with antisocial forces, in the HitachiGroup Codes of Conduct, we have laid out provisions
stating that we will never engage in antisocial transactions
under any circumstances, and will refuse any improper
demands and unfair deals. We conduct eligibility checks
on all new as well as existing business partners. In Japan,
we insert antisocial-force rejection clauses in contracts sothat if it is determined that a business partner belongs to an
antisocial force, we can promptly void the contract and end
the relationship. The entire Hitachi Group acts decisively toeliminate approaches from antisocial forces in partnershipwith external specialist institutions (the National Center for
Removal of Criminal Organizations or the police).
In fiscal 2020, we revised our rules, adding provisions
on the prevention of money laundering in addition to theprevention of antisocial transactions, seeking to clarify
Hitachi’s stance of not tolerating money laundering as wellas to strengthen concrete initiatives. We establish these
concrete initiatives to eliminate the possibility of involvementwith persons or organizations engaged in money launderingor other illegal activities in and outside Japan. To that end, we
conduct due diligence on all customers and business partners,
including checking the sanctions lists of each country,
checking payment details, and including clauses in business
contracts to prevent money laundering and terrorist financing.

Export Controls
Approach

Activities

For basic export control policies, we have adopted The
Hitachi Group Codes of Conduct, which states: “We will

Introduction

Management

Environmental

SocialGovernance

Assurance

175

help maintain international peace and security throughhandling tax audits, and managing tax risk) and the handlingcompliance with all applicable laws and regulations
concerning import and export, and will operate appropriately
according to our internal rules and policies.” Hitachi, Ltd.
has established Corporate Regulations concerning Security
Export Control based on this policy to ensure implementationof strict export control practices in line with relevant laws
and regulations, screening all goods and technologies
intended for export against such factors as destination
countries and regions as well as intended end use andend users. We provide guidance and educational support
for the formulation of regulations and the establishment offrameworks to Hitachi Group companies to ensure that all
Group companies follow the same export control policies inaccordance with relevant laws and regulations.
As part of our educational program for all Group
companies, we operate online courses and e-learning
programs on export controls. We operate a basic e-learning
program in 14 languages and an e-learning program forpractitioners in Japanese and English. Hitachi is working
to ensure that export controls are thoroughly enforced
throughout the Group.

of other tax-related matters.

Hitachi’s Tax Compliance Approach
Approach

GRI 207-1/207-2/207-3/207-4

Under the Chief Financial Officer (CFO), Hitachi has built asystem of tax governance designed to address tax risks
associated with the globalization of its business, such as
indications made by the tax authorities and tax-related
legal proceedings in each country. Specifically, we haveestablished tax-related rules for the purposes listed below.
To ensure thorough compliance with these rules, weare striving to raise awareness of them among all employees
involved in tax management (filing and paying taxes,

1. Group companies strictly comply with all relevant laws
and implement tax management when pursuing theirbusiness activities, bearing in mind such international taxcompliance standards as the Transfer Pricing Guidelines
for Multinational Enterprises and Tax Administrationsof the Organisation for Economic Co-operation andDevelopment (OECD), as well as that body’s Action Plan
on Base Erosion and Profit Shifting (BEPS).
2. Group companies effectively, continually, and proactively
manage tax-related issues in a manner befitting theirstatus as socially responsible organizations, while
maintaining Hitachi brand value and seeking to maximize
shareholder value.
3. Group companies build sincere and positive relations oftrust with the tax authorities in the regions where thesecompanies do business, and strive to maintain anddevelop those relations.
In accordance with these rules, we have established rules ontransfer pricing management for Group companies, seeking
to identify and mitigate potential taxation risks related totransfer pricing in transactions with foreign-affiliated parties,
and to help ensure compliance. As stated above, we are
striving to raise awareness of these rules and ensure thatthey are followed.

Hitachi Sustainability Report 2022

Contents

Tax Compliance Initiatives
Activities

By following the relevant tax-related rules applicable to theGroup as a whole, Hitachi manages tax risks associatedwith globalization. For example, we are strengthening ourrisk management as well as compliance with laws andregulations by identifying and sharing indications made by
the tax authorities and tax-related legal proceedings in eachcountry. The results of our tax filings and tax audits in Japanare reported to the CFO, and we are continuously working
to ensure appropriate tax reporting and prevent fraud. In
preparing tax filings, we determine whether anti-tax havenlegislation applies, and when it does, we reflect it properlyin the tax filing to ensure that we make appropriate tax
payments.
Hitachi follows rules for transfer pricing management
and also manages transfer pricing in accordance with
the OECD Transfer Pricing Guidelines and the laws andregulations on transfer pricing in each country or region
where Group companies are located.
In the fiscal year ended March 31, 2022, we paid 248.4
billion yen*¹ in corporate income tax (68% in Japan and 32%
outside Japan*²).
*1 Refer to income taxes paid in consolidated statements of cash flows ofHitachi, Ltd.
*2 Based on the percentage in the country-by-country report submitted to tax
authorities

Introduction

Management

Environmental

SocialViolations of Laws and Regulation
Activities

GRI 205-3/206-1/419-1

In fiscal 2021, there were no incidents in which Hitachi wasprosecuted or penalized by authorities for bribery, corrupt
practices, competition law or export control. Regarding tax
compliance, Hitachi acts in accordance with all applicablelaws and regulations and did not receive any significant fines
or nonmonetary sanctions for noncompliance with tax laws
and regulations in fiscal 2021.

Governance

Assurance

176

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Risk ManagementWhy
ー Why it matters ーSocialGovernance

Assurance

177

Relevant SDGs
GRI 103-2/403-2

Social issues, including rapid advancements in digitalization and complex changes in political and economic situations occurring worldwide, along with environmental issues,
including climate change, resource depletion, and major disasters, are bringing changes to the business environment that are difficult to predict. Hitachi monitors and analyzes
this business environment, conducts risk management in terms of both responding to risks that should be anticipated and opportunities for further growth in light of social
issues, Hitachi’s competitive advantage and management resources, and strives to create revenue opportunities while controlling risks.

How

What

ー What we are doing ーAddressing Risks
and Opportunities

Environmental

・Strengthening risk
management systems
・Understanding andresponding to risks andopportunities related toinvestment, sustainability,etc.

ー How we are doing it ー

Policy and promotion
structure

In April 2022, a Risk Management Meeting that deliberates important matters related to Hitachi management was established within
the Senior Executive Committee. Chaired by the CEO with the Chief Risk Management Officer (CRMO) as vice chair, the meeting
discusses and makes decisions on important matters relating to companywide risks. By centrally managing the various risks faced
by Hitachi, which has operations around the world, we are working to achieve a solid management foundation that is linked to
growth strategy.
Achievements in FY 2021

Strengthen risk
management systems

Established a Risk Management Meeting that deliberates important matters related to Hitachi management within the Senior
Executive Committee and selected top risks based on global risk trends
Set up Six risk-specific working groups under the Risk Management Meeting; investment risks, business risks, crisis management,compliance, Group governance and regional risks, and each WG coordinates Group corporate functions across the organization
while conducting activities to mitigate the respective risks
Ascertained and appropriately responded to risks and opportunities related to investments (e.g., M&A, sale of assets, orders for
projects) and assets held on the group’s consolidated balance sheet

Understand risks andopportunities and takeappropriate action

Implemented crisis and compliance management initiatives
Disclosed climate-related information based on the TCFD recommendations
P049 Climate-related Financial Information Disclosure (Based on TCFD Recommendations)Hitachi Sustainability Report 2022

Contents

Introduction

Management

・Strengthening BusinessContinuity Plans (BCPs)
・Improving the safetyof employees sent todangerous regions

SocialGovernance

Assurance

178

How

What

ー What we are doing ーBusiness
Continuation
Initiatives

Environmental

ー How we are doing it ー

Policy and promotion
structure

To increase preparedness for major disasters and other risks across the entire Group worldwide, we have issued the Hitachi Group
Guidelines for Developing Business Continuity Plans. We are strengthening our measures against COVID-19 and natural disasters aspart of Pandemic and Natural Disaster BCPs, and the procurement divisions in business units and key Group companies in Japan
have created procurement BCPs to minimize the impact of disasters that may occur.
Achievements in FY 2021

Under the COVID-19 task force’s leadership, our regional headquarters around the world gathered local information as well as share
Continuously strengthening information on the measures taken by Hitachi Group companies in their respective regions
Pandemic and Natural
Conducted an earthquake drill on the assumption that there is a mix of those who come to the office and those who work from
Disaster BCPs
home
Continuously strengthening Expanded the number of business sites utilizing the Procurement BCPs Management System for our procurement partners in Japanprocurement BCPs
and to digitize information
Continuously improving thesafety of employees sent to Provided medical assistance for Hitachi Group employees outside Japan
dangerous regions

Hitachi Sustainability Report 2022

Contents

Introduction

Addressing Risks and Opportunities

Management

Environmental

SocialGovernance

179

Assurance

GRI 102-11/201-2

With the rapid advance of digitalization and complex developments in the political andeconomic landscape globally, the business environment is changing day by day. Hitachi
monitors and analyzes this business environment, conducts risk management in terms of both
responding to risks that should be anticipated and opportunities for further growth in light ofsocial issues, Hitachi’s competitive advantage and management resources, and strives tocreate revenue opportunities while controlling risks.

Risk Management Structure
Senior Executive Committee
Risk Management Meeting
CRMO• Formation of working groups for each risk category• Cross-utilize corporate functions
Risk Categories / Working Groups

Strengthening of the Risk Management Structure and Its Aims

Investment
Risks

Business
Risks

CrisisManagement

Investment Strategy
Committee OfficeCompliance
Division

Safety and HealthManagement DivisionCorporate Sales &Marketing Group

Investment
Management
Division

Corporate Quality
Assurance Group

Legal
Division

Risk Management
Division

Sustainability
Promotion
Division

FinanceGroup

ComplianceGroup
GovernanceRegional
Risks

SystemIn April 2022, a Risk Management Meeting that deliberates important matters related to Hitachi
management was established within the Senior Executive Committee. Chaired by the CEO
with the Chief Risk Management Officer (CRMO) as vice chair, the meeting discusses andmakes decisions on important matters relating to company-wide risks. By centrally managing
the various risks faced by Hitachi, which has operations around the world, we are working toachieve a solid management foundation that is linked to growth strategy.
Six risk-specific working groups have been set up under the Risk Management Meeting,investment risks, business risks, crisis management, compliance, group governance and regionalrisks. Each working group coordinates Group corporate functions across the organization while
conducting activities to mitigate the respective risks.
For example, the Business Risks Working Group discusses risks and responses in the
global supply chain. Since control of consolidated management is important for Hitachi asa group made up of more than 800 companies, we must also develop plans to disseminate
and manage guidelines and policies. This is an area the Group Governance Working Groupwill discuss going forward. Addressing regional risks in an effort to review the roles of local
subsidiaries and achieve overall optimization at global sites, we will ensure that Hitachi’s assets
are utilized effectively.
Initiatives about investment risks, crisis management and compliance are introduced on
the following pages.

Promotion Organization

Selecting Top Risks based on Global Risk Trends
In the Mid-term Management Plan 2024, we are utilizing knowledge from inside and outside theGroup to collect and analyze information on the external environment surrounding Hitachi andselect top risks through the Risk Management Meeting.
Specifically, we have organized major risks under classifications such as disasters,
accidents and epidemic; geopolitics and geoeconomics; economics, finance and markets;sustainability; investment and orders for projects; and operations. We then assess and narrow
down the risks from the perspectives of the nature of risk events, expected time period,
likelihood of occurrence and seriousness when occurring, and select the top risks, such as therisk of a major natural disaster in Japan that may significantly impact Hitachi’s business. The six
working groups consider and implement policies to respond to each of the top risks.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialAddressing Investment Risks and Opportunities
SystemGRI 102-15/102-29/102-30/102-31

To ascertain and appropriately respond to risks and opportunities related to investments (e.g., M&A, sale of assets, orders for projects),
Hitachi has established a decision-making framework based on the following flowchart. Decision-making regarding individual investments(e.g., execution, business plan changes) is delegated from the Board of Directors as the highest level body to the head office Senior Executive
Committee (which generally meets twice a month) or the relevant sector or business unit, based on the size and specifics of the matter. Thisfacilitates flexible and appropriate decision-making. For important matters that fall under deliberation by the head office Senior Executive
Committee, the Investment Strategy Committee working as its advisory body checks the risks, response measures for the matter from
economic value perspectives such as profitability and cash flow as well as in terms of the impact on social value and environmental value.
Following deliberation, the Investment Strategy Committee delivers a report that includes approval or rejection recommendations to the Senior
Executive Committee, of which the CEO is also a member.
After executing an investment, Hitachi regularly monitors the achievement of business objectives and plan while taking into accountchanges to the risk climate including the external environment. By generally having monitoring performed by the relevant business units, which
are accountable for profits and closely associated with field operations, flexibility can be maintained, while head office can still become involved
depending on the importance of the matter. For changes to business plans, business withdrawals, asset sales and other matters related toimportant investment targets, the head office Senior Executive Committee engages in similar deliberations to the initial investment stage. For
investment targets whose business is not proceeding as planned, a framework has been established to deliberate the merits of continuing abusiness, including the prospects of withdrawal, in an effort to enhance capital efficiency.
Conceptual Diagram of the Decision-Making Flow
When an investment is executed

Chairperson: CRMO

Approval by the CEO(important matters)

Approval by the BU CEO or
executive of cer in charge ofthe sector

Head OfficeSenior Executive
Committee

Business Unit (BU)
Senior Executive
Committee

After an investment is executed
Business withdrawal,
sale or continuation

Investment Strategy
Committee

Board of Directors

ReportAssurance

180

Quantitative Understanding of Risks


Resolution by the Boardof Directors (particularly
important matters)

Governance

A committee whose
members are from related
corporate divisions suchas the Finance Group
Clarifies the risk factors
for a proposed matter,
identifies important
discussion points, andissues a report that includes
approval or rejection

ReportHead OfficeSenior Executive Committee

Decision by the BU towithdraw from, divestiture orcontinue with the business
Conflicts withspecified conditions

Monitoring by head office

Monitoring by the BU

Activities

GRI 102-15

Hitachi calculates expected maximum risks (Value at Risk)
assumed by statistical methods according to the type of
assets held on the group’s consolidated balance sheet.
We avoid missing out on growth opportunities byvisualizing the capacity for growth investment, etc.,
considering consolidated net assets and other factors. We
also engage in monitoring and hold discussions throughthe Risk Management Meeting to ensure that risks are notexcessively unbalanced compared to Hitachi’s consolidated
financial strength.
We also quantitatively analyze and understand the stateof risks and profitability on a regional and per-sector basis.

Hitachi Sustainability Report 2022

Contents

Crisis Management Initiatives
SystemManagement

Environmental

SocialSystemBased on the selected top risks, the Crisis Management
Working Group promotes the development of response
measures, including crisis management structures, for eachrisk. By making preparations under normal conditions, wehave put systems in place to respond swiftly in the event arisk does materialize.

Severity

Occurrenceof crisis

Potential risks• Establishment of a task force• Consolidation andcentralization of information• Initial response,
implementation ofabatement measures

Various risks

Responding to risks
other than top risks• Ongoing monitoring• Consideration of including arisk in top risks

Preparations under normal conditions• Preparation of response and operational steps based on crisis
scenarios

Assurance

181

Safety-First Risk Management

Activities

The Compliance Working Group is made up of members
from the Compliance Division, Sustainability Promotion
Division, Corporate Quality Assurance Group and Safety and
Health Management Division.
For major compliance-related risks falling underbusiness ethics and compliance, environmental compliance,
quality compliance, and health and safety (fatal and serious
incidents, etc.), information on the measures implemented
by each department under regular conditions (developmentof regulations, training, monitoring, audits, etc.) andthe response methods implemented in the event of an
emergency (communication with internal and external
stakeholders including top management when a majorrisk has materialized, etc.) are linked and shared amongst
member of the Working Group as management methods
for the different risk areas. By pursuing a greater level ofglobal collaboration, we will strive to raise the level of risk
management in each field and mitigate various risks.

Crisis Management
Working Group
Response when acrisis occurs

GovernanceCompliance Initiatives

Activities

Management of top risks

Introduction• Conducting drills, revising procedures, responding to issues• Recon rming business continuity plans

Compliance
Division

Sustainability
Promotion Division

Business Ethics
and Compliance

Environmental Compliance

Information Sharing
Consideration of Preventive
Measures and Early
Response Enhancement of
Collaboration
Safety and HealthManagement DivisionCorporate Quality
Assurance Group

Health and Safety

Quality ComplianceThree Hitachi Group companies, namely GlobalLogic,
Hitachi Energy and Hitachi Vantara have sites in
Ukraine. The safety and health of our employees
and their families is the highest priority for the HitachiGroup. GlobalLogic, which has an engineering site
in Ukraine, has approximately 7,500 employees (asof May 31, 2022). Based on the business continuity
plan, top priority has been given to the safety of thesite’s employees and their families, and measures
were taken to evacuate them to safe locations in
Ukraine or out of the country. The company is now
returning to normal operations with an operating
rate of 96% as of May, and is working to maintainbusiness continuity while ensuring safety.

Annual Securities Report (The 153rd Business Term)
https://www.hitachi.com/IR-e/library/stock/hit_sr_fy2021_4_en.pdf

Hitachi Sustainability Report 2022

Contents

Introduction

Business Continuation Initiatives
Approach on Business Continuity Plans (BCPs)
ApproachGiven the close relationship of our business to social
infrastructure, we are enhancing our BCPs to ensure that the
impact of risks does not disrupt our business and thereby
significantly affect society. The Hitachi Group Guidelines forDeveloping Business Continuity Plans (Overview) and the
Hitachi Group Guidelines for Developing Business Continuity
Plans (By Department) were issued in Japanese and thentranslated into English and Chinese for distribution to all
Hitachi Group companies to enhance preparedness for
major disasters and other risks.
Regarding infectious diseases, we released the HitachiGroup Guidelines for Pandemic Influenza Preparedness
in Japanese, English, and Chinese. In fiscal 2021, they
served as a useful tool in dealing with the novel coronavirus(COVID-19) pandemic.
We have also appointed personnel with responsibility forrisk-response policies at our main overseas bases. Around
300 Group companies outside Japan prepared BCPs tostrengthen their ability to respond to business risks including
major disasters, infectious diseases, political instability, social
disruption, and acts of terrorism. We will reflect in our BCPs
the current environment of significantly more people working
from home and the experienced gained in the course ofrecent COVID-19 measures.

Management

Environmental

SocialGovernance

Assurance

182

GRI102-15

Formulation of BCPs
Since fiscal 2011, Hitachi, Ltd. and its Group companies
in Japan have formulated BCPs for each business in
preparation for major earthquakes, wind and flood damage,and novel strains of influenza. Each business unit regularly
reviews its BCP and revises it as necessary to reflect thelatest risk assessment results. Group companies outside
Japan have formulated BCPs in light of risks of concern intheir respective locations.
From fiscal 2022, we will strengthen our BCPs
especially for infectious diseases such as COVID-19 and formega-earthquakes.

headquarters temporarily ceases to function. From fiscal
2019 we have conducted drills that assume remote work.
In such ways, we are making sure that our efforts are in linewith reality.
P118 Measures to Prevent Infectious Disease

Drill Simulating Earthquake Measures
FY 2018·Initial response drills simulating a major
earthquake in the suburbs of TokyoFY 2019·Drills to set up a substitute headquarters in the
Kansai region in case our Tokyo headquarters
temporarily ceases to function·Drills to set up an earthquake task force on aremote-work basis on the assumption that amajor seismic event had occurred on a holiday,
shutting down traffic

FY 2020·Drills to set up an earthquake task force on aremote-work basis on the assumption that all
work must be conducted remotely

FY 2021·Remote drills using a Web conferencing systemon the assumption that not everyone canassemble at the office on weekdays and that
there is a mix of those who come to the officeand those who work from home

Pandemic and Natural Disaster BCPs Initiatives
Activities

A COVID-19 task force, headed by the President & CEO
of Hitachi, Ltd., was established at Group headquarters
to provide instructions on preventive measures to Group
companies. Similarly, each Group company formed its
own task force to secure the safety of its employees andbusiness continuity while helping to maintain the social
infrastructure through their business operations. Our regional
headquarters around the world gather local information as
well as share information on the measures taken by HitachiGroup companies in their respective regions.
Hitachi, Ltd. is also strengthening its measures against
natural disasters by conducting annual earthquake drills,
which simulate a major seismic event. In fiscal 2017, wedeveloped action plans including setting up substituteheadquarters in the Kansai region in case our Tokyo

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialProcurement BCPs Initiatives
Approach

Activities

Hitachi is also working to enhance BCPs for procurement across Group companies worldwide so that the occurrence ofincidents*1 does not disrupt business and have a significant impact on society.
To minimize the impact of disasters that may occur, the procurement divisions in business units and key Group companies
in Japan do the following: (1) standardize and use generic parts to make procurement as flexible as possible; (2) cultivate multiple
suppliers; (3) distribute production across several locations; (4) budget inventory strategically; and (5) consider and promote
substitute products.
We also hold desktop exercises to check the effectiveness of procurement BCPs against earthquakes and to make further
improvements hold group discussions about what should be done during and after such disasters.
We share these activities with procurement divisions in business units and key Group companies outside Japan as
appropriate, making use of them in reviewing strategies in an effort to enhance procurement BCPs throughout the Group
worldwide.

Governance

Assurance

183

Improving Safety for Employees Sent toDangerous Regions
Activities

When sending employees to countries and areas at high riskof conflicts, terrorism, and other threats, we take all possible
measures to ensure their safety. On-site surveys are also
conducted by in-house and outside experts beforehand.
Hitachi, Ltd. is also contributing to safety measures atother Japanese corporations operating outside Japan. To
help enhance collaboration between the private and public
sectors in this area, we participate in the Council for PublicPrivate Cooperation for Overseas Safety organized by
Japan’s Ministry of Foreign Affairs.

*1 Incidents: Events that interrupt business operations, such as major earthquakes and other natural disasters

Achievements in Fiscal 2021

Achievements in Fiscal 2021

In January 2020, we introduced the Procurement BCPs Management System for our procurement partners inJapan to efficiently share information among Hitachi Group companies during disasters.

In fiscal 2021, Hitachi, Ltd. undertook a range ofmeasures to ensure the safety of its employees
working around the globe. These included thetimely provision of information by alerts on conflicts
occurring around the world and also the COVID-19
pandemic as well as information from outside risk
consultants contracted by Hitachi, Ltd. posted on
its intranet. In addition, the company employed an
outside specialist to provide medical assistance toHitachi Group employees outside Japan.

In fiscal 2021, we worked to expand the number of business sites utilizing the system and to digitize information to
help shorten recovery time.

P132 Responsible Procurement

Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing.

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Information Security
Why
ー Why it matters ーEnvironmental

Assurance

184

Even as the development of IoT creates new value, cyberattacks are growing increasingly sophisticated and widening in focus from traditional IT to encompass the IoT/OT
field as well. The risks for corporations include leaks of information, operational stoppages, and even direct disruption to business, making information security one of the mostcritical issues companies face. Hitachi, in expanding its Social Innovation Business worldwide, has highlighted the importance of working to ensure cybersecurity as a key
management issue and is engaged in information security governance efforts.
Also, amid rapidly expanding data use with the development of digital technologies, privacy risks are increasing as well. In working to provide a safe and secure social
infrastructure system, Hitachi is prioritizing personal information protection efforts in order to realize the secure management of personal information entrusted to us by ourcustomers, personal information related to business operations, and more.

How

What

Personal
Information
Protection

Governance

GRI 103-2

ー What we are doing ーInformation
SecuritySocial・Disseminating Information
Security Policy
・Strengthening information
security management

ー How we are doing it ー

Policy and promotion
structure・Implementing security
monitoring

Hitachi has established Information Security Policy to foster cybersecurity risk management. The Information Security Committee ischaired by the Chief Information Security Officer (CISO), who is the C-level executive with ultimate authority and responsibility regarding
the handling of information security and personal privacy issues. The committee determines relevant policies and measures, while
the information security heads at each Hitachi business unit and Group company promote workplace awareness and oversee theimplementation of measures.
Achievements in FY 2021

・Preventing information
leaks
・Providing education
programs on information
security・Conducting thoroughpersonal information
protection/information
security audits andinspections
・Responding to personal
data protection laws
around the world・Acquiring PrivacyMark
certification
・Managing customer
information
・Promoting privacy
protection efforts by digitalbusiness divisions

Advanced the strengthening of information security governance worldwide, based on our rules for information security, establishedin compliance with the ISO/IEC 27001 standard, and furthermore enhanced with NIST SP 800-171 U.S. government standard.
Strengthening information
security management

Implemented IT countermeasures and activities to raise security awareness among employees in conjunction with promoting
telecommuting
Implemented measures to reduce security risks during deals/post-merger integration in conjunction with acquisitions and salesof companies

Security monitoring

Enhanced cyber monitoring by using endpoint detection and response to monitor equipment operation, implemented
authentication, and strengthened cyber monitoring

Education on information
security

Held e-learning programs on information security and personal information protection for all executive officers and employees(Hitachi, Ltd. attendance rate: 100%)

Thorough personal information
protection/information security Conducted personal information protection/information security internal audits at all Group companies and divisions (Annually)
audits and inspections
Responding to personal dataprotection laws around theworld

Formulated and put into effect from April 2022 a Group-wide internal code of conduct concerning protection of personal
information, which takes into consideration international legal frameworks, such as the European General Data Protection
Regulation (GDPR)

Acquiring third-party
certification related to personal
information protection

Acquired PrivacyMark certification for 37 Hitachi Group companies in Japan

Personal information leaks

Personal information leaks: 0

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

185

Assurance

Information Security
Information Security Policy
PolicyHitachi considers one of its top management priorities tobe information security governance to minimize the riskof business disruption such as leaks of information oroperational stoppages due to cyberattacks.
As a global company, Hitachi regards cyber security
risk as one of our management risks. Accordingly, we
have formulated Information Security Policy in line with our
corporate management policies and based on our cybersecurity risk management.
We have our data centers and other divisions certified
by the ISMS Accreditation Center in accordance with the
ISO/IEC 27001 Information Security Management Systeminternational standard. This certification has been received
by seven divisions of Hitachi, Ltd. and 27 divisions of 23
Group companies.*¹

Framework for Promoting Information Security
Structure

At Hitachi, Ltd., the Chief Information Security Officer (CISO), who is the C-level executive with ultimate authority and responsibility
regarding the handling of information security and personal privacy issues, oversees the promotion of information security for all
Hitachi products, services, and internal facilities.
Chaired by the CISO, the Information Security Committee determines all policies and procedures for information security andpersonal information protection. Business Units (BU) and business sites establish information security promotion divisions, withthe heads of the units and sites serving as information security officers. These divisions work to implement information security
management in each workplace and provide relevant education to employees. This framework is also implemented at Group
companies to promote information security across the Group through mutual cooperation.

Framework for Promoting Information Security
Hitachi, Ltd.
HQ

BU

BU

Group company

Hitachi, Ltd.

Group company

Group company

Group company

Group company

Group company

President & CEO*1 As of September 30, 2021.
Chief information security officer (CISO)

Information Security Policy

1.F ormulating administrative rules for information security andensuring their continual improvement
2. Protection and ongoing management of information assets
3. Legal and regulatory compliance
4. Education and training
5. Preventing incidents and taking action when they occur
6. Ensuring business processes are optimized within thecorporate group

Information security audit officer

Information security committee
Chairperson (and CISO) / Information security education director /Committee members: Representatives of business offices and heads of HQ
management divisions

Information security
officer
Audit officer

Information security promotion meeting

BU
OfficeInformation
security officer

Person responsible for implementing
information security
Information security promotion division
External liaison division
Cybersecurity officer
Information systems manager
Information asset manager

Company president

Chief information security
audit officer

Hitachi Sustainability Report 2022

Contents

Information Security Management
Activities

Hitachi has established information security management
based on ISO/IEC 27001 and has been working tostrengthen information security by reviewing regulations
with the U.S. government standards SP800-171 due to theintensifying cyberattacks in recent years. These rules areglobally distributed by Hitachi, Ltd. and its Group companies.
Other measures include actively promoting the use of sharedsecurity services and related support for information security
provided by regional headquarters in the Americas, Europe,
Southeast Asia, China, and India.
The Information Security Promotion Council and otherbodies convey policies and procedures for information
security and personal information protection determined by
the Information Security Committee internally and to othercompanies in the Hitachi Group. Information security officers
at business sites and Group companies ensure that thesedecisions are implemented in the workplace.
Details of our information security initiatives arecontained in our Information Security Report.
Information Security Reporthttps://www.hitachi.com/sustainability/download/pdf/
securityreport_e.pdf

Introduction

Management

Environmental

SocialAchievements in Fiscal 2021
As Hitachi promotes new workstyles based on
telecommuting, the vulnerability posed by employees’
security awareness becomes a risk. Considering thisthreat, we are working to raise security awarenessamong our employees with an employee-centeredapproach alongside IT-based security measures. Also,
given the vigorous acquisition and sale of companies
in recent years, we keep an eye on the security
conditions during deals/post-merger integration, andtake measures to reduce security risks.

Security Monitoring
In Hitachi, the Security Operation Center (SOC) monitors
security on an around-the-clock basis so global-scale
cyberattacks can be detected and countermeasures initiatedright away. The Incident Response Team (IRT) collects anddevelops threat intelligence*¹ and manages the response to
any security incidents.
Cyberattacks become more sophisticated each year,with damage tending to increase as attacks slip past
conventional detection and go undiscovered for longer
periods. To counter this risk, we are working to enhancecyber monitoring by using endpoint detection and response
to monitor equipment operation, as well as implementing
authentication. We continue improving and strengthening our
cyber monitoring environment using the latest technology.
*1 Threat intelligence: An approach to countering cyberattacks using knowledgeof new threats gathered from multiple sources of information on cybersecurity.

Note: Hitachi normally refers to its suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

Governance

Assurance

186

Preventing Information Leaks
Activities

Hitachi takes the following IT steps to prevent information
leaks: encrypting devices; using thin clients;*¹ employing
electronic document access control and expiration
processing software; maintaining ID management andaccess control by building an authentication infrastructure;and filtering e-mails and websites. In response to the recent
spate of targeted e-mail attacks and other cyberattacks,
we are participating in an initiative to share information
between the private sector and the government. We are alsoenhancing various IT measures such as a defense in depth
strategy.
To prevent leaks from our procurement partners, we
review their information security measures based on Hitachi’s
own standards before allowing them access to confidential
information. We also provide tools to procurement partners
for security education and for checking business informationon computers. In addition, we require procurement partners
to check and remove business information from personal
computers.
*1 T hin client: A terminal with the minimum necessary software. Thin clientcomputing significantly enhances cyber security by storing applications anddata on the server.

Hitachi Sustainability Report 2022

Contents

Education on Information Security
Training

Hitachi holds annual e-learning programs on information
security and personal information protection for all executive
officers and employees. Approximately 35,000 employees
at Hitachi, Ltd. take these programs, and the percentageof employees completing these programs reaches 100%
every year (excluding those who cannot attend for reasons
such as being on leave). The company offers a variety ofcourses that have different goals and are tailored to different
target audiences, including new employees, new managers,
and information system administrators. Hitachi, Ltd. also
implement simulation training to educate employees aboutphishing attacks and other cyberattacks. Employees aresent deceptive e-mails as phishing simulations to heighten
their awareness of security through direct experiences.
Educational programs from Hitachi, Ltd. are sharedwithin the Group to provide Group-wide education on
information security and personal information protection.

Thorough Personal Information Protection/
Information Security Audits and Inspections
Activities

The Hitachi has developed its approach to security basedon the PDCA (plan-do-check-act) cycle for its information
security management system that Hitachi, Ltd established.
Hitachi conducts annual internal audits of personal
information protection and information security at all Group
companies and BUs.
The President & CEO of Hitachi, Ltd. appoints officers
to conduct internal audits. These officers are not allowed toaudit their own units, underlining our commitment to fairness
and objectivity in auditing.

Introduction

Management

Environmental

SocialThere are 169 Hitachi Group companies*¹ in Japan that
conduct internal audits in the same way as Hitachi, Ltd., andall results are subject to confirmation by Hitachi, Ltd. Hitachirequires Group companies outside Japan to use a common
global self-check approach to ensure Group-wide auditing
and inspections. All BUs conduct annual self-inspections
for Confirmation of Personal Information Protection andInformation Security Management, and monthly inspections
for operations that involve processing important personal
information (740 registered operations as of March 2022).
This regular control mechanism ensures ample safety
management and implementation.
A dedicated internal security team at Hitachi, Ltd.
conducts regular on-site assessments of the state of
information security measures, and investigates external
vulnerabilities in public-facing servers once every fourth
quarter. In this way, Hitachi, Ltd. is working to reduce
security risks by identifying discrepancisses with self-checks.
*1 Including partner companies that have submitted voluntarily

Governance

Assurance

187

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

188

Personal Information Protection
Personal Information Protection Policy
PolicyStructure

Activities

Hitachi places great importance on protecting personal
information that is entrusted to us by customers or related
to our business operations. As a member of the global
community, Hitachi commits to protecting personal
information in accordance with a vision for personal
information protection summarized as providing safety
and trustworthiness, and recognizing the importance ofindividuals’ rights.
Hitachi, Ltd.’s Personal Information Protection Policy
sets out its corporate philosophy and principles on personal
information protection. The policy is disseminated to all
executive officers and employees as well as being publicly
available.
Hitachi has also established a personal information
protection management system based on this policy.
Through the rollout of the system, Hitachi is ensuring
protection of personal information by such means as safe
handling of personal information, educational programs forall employees, and periodic audits.
Personal Information Protection Policy of Hitachi, Ltd.
https://www.hitachi.com/privacy-e/

Responding to Personal Data Protection Laws
Around the World
ApproachWith the increasing risk of privacy violations in recent years
due to the advent of the digital age following advancesin IT and the globalization of socio-economic activities,
lawmakers are actively seeking to create and modify relevantlaws and legislation in countries and regions around theworld. Hitachi ensures thorough global compliance with legal
frameworks, continues to monitor related legal frameworks
and social trends, and implements appropriate measures.
In Japan, Hitachi will report any leakage of personal
information and notify affected individuals, as required by
the Amended Act on the Protection of Personal Information.
In the event that a leak could result in a situation that would
harm the rights and interests of individuals, we will promptly
report it to the Personal Information Protection Commission
and notify the affected individual(s).
Hitachi, Ltd. has also formulated a Group-wide internal
code of conduct concerning the protection of personal
information, which takes into consideration international
legal frameworks such as the European General Data
Protection Regulation (GDPR), and put this code of conduct
into effect from April 2022. Furthermore, each Group
company is strengthening its system for protection of
personal information, and is working to ensure thorough andappropriate protection of personal information on a global
scale.

PrivacyMark Certification
Activities

GRI 418-1

Hitachi, Ltd. has received PrivacyMark*1 certification. The
entire Hitachi Group is committed to personal information
protection; 37 Hitachi Group companies in Japan have been
granted the PrivacyMark as of March 31, 2022.
Hitachi also strives to safeguard personal information
globally at Group companies outside Japan, based oneach company’s personal information protection policy,
and ensures that they comply with all applicable laws andregulations in each country and region as well as they
respond the expectations of society at large. In addition,
there were no cases of personal information leakage byHitachi, Ltd. during fiscal 2021.
*1 PrivacyMark: A third-party certification established in April 1998 that is grantedby the assessment body the Japan Information Processing Development
Corporation to businesses that have taken appropriate security management
and protection measures related to personal information.

Hitachi Sustainability Report 2022

Contents

Management of Customer Information
Activities

Hitachi has deployed customer relations management (CRM)
systems, which allow us to collect and accurately manage
customer and transaction information, in addition to use asa marketing tool. The data collected in these CRM systems
enable us to formulate more effective sales strategies andoffer collaborative solutions through cooperation by multiple
business sites.

Privacy Protection Initiatives by Hitachi’s Digital
Business Division
Approach

Activities

Under the Digital Systems & Services Sector, which
drives our digital business, we have assigned a personal
data manager to unify our handing of personal data, andestablished a privacy protection advisory committee tosupport risk assessments and develop countermeasures
based on its knowledge and expertise of privacy protection.
In accordance with the policies set by the committee, ouremployees implement privacy impact assessments forprocesses where personal data will be handled and takemeasures to prevent privacy violations.
Hitachi Privacy Protection Initiatives for the Utilization of Personal Data
(In Japanese only)
https://www.hitachi.co.jp/products/it/bigdata/bigdata_ai/
personaldata_privacy/index.html
P187 Thorough Personal Information Protection/Information Security
Audits and Inspections

Introduction

Management

Environmental

SocialGovernance

Assurance

189

Hitachi Sustainability Report 2022

Contents

Introduction

Management

Environmental

SocialGovernance

Assurance

190

Governance Data
Corporate Governance

GRI 405-1

Leadership Demographics
Unit

Gender

Total
Directors*1
Executive officers*

1

PeopleExecutive officers and corporate officers*1
Ratios of female and non-Japanese executive officers andcorporate officers％*1 As of June 2022
*2 Including 9 independent directors (seven from Japan and two from outside Japan)

MaleNationality

FemaleJapanese

Non-Japanese

12*2

10

2

7

5

34

33

1

31

3

74

65

9

61

13

12.2

17.6

Contents

Hitachi Sustainability Report 2022

Introduction

Management

Environmental

SocialGovernance

191

Assurance

Business Ethics and ComplianceBusiness Ethics and Compliance Training
Reporting Boundary

Number of participants of business ethics and compliancetraining*1
Participation rate of business ethics and compliancetraining*

Unit

FY2017FY2018FY2019FY2020

FY2021

Hitachi Grouppeopleーーーー

341,888

Hitachi Group

％

ー

ー

ー

ー

99.1

FY2018FY2019*1 Disclosures began in fiscal 2021.

Hitachi Global Compliance Hotline (Whistleblower System)
Reporting Boundary

Number ofcompliance reports*1

Hitachi GroupFY2020

FY2021

ー

459

639

1,023

HR issues (Labor management, travel
expenses, commuting costs, etc.)

ー

ー

ー

ー

226

Harassment

ー

ー

ー

ー

341

ー

ー

ー

ー

27

Cases

Financial
Cases

ー

ー

ー

ー

26

Competition law

ー

ー

ー

ー

3

Bribery

ー

ー

ー

ー

30

Others

ー

ー

ー

ー

370

Americas

ー

ー

ー

ー

238

Europe (including CIS)

ー

ー

ー

ー

98

ー

ー

ー

ー

54

ー

ー

ー

ー

13

APAC (excluding Japan)

ー

ー

ー

ー

234

Japan

ー

ー

ー

ー

386

Procurement(By area)

FY2017ーTotal(By category)

Unit

Middle East/North Africa
Sub-Sahara*1 Discloses of the total number of cases began in fiscal 2019 and the breakdown in fiscal 2021.

Cases

Hitachi Sustainability Report 2022

Assurance

Contents

Introduction

Management

Environmental

SocialGRI 102-56

Governance

Assurance

192

Independent Assurance Report
To President & CEO of Hitachi, Ltd.

To enhance the reliability of the data disclosed in the Hitachi Sustainability Report 2022,
we have received independent assurance of key environmental, social and governanceperformance indicators by KPMG AZSA Sustainability Co., Ltd. The indicators that wereassured are marked with a .
The standards, guidelines, and calculation methods used in collecting environmental data
are posted on our website.

We were engaged by Hitachi, Ltd. (the “Company”) to undertake a limited assurance engagement of the environmental, socialand governance performance indicators marked with(the “Indicators”) for the period from April 1, 2021 to March 31, 2022
(or as of June 30, 2022 for the Ratio of Female and Non-Japanese Executive and Corporate Officers) included in its Hitachi
Sustainability Report 2022 (the “Report”) for the fiscal year ended March 31, 2022.
The Company's Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s
reporting criteria”), as described in the Report.
Our Responsibility

Calculation Methods for Environmental Load Data
https://www.hitachi.com/environment/data/method.html

Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We
conducted our engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance
Engagements other than Audits or Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance Engagementson Greenhouse Gas Statements’ issued by the International Auditing and Assurance Standards Board. The limited assurance
engagement consisted of making inquiries, primarily of persons responsible for the preparation of information presented in
the Report, and applying analytical and other procedures, and the procedures performed vary in nature from, and are less inextent than for, a reasonable assurance engagement. The level of assurance provided is thus not as high as that provided by areasonable assurance engagement. Our assurance procedures included:• Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report andreviewing the Company’s reporting criteria.
• Inquiring about the design of the systems and methods used to collect and process the Indicators.
• Performing analytical procedures on the Indicators.
• Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with
the Company’s reporting criteria, and recalculating the Indicators.
• Visiting the Nakajo business office of Hitachi Industrial Equipment Systems Co., Ltd. selected on the basis of a risk analysis.
• Evaluating the overall presentation of the Indicators.
Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that
the Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as
described in the Report.
Our Independence and Quality Control
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior. In accordance with International Standard
on Quality Control 1, we maintain a comprehensive system of quality control including documented policies and procedures
regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

/s/ Kazuhiko Saito
Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
September 2, 2022

Notes to the Reader of Independent Assurance Report: This is a copy of the Independent Assurance Report and the original
copies are kept separately by the Company and KPMG AZSA Sustainability Co., Ltd.

Inquiries

Sustainability Promotion Division
6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo,
100-8280, Japan
Tel: +81-3-3258-1111
www.hitachi.com/sustainability/