Hitachi Sustainability Report 2019
Fiscal 2018 Results

Hitachi
SocialInnovation

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Contents

Contents
02

07

Introduction

45 Contributing to a Low-Carbon Society at Factories

02
02
04

50 Climate-related Information Disclosure

and Offices

How to Use This Report
Editorial Policy
Hitachi Group Profile

55

62

CEO’s Message Executive Officer’s Message: CSR andthe Environment

12

Corporate Credo

13

12 Hitachi Group Identity
Sustainability Management
13 The 2021 Mid-term Management Plan

19

14 Sustainability Strategy Promotion Structure
16 Contribution to SDGs
Engagement and Participation in Initiatives
19 Stakeholder Engagement
26 Main Initiatives and Groups in70

and Sustainability

Which Hitachi Is Involved

27 International Standardization Activities

28

Environmental
29  Advancing Our Environmental Vision andLong-Term Environmental Targets

30 The Environmental Vision and Hitachi
Environmental Innovation 2050

3139

Environmental Governance

31 Enhancing Environmental Governance
32 Environmental Action Plan
34 Environmental Management System
Achieving a Low-Carbon Society
39 Efforts to Achieve a Low-Carbon Society
39 Contributing to a Low-Carbon Society Through the
Decarbonization Business

127 Social Contribution Activities(Based on TCFD Recommendations)Management
08
10

124 Customer Satisfaction

127 Community

78

Achieving a Resource Efficient Society
55 Efforts to Achieve a Resource Efficient Society
55 Enhancing Efficiency of Water Usage
58 Improving Efficiency in the Use of Resources
Achieving a Harmonized Society with Nature
62 Efforts to Achieve a Harmonized Society with Nature
63 Managing and Reducing Chemical Substances
67 Preserving Ecosystems
Environmental Data
70 Environmental Load Through the Value Chain
72 Environmental Load from Operations
76 Environmental Accounting

Social79

Innovation Management
79 Research and Development (R&D)
82 Intellectual Property
85 Human Capital
85 2021 HR Strategy
86 Developing Global Human Capital
91 Diversity and Inclusion
96 Work-Life Management
100 Occupational Health and Safety
107 Human Rights
107 Respect for Human Rights Throughout the

132 Governance
133 Corporate Governance
141 Compliance142 Sharing Our Codes of Conduct and Values Acrossthe Group

144 Promoting Work Practices in Line with International
Ethics Codes

146 Risk Management
146 Addressing Risks and Opportunities
150 Stable Provision of Products and Services
151 Information Security

155 Data
156 Indicators and Data
160 Key Sustainability Challenges and GRI Standards
161 Main Assessments and Awards
164 Independent Assurance

Value Chain

111 Freedom of Association andCollective Bargaining

113 Value Chain Management
113 Responsible Procurement
119 Quality and Safety Management
122 Rigorous Information Management
123 Use of Personal Data and Protection of Privacy
Hitachi Sustainability Report 20191

Introduction

Contents  Management

Environmental

SocialGovernance

Data

Introduction

How to Use This Report
Use the category tabs, navigation icons, and link buttons to go directly to different sections of
this report.

Link Buttons  

Click to go to corresponding website  

Period:The main period covered is fiscal 2018 (April 1, 2018, to March 31, 2019)

Companies:

1,222 companies, namely Hitachi, Ltd. and 1,221 consolidated subsidiaries(including 418 equity-method associates and joint ventures)

Boundary of Data:

Financial data: 1,222 companies, namely Hitachi, Ltd. and 1,221 consolidated
subsidiaries (including 418 equity-method associates andjoint ventures)

Click to go back one page
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Navigation Icons

Click to go to corresponding page

What This Report Covers (Boundary of Reporting)

Category Tabs

Social data:

Boundary of data indicated under each indicator

Environmental
data:

804 companies, namely Hitachi, Ltd. and 803 consolidated
subsidiaries. However, for environmental performance data associatedwith Hitachi’s business operations, Hitachi, Ltd. and consolidated
subsidiaries whose environmental load comprises 90% of the total(based on Hitachi calculations) are included.

Go to the beginning of the corresponding section

Contents
Contents

Introduction
Introduction

Management
Management

Environmental
Environmental

SocialSocialReporting Cycle:

Published every year as an annual report

Date Published:

October 2019

Notes:• 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 2018.

Editorial Policy[Symbol Marks Used in This Report]

Basic Concept* Technical terms, proper nouns, tables, diagrams, etc. requiring explanation

The Hitachi Sustainability Report 2019 details the environmental (E), social (S), and[Hitachi References in This Report]

governance (G) issues that are vital to the sustainability of our operations and society, presenting

Hitachi, Ltd.: Information on or initiatives of Hitachi, Ltd.

our stance and the activities undertaken in fiscal 2018.

Hitachi and the Hitachi Group: Information on or initiatives of all Group companies inInasmuch as the report is a tool with which we engage with our stakeholders through honest

and outside Japanand transparent disclosures of information, it contains our basic policies, promotion systems, key
performance indicators, and specific measures for our CSR initiatives in line with the disclosure[Key Guidelines Referred to in Preparing This Report]

requirements of the GRI Sustainability Reporting Standards (GRI Standards).

• GRI Standards, Global Reporting Initiative• Environmental Reporting Guidelines (2012 version, 2018 version),
Ministry of the Environment, Japan

Hitachi Sustainability Report 20192

Introduction

Contents  Management

Environmental

SocialGovernance

Data

Introduction

Disclosure of Financial and Non-Financial Information
Hitachi, following closely the deliberations of the European Union (EU) and the International
Integrated Reporting Council (IIRC) about non-financial disclosure, presents information to match

Hitachi Sustainability Report 2019
Fiscal 2018 Results

the needs of stakeholders reading this report.
Since the 2016 edition, the Hitachi Integrated Report has presented both financial and

Hitachinon-financial information showing how Hitachi is striving to create value. The Hitachi Sustainability

Soci alInnovation

Report continues to serve as a comprehensive tool providing detailed non-financial information.

Financial and Non-Financial Information
Reports on Hitachi’s Value Creation

Hitachi Sustainability Report 2019

Web Sustainability
http://www.hitachi.com/sustainability/

Web Environmental Activities
http://www.hitachi.com/environment/

 lobal Community Relations and Activities
G(Social Contribution Activities)
http://www.hitachi.com/sustainability/sc/

Financial Information Reports

Hitachi Integrated Report 2019

Hitachi Integrated Report 2019Year ended March 31, 2019

Hitachi
SocialInnovation

Web Investor Relations
http://www.hitachi.com/IR-e/

Hitachi Integrated Report 2019

Note: We also disclose information about Hitachi, Ltd. in the Corporate Governance Report.

Note: Information about Hitachi, Ltd. is also
disclosed in the Annual Securities Report
and the Report on the 150th Business Term.

Non-Financial Information Reports
The Hitachi Sustainability Report 2019 provides non-financial information to investors,
auditors, and CSR experts in an easily searchable, interactive PDF format(A4, 166 pages).
	  The CSR website contains not only the contents of this report but also news releases
to provide up-to-date information to our diverse stakeholders.

Web

Independent Assurance
To enhance the credibility of this report, we have engaged KPMG AZSA Sustainability Co., Ltd.
to provide assurance on environmental and social performance indicators. This assurance wascarried out in accordance with the International Standard on Assurance Engagement (ISAE) 3000
and 3410.
Performance indicators for fiscal 2018 that have been assured are marked with

Hitachi Sustainability Report 2019

in the report.

3Introduction

Contents  Management

Environmental

SocialGovernance

Data

Introduction

Hitachi Group Profile
Company Profile (as of March 31, 2019)

Consolidated Financial Highlights for
Fiscal 2018, Based on the International
Financial Reporting Standards (IFRS)Revenue and Share by Segment

Smart Life & Ecofriendly Systems
485.0 billion yen (5%)(Consolidated for fiscal 2018, based on IFRS)Corporate name

Hitachi, Ltd.

Incorporated

February 1, 1920
(founded in 1910)

Revenue

9,480.6 billion yen(up 1%, year on year)

Head office

1-6-6 Marunouchi,
Chiyoda-ku, Tokyo 100-8280,
Japan

EBIT*1513.9 billion yen (down 20%)

Toshiaki Higashihara
Representative Executive
Officer, President, and CEO

Income from continuing
operations, before
income taxes

516.5 billion yen (down 19%)

Representative458.79 billion yen

Net income attributable to 222.5 billion yen (down 39%)
Hitachi, Ltd. stockholders

Number of

33,490 (unconsolidated basis)

Capital expenditure*2

414.7 billion yen (up 11%)

employees

295,941(consolidated basis)

R&D expenditure323.1 billion yen (down 3%)

Number of consolidated
subsidiaries (including
variable interest entities)

803 (Japan: 181,
outside Japan: 622)

Total assets

9,626.5 billion yen

Total Hitachi, Ltd.
stockholders’ equity

3,262.6 billion yen

Capital

Number ofequity-method associates
and joint ventures

418

Automotive Systems
971.0 billion yen (9%)

IT

9,480.6

9,368.6

9,162.2

Revenue (left scale)731.1 billion yen

217.4

172.1

231.2

Energy453.9 billion yen(4%)

Hitachi Construction Machinery Co., Ltd.

1,033.7 billion yen (10%)

Industry895.4 billion yen(9%)

Hitachi Metals, Ltd.

1,023.4 billion yen (10%)

Mobility

1,214.1 billion yen (12%)

Hitachi Chemical Co., Ltd.

681.0 billion yen(7%)

Smart Life

1,649.3 billion yen (16%)

Others561.3 billion yen(5%)(Consolidated for fiscal 2018, based on IFRS)

400

222.5

200

2014

2015

2016

2017

2018

(FY)

(7%)

Revenue and Share by Region

600

362.9

2,000
0

Hitachi High-Technologies Corporation

Other Areas
Number of Companies:
Number of Employees:

Asia
2,019.5 billion yen (21%)
Number of Companies:
316
Number of Employees:
85,000Europe1,018.5 billion yen (11%)
Number of Companies:
129
Number of Employees:
17,000

Revenue by Region
Japan:
4,664.5 billion yen
Outside Japan:
4,816.0 billion yen

572.3 billion yen (6%)
89
10,000Japan
4,664.5 billion yen (49%)
Number of Companies:
181*1
Number of Employees:
162,000

800

6,000
4,000

2,121.6 billion yen (20%)

Note: Revenue by segment includes intersegment transactions.

1,000

8,000

9,480.6 billion yen

Note: Our revenue segments were reclassified in fiscal 2019 into five sectors and four subsidiaries.

1,200

10,034.3

9,774.9

Social Infrastructure & Industrial Systems
2,539.8 billion yen (25%)

Electronic Systems & Equipment
951.2 billion yen (9%)(billion yen)

10,00010,285.6 billion yen
Consolidated Revenue

Information & Telecommunication Systems
2,065.9 billion yen (20%)

Construction Machinery
1,033.7 billion yen (10%)

Revenue and Net Income Attributable to Hitachi, Ltd. Stockholders
12,000Subtotal of Revenue
by Segment

High Functional Materials& Components
1,704.4 billion yen (17%)*1 EBIT: Income from continuing operations before income tax, lessinterest income, plus interest charges.
*2 Since fiscal 2015, the amount of investment in leased assetsthat fall under the heading of finance and leases included inconventional capital expenditure are deducted from capital
expenditure for disclosure.
Note: Hitachi’s consolidated financial statement is prepared basedon the International Financial Reporting Standards (IFRS).

(billion yen)

Others534.4 billion yen (5%)

0North America
1,205.6 billion yen (13%)
Number of Companies:
88
Number of Employees:
21,000*1 Hitachi, Ltd. and 180 consolidated subsidiaries.

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

Hitachi Sustainability Report 20194

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Introduction

Key Business Segments
Information & Telecommunication Systems

Electronic Systems & Equipment

Hitachi provides IT services that address customers’ diverse needs by combining Hitachi’s

Drawing on the Hitachi Group’s advanced technologies, Hitachi provides systems supporting

extensive expertise in a diverse range of business fields, including financial services, with

the information society, including semiconductor manufacturing equipment, measurement andadvanced information technology. Our services cover the entire life cycle of systems, ranging

analysis equipment, broadcasting and video systems, wireless communications and informationfrom consulting to system integration, operation, maintenance, and other support.

systems, and healthcare solutions that support healthy lifestyles.

Main Products and Services
Systems integration, consulting, cloud services, servers, storage, software, telecommunications & networks, ATMs
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi Information & Telecommunication Engineering, Ltd., Hitachi-Omron Terminal Solutions, Corp., Hitachi Computer
Products (America), Inc., Hitachi Solutions, Ltd., Hitachi Systems, Ltd., Hitachi Consulting Co., Ltd., Hitachi Global Digital
Holdings Corporation, Hitachi Payment Services Pvt. Ltd., Hitachi Vantara Corporation

Social Infrastructure & Industrial Systems

Main Products and Services
Semiconductor manufacturing equipment, measurement and analysis equipment, advanced industrial products,
medical equipment
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi High-Technologies Corporation

Construction Machinery

Hitachi has a long and proven track record of high reliability in supporting people’s daily lives

Leveraging decades of technological expertise and know-how, Hitachi offers solutions thatthrough such products and services as rolling stock and train management systems, power

address the needs of a broad range of industries, including civil engineering and construction,

plants and transmission and distribution systems, elevators and escalators, and water solutions.

building and structural demolition, and mining and excavation. Hitachi also handles the sale,

It also offers industrial solutions and equipment to enhance the sophistication of production

servicing, and maintenance of hydraulic excavators and other construction machinery to provide

facilities. Hitachi utilizes digital technologies to provide optimum solutions in addressing the

integrated solutions globally.

issues and diversifying needs of customers worldwide.
Main Products and Services
Industrial machinery and plants; elevators; escalators; railway systems; thermal, nuclear, and renewable energy power
generation systems; power transmission and distribution systems

Main Products and Services
Hydraulic excavators, wheel loaders, mining machinery
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi Construction Machinery Co., Ltd.

Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi-GE Nuclear Energy, Ltd., Hitachi Industrial Equipment Systems Co., Ltd., Hitachi Elevator (China) Co., Ltd.,
Hitachi Building Systems Co., Ltd., Hitachi Industry & Control Solutions, Ltd., Hitachi Plant Construction, Ltd., Hitachi Plant
Services Co., Ltd., Hitachi Power Solutions Co., Ltd., Hitachi Rail Europe, Ltd.,*1 Sullair US Purchaser, Inc.
*1 Hitachi Rail Europe Ltd. changed its company name to Hitachi Rail Ltd. on April 1, 2019.

Hitachi Sustainability Report 20195

Introduction

Contents  Management

Environmental

SocialGovernance

Data

Introduction

High Functional Materials & Components

Smart Life & Ecofriendly Systems

Hitachi draws on its wealth of technological expertise and know-how to provide a variety of

Hitachi provides solutions and services aimed at resolving lifestyle issues through its homematerials and components—such as semiconductor- and display-related materials, synthetic

appliances, lighting and housing equipment, and refrigerating and air-conditioning. Hitachi also

resin products, specialty steels, magnetic materials, casting components, and wires andcontributes to the resolution of social issues by helping reduce environmental impact and making

cables—that enable advanced functions in products for such sectors as autos, IT and consumer

an ongoing effort to improve products’ energy efficiency.

electronics, and industrial and social infrastructure. Business operations are focused in Asia,
North America, and Europe.
Main Products and Services
Semiconductor- and display-related materials, printed wiring board and related materials, automotive parts, energy storage
devices, specialty steel products, magnetic materials, casting products, wires and cables
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.

Main Products and Services
Refrigerators, washing machines, vacuum cleaners, room air conditioners, air-conditioning equipment
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi Appliances, Inc.,*1 Hitachi Consumer Products (Thailand), Ltd., Hitachi Consumer Marketing, Inc.
*1 Hitachi Appliances, Inc. merged with Hitachi Consumer Marketing, Inc. and changed its company name to Hitachi Global Life Solutions, Inc.
on April 1, 2019.

OthersAutomotive Systems
To contribute to the realization of an affluent society by creating new value-added systems,

In addition to the manufacture and sale of optical disk drives, the company is involved in realestate sales and leasing and management services for offices and other commercial buildings.

products, and services through the harmonization of people, vehicles, and society, Hitachi isaccelerating its technological development in the fields of environment and safety. We will further
develop our Advanced Vehicle Control System, integrating our safety and information technologies
with the Hitachi Group’s social infrastructure services to meet society’s needs for environmental
conservation, accident elimination, and traffic congestion reduction.
Main Products and Services
Engine powertrain systems, electric powertrain systems, integrated vehicle control systems
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi Automotive Systems, Ltd., Hitachi Automotive Systems Americas, Inc.

Main Products and Services
Optical disk drives; real estate management, sales, and leasing
Principal Consolidated Subsidiaries (as of March 31, 2019)
Hitachi-LG Data Storage, Inc., Hitachi Life, Ltd., Hitachi Urban Investment, Ltd., Hitachi America, Ltd., Hitachi Asia Ltd.,
Hitachi (China) Ltd., Hitachi Europe Ltd., Hitachi India Pvt. Ltd.*1*1 Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China) Ltd., Hitachi Europe Ltd., and Hitachi India Pvt. Ltd. are the Group’s regional
headquarters, respectively, for the Americas, Southeast Asia, China, Europe, and India and are responsible for marketing the Group’s products.
Note: Other major equity-method associates and joint ventures include Hitachi Capital Corp. and Hitachi Transport System, Ltd.

Hitachi Sustainability Report 20196

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Management
CONTENTS
08

CEO’s Message

10	
Executive Officer’s Message: CSR andthe Environment
12

Corporate Credo
12

13

Hitachi Group Identity

Sustainability Management
13
14
16

The 2021 Mid-term Management Plan and Sustainability
Sustainability Strategy Promotion Structure
Contribution to SDGs

19	
Engagement and Participation in Initiatives
19
26
27

Stakeholder Engagement
Main Initiatives and Groups in Which Hitachi Is InvolvedInternational Standardization Activities

Hitachi Sustainability Report 20197

Contents

Introduction

Management

Environmental

SocialGovernance

Data

CEO’s Message

Resolving Social Issues and Improving
Quality of Life Through Social Innovations

We are today going through an era of volatility, uncertainty, complexity, andambiguity (VUCA) in which the future of society and economy is becoming
increasingly difficult to predict. Our lives are being affected by many sweepingchanges, such as shifting demographics from urbanization and aging, climatechange, and resource shortages. This has heightened expectations worldwide forprivate businesses, which are the drivers of innovation, to make a bigger contribution
to the resolution of society’s issues and the achievement of Society 5.0 and theSustainable Development Goals (SDGs). There is growing global demand, inparticular, for intelligent social infrastructure using digital technology—a need that
Hitachi is well-positioned to meet.
In the VUCA era, we believe it is all the more important for us at Hitachi toreembrace our Corporate Credo: to contribute to society through the developmentof superior, original technology and products. This philosophy has remained at
the heart of our operations over the 109 years since our founding, and it informs
the Hitachi Group Vision to become a company that “delivers innovation thatanswer society’s challenges.” As a global leader with business operations worldwide,
we believe it is our mission to contribute to the resolution of social issues andachievement of the SDGs by accelerating our Social Innovation Business.

Hitachi Sustainability Report 20198

Contents

Introduction

Management

Environmental

SocialGovernance

Data

CEO’s Message

Our 2021 Mid-term Management Plan, announced in May 2019, outlines our aim

For instance, in addressing social issues to help achieve the SDGs, we willto help bring about a sustainable society through our global leadership in the Social

strengthen our efforts to cultivate the “seeds” of innovation into new ideas

Innovation Business, simultaneously increasing social, environmental, and economic

ready for implementation through collaborative creation with universities, open

value, improving people’s quality of life, and enhancing value for our customers. We seek

innovation at “Kyōsō-no-Mori” of Hitachi’s Central Research Laboratory, and venture

to improve people’s lives by providing intelligent social infrastructure globally throughcapital investment.

our digital solutions. The sources of our strength in these areas are our operational

Human capital is another key driver of our Social Innovation Business, and I believe

technology (OT) accumulated over a century of developing monozukuri excellence—

it is extremely important for our employees to have an awareness in their work that all

starting with the five-horsepower induction motor—and our IT skills honed over thebusinesses relating directly to social infrastructure can be seen as contributions topast 50 years. We can contribute to the solution of various problems facing societysociety. Human capital is an important component of our efforts to create social value.

with our OT, IT, and high-quality products.

In striving to achieve our goals for the medium and long term, I would like for all ourAmong the issues facing contemporary society, climate change is regarded as

employees to consider the kind of value we can provide not only to our customers but

being one of the most important, as reflected in the goal set in our Mid-term

also to society so that we may make an even bigger contribution through the provision

Management Plan of raising environmental value. Roughly 90% of CO2 emissions fromof social, environmental, and economic value.

Hitachi’s value chain come from the use of our products and services. We thus have a
responsibility to help achieve a low-carbon society by prioritizing our decarbonization
business, which seeks to provide more value to customers and society while using
less energy.
When people hear the name Hitachi, I would like everyone to associate us withbeing an innovation partner. This will require that we accelerate our collaborative

Toshiaki Higashihara

creation with a full range of stakeholders worldwide and to construct an “innovation

President & CEO

ecosystem” with them.

Hitachi, Ltd.

Hitachi Sustainability Report 20199

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Executive Officer’s Message: CSR and the Environment

Integrating Sustainability Initiatives
into Our Management Strategy

The risks we face from such factors as climate change and a global population
explosion have grown to unprecedented levels in recent years and are threatening
the sustainability of our way of life. Since the European Union announced an action
plan in 2015 to accelerate its transition to a circular economy, in which growth isachieved through the effective use of resources, companies have increasingly
been called to shift to sustainable business models. They are being asked toaddress social issues and help achieve the Sustainable Development Goals(SDGs) through their main business activities, while also integrating sustainability
initiatives into their management and business strategies.
Since its founding, Hitachi has had a Corporate Credo of contributing tosociety through the development of superior, original technology and products,
and this has remained at the heart of its operations. Sustainability has been a
primary consideration in our management, as we have sought to contribute toa sustainable society through our Social Innovation Business. We will further
pursue sustainability management going forward and strive to continually

Osamu Naito
Hitachi, Ltd.
Vice President and Executive Officer
Head of Executive Officer Support andenhance our corporate value in response to global trends.
Our 2021 Mid-term Management Plan, announced in May 2019, outlines agoal of contributing to the realization of a sustainable world by simultaneously

General Manager of Government &increasing social, environmental, and economic value. Toward this end, we must

External Relations Group

regard sustainability as a management issue and strengthen our governance.
In 2017, we thus created the Executive Sustainability Committee chaired by thepresident and CEO of Hitachi, Ltd. and comprising other members of the Senior

Hitachi Sustainability Report 201910

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Executive Officer’s Message: CSR and the Environment

Executive Committee, along with the CEOs of every business unit, to discuss andIn response to growing calls in recent years from investors and other stakeholders forreach decisions on the Group’s sustainability strategy as a key management andclimate-related disclosures, we are advancing our efforts in line with the recommendations

business issue. The topics discussed at the Executive Sustainability Committee meetingof the Task Force on Climate-related Financial Disclosures (TCFD). In fiscal 2018, we

in June 2018 included integrating our sustainability strategy into the 2021 Mid-term

participated in the Ministry of Economy, Trade, and Industry’s TCFD Study Group on

Management Plan to respond to climate change and to help achieve the SDGs throughImplementing TCFD Recommendations for Mobilizing Green Finance Through Proactive

our business activities. Deliberations at the December 2018 meeting focused on

Corporate Disclosures, which brought together private businesses and financial institutions

expanding our decarbonization business and introducing the Hitachi Internal Carbon

for discussions on the development of guidelines on climate-related financial disclosures

Pricing (HICP) system as specific approaches to achieving our long-term environmental(TCFD Guidance) in promoting constructive dialogue between global corporations

targets (for CO2 reduction). Other issues discussed included corporate measures thatand investors.

are the foundations of management, such as human rights, CSR procurement, and theThis report outlines our strategies for climate-related risks and opportunities based

development of human capital; sustainability-related stakeholder engagement; andon these TCFD discussions. It also contains detailed information on our ESG-related

Hitachi’s disclosure policy on ESG information.

activities, which I hope will be pertinent to our readers.

Climate change is a priority management issue for us at Hitachi, and we are striving
to reduce CO2 emissions throughout our value chain. We announced our long-term

We will continue to pursue sustained growth for both society and our company
through dialogue with and proactive information disclosure to our stakeholders.

environmental targets called Hitachi Environmental Innovation 2050 in fiscal 2016 that
includes a CO2 reduction target of 80% throughout the value chain by fiscal 2050
(compared to fiscal 2010). To achieve a resource efficient society, we are responding to
the issue of water scarcity and promoting the efficient use of water and otherresources. We are also promoting the effective use of plastic and other resources tominimize our impact on natural capital to achieve a harmonized society with nature.

Hitachi Sustainability Report 201911

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Corporate Credo
Hitachi Group Identity
Society is today undergoing great changes and faces a range of challenges, from rapid urbanization

Management Plan is the action plan we define to realize the Hitachi Group Vision; byand shifting demographics to climate change and resource scarcity. The Hitachi Group’s Corporate

integrating our management and sustainability strategies, we seek to enhance the effectiveness

Credo is to contribute to society through the development of superior, original technology andof this approach.
The implementation of our plan is a way for us to fulfill our responsibilities as a good corporate

products. To accomplish this mission, we uphold the values of Harmony, Sincerity, and Pioneering
Spirit that comprise the Hitachi Founding Spirit. Our Group Vision was created based on thiscitizen through robust, diverse governance; the pioneering spirit and strong ethical stance of

mission and these values to express what the Hitachi Group aims to become in the future.

our employees; and operations that help address social issues. We operate and pursue ourTogether, these three elements—Mission, Values, and Vision—make up the Hitachi Group Identity.

activities in line with the Hitachi Group Codes of Conduct, the guidelines for ethical behavior anddecision-making shared by all executives and employees of the Hitachi Group.

Based on our Group Identity, and continuously considering the next generation, we promote
corporate activities informed by sensitivity to the needs of a changing society. Our Mid-term
Trends in Society and Hitachi Group Identity
Hitachi Group Identity

The mission that Hitachi
aspires to fulfill in society

MISSION

The values crucial to
the Hitachi Group inaccomplishing its mission

VALUES

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

Megatrends*1
Rapid urbanization(72% rise in global urban population by 2050)
Shifting demographics (shifting workforce)

Hitachi Founding Spirit:

Harmony, Sincerity, Pioneering Spirit(Doubling of share of 60-and-over in the
population between 2000 and 2050)
Climate change and resource scarcity(50% rise in demand for energy and 40%
in water intake by 2030)*1 Based on the “Five Megatrends and Possible Implications,” published in 2014 by PwC.

Solidifying the Hitachi Group Identity

VISION

What the Hitachi Groupaims to becomein the future

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

Direction of our management strategies

Rules for fair corporate behavior

Mid-term Management Plan

Hitachi Group Codes of Conduct

Business plans

Companies’ regulations and standards

Hitachi Sustainability Report 201912

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Sustainability Management
The 2021 Mid-term Management Planand Sustainability

PolicySince its founding, Hitachi has responded to social challenges by placing its Corporate Credo ofEnhancing Three Kinds of Value with Solutions in Five Sectors

contributing to society through the development of superior, original technologies and products
at the center of its business. In recent years, we have promoted our Social Innovation Businessin order to contribute to improving people’s quality of life and realizing a sustainable society. We

Improving quality of life and adding value for customers

have implemented sustainable management, placing sustainability at the center of our businessstrategy and—in our 2021 Mid-term Management Plan announced in May 2019 and ending infiscal 2021—setting ourselves the goal of contributing to the realization of a sustainable world

Social value

Environmental
value

Economicvalue

as a global leader of Social Innovation Business. We strive to simultaneously increase social,environmental, and economic value, as well as enhance our customers’ corporate value and thepeoples’ quality of life.

Increasing social, environmental, and economic value throughbusiness and technology solutions in five sectors

With our 2021 Mid-term Management Plan, we have advanced to a new stage, identifying fivesectors where we can increase social, environmental, and economic value for our customers
simultaneously: mobility, smart life, industry, energy, and IT. In order to increase the three kinds ofvalue simultaneously, we will expand our Social Innovation Business through collaborative creation
with our partners around the world by providing Lumada, a solution that accelerates digital

Mobility
solutions

Smart life
solutions

Industrysolutions

EnergysolutionsITsolutions

Product

Product

Product

Product

Product

innovation, as a cyber-physical system allowing the cyber and physical spaces to interact.
Based on these ideas, we continue to pursue the 2021 Mid-term Management Plan, further
merging sustainability and business to contribute to the resolution of social issues throughinitiatives like Society 5.0 and Sustainability Development Goals (SDGs).
Social Innovation Business
2021 Mid-term Management Plan

Hitachi Sustainability Report 201913

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Sustainability Management

Sustainability Strategy
Promotion Structure

Frameworks and Systems

In 2017, Hitachi, Ltd. launched the Executive Sustainability Committee to discuss and reach

The CSR and Environmental Strategy Division at Hitachi, Ltd., which played a leading role indecisions on the Group’s sustainability strategy. The committee comprises President and CEO

CSR management and activities across the entire Hitachi Group, was enhanced and renamed the

Toshiaki Higashihara and other members of the Senior Executive Committee, along with the

Sustainability Promotion Division in April 2018 in response to growing awareness and importanceCEOs of every business unit.

of sustainability in management and business. The new division is responsible for holding regular

Sustainability Promotion Meetings attended by sustainability strategy promotion officers

dialogue with stakeholders in each region in cooperation with regional headquarters. Throughfrom business units were also established under the committee to strengthen our systems forsuch dialogue, we endeavor to grasp global social issues promptly, extensively, and deeply,

promoting specific measures for advancing sustainability, including contribution to achieving theincorporating them into the issues our management deals with. At the same time, this dialogue

SDGs. We aim to achieve a sustainable society through long-term corporate strategies focusinglets us safeguard our corporate responsibility in a global society and make continued efforts to

on ESG (environmental, social, and governance) in business activities as well as conventional

improve as we strive to achieve sustainable management and a sustainable society.

CSR activities to take responsibility for our corporate impact on society and respond to requests
from stakeholders.
To review and discuss CSR initiatives, CSR Corporate Meetings are regularly held by officers
from corporate divisions of Hitachi, Ltd., as are CSR Manager Meetings attended by CSR andsocial contribution officers from business units and Group companies. Global and Regional CSR
Meetings are also held regularly, allowing CSR officers from regional headquarters outside Japanto share common directions and exchange information with the aim of promoting sustainability.
And, to discuss and implement specific measures to achieve long-term environmental targets,
Eco-Management Meetings, whose members are environmental promotion officers from business
units and Group companies, and Sustainability Promotion Meetings are working together. Global
and Regional Environmental Meetings are also held regularly, allowing environmental initiative
officers from regional headquarters outside Japan to share common directions and promote
environmental initiatives.

Hitachi Sustainability Report 201914

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Sustainability Management

Sustainability Strategy Promotion Structure
Executive Sustainability Committee
Chair

President & CEO

Members Senior Executive Committee members, business unit CEOs, Hitachi, Ltd. division heads
Key roles Discuss and decide on sustainability strategy at management/BU/department levels

Global CSR Meetings
Members: CSR officers at regional
headquarters and Hitachi, Ltd. global sites
Key roles: Report and discuss Hitachi, Ltd.
sustainability strategy and activities, reportand discuss CSR activities at regional
headquarters outside Japan

Global Environmental Meetings
Members: Environmental officers at regional
headquarters and Hitachi, Ltd. global sites
Key roles: Report and discuss Hitachi, Ltd.
environmental strategy and activities,
report and discuss environmental activities
at regional headquarters outside Japan

Sustainability Promotion Meetings

Eco-Management Meetings

Members Business promotion division heads at BUs and key Group companies

Members Environmental promotion division heads at BUs and key Group companies

Key roles Discuss and implement specific measures for sustainability strategy

Key roles Discuss and implement concrete measures to achieve long-term environmental

targets in sustainability strategy

CSR Corporate Meetings
Members: General managers in corporate planning, human capital, legal, procurement,
quality control, and other corporate divisions
Key roles: Discuss CSR activities of corporate divisions

CSR Manager Meetings
Members: CSR officers of BUs and Group companies
Key roles: Report and discuss sustainability strategy and activities, introduce sustainability
activities of BUs and Group companies

Environmental Manager Meetings
Members: Environmental strategy officers at BUs and Group companies
Key roles: Promote environmental policies and develop environmental information
and activities

Regional Environmental Meetings
Members: Regional environmental specialists at global sites
Key roles: Develop environmental policies and initiatives, share information on regional
environmental regulations and local environmental issues

Regional CSR Meetings
Members: CSR officers at Group companies outside Japan
Key roles: Report sustainability strategy and activities and discuss and share information
on regional CSR initiatives

Hitachi Sustainability Report 201915

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Sustainability Management

Executive Sustainability Committee Meetings
In fiscal 2018, the Executive Sustainability Committee held meetings in June and December.
At the June meeting, our response to climate change and the integration of our sustainability
strategy into the 2021 Mid-term Management Plan were discussed. The focus was on how

By proactively responding to social issues, Hitachi contributes tothe achievement of all SDGs through its responsible corporate conduct
and its Social Innovation Business.

business units and key Group companies should link their operations to the SDGs in terms ofbusiness opportunities and risks, as well as how Hitachi should respond to risks and social

Corporate Commitment

demands around climate change. We also reviewed ESG, SDGs, and other sustainability initiatives
to be incorporated into the 2021 Mid-term Management Plan.
At the December meeting, as part of our countermeasures against climate change, we
discussed the expansion of our decarbonization business and introduction of the Hitachi Internal
Carbon Pricing (HICP) system as specific approaches to achieving our long-term environmental
targets (for CO2 reduction). We also discussed corporate measures that are the foundations ofBusiness Strategy

management, like human rights, CSR procurement, and the development of human capital;sustainability-related stakeholder engagement; and specific information disclosure requirements.

Contribution to SDGs

PolicySDGs and Hitachi’s Social Innovation BusinessWe consider the SDGs an important initiative for realizing a sustainable society and improving
people’s quality of life through solving global social and environmental issues. We have significantly

Hitachi contributes to the achievementof all SDGs both directly and indirectly
through its business activities.

contributed to achieving the SDGs through our Social Innovation Business, which also serves asa source of sustainable growth for us.
Accordingly, through the provision of innovative solutions and products in our Social Innovation
Business, we will strive to create social, environmental, and economic value as part of ourmanagement strategy. We will also strive to reduce negative social and environmental impacts
resulting from our business and seek a deeper understanding of business risks arising fromsocial and environmental changes to ensure greater robustness against them.

Hitachi Sustainability Report 201916

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Sustainability Management

Identifying How Hitachi Can Contribute to the SDGs
In fiscal 2017 Executive Sustainability Committee meetings chaired by President and CEO

In phase 3, starting in fiscal 2018, Hitachi started seeking new business opportunities emerging

Toshiaki Higashihara, the committee members considered the 17 SDGs, and the opportunities

from social challenges addressed by the SDGs. Specifically, we clarified how each business unit

and risks they represented, and identified 11 Goals to the achievement of which Hitachi canand key Group company should link their Social Innovation Business to the SDGs and set

make a particularly significant contribution: 5 Goals where we can make significant impact

quantitative KPIs, wherever possible, for the social and environmental value they created to help

through our key business strategies, and 6 additional Goals that we must contribute to throughvisualize improvements.

our entire corporate activities. We view the latter 6 Goals as relevant to our entire business andmanagement strategies, making an impact on corporate sustainability.
Because we are active in a broad range of business fields, we believe we can contribute

In fiscal 2019, we launched an initiative exploring ways to build a framework for assessing
social and environmental impacts brought about by business activities, in order to make ourefforts to create social and environmental value closely linked to the SDGs more appealing toextensively to the achievement of the SDGs other than the 11 Goals identified. Understanding

our customers and society in a concrete manner. Moving forward, we will develop an impactthat all SDGs are mutually related, we will endeavor to contribute to the achievement of all 17

assessment approach with reference to key businesses outlined in the 2021 Mid-term

SDGs both directly and indirectly.

Management Plan, thereby establishing an impact evaluation framework for social andenvironmental value that can be used across the entire Group.
This approach will enable us to offer more sustainable business options to our customers

Road Map for Achieving the SDGs

based on consideration of the positive and negative social and environmental impacts of ourbusiness activities. In this way, we will realize the three kinds of value outlined in the 2021

Developing a sustainable society as defined by the SDGs will lead to sustainable growth for

Mid-term Management Plan.

Hitachi, too. We believe that we are providing value not only to the companies and consumers
that are our direct customers but also to society more broadly. This is the essence of our Social
Innovation Business. The products and services that we provide are all closely linked to social
sustainability, and we aim to establish a global position as a business-to-society (B2S) company
through our efforts to help achieve the SDGs.
In fiscal 2017, we officially launched strategic initiatives for achieving the SDGs. In phase 1,
as part of our initiatives to help deepen understanding across the Hitachi Group of sustainability
and the SDGs, sustainability workshops were held individually for four business units: Water,
Energy Solutions, Healthcare, and Railway Systems. Sustainability newsletters were also issued
in an effort to promote understanding and awareness of our SDG initiatives. In phase 2, ourSustainability Promotion Division worked with the planning divisions of business units and key
Group companies to clarify how each could contribute to the achievement of the SDGs throughtheir key businesses and create business opportunities from the SDGs.

Hitachi Sustainability Report 201917

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Sustainability Management

FY 2017

FY 2018

FY 2019 and beyond

Phases 1 and 2

Phase 3Phase 3

Understand sustainability and theSDGs, clarify how key businesses
are linked to the SDGs

Incorporate sustainability
perspectives in ourmanagement strategy

Explore new business possibilities
based on the motives of solvingsocial issues

Increase understanding throughsustainability messages from theCEO, symposiums, workshops,
newsletters, etc.

Incorporate the vision of Hitachi’s
future business and growth originatingfrom achieving the SDGs andsustainability (solving social issues) in
the 2021 Mid-term Management Planbusiness strategy, based on theknowledge that realizing a sustainable
society will make sustainable growth
possible for Hitachi.

Promote management focusing on social,environmental, and economic value.

Work with planning divisions and otherrelevant departments at business
units and key Group companies toclarify how their businesses are linked
to the SDGs in terms of business
opportunities and risks.

Explore building a framework forquantitatively assessing the impact of
non-financial value created by the five
focus sectors as set out in the 2021
Mid-term Management Plan.

The measures will be taken in collaboration with business units, major Group companies,
corporate-related departments, and global sites (regional strategies).

Hitachi Sustainability Report 201918

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives
Stakeholder Engagement
Hitachi’s Approach to Engagement

PolicyHitachi promotes its Social Innovation Business with efforts to accurately perceive the social

resources for conducting business—and place importance on direct dialogue between employees

issues in each country or region, followed by collaborative creation with customers, national andand senior management. Partly in recognition of the growing interest in ESG investment, we are

local governments, academic and research institutes, and other stakeholders to resolve them.

also active in dialogue with shareholders and investors.

We strive to enhance the value of human capital—which are indispensable management
Main Roles

Main Divisions

Customers

Stakeholders

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

Quality Assurance
Sales

Customer satisfaction activities
MarketingWebsiteAdvertisement activities

Means of Communication
Quality and Safety Management
Rigorous Information Management
Customer Satisfaction

pp. 119–122
pp. 122–123
pp. 124–126

Pages

Shareholders and Investors

Timely and proper information disclosure, fairassessment and support from capital markets,reflection of shareholder and investor viewpoints in corporate management

Public Relations
and IR

Financial results briefings (quarterly)
General shareholders’ meetings (annual)IR events, one-on-one meetings (about 550 times/year)
IR tools: Integrated Report, business reports, etc.

Stakeholder Engagement

pp. 19–25

Suppliers

Building of fair and sound business relations,smooth information sharing toward better
partnerships

Procurement

Procurement activities
Supplier meetings
CSR monitoring (345 companies/year)
CSR audits (24 companies/year)

Responsible Procurement
Respect for Human Rights Throughout
the Value Chain

pp. 113–119

Employees

Active utilization, proper treatment,
promotion of occupational health and safety ofhuman capital

Public Relations
Human Capital

Intranet, in-house newsletters
Training
Town hall meetings between senior management
and employees (20 times/year)
Employee surveys (annual)

Developing Global Human Capital
Diversity and Inclusion
Work-Life Management

pp. 86–91
pp. 91–96
pp. 96–100

National and Local
Governments, Industrial
Associations

Compliance with domestic and foreign laws
and regulations, policy recommendations,participation in industry-governmentacademia collaborative projects

Government &External Relations

Policy council participation
Participation in business and industry associations

Stakeholder Engagement
Main Initiatives and Groups in Which
Hitachi Is Involved

pp. 19–25

Local Communities

Fulfillment of responsibilities as corporate
citizen, involvement in local communities

Social Contribution
All Business
DivisionsContribution to local communities through businessParticipation in volunteer activities

Social Contribution Activities

pp. 127–131

Academic Associations andResearch Institutions

Promotion of technological innovations,participation in industry-governmentacademia collaborative projects

Research andDevelopment

Open innovation (joint research)Innovation Management

pp. 79–84

NGOs and NPOs

Incorporation of diverse public opinions,promotion of stakeholder-focusedmanagement, social contribution throughnonprofit activities

CSR Promotion

Stakeholder dialogue (5 times/year)
Dialogue through collaboration

Stakeholder Engagement
Social Contribution Activities

pp. 19–25
pp. 127–131

Global Environment

Realization of a low-carbon society,a resource efficient society, a harmonizedsociety with nature

Environment
All Business
Divisions

Stakeholder dialogues (annual)

Environmental

pp. 28–77

pp. 107–111
Occupational Health and Safety
Freedom of Association and Collective Bargaining
Stakeholder Engagement

pp. 100–106
pp. 111–112
pp. 19–25

pp. 26–27

Hitachi Sustainability Report 201919

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Framework for Promoting Engagement

Frameworks and Systems

The outcomes of communication with stakeholders are shared with respective divisions andHitachi’s President and CEO Toshiaki Higashihara serves as chair of the Communications andactively utilized as valuable insights into our business. Public interest is growing in how corporations

Information Network Association of Japan (CIAJ),*1 making efforts toward building a fulfilling soci-are taking in stakeholders’ voices to improve their businesses, and we will continue to globally

ety and promoting information and communication technology to contribute to resolving many

develop and promote ways of capitalizing on the opinions of the members of society with whomsocial issues through exchanging views and opinions with relevant ministries and agencies.

we engage in our business activities.

PolicyFrameworks and Systems
Working with Governments and 
Public Policymakers  Objectives, Activities, and Achievements*1 Communications and Information Network Association of Japan (CIAJ): A major ICT industry association consisting of manufacturers ofcommunication network devices and terminals, communication operators, service providers, and user companies.

Framework for Promoting External Relations
Hitachi established the Government & External Relations Division in our corporate headquarters
in fiscal 2009 to guide and accelerate the external relations of the entire Hitachi Group, and we

Hitachi’s Approach to External Relations Initiatives

have since worked to strengthen our relationships with government and industrial organizations.

We believe that it is governments that are best positioned to both understand and work to resolve

In fiscal 2018, we established the Government & External Relations Group by integrating thissocial issues, whether at the national or regional level. As we develop our Social Innovation

division with the Sustainability Promotion Division to achieve our new goals of further enhancing

Business on a global scale, our activities in the social infrastructure field are particularly intertwined

the global expansion of our Social Innovation Business in terms of external relations.

with the public interest. This makes government institutions and related organizations in Japan and

The Government & External Relations Group is not only active in Japan but also works withother countries around the world important partners to Hitachi both as customers and as backers.

the Hitachi Corporate Office in Washington DC, the Hitachi Corporate Office, Europe, and otherToday’s global community urgently requires solutions for a range of social issues related to thebusiness locations in the Americas, Europe, Middle East, Africa, and the Asia Pacific. By dealing

environment, energy, aging societies, and urbanization. At the same time, innovation in the fields

with governments and organizations as a unified Group in seeking mutual benefit with theof internet of things (IoT) and artificial intelligence (AI)—the so-called fourth industrial revolution—communities we participate in, we explore new business opportunities for Hitachi in eachis advancing rapidly. Like the Japanese government and its “Super Smart Society” (Society 5.0)

community’s unique social issues and policies.

proposal, governments around the world are expanding their support systems in response tothese developments. For Hitachi, promoting our business according to legislative policies andPolicy Council Participation

making effective use of governmental advice and support systems is enormously helpful to us in

As part of our dialogue with government officials, Hitachi executives and other representatives

advancing our Social Innovation Business. We also increasingly receive requests for proposals

participate in a range of government-sponsored policy councils. We are particularly active in thefrom the Japanese government as they seek to identify solutions for social issues and craft

discussion of how best to realize “Society 5.0” advocated by the Japanese government,

infrastructure support policies to resolve unique regional challenges. Assisting with these

exploring ways to simultaneously resolve social issues and achieve economic growth. Executive

requests, whether directly or through participation in an economic organization or industrial body,

Chairman Nakanishi has been a member of the governmental Council on Investments for the Futureis one way Hitachi contributes to a better society.

since its first meeting in September 2016. The council is a command post for the government’s

Appointed chair of Keidanren (Japan Business Federation) in 2018, Executive Chairman

growth strategy, chaired by the prime minister of Japan. As a representative of a corporation

Hiroaki Nakanishi has since been working on policy recommendations for achieving the SDGs

contributing to the realization of “Society 5.0,” Executive Chairman Nakanishi makes proposals inthrough realizing Society 5.0 under the theme of “Society 5.0 for SDGs.” In the same way,

areas including the use of data, open innovation, and development of human resources.
Hitachi Sustainability Report 201920

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

The government’s growth strategy, Investments for the Future Strategy, formulated based on

educational institutions, and offering insights into paradigms of international legislation anddiscussions at the Council on Investment for the Future, outlines policies toward realizing

agreements in the era of global business.

“Society 5.0.”

As a member of the Japan Electrical Manufacturers’ Association (JEMA), Hitachi is committed

Staff and senior management from the Hitachi headquarters and business departments haveto sustainable development of the electric machinery industry and contribution to a low-carbon

also participated in meetings and roundtable discussions that look into policy from the standpoint

society. To that end, we are working on various initiatives, including promotion of infrastructureof expanding businesses, as well as cooperating in planning new policies for Japan, including

systems exports, study of the impact of electric-power system reforms on the electric machinery

specific recommendations for more effective policy planning and implementation. For example,

industry and new business trends, improvement in the efficiency of industrial system devices, andHidenobu Nakahata, senior vice president and executive officer, is a member of the 2050

promotion of the use of electricity storage systems, as well as actively communicating our views

Economic and Social Structure Committee under the Industrial Structure Council of the Ministryby participating in many committees and working groups.

of Economy, Trade and Industry (METI) to discuss a society for healthy longevity and extended
working life; Osamu Naito, vice president and executive officer, is a member of the METI’s Study

United States: Hitachi Corporate Office in Washington DC

Group on Implementing TCFD Recommendation for Mobilizing Green Finance Through Proactive

The Hitachi Corporate Office in Washington DC has three missions: (1) Enhancing Hitachi’s

Corporate Disclosure; and employees participate as advisors on the advisory committee on

presence in the United States; (2) Contributing to the growth of business in the United States;

Japan’s electric energy networks and investments established by the Agency for Naturaland (3) Gathering and analyzing geopolitical intelligence. The North American market plays an

Resources and Energy.

important part in our business, accounting for 13% of our total revenue and more than 21,000
employees. The US political and economic climate has been rapidly changing in recent years,

Participating in Business and Industry Associations

significantly impacting our business globally. We must monitor these changes closely in order toMembership in business and industry associations is another critical aspect of our external

make critical business decisions, not just for the US but for other markets as well. Building

relations. Hitachi is a member of Keidanren, where Executive Chairman Nakanishi was appointed

reliable relationships and networks with influential leaders and experts including government

chair in May 2018. Other executives and employees also participate in major Keidanren committees.

representatives in the United States and enhancing our presence in those circles provide valuable

As the planning and coordination chair for the subcommittee on Europe, we also maintain close

feedback for our management and an emergency safety net.

economic relations with European governments and economic organizations. In relation to theAs part of our efforts to expand our Social Innovation Business, the Hitachi Corporate Office inUnited Kingdom’s decision to withdraw from the European Union, commonly referred to as

Washington DC is engaging in dialogue with and lobbying US government representatives and“Brexit,” we have been communicating with both the United Kingdom and the European Union toregulatory authorities to facilitate a favorable business environment. In recent years, particular

continue maintaining stable business environment in the region as before.

focus has been placed on establishing relationship with state-level government authorities, who

President Higashihara serves as vice chair of the Japan Electronics and Information Technology

have decision-making power over regional infrastructure investment plans, as well as federal

Industries Association (JEITA), whose mission is to achieve Society 5.0, including through thegovernment officials, by working closely with regional Hitachi Group companies. By proactively

promotion of Connected Industries, and thereby optimize society as a whole. As a corporate

enhancing engagement in many areas, including security and trade issues, new technologies

member of the association, Hitachi has been active in various committees and working groups,

such as IoT and AI, energy policies, and infrastructure investment, the Washington office will

examining and making proposals on the promotion of IT and data utilization, working on elementary

strive not only to support Hitachi’s business growth but also to contribute to US society andand secondary education issues while arranging for lectures at universities and other advanced

the community.
Hitachi Sustainability Report 201921

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Europe: Hitachi Corporate Office, Europe

Asia-Pacific Region: Hitachi Asia Ltd., APAC Office

The Hitachi Corporate Office, Europe, located in Brussels, monitors policy and legislation trends in

The Asia-Pacific region is replete with challenges in areas including the environment, energy,

the European Union, such as the European Commission and European Parliament, and analyzes

transportation, and healthcare that call for urgent solutions. At the same time, however, it offers atheir impact on Hitachi’s business activities. It demonstrates how business can contribute to

wealth of business opportunities. At Hitachi Asia, a core team made up of top-level managers

European policy and to societal issues.

from each national and regional office monitors legislative policies and legal regulations impacting

Specifically, the office actively gathers information in the fields of energy, trade, information andbusinesses across the Asia-Pacific region and ensures that business activities remain suitable totelecommunications, transportation, healthcare, research and development, environment, CSR or

each location’s individual circumstances. On matters such as trade policies and data flow issues

ESG (Environmental, Social, and Governance), and SDGs (Sustainable Development Goals);that have cross-border implications, solutions are sought through cross-border collaboration.

communicates with relevant departments within the company and other Group companies; andThe Asia-Pacific region is known for its religious, political, and economic diversity. To expand

makes policy contributions to EU institutions through business and trade associations likeour Social Innovation Business in this region and contribute to solving the social issues it faces,

BUSINESSEUROPE, DigitalEurope, and the Japan Business Council in Europe (JBCE). We havecooperation with national and local governments and involvement in policymaking throughout thealso participated in the European Commission Product Environmental Footprint (PEF) pilot project

region, including Japan, is crucial. For this reason, we sponsor regional events like the Hitachi

since 2013 as part of our environmental policy activities, exchanging opinions, supporting theSocial Innovation Forum (HSIF) and Hitachi Young Leaders Initiative (HYLI) and endeavor todevelopment of new policies, and helping to verify the environmental footprint calculation methodadvance long-term and organic involvement in international scholarship programs through theannounced by the European Union.

Hitachi Global Foundation as part of our strategy to raise understanding and awareness of our

Regarding sustainable finance, non-financial information disclosure, and conflict minerals

values and vision for the future among those involved in formulating policy.

regulation, we maintain ongoing dialogues with the European Union’s Directorate-General for

Hitachi has long emphasized information exchange and communication between Group

Financial Stability, Financial Services, and Capital Markets Union and Directorate-General forcompanies on a national basis. Starting in fiscal 2017, we brought in outside specialists as

Trade, and communicate our views on each field via the JBCE. We also actively participate in theexternal relations advisors to strengthen our voice in regional policymaking. As One Hitachi, we

EU-Japan Working Group on Corporate Social Responsibility, an EU-Japan industrial policy

will continue to seek dialogue with policymakers across a variety of forums in order to resolve

dialogue initiative. To promote engagement by and dialogue with business leaders, we work withsocial challenges through policy contributions and business.

affiliated organizations in Japan and Europe to organize and host the EU-Japan CSR BusinessDialogue, striving to promote two-way dialogue in the field of sustainability after the conclusion of
the Economic Partnership Agreement (EPA) between the EU and Japan to further advance joint

Engagement with Customers

Objectives, Activities, and Achievements

cooperation toward common challenges and goals.
Since 1998, we have held the EU Hitachi Science & Technology Forum to deepen

It is critical for Hitachi to gain stakeholders’ understanding of its Social Innovation Business andunderstanding of Hitachi’s business. Starting in fiscal 2016, we have focused on our Social

corporate vision, which aspire to realize a sustainable society. We conducted a Global Brand

Innovation Business and, in fiscal 2019 we plan to hold discussions with policymakers and otherCampaign in 16 countries under the slogan “THE FUTURE IS OPEN TO SUGGESTIONS,”

diverse stakeholders about how business can use IoT technology to help achieve SDGs andpresenting examples of how Hitachi’s Social Innovation Business is helping to address the many

resolving social issues, examining the very place of our Social Innovation Business in society.

issues societies now face globally, such as energy issues, depletion of water resources,

Through these activities Hitachi actively communicates with European stakeholders.

transportation issues linked to urbanization, healthcare issues associated with the graying of
Hitachi Sustainability Report 201922

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Dialogue with Shareholders
and Investors

Objectives, Activities, and Achievementssociety, advancement of big data and other information technologies, food safety, andHitachi conducts extensive investor relations (IR) activities, focusing on dialogue with stakeholders,

information security.

including institutional investors and analysts.

To globally enhance the Hitachi brand, we have held the Hitachi Social Innovation Forum in

In fiscal 2018, we held quarterly financial results briefings as well as corporate strategy meetings

locations worldwide, including Japan, the United Kingdom, Italy, Australia, the Philippines, andon the progress of our 2018 Mid-term Management Plan. We also hosted the ninth consecutive

India, showcasing examples of the Social Innovation Business being conducted in each region.

annual Hitachi IR Day, where divisional management teams from each business explained their

Through keynote speeches, panel discussions, and exhibits, we present a wide range ofbusiness strategies and management policies under the plan.

stakeholders—including customers and government officials—with solutions to social issues
that countries and regions around the world face today.

We held briefings on Hitachi’s R&D Group, a source of value creation, Hitachi executives
visited institutional investors and analysts in North America, Europe, and Asia to explain ourmanagement strategies for mid- and long-term growth, for a combined total of around 550
meetings. We are doing our best to reflect feedback in management and operations to enhance

Engagement with Employees

Objectives, Activities, and Achievements

our corporate value.
On the Hitachi IR website, we post briefing materials and videos as well as business

Since fiscal 2012, we have held town hall meetings as forums for direct dialogue between senior

performance and stock price trend charts in a timely manner. As part of our efforts to enhance

management and employees. In fiscal 2018, President and CEO Toshiaki Higashihara attended aour information disclosure, we have introduced a new responsive design to allow smartphone

total of 20 town hall meetings in Japan, the United States, Thailand, India, the Philippines, andand tablet users to browse our website with ease.

other countries. Our executive vice presidents responsible for the four focus business domains
also held more than 30 town hall meetings, engaging in discussions with our employees.
Ordinary business meetings and conferences are limited in agenda, and company

Investor Relations
Disclosure Policy

communications with employees via our intranet and other channels tend to be one-way. Townhall meetings, however, are forums for direct dialogue where employees can gain a real sense of
the senior management’s way of thinking and what is needed for Hitachi to make the next leap

Stakeholder Dialogue

Objectives, Activities, and Achievements

forward, as well as occasions for reaching a shared understanding of the work in which everyone
is involved. These interactions help drive mindset reform within Hitachi. For example, at one town

Hitachi organizes stakeholder dialogues in countries and regions around the world to invite

hall meeting, a participant pointed out that existing structures and procedures made it difficult for

opinions on social challenges from stakeholders representing specialized knowledge platforms

junior-level staff to propose new business ideas. This ultimately led to the creation of an entirelyand ensure that their insights are reflected in the business activities conducted at each of

new way for employees to make business proposals: an internal “New Ideas Contest” called

Hitachi’s global businesses and business units.

“Make a Difference!”
In the town hall meetings, we believe that it is important for senior management to hear thethoughts of frontline employees and for both sides to share their awareness as they engage indialogue on diverse topics, such as how we can grow our business.
Hitachi Sustainability Report 201923

Contents

Introduction

Management

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

The Information & Telecommunication Systems Segment’s
Contribution to SDGs

Europe: AI and the Future of Work in the EU
In February 2019, Hitachi organized a European stakeholder dialogue in Brussels on the

In March 2019, the Systems & Services Business, a section of our Information &responsible development of digitalization for the future of work. Facilitated by CSR Europe,*1

Telecommunication Systems Segment, hosted a dialogue between Hitachi executives and24 people attended, including representatives from the European Commission, International

external experts on the theme “Appreciation and Expectations Toward Hitachi Building

Labour Organization, NGOs, academia, and the wider tech sector.

Infrastructure for a Society Where People Can Live a Safe, Secure, and Comfortable Life with

Hitachi Rail STS’s chief technology officer opened the event by outlining Hitachi’s experience

Digital Technologies.” The discussion, led by the CEOs of the Financial Institutions Business Unit,of digitalization and co-creating solutions with customers. The subsequent discussion focusedSocial Infrastructure Systems Business Unit, and Service & Platforms Business Unit and the CSO

on the potential impacts of digitalization, providing greater understanding of the issues leadersof the Systems and Services Business, was focused on how these three business units canmust consider. Attendees were generally optimistic about future scenarios, but some took apromote the SDGs as part of corporate culture and connect them to business opportunities.

more cautious view. Any approach, it was agreed, must remain human-centric. Participants also

One external expert commented, “Each business unit’s business could positively or negatively

discussed how policy and smart regulation could ensure that technology is applied responsibly inaffect society. Taking proactive steps toward the SDGs will not only contribute greatly to thethe context of the future of work. The emerging themes highlighted a need for corporations tosustainability of society, it could also be a growth driver for Hitachi.” Another said, “The Social

lead with strong ethical platforms, integrated and transparent decision-making, and diverse

Infrastructure Systems Business Unit’s information platform for regional comprehensive care isworkforces to drive innovation without bias. Participants were also clear on the importance ofan initiative contributing to resolving the issues of an aging society with a declining birthrate as

taking a collaborative approach with multiple stakeholders, particularly employees, if business iswell as supporting the human rights of children and the disabiled, helping achieve

to adapt responsibly to the rapid changes caused by digitalization. Hitachi will use the results ofGoal 16 of the SDGs.”

this dialogue to guide its internal and external engagement on the future of work.

The dialogue was concluded by the following closing remarks from Hitachi: “We are*1 CSR Europe is a leading European business network for corporate sustainability and responsibility.

committed to helping realize a sustainable society through social innovation, in accordancewith our corporate mission. We willcontinue our efforts to raise awareness of
this commitment among our employees
and promote our business throughcollaborative cooperation along the value
chain based on our policy of contributing
to the SDGs.”

A discussion of the stakeholder dialogue on AI and the future of work.
The stakeholder dialogue held by the Information & Telecommunication
Systems Segment.

Hitachi Sustainability Report 201924

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Philippines: The Social Challenges to Realizing
Sustainable Urbanization

outcomes and impact of planned actions.
The group also emphasized the strong

Hitachi Asia’s Philippine Branch hosted the country’s first-ever Hitachi stakeholder dialogue inneed for business and government toMarch 2019 on the theme of “The Social Challenges to Realizing Sustainable Urbanization in thework more closely than ever to realize thePhilippines.” The dialogue drew a total of 36 participants representing 3 Hitachi Group companies

benefits of these initiatives.

and 18 external organizations, including government agencies, private-sector companies, andThe key takeaways were summarized in

civic groups. The aim of the dialogue was to foster and deepen collaboration between stakeholders

a report which was shared with Hitachi

in support of the United Nations’ 17 Sustainable Development Goals (SDGs), and the keynote

Australia’s management and can bepresentation was delivered by a senior Philippine government official, who explained the country’s

leveraged during further development oflong-term plans and alignment with the SDGs.

regional sustainability strategy.

The dialogue’s first session focused on the sub-theme “Perspectives on Balancing Growthand Sustainability,” examining sustainability reporting by listed firms and challenges in sustaining

Participants in the stakeholder dialogue on the business implementationof the SDGs in Oceania.

India: The Business Contribution Toward the SDGs in India

national infrastructure development programs. The second session’s sub-theme was “Opportunities

Working toward developing a sustainable society, Hitachi India held the CSR India Stakeholder

for Collaboration in Different Sectors.” A senior representative from Hitachi clarified the meaning

Dialogue 2018 on October 25 in New Delhi. The event was attended by 32 external and internalof “smart city” as human-centric rather than technology-focused, and government programs forstakeholders, including Hitachi Asia’s Chairman Kojin Nakakita and Hitachi India’s Managing

multistakeholder collaboration were highlighted.

Director Bharat Kaushal.

Participants learned about efforts by government, business and civil society in support ofsustainable urbanization, and built trust to facilitate greater collaboration in future.

The dialogue focused on the role of the private sector and how business can contribute to the
SDG agenda in India, particularly in the areas of e-Education, e-Governance, and urban
transportation. Participants shared their understanding and experiences of how companies canAustralia: The Business Implementation of the SDGs in Oceaniaalign their way of working with the SDGs. During the discussion, the need to inculcate

In March 2019, Hitachi Australia and KPMG Australia cohosted a stakeholder dialogue on thesustainability into one’s business model to ensure long-term impact was emphasized. It was also

business implementation of the SDGs in Oceania. The 14 participants included CSR andacknowledged that, given the size and complexity of the challenges, a collaborative approachsustainability representatives from a diverse group of organizations, including Downer Group,

rather than an individual effort will be required to achieve the SDGs.

Unilever Australia Ltd., SunRice, Fujitsu Australia Ltd., Insurance Australia Group Ltd. (IAG),
Transurban Ltd., and National Roads and Motorists’ Association Ltd. (NRMA).
In preparation for the 2021 Mid-term Management Plan and its accompanying sustainability
strategy, Hitachi Australia sought to understand how other Australian companies approach theBased on the key learnings from the dialogue, Hitachi will persevere in its ambitious efforts toincorporate sustainability into its business. By proactively responding to social issues, andthrough collaborative creation with various stakeholders, Hitachi will continue contributing toachieving the SDGs.

SDGs and to what extent their business strategies and targets are influenced by these global
goals. Participants agreed that making SDGs central to business strategy will soon be the norm.
During the half-day discussion, participants shared insights into how to better engage
employees in the development and achievement of these strategies and how to measure the
Hitachi Sustainability Report 201925

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Main Initiatives and Groups in Which
Hitachi Is Involved
United Nations Global Compact

Task Force on Climate-related Financial Disclosures

Hitachi, Ltd. became a full member of the United Nations Global Compact in February 2009.

In June 2018, Hitachi announced its support for the Task Force on Climate-related Financial

Our corporate foundation is the basis for our continuing growth as a global company, and it must

Disclosures (TCFD), which was established by the Financial Stability Board to encourage

meet internationally recognized global standards that go beyond national and regional laws anddisclosure of information about climate-related risks and opportunities.

regulations. We believe that respecting and implementing the 10 principles of the UN Global
Compact will build a stronger foundation for our business.
In fiscal 2018, the Hitachi Group also participated in workshops organized by the Global
Compact Network Japan on seven different topics, including human rights, supply chain
management, and the UN’s Sustainable Development Goals (SDGs).

Japan Climate Initiative
The Japan Climate Initiative (JCI) is a network formed to improve information-sharing anddiscussion between companies, local governments, NGOs, and other organizations actively
working to address climate change in Japan. Hitachi has been a member since the JCI’s
founding in 2018.

World Business Council for Sustainable Development
The World Business Council for Sustainable Development (WBCSD) is an organization led byCEOs of around 200 progressive companies around the world. Its aim is to create a sustainable
future for business, the environment, and societies. Hitachi, Ltd. has participated in the WBCSD
since 1995.

Hitachi Sustainability Report 201926

Contents

Management

Introduction

Environmental

SocialGovernance

Data

Engagement and Participation in Initiatives

Business for Social Responsibility
Founded in 1922, Business for Social Responsibility (BSR) is an international NPO with a focus

Additionally, the Hitachi Group Standardization Committee was established to coordinate theon CSR. Together with over 250 corporate members and external partners around the world, itefforts of all Hitachi Group companies toward international standardization. The Steering

uses its global network for activities designed to build a fair, sustainable world. Hitachi joined BSR

Committee*1 of this body determines priority themes and promotes standardization activities byin 2007, and has participated in the organization’s human rights sessions since fiscal 2016.

establishing working groups for each theme.
*1 Steering Committee: Headed by the executive officer overseeing R&D, this entity includes chief technology officers of Hitachi business units
and key Group companies. The committee is responsible for decisions on cross-departmental and companywide standardization projects.

Assessment of Hitachi’s International
Standardization Activities

Objectives, Activities, and Achievements

Hitachi’s international standardization work is well regarded. In fiscal 2018, we were honored byInternational Standardization Activities

such bodies as the IEC, the Ministry of Economy, Trade, and Industry, the Telecommunication
Technology Committee, and the Railway Technology Standardization Investigation Committee.

Hitachi’s Approach to International Standardization

PolicyHitachi Group Standardization Committee
To help create and expand markets as well as to accelerate our global business expansion, weare actively involved in developing international standards through participation in the activities ofinternational standards-developing organizations such as the International ElectrotechnicalCommission (IEC) and the International Organization for Standardization (ISO). Additionally, bycontributing to international standardization efforts by consortia and other bodies, and providing

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

Members:
Hitachi Group representatives incharge of international
standardization (CTOs, etc.)

solutions consistent with international standards, we support the development of sound global

Framework for Promoting International
Standardization Activities

Priority Theme 2
Working Group

Steering Committee

markets and facilitate innovation to resolve social issues.

Priority Theme 1
Working Group

Priority Theme 3
Working Group
Frameworks and Systems

As part of its efforts toward international standardization activities, Hitachi commits employees to

Hitachi Group Standardization Committee

serve on the IEC’s Market Strategy Board as well as other key positions such as technicalcommittee chairperson and secretary at international standardization organizations like the ISO.
Hitachi Sustainability Report 201927

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Striving to Increase Environmental Value

Environmental

Hitachi aims to achieve a low-carbon society, a resource efficient society, and a harmonized society
with nature under its Environmental Vision. To this end, we strive to achieve the long-term
environmental targets of Hitachi Environmental Innovation 2050 not just within Hitachi itself but acrossour entire value chain. Additionally, we support the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), and are actively advancing our efforts to clarify and disclose
information on climate-related risks and opportunities.

CONTENTS
29	
Advancing Our Environmental Vision andLong-Term Environmental Targets
30  The Environmental Vision and Hitachi Environmental
Innovation 2050

3139

Environmental Governance
31
32
34

Enhancing Environmental Governance
Environmental Action Plan
Environmental Management System

Achieving a Low-Carbon Society

39 Efforts to Achieve a Low-Carbon Society
39  Contributing to a Low-Carbon Society Through the
Decarbonization Business45  Contributing to a Low-Carbon Society at Factories
and Offices

50  Climate-related Information Disclosure(Based on TCFD Recommendations)55

Achieving a Resource Efficient Society
55
55
58

Efforts to Achieve a Resource Efficient Society
Enhancing Efficiency of Water Usage
Improving Efficiency in the Use of Resources62	
Achieving a Harmonized Society with Nature
62
63
67

70

Efforts to Achieve a Harmonized Society with NatureManaging and Reducing Chemical Substances
Preserving Ecosystems

Environmental Data
70
72
76

Environmental Load Through the Value Chain
Environmental Load from Operations
Environmental Accounting

The natural forest at the Central Research Laboratory of Hitachi, Ltd., where the new R&D center to accelerate new innovation through open, collaborative creation,“Kyōsō-no-Mori,” was opened (Kokubunji, Tokyo).

Hitachi Sustainability Report 201928

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Advancing Our Environmental Vision and Long-Term Environmental Targets
Hitachi’s Approach
Hitachi’s Corporate Credo is to “contribute to society through thedevelopment 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 managementfrom a long-term perspective. Meeting society’s expectations with
innovations that mitigate environmental issues also presents major
business opportunities.
Guided by our Environmental Vision defining our future environmental
goals, in September 2016 we announced a set of long-term environmental
targets called Hitachi Environmental Innovation 2050 aimed at achieving
a low-carbon society, a resource efficient society, and a harmonized society
with nature. To achieve these targets looking toward 2030 and 2050, we
promote Group-wide environmental activities in line with our Environmental
Action Plan that is updated every three years.
We will make steady efforts to achieve the targets set forth in Hitachi
Environmental Innovation 2050 to help resolve environmental issues and to
conduct environmental management in a manner that meets the expectationsof society.

Our Impact on Society
GHG emissions throughout value chain

141.49Mt-CO2e

Our Performance
Reduced CO2 emissions from products/services

34% (base: FY 2010)

Hitachi Sustainability Report 201929

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Advancing Our Environmental Vision and Long-Term Environmental Targets

The Environmental Vision and
Hitachi Environmental Innovation 2050

Policygrow more serious, the responsibilities and contributions of companies are growing, given

Hitachi will resolve environmental issues and achieve both a higher quality of life
and a sustainable society through its Social Innovation Businessin collaborative creation with its stakeholders.

the increasing demands and expectations for reductions in the environmental burden of their

The aim of Hitachi’ s environmental management

As climate change, resource depletion, ecosystem destruction, and other environmental issues

business activities.
The 2013 Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC)
concluded that limiting global warming “below 2°C relative to pre-industrial levels” would require

Low-Carbon
Society
Climate Change
Mitigation/Adaptation

Resource
EfficientSociety

Saving and Recycling
Resources

HarmonizedSocietywith Nature
Preservation of
Ecosystems“40 to 70% global anthropogenic GHG emissions reductions by 2050 compared to 2010.” The
IPCC’s 2018 Special Report on Global Warming of 1.5°C, moreover, emphasized that many of
the consequences of climate change can be averted if the increase in temperature is maintained
below 1.5°C. The 24th Conference of the Parties to the United Nations Framework Convention
on Climate Change (COP24) held in December 2018 adopted guidelines for the implementationof the Paris Agreement, which entered into force in 2016. And in addition to climate change,such environmental issues as those involving the water supply, resources, and the ecosystem arebeing debated around the world.
In response to global demands for a reduced environmental burden, we created a management
strategy called the Environmental Vision, which declares, “Hitachi will resolve environmental issues

Hitachi Environmental Innovation 2050
For
a low-carbon
societyFora resource efficientsocietyThrough the value chain
CO2 emissions

Build a society that uses
water and otherresources efficiently

FY 2050

and achieve both a higher quality of life and a sustainable society through its Social Innovation
Business in collaborative creation with its stakeholders.” We have clearly stated our aim toachieve a low-carbon society, a resource efficient society, and a harmonized society with nature—
the components of a sustainable society—in accordance with this Vision. To guide our efforts

FY 2030(compared to FY 2010)For
a harmonized society
with nature
Impact on natural capitalwith customers and society
Efficiency in use ofwater/resources
FY 2050(compared to FY 2010 in
the Hitachi Group)

toward 2030 and 2050, in September 2016 we established long-term environmental targets
called Hitachi Environmental Innovation 2050. We are steadily promoting environmental activities
to achieve these long-term goals in line with our Environmental Action Plan, which is updated
every three years. Currently, we are further strengthening our environmental activities in working
toward the targets of the Environmental Action Plan for 2021 (covering fiscal 2019–21), formulated
in line with the 2021 Mid-term Management Plan.
Our environmental strategy, centered on the Environmental Vision and our long-term
environmental targets, is deliberated by the Executive Sustainability Committee, chaired by thepresident and CEO, and advanced by the Hitachi Group as a whole.

Hitachi’s Environmental Vision

Hitachi Sustainability Report 201930

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance
Enhancing Environmental
Governance

Frameworks and Systems

To achieve our Environmental Vision and reach our long-term environmental targets, we areenvironmental compliance risks, the three-year Hitachi Group Environmental Action Plan isenhancing environmental governance by building a global structure to support environmental

formulated in line with the Mid-term Management Plan by environmental promotion division

decision making and implementation at Hitachi, Ltd. and 803 consolidated subsidiaries (a total ofheads from business units and major Group companies participating in Eco-Management

804 companies as of March 31, 2019).

Meetings. Targets (and measures to achieve them) in the Environmental Action Plan that affectImportant items related to environmental initiatives are deliberated by the Executive

not only our environmental strategy but also our business strategy—like those to reduce the CO2

Sustainability Committee, chaired by the president and CEO of Hitachi, Ltd., and attended by top

emissions of our products and services—are determined jointly by the Eco-Management Meetings

Hitachi executives. To develop ways to achieve our long-term environmental targets and reduceand Sustainability Promotion Meetings, attended by business promotion division heads. A progress
report concerning important targets in the Environmental

Sustainability Strategy Promotion Structure

Action Plan is made to the Executive Sustainability Committee,
and instructions from committee members are reflected in

Executive Sustainability Committee
Chair

actual environmental activities.

President & CEOGroup-wide efforts to advance environmental activities are

Members Senior Executive Committee members, business unit CEOs, Hitachi, Ltd. division heads
Key roles Discuss and decide on sustainability strategy at management/BU/department levels

undertaken outside Japan as well. Environmental officers are
assigned to China, the rest of Asia, the Americas, and Europe toshare information on the state of progress of our environmental

Global CSR
Meetings

activities and on the latest environmental regulations in eachcountry and region. Respective Regional Environmental

GlobalEnvironmental
Meetings

Sustainability Promotion Meetings

Eco-Management Meetings

Members Business promotion division heads at BUs andMembers Environmental promotion division heads at BUs

key Group companies
Key roles Discuss and implement specific measures forsustainability strategy

Meetings are also held once or twice a year.

and key Group companies
Key roles Discuss and implement concrete measures toachieve long-term environmental targets insustainability strategy

CSR Corporate Meetings

Environmental Manager Meetings

CSR Manager Meetings

Regional Environmental Meetings

Regional CSR Meetings

Hitachi Sustainability Report 201931

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance

Environmental Action PlanObjectives, Activities, and Achievements

Hitachi incorporates its environmental strategy into its management strategy in order to achieve

Factories and Offices: Enhance Efficiency of Water Usage

its Environmental Vision and the Hitachi Environmental Innovation 2050 long-term environmental

Item

Indicator

Fiscal 2018
targetFiscal 2018
resultAchievement
level

Enhance efficiency ofwater usage

Reduction in water use per unit (base: FY 2005)

27%

34%

◆◆◆

Fiscal 2018
targetFiscal 2018
resultAchievement
level

14%

16%

◆◆◆

Fiscal 2018
targetFiscal 2018
resultAchievement
level

36%

40%

◆◆◆

targets. Toward this end, the Environmental Action Plan is drawn up every three years inaccordance with the Mid-term Management Plan.

Factories and Offices: Use Resources Efficiently

Environmental Action Plan for 2018: Results

Item

Indicator

Reduce waste generation

Reduction in waste and valuables generation per unit
(base: FY 2005)

Hitachi has pressed forward with environmental activities based on the Environmental Action
Plan for 2018 (fiscal 2016–2018), which stipulated detailed activities and high targets to tackle byfiscal 2018.
For our performance in fiscal 2018, its final year, we were able to achieve the goals for key
indicators except two: “improve environmental performance” of “products and services” andFactories and Offices: Manage Chemical Substances
Item

Indicator

Reduce emissions ofchemical substances

Reduction in atmospheric emissions of chemical
substances per unit (base: FY 2006)“reduce energy use” of “factories and offices: climate change response.” For the former, the salesof environmentally high performance products and services fell short of our forecast, and for thelatter, the amount of energy use increased due to the in-house-manufacture of the products thatused to be outsourced and the decrease in sales in energy intensive business divisions.

Ecosystem Preservation
Item

Indicator

Fiscal 2018
targetFiscal 2018
resultAchievement
level

Contribute to ecosystempreservation

New ecosystem preservation activities implemented

600

953

◆◆◆

◆◆◆ Achieved

Management
Item

Indicator

Strengthen global
environmental management

Voluntary implementation of environmental monitoringby business units and Group companies at overseas
business sites (implementing sites/total targeted)

Fiscal 2018
targetFiscal 2018
resultAchievement
level

80% or higher(cumulative total)

90%

◆◆◆

Indicator

Improve environmental
performance

Rate of reduction in CO2 emissions from use of products
and services (base: FY 2010)

Environmental Action Plan for 2021 (Fiscal 2019–2021)
We developed the Environmental Action Plan for 2021 in line with the 2021 Mid-term Management

Products and Services
Item◆◆ Partially achieved

Fiscal 2018
targetFiscal 2018
resultAchievement
level

40%

34%

◆◆

Plan, and we will further enhance our measures to achieve the Hitachi Environmental Innovation
2050 long-term environmental targets. They have been reclassified into 27 targets in four categories,
namely, the three societies, as set out in the targets—a low-carbon society, a resource efficientsociety, and a harmonized society with nature—and environmental management.

Factories and Offices: Climate Change Response

For a low-carbon society, the original goals of improving environmental performance andItem

Indicator

Fiscal 2018
targetReduce energy use

Reduction in energy use per unit (base: FY 2005)

17%

Fiscal 2018
resultAchievement
level

14%

◆◆

reducing energy use have been revised to “reduce CO2 emissions from products and services”
and “reduce CO2 emissions from business sites,” which are more closely aligned with our long-term
Hitachi Sustainability Report 201932

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governancetargets. For a resource efficient society, a new goal, “respond to water shortages,” has been added

substances.” GREEN 21 is used as a system for evaluating and managing the achievement

to such goals as enhancing the efficiency of water and resource usage. For a harmonized society

made over the three years for each goal.

with nature, we have set a new goal of calculating impact per BU and Group company in order to“reduce impact on natural capital” in addition to such goals as “reduce emissions of chemical

The following is a list of major goals for the first and the final years of the Action Plan covering
the three years from fiscal 2019 to 2021.
Environmental Action Plan Achievement Evaluation System: GREEN 21

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.

Environmental Management
Items

Indicators

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)

A Low-Carbon Society
Items

Products &services

Factories& offices

Indicators

A Resource Efficient Society
Fiscal2019
targets

Final fiscal
year (2021)
targets

19%

21%

Reduce CO2
emissions of products
and services

Reduction rate of
CO2 emissions(base: FY 2010)

Address climatechange risks andopportunities

Identification and review of risks andopportunities

Reduce CO2
emissions offactories and offices

Reduction rate of
CO2 emissions perunit (base: FY 2010)

7%

9%

Reduce CO2
emissions fromtransportation(shipping)

Reduction rate oftransportationenergy consumption
per unit (Japan)(base: FY 2010)

9%

11%

Items

Indicators

Fiscal 2019 targets

Final fiscal year (2021) targets

20%

80%

A Harmonized Society with Nature

Fiscal2019
targets

Final fiscal
year (2021)
targets

23%

26%

Water
circulation(factories andoffices)Enhance efficiency
in the use of water
Respond to water
shortages

Reduction rate inwater use per unit
(base: FY 2010)

Resource
circulation(factories andoffices)Enhance efficiency
in the use ofresources
Reduce andrecycle wastematerials

Reduction rate inwaste andvaluables
generation per unit
(base: FY 2010)

10%

12%

Waste landfill rate

14%

12%

Evaluation system for the achievement of the Environmental Action Plan

GREEN 21

Promotion of water risk management basedon water stress survey results

Items

Indicators

Fiscal2019
targets

Final fiscal
year (2021)
targets

16%

18%

Chemical
substances(factories andoffices)

Reduce chemical
emissions

Reduction rate inchemical
atmosphericemissions per unit
(base: FY 2010)

Ecosystem
preservation

Reduce impact onnatural capital

Calculation of positive and negative impact(environmental load, forest conservation
activities, etc.)

Hitachi Sustainability Report 201933

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance

Environmental Management
SystemFrameworks and Systems

Enhancing the Environmental Management System
Hitachi has built an environmental management system to promote activities aimed at attaining

Status of ISO 14001 Certification (Hitachi Group, as of March 31, 2019)

the goals of the Environmental Action Plan.
We have established globally applicable environmental classification criteria to conduct
environmental management properly and efficiently in accordance with the environmental load

Total
239

Number of certified companies*1*1 Companies with at least one certified business site.

and compliance risk levels of Group business sites, both large and small. We assign a score foreach classification item, such as the amount of power consumed, the volume of waste generated,
and whether or not legal restrictions apply. All Group business sites are then classified into A, B,
or C, and environmental management is conducted according to the respective level of risk. Of
our approximately 1,200 business sites, about 200 major manufacturing sites are classified as A,

Americas16

a category accounting for more than 90% of the Group’s total environmental load.

Europe13

China
56
Rest of
Asia, etc.
55

The business units and Group companies with category A manufacturing sites participate in
Eco-Management Meetings to draw up the Environmental Action Plan. The plan is then

Japan
99

disseminated throughout the BUs and Group companies by environmental strategy officers,
chosen from among the heads and general managers of those organizations.
The corresponding BUs and Group companies formulate their own environmental actionplans based on the Hitachi Group plan. Our environmental management system is thus a productof a Group-wide effort, extending from the stage of formulation to implementation.

List of ISO 14001-Certified Companies

In addition to adhering to an in-house environmental management system, all our global
category A manufacturing sites have acquired external certification, such as ISO14001. By seeking
the opinions of external experts, we have developed a framework for Group-wide improvements
in our environmental activities.

Collecting and Monitoring Environmental Performance Data to
Improve Environmental Practices
To conduct environmental management efficiently and effectively, we collect data on theenvironmental performance of business operations using the Environmental Data Collection
System (Eco-DS). The system supports three languages (Japanese, English, and Chinese) andenables some 1,200 Hitachi business sites, including factories, research laboratories, andoffices in over 60 countries, to extensively monitor and register about 20 items, ranging fromenvironmental load data on items such as energy use, water use, and waste generation, to
Hitachi Sustainability Report 201934

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance

Environmental Action Plan Achievement Evaluation System:
GREEN 21
whether an item falls under relevant environmental laws and regulations, to environmental

GREEN 21 is used as a system for evaluating and managing our achievements made overaccounting. We have also set up an international help desk to support the system’s operation

three-year periods toward the targets set in our Environmental Action Plan.

and promote understanding of environmental management at each business site.

GREEN 21 uses the environmental load data registered in our Environmental Data Collection

The collected data is aggregated and analyzed by the Sustainability Promotion Division, as

System (Eco-DS) to convert the success shown by each of approximately 200 major manufacturing

well as by the administrative division of each business unit and Group company, and is used tosites at reaching the targets of the Environmental Action Plan into green points (GPs), then evaluates

identify environmental management issues, share instructive examples within the Group, andeach site’s progress on a category-by-category basis. A perfect score for any category is 100

apply the PDCA cycle to improve environmental practices.

GPs. Meeting the Environmental Action Plan’s first-year targets is worth 40 GPs, meeting the

At the approximately 200 Hitachi manufacturing sites that have been prioritized for monitoring

second-year targets 60 GPs, and meeting the final-year targets 80 GPs. Points are also awarded

under our environmental classification criteria, we aggregate and analyze data on such key items

for particularly ambitious and motivated activities, as an incentive, and progress made on theas energy, waste materials, and water on a monthly basis, implementing measures to reduce thethree-year Environmental Action Plan is comprehensively evaluated. Representing this progress

environmental burden and achieve the targets of our Environmental Action Plan.

as GPs shows how much each site has achieved in each category, and allows sites to becompared with each other, the results of which are in turn used in the Environmental Action

Environmental Data Collection System

Plan’s PDCA (plan-do-check-act) cycles.
The Sustainability Promotion Division also uses the results of the GREEN 21 evaluation as

Business site

Business sitea condition for awarding its Eco-Factories & Offices Select certification for business sites that

Business site

Monitor and register in 3 languages(Japanese, English, and Chinese)

promote activities demonstrating a high level of environmental consciousness and produce
Approx. 1,200 sites(in over 60 countries)

notable results in that area.
From fiscal 2019, progress will be evaluated and managed for individual categories newly
created based on the Environmental Action Plan for 2021, and this will be used to promote

Environmental Data
Collection Systemfurther environmental activities.

(Eco-DS)

Help desk (Japanese,
English, and Chinese)
Aggregate
and analyze

Sustainability Promotion Division

Administrative division of business
unit and Group company

Hitachi Sustainability Report 201935

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance

Key Indicators

entire Group, with other locations encouraged to implement them as well. To maintain and raise
the level of environmental awareness through Eco-Factories & Offices Select, certified factories

GREEN 21: FY 2018 Evaluation Results (Hitachi Group)and offices are re-evaluated every fiscal year to confirm that their performance continues to meetManagement
94 GPsrequirements. In fiscal 2018, 6 facilities were newly certified, 2 facilities were recertified and 61

100

facilities had their certifications renewed. The total number of certified factories and offices was 69.

80
60

Collaboration with stakeholders
74 GPs

Products and services
86 GPs40

Eco-Factories & Offices Select Certification Criteria
A factory or office that has met at least one of thefollowing criteria

200Ecosystem preservation
84 GPsGlobal warming prevention
75 GPsResource recycling and management ofchemical substances

80 GPsEco-Factories &Offices SelectFacilities deemed
to have met theirtargets for eachfiscal year under
the GREEN 21
evaluation
system

Eco-Factories & Offices

Eco-Factory SelectEnergy efficiency
Renewable energy use
High-efficiency lighting
Recycling of waste and other resources
Efficient water recycling
Reductions in chemical substance emissions
Eco-Office SelectHigh-efficiency lighting
Renewable energy use
Energy savings
Improved office building environmental performance

Factories and Offices

Reducing the Environmental Burden Through “Eco-Factories &Offices Select” Certification
Eco-Factories & Offices

To reduce the environmental burden of our business sites, since fiscal 2011 the Sustainability
Promotion Division has implemented an “Eco-Factories & Offices Select” certification program forbusiness sites that promote activities demonstrating a high level of environmental consciousness
and produce notable results in that area. This helps raise the environmental awareness of
employees and promote environmentally conscious activities at our business sites.
Based on certification criteria that were developed for our manufacturing (factory) andnonmanufacturing (office) divisions globally, we certify existing factories that actively engage in
improvements to achieve efficient production and new offices that have been environmentallydesigned from the start. Superior policies from certified factories and offices are shared with the
Hitachi Sustainability Report 201936

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governance

Environmental Education for Employees

Actions and Achievements

Hitachi believes that promoting greater environmental awareness and understanding among

For general education aimed at all employees, we offer Internet-based e-learning courses in

employees is essential to efforts to energize its environmental activities. Toward that end, weJapanese, English, and Chinese to heighten familiarity with our Environmental Vision and long-termoffer general education using e-learning for all Group employees, from new hires to executives.

environmental targets called Hitachi Environmental Innovation 2050. In fiscal 2018, 156,233

We also provide specialized Hitachi Group training on environmental risks and compliance with

employees worldwide received this training.

environment-related laws and regulations for working-level employees in charge of environmental
management and internal environmental auditors.

For employees working in air, water quality, and waste management, we also provide specialized
Hitachi Group training on recent amendments to laws and operational procedures as well as on
basic environmental management. In fiscal 2018, we offered legal compliance education forEnvironmental Education and Training Systeminternal environmental auditors and working-level employees. In Japan, 159 people from 48
companies attended courses (October 2018) on social responsibility that examined revisionary

TargetIntroductory

Beginning

Intermediate

Advanced

General education

Introductory training for new employees

All employees

trends in environmental laws and case studies of things to avoid. In China, 73 people from 41
companies attended working-level courses in Beijing (September 2018) to not only deepen
understanding of regulatory amendments but also to learn about the initiatives taken at Group

Online e-learning: Eco-Mind education (General topics:
Global environmental issues, environmental law, etc.)

business sites to save energy, recycle water, and reduce volatile organic compounds (VOCs).
In addition, they deepened their understanding of the Sustainable Development Goals (SDGs) at

Online e-learning: Eco-Mind education (Hitachi Group topics:
Environmental policy, Environmental Action Plan, etc.)

a seminar organized by an external consulting company.
The enforcement of China’s environmental laws and regulations has been growing more

Specialized education

Basic environmental management course for working-level
employees (management of waste, air/water quality, &hazardous materials; development & operation ofmanagement systems; etc.)

Working-level
employees

stringent under the guidance of the central government, and the number of charges and penalties
has increased sharply. An environmental management training program—attended by 44 people

Education for Eco-Factories

from 36 companies—was held in Beijing, China, in March 2019 to reduce environmental risks

Eco-Product development training

and raise the knowledge of working-level employees. The program featured lively group

Risk communicator training

discussions on various issues, including points worth noting in environmental compliance.
ISO 14001 auditor brush-up training

Internal
environmental
auditors

ISO 14001 auditor
certification training

ISO 14001 senior auditor
certification training

In addition to Hitachi Group training, individual companies and units provide education tailoredto their own business area.

Environmental Compliance
In conducting business activities around the world, Hitachi seeks to minimize environmental risks
to ensure compliance with the laws and regulations of each country and region.
One such effort is by setting and monitoring compliance with voluntary management criteriathat are more stringent than regulatory requirements. In the unfortunate event that we do find a
Hitachi Sustainability Report 201937

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Environmental Governanceviolation or receive a complaint, we take steps to enhance environmental risk management by
sharing the causes and countermeasures throughout the Group and preventing a recurrence ofsimilar incidents.
To further mitigate environmental risks we also conduct multifaceted internal environmental
audits. In addition to the internal audits set forth under ISO 14001, the major global businesssites are audited by the Sustainability Promotion Division and the Internal Audit Office—which arecorporate divisions of Hitachi, Ltd.—around every three years. Business units and Group
companies have their own environmental audit programs. In the three years from fiscal 2016 to
2018, they conducted environmental audits at 70 of the 78 overseas business sites that havebeen prioritized for monitoring under our environmental classification criteria. The business sites
identified as needing improvements were requested to submit action plans and provided withfollow-up and advice until the plans were fully implemented. In these ways we comprehensively
implement and enhance our environmental compliance framework.
In fiscal 2018, we received a worldwide total of 16 notices of regulatory violation concerning
water quality, air quality, or waste matter and complaints about noise or odor. Of these, 3 werecomplaints from nearby residents regarding noise or odor, but they were all promptly addressed.
Hitachi will continue to implement enhanced environmental management in order to prevent
repeated or new contamination occurrences.
Regulatory Violations and Complaints (Hitachi Group)
Regulatory violations

Fiscal 2018 cases

Water quality

Air quality

Waste matter

Complaints
Other(equipment registration, etc.)

4

2

3

4

3

As part of our measures to address the pollution of soil and groundwater, we are examining
the soil and water for any contamination at business sites where hazardous chemical substances
had been used. In case contamination is found, we will conduct cleaning and monitoring activities
until decontamination has been completed.

Hitachi Sustainability Report 201938

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society
Efforts to Achieve a Low-Carbon Society

PolicyIn line with the scenario in the IPCC’s Fifth Assessment Report to keep the increase in global

In response to the growing interest of investors in the financial impact of climate change on

temperatures below 2°C, we have established long-term reduction targets for CO2 emissions ofcorporate operations, in June 2018 we announced our support for the recommendations of

50% by fiscal 2030 and 80% by fiscal 2050 (compared to fiscal 2010 levels) throughout the

the Task Force on Climate-related Financial Disclosures (TCFD). We are actively disclosing

value chain.

climate-related information in accordance with these recommendations and conducting dialogue

Approximately 90% of the value-chain emissions of our products and services—from thewith investors.

procurement of raw materials and parts to production, transportation, use, disposal, andrecycling—result from the use of our products and services after they were sold. For this reason,
to reduce emissions across the value chain and achieve our long-term targets, it is crucial that
we reduce CO2 emissions not just during production but also during the stage of use.

Objectives, Activities, and Achievements

Ratio of CO2 Emissions at Each Stage of Hitachi Value Chain
Production
Transportation

Contributing to a Low-Carbon Society
Through the Decarbonization
Business

Disposal/recycling

Use

Expanding the Decarbonization Business
Hitachi is utilizing Lumada to expand its decarbonization business. Through collaborative creation,
we will help the world mitigate and adapt to climate change by supplying solutions in the fivebusiness areas of IT, energy, industry, mobility, and smart life—the growth areas identified in the

Procurement of raw materials/parts

2021 Mid-term Management Plan.

We will not only further enhance the energy efficiency of our products and services to contributeto emission reductions during their use but also seek to globally expand our decarbonization
business that utilizes IT and other innovative technologies. We are also actively implementing
measures to reduce CO2 emissions during production; in fiscal 2018, for example, we introduced
the Hitachi Internal Carbon Pricing (HICP) framework to raise production efficiency at factories
and offices and to promote energy-saving initiatives, and we are taking a variety of steps toaccelerate the shift to renewable energy sources.

Hitachi Sustainability Report 201939

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Decarbonization Business: A Hitachi Focus

IT solutions

Finance and public-oriented solutions
Promoting digital solutions
Data center
Developing smart data centers ervers/storage
S
Enhancing energy-saving features ofservers and storage

Energy solutions

Industry solutions

Power grid solutions
Enhancing efficiency of powertransmission/distribution

Smart logistics
Improving energy-saving features
through fully IT-enhanced logistics

Energy management
Advancing smart energy management
to reduce peak electricity demand

Factory automation
Enhancing energy efficiency throughshorter lead times

Power generation
Promoting power generation systems
using wind and other non-fossil
energy sources

Water business
Enhancing efficiency of water andsewage systems
Industrial products
Enhancing efficiency of industrial
products

In the IT sector, Hitachi is contributing to building a low-carbon society by transforming social
systems and lifestyles by providing innovative digital solutions.

Mobility solutions

Smart life solutions

Railways
Enhancing energy-saving features ofrolling stock
Developing smart operating systems

Smart cities
Reducing CO2 through comprehensive
urban energy management solutions

 levators
E
Enhancing energy-saving features of
elevators and escalators throughreplacement
Enhancing energy efficiency throughtotal building solutions

Vehicle electrification
Promoting electrification through electric
powertrain systems
Home appliances
Enhancing energy efficiency of home
appliances
Promoting connected home appliances
Smart therapies
Enhancing energy-saving features of
medical devices

Finally, in the smart life sector, we are providing clean-energy vehicles, smart home appliances,and other highly efficient, energy-saving products and services to make people’s lives safer, moreIn the energy sector, we are contributing to CO2 reduction through the provision of power

convenient, and comfortable by improving connectivity through the use of IT. In addition, we are

generation systems using non-fossil energy, such as renewable energy and nuclear power, andworking with our business partners to build smart cities and smart mobility systems that bringcreating smart grids that transmit and distribute power efficiently and stably and can optimize

those technologies together, thereby helping to create decarbonized cities that improve the lives

local supply and demand.

of all residents.

In the industry sector, along with providing high-efficiency industrial products and improving
the overall efficiency of clients’ factories, we are using IoT and AI to optimize operations to help
our customers reduce their CO2 emissions.
In the mobility sector, we are promoting energy savings by making trains lighter and introducing
operating systems that use cutting-edge IT to improve overall efficiency.

Calculating Avoided Emissions During the Use of Products and Services
In calculating CO2 emission reductions from the use of our products and services, such as thosecited in our decarbonization business above, we use the following methods depending on thenature of the business, as set out in the Guidelines on Calculating CO2 Emission Reductions for
Hitachi Group Products and Services.*1

Hitachi Sustainability Report 201940

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society(1) Enhancing energy-saving features

solutions entailing a switch from grid-supplied electricity (from both fossil and non-fossil fuels,

Calculate avoided emissions as reductions in CO2 emissions by comparing the reductions inusing fiscal 2010 as the base year) to electricity from just non-fossil energy sources, such as

CO2 emissions due to energy-saving improvements in new products and services with earlier

renewable energy and nuclear power.

ones having equivalent functions (using fiscal 2010 as the base year), considering theBased on the above approach to reducing CO2 emissions as avoided emissions, we willproduction volume of the relevant years.
(2) Switching to other solutions

further enhance the energy-saving features of our products and services, promote electricity from

Calculate avoided emissions as reductions in CO2 emissions as a result of switching to a new

non-fossil fuels, and provide low-carbon solutions to achieve our long-term targets for further

solution offering value equivalent to an earlier solution.

reductions through our decarbonization business.

(3) Switching to non-fossil energy sources
Calculate avoided emissions as reductions in CO2 emissions when embracing energy*1 The Guidelines are based on various standards, including the Guidance on Quantifying Greenhouse Gas Emission Reductions fromthe Baseline for Electrical and Electronic Products and Systems (IEC TR62726) issued by the International Electrotechnical Commission (IEC),
and calculation methods established by the government or industrial associations.

Calculating CO2 Emission Reductions as Avoided Emissions

Reductions through enhanced energy-savingfeatures of products and services(1) Enhancing energy-saving features

Reductions through solutions(2) Switching to other solutions(3) Switching to non-fossil energy sources

Calculate avoided emissions as reductions in CO2 emissions
by comparing the reductions in CO2 emissions due toenergy-saving improvements of new products and services
with earlier ones having equivalent functions

Calculate avoided emissions as reductions in CO2 emissions
as a result of switching to a new solution offering value
equivalent to an earlier solution

Calculate avoided emissions as reductions in CO2 emissions
by comparing with grid-supplied electricity

E.g., Elevators

E.g., Railway system

E.g., Wind power, nuclear power plants, etc.

Earlier products

New products

Avoidedemissions of CO2
CO2 emissions

Avoidedemissions of CO2
CO2 emissions

CO2 emissions

Avoidedemissions of CO2

Motor vehicles(fossil fuel)Railway system(electricity)

Grid-supplied
electricity fromthermal power
plants, etc.

Electricity fromnon-fossil energy
sources, such as
wind power, etc.

Hitachi Sustainability Report 201941

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Improved Environmental Performance in Products and Services

Improving Environmental Performance ThroughEnvironmentally Conscious Design Assessments

Under the Environmental Action Plan for 2018, Hitachi set a target of reducing CO2 emissions
during usage per product and service function. Our goal was to reduce CO2 emissions by 40% in

We conduct independently developed Environmentally Conscious Design Assessments forfiscal 2018—the final year of the action plan—compared to fiscal 2010 for a group of products

all products and services involving a design process to steadily improve environmental

capable of making a big contribution to resolving environmental issues. Our actual rate of reduction

performance throughout the Group. To reduce the environmental burden in multifaceted ways, 30

in fiscal 2018 was 34%. We attribute the shortfall to the fact that, among our broad array ofenvironment-related areas are assessed for their impact on climate change, resource depletion,

products, those featuring high environmental performance failed to reach their sales targets,and environmental pollution (ecosystem degradation) at each stage of our products’ andresulting in a lower reduction rate for the Group as a whole.

services’ life cycle.
In addition to implementing these assessments, to meet the IEC 62430*1 criteria for

Key Indicators

environmentally conscious design, we are integrating environmentally conscious design anddevelopment of products and services into our existing management system, including by

Reduction in CO2 Emissions (Hitachi Group)

meeting environmental regulatory requirements and ascertaining the environment-related needsof our stakeholders.

From base year34

For our main, priority products, we conduct not only Environmentally Conscious Design%
reduction
FY 2010 (base year)
CO2 emissions
Function size*1

Assessments but also Life Cycle Assessments (LCAs) to quantitatively evaluate their burden
on the global environment in such areas as the consumption of mineral resources, fossil fuels,
and water resources, as well as their impact on climate change and air pollution. The results of

FY 2018
CO2 emissions

100%

Function size

66

such LCAs are disclosed to our stakeholders and utilized in improving the design of%*1 Major functions of products correlated to CO2 emissions.

next-generation products.
*1 The standard developed by the International Electrotechnical Commission concerning environmentally conscious design for electrical andelectronic products.

Fiscal 2019 marked the start of the Environmental Action Plan for 2021, established in linewith the 2021 Mid-term Management Plan. Going forward, we will continue our efforts to reduce
the environmental burden globally by further promoting environmentally conscious design in our
products and services and developing and advancing innovative solutions.

Hitachi Sustainability Report 201942

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Visualizing CO2 Emissions Through Our Carbon Footprint
Participation in the Carbon Footprint Communication Program (Services & Platforms Business Unit, Hitachi, Ltd.)The carbon footprint of products (CFP) is the CO2 equivalent of the total amount of greenhouse

Products Approved/Certified for a CFP Declaration in Fiscal 2018

gases (GHGs) emitted over the entire life cycle of a product or service—from procurement ofmaterials through to disposal and recycling. Making the GHG emission amount visible in thisway encourages efforts to reduce the amount of carbon emitted by products over their

Product

Midrange storage arrayModel(parentheses
indicate name ofprevious model)

Hitachi Virtual Storage Platform
G130 (G100), G150 (G100),
G350 (G200), G370 (G400),
G700 (G600), G900 (G800)

whole life cycle. Countries and regions around the world use the CFP approach.
Hitachi launched CFP assessment in 2009. We participate in the Carbon Footprint
Communication Program of the Japan Environmental Management Association for Industry(JEMAI) and are working to expand the number of Approved CFP Products.* The program1

calls for the calculation and disclosure of CO2 emissions throughout the life cycle of approved
products. We go one step further, though, disclosing not only the CO2 emitted by our products
but also the rate of reduction from previous models in an attempt to provide relevant datathat is more specialized, transparent, and neutral in nature.
In fiscal 2018, the midrange storage array Hitachi Virtual Storage Platform G130 (and fiveother models in the series) was newly verified and approved by the JEMAI CFP Program.
Products approved in earlier years are introduced in our catalogs and on both in-house andexternal websites.

Rate of reduction in
CO2 emission(compared toprevious model)–34% to –57%

*1 Approved CFP Product: A product that is tested according to the product category rules of the Carbon Footprint Communication
Program, is verified as conforming to those rules, and for which an application is made for registration and public announcement.

Hitachi Sustainability Report 201943

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Reducing CO2 Emissions Throughout the Value Chain“Chatbot Service” to Facilitate Digital Communications (Systems & Services Business, Hitachi, Ltd.)To support workstyle reforms, Hitachi, Ltd. developed and launched in June 2018

Before and After Introducing the Chatbot Service“Chatbot Service,” a digital communications tool that can advance operational reforms andcreate new value. The service uses a chatbot*1 to improve the efficiency of responses toinquiries for a variety of businesses. In responding to inquiries via chat, it automatically draws
on operational scenarios and FAQs created from knowledge accumulated within a company.
This can lighten the work burden of help desks and contact centers that handle internal and

BeforeAfter

Employee

General affairs division

Employee

Could you please
explain xxxx to me?

The answer is …

Could you please
explain xxxx to me?

General affairs division
The answer is …

external inquiries.
A chatbot service was developed following trials within Hitachi’s general affairs division,
where it was used alongside human operators to respond to inquiries. This helped reduce
the number of inquiries handled by operators in fiscal 2018 by 20% compared to fiscal 2017.

Inquiry and response
via phone or e-mailThe improved efficiency in both workload and energy consumption from equipment use

Inquiry and response
via phone or e-mailresulted in reducing CO2 emissions by 40% (equivalent to 1,280 kg-CO2) from the previous
fiscal year, as calculated using the SI-LCA method*2 developed by Hitachi. This method

Response to FAQs
by chatbot

assesses CO2 emissions over the entire life cycle of services and solutions, from design andFAQs

development to use and disposal.
Hitachi will strengthen its chatbot functions and expand the range of digital communications

Roughly 20% reduction
in time spent responding
to inquiries

services, developing them into solution cores for Lumada. We will thereby support the creationof new value and reform of workplace operations, while also contributing to reducing theenvironmental burden, such as through lower CO2 emissions.
*1 Chatbot: A computer program that uses artificial intelligence to respond automatically to questions using text and audio.
*2 SI-LCA: The System Integration-Life Cycle Assessment method used to calculate CO2 emissions.

CO2 emissions

Volume of communication data

Operator
workload

CO2 reduction rate:
Electricity
consumption

40%(equivalent to 1,280 kg-CO2/year)

Volume of communication data
Operator
workloadElectricity
consumption

Hitachi Sustainability Report 201944

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Contributing to a Low-Carbon Society at
Factories and Offices


UNIPARA-mini Series Uninterruptible Power System(Hitachi Industrial Products, Ltd.)

Objectives, Activities, and Achievements

Reducing CO2 Emissions at Factories and Offices

Hitachi Industrial Products provides an uninterruptible power system (UPS) to supply
electricity in emergency situations, such as a power outage or malfunction, to manufacturing

In order to achieve our long-term environmental targets, we are aiming to reduce CO2 emissions

equipment, public facilities, and a range of other fields. In fiscal 2018, a new series offrom our factories and offices 50% by fiscal 2030 compared to fiscal 2010 levels, and working tocompact systems was launched called the UNIPARA-mini (10 to 50 kVA) providing highpromote thoroughgoing energy savings and encourage the deployment of renewable energy.

energy efficiency.

Specifically, at our factories we are advancing initiatives to improve equipment efficiency by

The UNIPARA-mini is the first small- to medium-capacity model in the industry to fully

introducing and upgrading to high-efficiency equipment as well as to reduce energy use during

use a silicon carbide (SiC) element as the main circuit. The series takes advantage of

production by raising efficiency through IoT-based measures such as installing smart meters.

the high-temperature operation features and high-speed switching capabilities of SiC

At our offices, we are making efforts to reduce CO2 emissions by building new high-efficiency

elements to miniaturize the cooling unit and filter, reducing thefacilities and combining and integrating existing facilities.

weight by up to around 40% and the installation area by roughly

We are also proceeding with plans to install solar power generation systems at our factories

60%, compared to the previous model. In addition, thanks toand offices and purchase renewable energy as well as advancing the adoption of renewable

the low level of electricity loss, the series offers an energy

energy credits.*1 In fiscal 2018 we introduced a new solar power generation scheme. This is anefficiency rating of 93.5% at 20 kVA (and maximum efficiency ofoff-balance-sheet self-consumption scheme in which solar power generation equipment is

94.3%),*1 which is top-class for the industry, helping reduce

installed at facilities without becoming an asset of Hitachi itself, and under which electricity is

UPS power consumption. Through these improvements,

paid for according to the amount generated. We are also advancing our purchasing of renewableannual energy reduction has increased to 8,744 kWh and CO2energy, with wind, hydroelectric, and geothermal power already accounting for 100% of the

reductions have risen to 4.6 t-CO2,* compared to Hitachi’s

electricity purchased at two business sites.

2

As a result of these initiatives, in fiscal 2018, 0.3% of the energy used across Hitachi wasprevious Hiverter-MP model.
*1 The efficiency rating is based on the 20 kVA UPS (20 kVA/16 kW output) and maximum
efficiency on the 20kVA UPS (10 kVA/10 kW output), calculated using the UPS efficiency:
measurement method of the JIS C 4411-3 2014 Annex J (standard).
*2 Calculations for both the UNIPARA-mini and the previous model (H-MP) are based on an
efficiency rating of 20 kVA, 24-hour continuous operations 365 days a year, an air-conditioning
performance coefficient of 2.0, a power factor rating of 0.8, and a load factor of 100%.

renewable energy generated at our factories and offices. We will continue to deploy renewable
UNIPARA-mini (30 kVA).

energy at our factories and offices, aiming to generate 2% of the total amount of electricity usedby the Group by fiscal 2030.
*1 Credits assigned to energy certified as having been produced from renewable sources. Purchasers of such credits can offset their conventionalenergy use instead of implementing their own reduction measures.

Hitachi Sustainability Report 201945

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Low-Carbon Roadmap for Factories and Offices

higher priority, but also minimize the future risks of climate change and make ourselves more
resilient. The introduction of the HICP framework is a key part of this process.

0Installing high-efficiency
equipment

50

Renewable energy
Low-carbon electricity

80

Renewable energy credit
2010

2020

2030

2040

2050

Introducing the Hitachi Internal Carbon Pricing Framework
We started operating the Hitachi Internal Carbon Pricing*1 (HICP) framework in fiscal 2018 inorder to promote increased investment in low-carbon equipment at our factories and offices.

Hitachi Internal Carbon Pricing (HICP) Framework
Investment effect in monetary terms

CO2 reduction rate (%)

Enhancing productivity*1 Internal carbon pricing: An in-house tool to assess in monetary terms the amount of carbon generated or reduced in order to voluntarily makeinvestment decision and conduct risk management.

CO2 reduction
effects

Energyreduction effect

Energyreduction effect

Before introducing
HICP framework

After introducing HICP
framework

CO2 reduction effects(in monetary terms)

Set internal carbon prices based on future risks like increased
burden from carbon taxes and emissions trading
Convert effects of CO2 reduction from investment in
low-carbon equipment into monetary value

The HICP framework makes CO2 reduction due to investment in low-carbon equipment visible,
and by adding the effects of such investment to previously calculated evaluations of the effects ofenergy reduction through investment, it helps to facilitate internal judgments on investment in

Evaluate effect of investment by adding monetary effect of CO2
reduction to previously calculated monetary value of effects ofenergy reduction through investment

equipment that take low-carbonization into account.
Specifically, with reference to emissions trading and carbon taxes inside and outside Japan,

Increase priority of low-carbon equipment investment

we establish company-internal carbon prices, convert into monetary value the effect of CO2
reduction due to investment in low-carbon equipment, add this to the value of energy reduction
effects, and use the result to evaluate the effect of our investment. By applying incentives likethese, we are expanding our investment in low-carbon equipment still further.
As the climate change issue deepens, we anticipate risks like increased burdens from carbon

Encourage low-carbon
equipment investment
Renewable energy

High-efficiency equipment

taxes and new emissions trading frameworks to emerge. By incorporating those risks into ourequipment investment decisions, we can not only make low-carbon equipment investment a

Hitachi Sustainability Report 201946

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Actions and Achievements
In fiscal 2018, the final fiscal year of the Environmental Action Plan for 2018, the reduction inenergy use per unit, one of the environmental goals for factories and offices, was 14% against a

Key Indicators
Reduction in Energy Use per Unit (Hitachi Group)target of 17% (from a base year of fiscal 2005). Part of the reason for not hitting the target was
an increase in energy use due to the in-house manufacture of products that had been outsourced
and a lower efficiency of facility use due to a decrease in sales. There were also some business

From base year

14

divisions that could not achieve expected reductions in energy use per unit due to a failure to%
reduction

appropriately respond to a reduction in the fixed power allocation linked to sales. Because
Hitachi’s operations cover many different areas, reductions in energy use per unit at factories andoffices are assessed using an activity amount*1 at each business site as the denominator.

FY 2005 (base year)

The Environmental Action Plan for 2021 calls for even higher goals around the world, and we

Energy used 2.06 GL*

will continue to harness our expertise in control and IoT technologies to actively pursue energy
conservation measures at our factories and offices.

1

FY 2018
Energy used 1.99 GL

100%

Activity amount86%

Activity amount*1 Energy volume used within the organization (Scopes 1 and 2).

We report the total amount of CO2 emissions from our entire Group, including CO2 emissions
from power plants selling electricity. Total CO2 emissions in fiscal 2018 decreased by approximately
200 kt-CO2 compared to fiscal 2017. This is due largely to a reduction in the operation rate of
power plants, as annual CO2 emissions by region, excluding that from these power plants,
remained almost the same with that in fiscal 2017. In the Americas, a materials company that
became a consolidated member of the Hitachi Group in fiscal 2016 accounts for a large portionof CO2 emissions, and we will look into ways to promote the use of inexpensive renewable energies.
*1 A value closely related to energy use at each business site (for example, production quantity, output, building floor space, and numberof employees).

CO2 Emissions (Hitachi Group’s factories, offices, and power plants)
Breakdown by Region (kt-CO2/year)(kt-CO2/year)
5,000

4,128

4,000

4,577

4,663

3,895

(FY)

4,470

2014

3,000
2,000

0

2015

2016

2017

2018

(FY)

2017

2018

11

16

15

8

7

Americas

358

375

China

305

211

166

175

Rest of Asia

423

402

384

407

426

2,217

2,090

2,011

1,994

1,996

Power plants*2

2014

2016

Europe

Japan

1,000

2015

Total

1,273 *1 1,332 *1 1,307 *1
170

817

810

732

739

556

4,128

3,895

4,577

4,663

4,470

*1 Includes 958 kt-CO2 (fiscal 2016), 1,036 kt-CO2 (fiscal 2017), and 1,087 kt-CO2 (fiscal 2018) emitted by a materials company that became
a consolidated member of the Hitachi Group in fiscal 2016.
*2 Emissions by power plants selling electricity were retroactively added in fiscal 2017.
Notes:• The CO2 electrical power conversion factor uses the 2005 emission coefficient for Japan published by the International Energy Agency (IEA) inthe 2010 edition of CO2 Emissions from Fuel Combustion.
• Energy-related CO2 emissions were 1,869 kt-CO2 (Scope 1) and 2,601 kt-CO2 (Scope 2).

Hitachi Sustainability Report 201947

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Introducing Renewable Energy
We are promoting the use of solar, wind, and other forms of renewable energy at our business

transportation is estimated to reduce CO2 emissions per unit to one-eleventh, and we willsites. During fiscal 2018, Hitachi generated an aggregate of 7,067 MWh of renewable energy forcontinue to make more use of railways for long-distance transportation.

its own use, which is 2.2 times the amount generated in fiscal 2017, corresponding to annual
power consumption by 3,000 households. Hitachi Computer Products (America) and Tata Hitachi
Construction Machinery (India) purchased 10,425 MWh and 7,500 MWh of renewable energy,*1 A mark conferred on companies using railways for more than 15% of its freight land transportation covering 500 km or more; for 15,000 metrictons or more in volume per year; or for more than 15 million ton-kilometers in volume x distance per year.
*2 A mark conferred on products using railways for more than 30% of its freight land transportation covering 500 km or more in terms ofvolume × distance.

respectively, to power their factories during fiscal 2018.

Reducing Transportation Energy Consumption
As part of our efforts to reduce energy output during transportation as well as at our factories
and offices, we have established targets for the reduction of transportation energy use per unit
for each business unit and Group company. Our business sites are promoting a modal shift tohighly efficient transportation methods, improving truck loading ratios and taking other measures
to reduce transportation energy consumption, and switching to the use of eco-cars for in-house

About the Eco Rail Mark

operation. CO2 emissions from transportation inside Japan for the Hitachi Group in fiscal 2018
were 102.8 kt-CO2,

equivalent to automobiles owned by 78,000 households.

We are making efforts to reduce transportation energy by actively promoting the use ofrailways, particularly for long-distance transportation. In recognition of the efforts, Hitachi, Ltd.
and Hitachi-Omron Terminal Solutions have been designated by the Ministry of Land, Infrastructure,
Transport, and Tourism as Eco Rail Mark companies*1 as of fiscal 2018. Furthermore, the Eco
Rail Mark was conferred on Hitachi, Ltd. and Hitachi Industrial Equipment Systems, recognizing
four of their products as Eco Rail certified products.*2 A modal shift from truck to railway

Hitachi Sustainability Report 201948

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Energy Savings in Eco-Factories & Offices
Achieving Low-Carbon Factories Through Photovoltaic Power Generation(Tata Hitachi Construction Machinery Co. Pvt. Ltd.)R&D Facility Featuring High Environmental Performance and Comfort(Central Research Laboratory, Hitachi, Ltd.)

Tata Hitachi Construction Machinery in India, a consolidated subsidiary of Hitachi

The Central Research Laboratory of Hitachi, Ltd. established a new research hub in April

Construction Machinery, is actively introducing renewable energy at its business sites.

2019 to accelerate innovation through open, collaborative creation for the realization ofIndia’s supply of electricity is chronically unstable, as rapid economic growth is causing

the Sustainable Development Goals (SDGs) and Society 5.0.

demand for electricity to expand by an average of 4.9% a year. In response, the company

Called “Kyōsō-no-Mori,”*1 it is a new R&D center for collaborative creation centeredis proactively introducing large-scale photovoltaic power generation facilities, whichon a research building (Kyōsō-tō) offering comfort conducive to the creation of new ideas

helps to not only stabilize the supply of electricity and operations at its plants but also

and solutions, as well as outstanding environmental performance. The building design

reduce CO2 emissions and electricity costs.

combines the use of natural light with highly efficient lighting while also optimally controlling

A large-scale, 5,000 kW photovoltaic power generation facility was established on thethe inflow of fresh air and thermal insulation, depending on the season. It also actively

grounds of the company’s Kharagpur Works in West Bengal State, generating aroundincorporates advanced, highly efficient BAT (best available technology) equipment certified

7,000 MWh of electricity per year, or around 30% of the plant’s energy consumption.

by the Ministry of the Environment. The result is a highly hospitable working environment

This lowered CO2 emissions by around 3,500 tons in fiscal 2018 and also loweredfeaturing enhanced energy efficiency and incorporating the natural richness of theelectricity costs by some 25%.

surrounding forest.

The company’s Dharwad Works in Karnataka State, meanwhile, consumes aroundAs a result of these efforts, the Kyōsō-tō received the highest S ranking (BEE 3.2)*2

7,500 MWh of solar energy generated offsite to meet approximately 75% of its annualfrom the Comprehensive Assessment System for Built Environment Efficiency (CASBEE),

electricity needs. The electricity is supplied through a power purchase agreement underwhich evaluates overall environmental performance. The office was also recognized for its

India’s open access system.*1

energy efficiency, receiving a Building Energy Index (BEI) value of 0.74 under the Building-Solar-generated energy used byhousing Energy-efficiency Labelingthe two plants combined annually is

System (BELS) to gain accreditation

14,500 MWh. This is approximately

as a low-carbon facility.
Through open, collaborative

50% of the total electricity consumed
by Tata Hitachi Construction

creation at Kyōsō-no-Mori, Hitachi

Machinery and makes the company

will engage in innovation to resolve

one of the highest consumers ofsuch energy within the Group.

Solar panels on the grounds of the Kharagpur Works.

*1 Open access system: A system in which access to the power grid managed by power transmitters and distributors is opened togenerators of natural energy, allowing the prioritized transmission of natural energy generated offsite to customers (plants) and others.

social issues and raise quality of life fora human-centric sustainable society.

The new Kyōsō-tō research building within the Kyōsō-no-Mori facility.

*1 Kyōsō-no-Mori (forest of collaborative creation) includes a museum (Odaira Kinen-kan) to showcase capabilities, a researchbuilding (Kyōsō-tō) to carry out projects, and a production shop (Jinsō-tō) to rapidly develop prototypes.
*2 BEE: Building Environmental Efficiency.

Hitachi Sustainability Report 201949

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Climate-related Information Disclosure(Based on TCFD Recommendations)

Governance
Hitachi sees climate change and other environmental issues as important management issues.

The Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial

In September 2016, after discussions at the Board of Directors, we established and announced

Stability Board (FSB), published its final report on information disclosure in June 2017 noting

long-term environmental targets called Hitachi Environmental Innovation 2050 containing CO2that investors needed more clarity in corporate disclosures on climate-related risks andreduction targets for 2030 and 2050.

opportunities and governance measures. In June 2018, Hitachi announced its endorsement of
the TCFD’s recommendations.

In April 2017, we established the Executive Sustainability Committee, chaired by the president
and CEO and staffed by other top executives, as the highest-ranking body to discuss and reach

The following contains key climate-related information in line with the TCFD’s recommendations.

decisions on the Group’s sustainability strategy in accordance with our management and businessstrategies. Members meet twice a year to discuss material environment-related policies andmeasures, including those in response to climate change, to share progress reports andachievements, and to set the course for further improvements and new initiatives.
We have adopted a committee system to separate the responsibilities for management oversight

Sustainability Strategy Promotion Structurefrom the execution of business operations. Under this system, the Audit Committee of independent
directors conducts an audit of sustainability-related operations

Executive Sustainability Committee
Chair

once a year. Reports on climate-related material issues are

President & CEO

made to the committee by Hitachi executive officers.

Members Senior Executive Committee members, business unit CEOs, Hitachi, Ltd. division heads
Key roles Discuss and decide on sustainability strategy at management/BU/department levels

Hitachi, Ltd. Vice President and Executive Officer Osamu
Naito participated in the TCFD Study Group on Implementing
TCFD Recommendations for Mobilizing Green Finance ThroughGlobal CSR
Meetings

Proactive Corporate Disclosures, launched by the Ministry of
Economy, Trade, and Industry in August 2018, and helped

GlobalEnvironmental
Meetings

Sustainability Promotion Meetings

Eco-Management Meetingscompile its December report. Hitachi also participates in theMembers Business promotion division heads at BUs andMembers Environmental promotion division heads at BUs

TCFD Consortium—launched in May 2019 with the participation

key Group companies
Key roles Discuss and implement specific measures forsustainability strategy

and key Group companies
Key roles Discuss and implement concrete measures toachieve long-term environmental targets insustainability strategy

of 164 companies and other organizations—as a member of
its Steering Committee and contributes to discussions on
approaches to effective corporate information disclosure andthe use of such information by financial institutes and other

CSR Corporate Meetings

Environmental Manager Meetings

CSR Manager Meetings

Regional Environmental Meetings

Regional CSR Meetings

entities to make appropriate investment decisions.
Sustainability Strategy Promotion Structure
Enhancing Environmental Governance
Audit Committee

Hitachi Sustainability Report 201950

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Strategy
We established long-term environmental targets called Hitachi Environmental Innovation 2050
in September 2016 based on our Environmental Vision defining the goals of environmental

Identification and Assessment of Climate-related Risks
and Opportunities

management from a broader perspective. Wishing to fulfill our responsibilities as a global company
in achieving a low-carbon society and taking note of the total CO2 reductions required globally—

Climate-related Risks

2

as projected under the RCP 2.6* and RCP 8.5* scenarios in the Fifth Assessment Report of the

As for climate-related business risks, we have followed the TCFD’s classification in considering (1)Intergovernmental Panel on Climate Change (IPCC)—we have set long-term CO2 reduction targets

risks related to the transition to a low-carbon economy in the 2°C scenario and (2) risks related tofor our entire value chain of 50% by fiscal 2030 and 80% by fiscal 2050, compared to fiscal 2010.

the physical impacts of climate change in the 4°C scenario, which assumes that efforts to reduce

Our 2021 Mid-term Management Plan announced in May 2019, meanwhile, calls for reducing

global CO2 emissions have failed. Risks are categorized into short term, medium term, and long

1CO2 emissions throughout the value chain by more than 20% by fiscal 2021, compared toterm, defined as follows:
Short term:

fiscal 2010.
*1 A Representative Concentration Pathway (RCP) scenario under which, at the end of the 21st century, the increase in global temperatures frompreindustrial levels is kept below 2°C.
*2 An RCP scenario that assumes that emissions continue to rise, resulting in an approximately 4°C rise in global temperatures compared topreindustrial levels.

three-year management period covered by the 2021 Environmental Action
Plan, in line with the 2021 Mid-term Management Plan)
Medium term: Through fiscal 2030 (time span of our fiscal 2030 long-term environmental targets)Long term:

For a low-carbon society

Category

Major risksTime span

Policy and legal

Increased business costs fromthe introduction of carbon taxes,
fuel/energy consumption taxes,
emissions trading systems, andother measures

Short to long term

Avoid or mitigate increases in business costs, suchas from carbon taxes, by further enhancing
production and transport efficiency and promoting theuse of non- or low-carbon energy sources

Technology

Loss of sales opportunities due todelays in technology development
for products and services

Medium to long term

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

Market and
Reputation

Impact on sales due to changes inmarket values or assessment of ourapproach to climate issues

Medium to long term

In the light of rising investor and market interest in
climate change and growing expectations of thebusiness sector, clearly identify the reduction of CO2
emissions in our management and business strategy
by incorporating reduction targets for fiscal 2021 in
the 2021 Mid-term Management Plan in line with our
long-term environmental targets

Throughout the value chain
CO2 emissions

50% reduction

Through fiscal 2050 (time span of our fiscal 2050 long-term environmental targets)(1) Risks related to the transition to a low-carbon economy (applying mostly to the 2°C scenario)

Climate Change Mitigation/Adaptation

FY 2030

Over the next three years from fiscal 2019 to 2021 (corresponding to the

FY 205080% reduction

Main initiatives(compared to FY 2010)

The Environmental Vision and Hitachi Environmental Innovation 2050
Efforts to Achieve a Low-Carbon Society

Hitachi Sustainability Report 201951

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society(2) Risks related to the physical impacts of climate change (4°C scenario)

Climate-related opportunities

Category

Major risksTime span

Category

Major opportunities

Acute and chronic

Climate-related risks to business
continuity, including increased
severity of typhoons, floods, anddroughts (acute risks) as well as
rising sea level and chronic heatwaves (chronic risks)

Short to long term

Products/services
and markets

Increased market value and revenue fromexpanded sales of products and services
with innovative technology that cancontribute to the mitigation and adaptationof climate change

Expand the decarbonization business, develop and market
products and services that contribute to a low-carbon
society, and promote the development of innovative
devices and materials that contribute to reducing theenvironmental burden

Resilience

Provision of solutions to address climaterelated natural disasters

Provide disaster-mitigation solutions, such as
high-performance fire-fighting command systems

Main initiatives
Take into account the possibility of flood damage
when deciding on the location or equipment layoutof a new plant. Measures tailored to the water risksof each manufacturing site will be strengthened in
the future based on the results of a water risk
assessment now being conducted

Main initiatives

Initiatives to Build a Water Efficient Society
Contributing to a Low-Carbon Society Through the Decarbonization BusinessClimate-related Opportunities
CO2 emissions during the use of our products and services by our customers account for

Responding to Business Risks and Opportunities of Climate Scenarios

approximately 90% of total emissions in our value chain. To achieve the CO2 reduction targets set

To identify specific climate-related risks and opportunities, we examined the business impact

forth in our long-term environmental targets and 2021 Medium-term Management Plan, it isof and responses to the 2°C and 4°C scenarios for five businesses that have a relatively hightherefore essential that we reduce emissions associated with the use of our sold products andlikelihood of being affected by climate change, namely, railway systems, automotive systems,

services. Developing and providing products and services that emit zero or very little CO2 during

water systems, power generation and power grids, and IT systems. These businesses contribute

their use can satisfy customer needs and help meet society’s demands for reduced emissions.

to improving people’s quality of life and enhancing value for our business customers and thus play

This represents a business opportunity for us in the short, medium, and long term and constitutes

an important role in our Social Innovation Business. Across all of these businesses, technologies

a major pillar of the Social Innovation Business that we are promoting as a management strategy.

that fuse our strengths in IT and OT, along with energy-related technologies, in particular, areWe believe that our business opportunities will expand over the long term as we leverage thedeemed helpful in creating social and environmental value for our customers and society and instrengths of our operational technology (OT), IT, and products, as well as our expertise in R&D, toadding great value to climate change responses.

create such specific solutions as high-efficiency, energy-saving products; high-efficiency production

Upon examination of the five areas of the Social Innovation Business, we believe that bysystems using digital technology; power generation systems using non-fossil energy that do not

paying close attention to market trends and developing our business flexibly and strategically,

emit CO2; environment-friendly mobility; and the building of smart, environmental cities.

we have high climate resilience in the medium to long term under either the 2°C or 4°C scenario.

Society’s need to adapt to climate change also presents business opportunities, as we can tap
our technological capabilities to provide solutions in preventing and responding to natural disasters.

Hitachi Sustainability Report 201952

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Strategies for the 2°C and 4°C Scenarios
Target businesses

Railway systems

Automotive systems

Water systems

Power generation and power grids

IT systems

Demand for railways, which run on electricity andemit less CO2, will grow as regulations for CO2
emissions are strengthened globally
Shift to energy-saving railcars will further
accelerate, including on existing routes

Electric vehicles will rapidly spread as tighter
laws and regulations on fossil fuels push up fuelprices and discourage ownership of internal
combustion engine vehicles. Markets foralternative, non-fossil technologies like hydrogenand biofuel vehicles will expand
The number of countries and regions with nearzero sales of internal combustion engine vehicles
will increase

Need for efficient water treatment systems that
emit less CO2 will expand as tighter regulations
on CO2 emissions in each country and region
lead to stringent energy regulations on pumps
used in water treatment

Power generation facilities for CO2-free
renewable energy, nuclear power, and othernon-fossil sources, as well as high-efficiency
power generation facilities that contribute to CO2
reduction will expand with tighter CO2 emission
regulations in each country and region
Demand will expand for construction of power
networks enabling the mass introduction ofrenewable energy with large output fluctuations
Innovations in energy-saving technologies willfurther expand demand for energy-saving
equipment and services

Climate change will lead to tighter CO2 emission
regulations in each country and region andchanges in the market environment, prompting
shifts in customers’ business portfolios andIT investments
The development of and demand forenergy-saving, high-efficiency IT and data
analysis technologies will further expand
Demand will increase for high-efficiency IT
systems utilizing CO2-free non-fossil energy
Investments and loans for low-carbon
businesses, green bond issues, and otherfinancial businesses will expand

Transport-related energy regulations will remain
weak, discouraging a shift to railways, andconventional modes of transportation like
automobiles and motorcycles will persist insome areas
The risk of flood damage to railways and related
facilities will increase due to a rise in such natural
disasters as typhoons and floods

Fuel efficiency laws and regulations 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
The risk of damage to vehicles will increase due
to a rise in such natural disasters as typhoons
and floods in various areas

Demand for clean water will increase due to anincrease in abnormal weather phenomena likefloods, intense heat, and drought
Rising temperatures will cause a rise in thevolume of required cooling water, the growth ofbacteria and algae, and a deterioration in water
quality due to floods
The risk of damage to water-related equipmentfrom such natural disasters as typhoons andfloods will increase

The cost competitiveness of non-fossil energy
will increase and demand for renewable, nuclear,and other non-fossil energy will increase as the
expansion of energy consumption pushes up theprice of fossil fuels
The risk of damage to power plants andnetworks will increase due to such natural
disasters as typhoons and floods

Demand for new, high-efficiency technology
will expand as damage to information equipmentfrom such natural disasters as typhoons andfloods increases and as energy demand
for multiplex IT systems in response to
BCP increases
Investment in social and public systems to
reduce damage from more frequent natural
disasters will increase

Economic growth, urbanization, and population
growth will drive the railway business globally as
an efficient form of public transport for large
numbers of passengers, regardless of whether
CO2 regulations are tight; market size in Japan
will remain flat, but other markets in Asia andelsewhere will expand
Major railway manufacturers will expand theirbusiness to meet global demand

Economic growth, urbanization, population growth,and infrastructure development like road
construction will expand the global market
for automobiles as a flexible and personalmeans of transport
Carmakers will have varying degrees ofenthusiasm in promoting electrification
Non-environmental factors like safety, security,and comfort will drive competitiveness, as
demand increases for new functions likeautonomous driving and advanced safety
features, and new mobility services like car
sharing growEconomic growth, urbanization, and population
growth will push up demand for water insome areas
In Japan, local governments and other entities
will accelerate wide-area collaboration andprivatization in building water systems andimproving the efficiency of their management
Replacement demand for aging water treatment
facilities will increase in developed countries

Economic growth, urbanization, andpopulation growth will push up demand forenergy, especially electricity, mainly indeveloping countries
Energy source will be chosen from theperspective of not just CO2 emissions but also
environmental burden, economic performance,
safety, and supply stability
Stability and efficiency of the power supply will
increase through the use of digital technology
Both companies and individuals will seek todiversify their energy supply and demand

Further digitization will exponentially increase
the volume of data circulated, accumulated,
and analyzed
New services and businesses utilizing big data,
IoT, AI, and other digital technology
will expand rapidly

Response to 2°C or 4°C scenarioContinue to strengthen the railway business,
as global demand for railways will increase undereither scenario
Promote R&D of new products and services that
improve efficiency of railway services throughdigital utilization, such as dynamic headway(flexible operation in response to passenger
demand), thereby offering customers
increased value

Response to 2°C scenario
Promote R&D of electrification technology andother alternative technologies to enhance
response to new markets, such as forelectric vehicles
Response to 4°C scenario
Promote R&D and product development inexisting technologies, including internal
combustion engines, to not only improve energy
efficiency but increase such non-environmental
value as safety, security, and comfort

Response to 2°C or 4°C scenario
Strengthen provision of seawater desalination
facilities and other water generation systems in
response to increased water demand from global
economic growth, urbanization, and population
growth under either scenario

Response to 2°C or 4°C scenarioContinue to enhance response to relevantmarkets in view of expected higher demand fornon-fossil energy under either scenario
Strengthen the grid solution business in
response to increased use of renewable energy
with large output fluctuations and diversificationof energy suppliers
Promote digital service solutions business fordiversifying needs of power customers

Response to 2°C or 4°C scenarioContinue to develop innovative digitaltechnologies and enhance digital service
solutions that generate new value in view of
expected growth in society’s demand andmarkets for digital services under either scenario

Impact on part of 616.5 billion yen in
Railway Systems Business Unit sales (FY 2018)

Impact on part of 971 billion yen in
automotive system business sales (FY 2018)

Impact on part of 169.1 billion yen in
Water & Environment Business Unit sales (FY 2018)

Impact on part of 456.6 billion yen in
Energy Sector sales (FY 2018)

Impact on part of 2,121.6 billion yen in
IT Sector sales (FY 2018)

The business environment underthe 2°C scenario

The business environment underthe 4°C scenario

Non-environmental factors(neither the 2°C nor 4°C scenario)
and market conditions

Responses to future business risks
and opportunities

Financial information(sales volume of each target sector)

We believe that by paying close attention to market trends and developing our business flexibly and strategically,
we have high climate resilience in the medium to long term under either the 2°C or 4°C scenario
Note: The above scenario analyses are not future projections but attempts to examine our resilience. How the future unfolds may be quite different from any of these scenarios.

Hitachi Sustainability Report 201953

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Low-Carbon Society

Risk Management
The Hitachi Group is engaged in many different businesses around the world, with each having

Total greenhouse gas emissions (Scope1, Scope2, and Scope3) across our consolidated

its own set of risks and opportunities. Climate-related risks are evaluated and monitored for eachvalue chain are calculated based on GHG Protocol standards and have been published sincebusiness unit and Group company as part of a process of assessing risks and opportunities infiscal 2013. Total CO2 emissions can fluctuate greatly due to the restructuring of our operations,accordance with the Environmental Action Plan, updated every three years. The results are

but given the nature of our business, some 90% of our emissions come from the use of soldtabulated by the Sustainability Promotion Division of Hitachi, Ltd., and their importance isproducts in Scope 3. Among our products and services featuring equivalent value, therefore, we

checked at Sustainability Promotion Meetings. Those risks and opportunities perceived as being

give priority to providing customers and society with those that emit less CO2. At the same time,

particularly important for the Group as a whole are deliberated by the Executive Sustainability

we will seek to further reduce CO2 emissions during production.

Committee, chaired by the president and CEO of Hitachi, Ltd.
Environmental Action Plan for 2021 (Fiscal 2019–2021)

Metrics and Targets

Environmental Load Through the Value Chain

Our environmental activities are managed through the Environmental Action Plan, whose
indicators and targets are updated every three years, including those to measure and manage
climate-related risks and opportunities.
Under the 2021 Environmental Action Plan (covering fiscal 2019–2021), each business unit
and Group company established their respective CO2 reduction targets in line with the 2021
Mid-term Management Plan, announced in May 2019, calling for a reduction of at least 20% in
CO2 emissions across our value chain by fiscal 2021 compared to fiscal 2010, and environmental
activities are being advanced to achieve those targets. To enable the setting of targets andmonitoring of progress across our many Group businesses and services throughout the value
chain, we use the reduction rate of CO2 emissions compared to fiscal 2010 as an indicator.

Hitachi Sustainability Report 201954

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society
Efforts to Achieve a Resource
Efficient Society

PolicyAccording to the OECD Environmental Outlook to 2050 released by the Organization for Economic

Enhancing Efficiency ofWater Usage

Objectives, Activities, and Achievements

Initiatives to Build a Water Efficient Society

Cooperation and Development (OECD), global water demand in 2050 is expected to increase by
about 55% compared to 2010, and consumption among manufacturers, in particular, is projected

As a resource, water is unevenly distributed across the world, and wide gaps between supply

to jump by 400%. In the light of these trends, expanding supplies of water for agricultural use willand demand are sometimes found even in the same region or country. In addressing water

prove very difficult. As access to freshwater sources becomes increasingly limited, farming andproblems, therefore, region-specific risk measures must be developed that take the respective

urban areas will face serious threats should groundwater dry up.

water stress*1 levels into account.

The 2017 edition of the UN World Population Prospects predicts that the world’s population

We examined water risks at each of our major manufacturing sites around the world, of which

will increase from 7.6 billion in 2017 to 9.8 billion in 2050, resulting in a twofold rise in thethere are approximately 200, by using our Environmental Data Collection System (Eco-DS) andconsumption of material resources worldwide. The higher volumes of resources that are collected,

such globally recognized tools for water risk assessment as the Aqueduct, developed by the

extracted, used, and eventually emitted as waste are expected to have a severe impact on theWorld Resources Institute (WRI); the Water Risk Filter, developed by the World Wildlife Fund for

economy, society, and the environment.
Hitachi’s business operations will respond to these issues by working with our customers andWater Stress Levels at Hitachi Manufacturing Sites

society to help build a society that uses water and other resources efficiently. We have set a fiscal
2050 target of improving the usage efficiency of water and other resources by 50% compared tofiscal 2010 levels. We will create higher economic value using less water and other resources andpursue production activities with a low environmental burden.
Initiatives to Achieve a Resource Efficient Society

Achieving a Resource Efficient Society
Building a society that uses
water efficiently

Building a society that uses
resources efficiently

Enhancing efficiency in the use of water

Enhancing efficiency in the use of resources

Created based on Aqueduct data.

WRI/Aqueduct

Responding to water shortages

Reducing and recycling waste materials

Hitachi Sustainability Report 201955

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

Actions and Achievements
Nature (WWF) and the German development finance institution DEG; and the Flood Hazard Map

In fiscal 2018, we set a target of a 27% reduction (over the base year of fiscal 2005) for waterof the World produced by the European Commission. We analyzed and evaluated water risks forusage per unit at our 208 global manufacturing sites and achieved a 34% reduction. The volume

each business unit and Group company, per country and region, and for the entire Group usingof water used declined by 17.61 million cubic meters, or 32%.

approximately 50 risk assessment items, including physical risks like water stress, water pollution,and floods; regulatory risks leading to higher water and discharge costs or new taxes; andreputation risks that can negatively affect communication with stakeholders.

Key Indicators
Reduction in Water Usage per Unit (Hitachi Group)

The results of the analysis and evaluation will be used to promote Group-wide activities toimprove water use efficiency and to strengthen measures specific to the water risks of eachmanufacturing site.

From base year

34

Hitachi is also addressing water shortages at the society level through its global business%
reduction

operations by creating new sources of water supply. We provide customers in and outside Japan
with a wide range of water-related products and services, such as wastewater recycling systems
and seawater desalination systems. We also provide machinery, electrical equipment, and services

FY 2005 (base year)

for water infrastructure. To date, we have installed approximately 700 water purification plants

FY 2018

Amount used 54.63 million m3

and 900 sewage treatment plants in Japan, as well as over 200 plants in some 40 countries andAmount used 37.02 million m3

100%

Activity amount

66%

Activity amountregions around the world. In addition, we offer comprehensive digital solutions for water andsewage treatment operators by drawing on our experience and know-how of Operational
Technology (OT), IT, and products that have been cultivated over the course of many years as
a comprehensive water service provider.

Water Usage (Hitachi Group)60

capable of instantly and accurately detecting leaks in water pipes in fiscal 2020.
Going forward, we will continue to help build a society that uses water efficiently by supporting
the effective maintenance and management of social infrastructure, the optimum utilization of finite
resources, and the provision of water environment solutions to enhance people’s quality of life.
*1 Water stress occurs when demand for water outpaces availability. The maximum volume of available water supply per capita is used as anindex to measure levels of scarcity. The minimum volume of water required for living, agriculture, industry, energy, and the environment is
considered to be 1,700 cubic meters per person per year, and regions below this level are said to experience water stress. According to the
WRI Aqueduct risk analysis, when the ratio of total annual water withdrawn to average annual water supply within an area is 80% or more, it isdefined as extremely high risk.

(FY)

46.86

In fiscal 2019, we will conduct a study on applying big data to forecast water demand incollaboration with the city of Osaka. And we plan to start providing water suppliers with a system

Breakdown by Region (million m3/year)(million m3/year)

45

43.91

41.34

38.54

37.02

30
15

2014

2015

2016

2017

2018

Europe

0.02

0.01

0.02

0.04

0.04

Americas

0.98

0.89

3.09 *1

2.78 *1

2.71 *1

China

2.32

1.22

1.51

1.51

1.34

Rest of Asia

3.85

3.56

4.00

4.04

3.93

Japan

39.69

38.23

32.72

30.17

29.00

46.86

43.91

41.34

38.54

37.02

Total
0

2014

2015

2016

2017

2018

(FY)

*1 Includes water used by a materials company that became a consolidated member of the Hitachi Group in fiscal 2016 (2.12 million m3/year infiscal 2016, 1.91 million m3/year in fiscal 2017, and 1.92 million m3/year in fiscal 2018).

Collecting and Monitoring Environmental Performance Data to Improve Environmental Practices

Hitachi Sustainability Report 201956

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

Improving Water Use Efficiency
Reducing Water Use with a Closed-Loop Water Cooling System(Waupaca Foundry, Inc.)

Reducing Water Use by Optimizing Ion-Exchange Water Treatment(Hitachi Chemical [Singapore] Pte. Ltd.)

Plant 1 of Waupaca Foundry (WFI) in the United States produces more than 3,000 types

Hitachi Chemical (Singapore) manufactures printed circuit boards for electronic devices andof castings, mainly automotive parts. At casting plants, water is required in largeuses large volumes of deionized water to rinse the boards during the production process.

quantities to cool running machinery and cupola furnaces used in the melting process.

Such water is generated by first purifying industrial water through a process of reverse

After introducing a closed-loop water cooling system, the amount of water intake inosmosis, separating purified water from concentrate, and then removing unwanted ions from2018 was reduced by approximately 454,000 cubic meters compared to 2015.

the purified water through ion exchange. The concentrate is not utilized in the manufacture

Prior to the initiative, cooling water flowed through industrial equipment only once
before being discharged. The new closed-loop system reuses non-contact coolingof printed circuit boards but can be used for other cleaning purposes and then discharged.
By optimizing the filters, sealants, and additional tanks used in reverse osmosis,

water, leading to significant improvements in water use efficiency. The system is capablewater consumption has been reduced, with the ratio of purified water to concentrateof reducing water intake by more than 80% and may, under certain conditions, virtuallyrising from 60% to 85%, leading to greater efficiencies in the generation of deionizedeliminate any water discharges.

water. In fiscal 2018, the company was able to reduce water consumption by 8,045

WFI is aiming to reduce water intake by 72% compared to 2010 levels on

cubic meters per month.

a company-wide basis by fiscal 2021. It achieved a 52% reduction in 2018.
Ion-Exchange Water Treatment
Raw water (industrial water)

Ion-exchange water
treatment system

Improvement in ratio of purified water to concentrate via reverse osmosis from
60% to 85%, reducing monthly water consumption by 8,045 m3

Purified water

Reverse osmosis system
WFI’s closed-loop water cooling system.

Deionized water

Production of
printed circuitboardsDeionization

Concentrate

Discharge

Hitachi Sustainability Report 201957

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

Improving Efficiency in
the Use of Resources

Objectives, Activities, and Achievements

Initiatives to Build a Society that Uses Resource Efficiently
To help build a recycling-oriented society, Hitachi is advancing measures at its business sites

Efficient Use of Resources Throughout the Value Chain

to improve resource use efficiency by 50% compared to fiscal 2010 by fiscal 2050. We arecontributing to the solution of resource-related problems by promoting the utilization of recycledmaterials, manufacturing that is oriented to resource saving and long product life, reduction and

Disposal

Procurement

Collection of end-of-use products,
recycling, remanufacturing

Use of recycled materials,
closed-loop recycling

recycling of factory waste, refurbishing*1 and remanufacturing,*2 and recycling of end-of-life
products. These are advanced at each stage of the value chain, namely, procurement, development
and design, production, distribution and sales, use, and disposal. Our Environmental Action Plan
contains detailed three-year activity targets for improvements in the waste and valuables generation

Use
Repair, reuse,refurbishing, sharing

per unit and the achievement of zero waste to landfill. We have established indicators to measure

Efficient Use of
Resources
Throughout
the Value Chain

Development & Design
Environmentally conscious design,
resource saving, long product life

our progress and are promoting activities throughout the Group to achieve these goals. In recent
years, we have also been addressing the global problem of plastic waste, such as by finding
efficient uses for the plastic waste generated in our business activities and by replacing one-way

Distribution & Sales

Production

Reuse, sharing, servicizing,
reduced packaging

Effective use of factory waste, closed-loop
recycling, reduced packaging(disposable) plastic containers and packaging with paper. We will further strengthen our efforts to
reduce our plastic waste.
*1 Refurbishing: Servicing end-of-use products to a condition conforming to new-product standards.
*2 Remanufacturing: Restoring end-of-use products through disassembly, washing, component replacement, and other work to a condition
equivalent to new products.

Promoting Product Collection and Recycling andthe Efficient Use of Resources
In response to the 2001 Home Appliance Recycling Law, Hitachi is taking part in a cooperative
effort among five companies*1 in the same industry to recycle air conditioners, television sets,
refrigerators, and washing machines at 19 recycling plants nationwide. In fiscal 2018, we recycledaround 72 kt of the roughly 81 kt of end-of-life home appliances we collected.
Hitachi has built its own recycling network providing services near our customers to collectand recycle such end-of-life products as supercomputers, mainframes, and other computing
machines; communication equipment like network devices and telephone switchboards; andinformation equipment like ATMs. In fiscal 2018, efforts by Hitachi Industrial Equipment Nakajo
Engineering and Tokyo Eco Recycle Co., Ltd. to recycle the base and rare earth metals of information

Hitachi Sustainability Report 201958

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

and communication equipment in Japan received the METI Minister’s Prize at the 3Rs (Reduce,
Reuse, and Recycle) Promotion Merit Awards, sponsored by the 3Rs Promotion Council.
We are also promoting the refurbishing and remanufacturing of collected used products. In the
United States, when a customer replaces a large-capacity storage unit with a new model, partsof the end-of-use device are cleaned, inspected, and refurbished as warranty-backed Hitachi

Flow Chart for the Recycling of Plastic in Home Appliances

Raw material
procurement

Processing

Utilization

Industrial plastic waste

components, used in servicing older units. After collecting malfunctioning electric components

Crushfrom automobile dealers and repair shops, we disassemble, check, clean and restore, reassemble,

Clean

Knead

Granulateand inspect those components, remanufacturing and marketing them as equipment featuring thesame performance as new products. Used construction machinery like large hydraulic excavatorsand dump trucks are similarly remanufactured so they function like new and offered as high-function,
reasonably priced products. We also collect end-of-use medical and industrial equipment(such as pumps, motors, distribution boards, transformers, refrigeration equipment, and air

Recycledpellets

Mold

Plastic in end-of-life
appliances
Crush

Clean

Knead

Granulateconditioners) and promote activities to reuse them as resources.
In an effort to use resources more efficiently, we also promote the use of recycled materials.
In fiscal 2018, recycled materials accounted for 2,415 kt (55%) of our total raw materials input of
4,403 kt. The share of recycled plastic used for the plastic parts of Hitachi appliances was 7%.
In addition to purchasing materials from manufacturers of recycled plastic, Hitachi Global Life
Solutions assigns a group company to process the plastic materials of end-of-life home appliancesand plastic containers, reusing them as parts for washing machines and refrigerators and as

Using IT to Manage Waste

packaging materials for ceiling lights. As a result of these efforts, it manufactured or used 926
tons of recycled materials in fiscal 2018.

Hitachi has developed and operates a waste management system aimed at efficient management*1 Hitachi Global Life Solutions; Sharp Corp.; Sony Corp.; Fujitsu General Ltd.; and Mitsubishi Electric Corp.

and reduced compliance risk.
The generation and disposal of waste produced not only at our factories and offices but also
during our contract operations are visualized and centrally managed. The information is added toour environmental performance data and linked to the Environmental Data Collection System(Eco-DS). In fiscal 2018, entries were made to the system regarding waste produced at
approximately 1,500 business and construction work sites in Japan and at approximately 600
business sites in 41 countries. For waste generated at our 200 major business sites, information
is sorted into three categories—hazardous, solid, and domestic—and data on disposal method,
disposal contractors, recycling rates, and export status is collected and analyzed. This information
is utilized to strengthen and promote measures aimed at reducing waste volume and improving
Hitachi Sustainability Report 201959

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

recycling rates. In Japan, we established a target of raising the e-manifest*1 system registration

initiative,*1 which seeks to minimize landfill disposal, 95 business sites achieved their zero waste

rate to at least 90% by fiscal 2015. While this was achieved in fiscal 2014, we still continued withemissions goal*2 as of fiscal 2018.

our efforts in fiscal 2018.
*1 The e-manifest is a document that waste generators must issue when commissioning a disposal company to handle waste disposal.

*1 Zero emissions: The principles and methods advanced by United Nations University in 1994 aimed at eliminating waste from human activity asmuch as possible while maximizing the use of resources and achieving sustainable economic and manufacturing activities.
*2 Defined as a final disposal rate (landfill disposal/waste and valuables) of less than 0.5% in any given fiscal year.

Waste Management System

Zero Emission Sites

OfficeKey Indicators
Intranet

Internet

Reduction in Waste and Valuables Generation per Unit (Hitachi Group)
From base year

16

E-manifest
Data link
Paper manifest%
reduction

JWnet*1 e-manifest

Valuable materials
General waste
Disposal contractor
Hitachi Group Environmental Data
Collection System(Eco-DS)FY 2005 (base year)

FY 2018

Amount generated 1,510 kt

Amount generated 1,384 kt

Internet

Contract details*1 JWnet: The Japan Waste Network is an electronic manifest system operated by the Japan Industrial Waste Information Center under the
auspices of Japan’s Ministry of the Environment.

100%

Activity amountIndustrial waste
disposal company

Breakdown by Region (kt/year)(kt/year)

1,336

1,356

1,384

(FY)
2014

For fiscal 2018, we set a target of a 14% reduction (from a base year of fiscal 2005) for waste

1,000

692

618

500

We endeavored to reduce waste through closed-loop recycling, whereby the byproducts andthe repeated use of packing and cushioning materials during transport. Under the Zero Emission

2014

2015

2016

2017

2018

2016

2017

2018

2

1

2

4

4

Americas

67

63

744 *1725 *1734 *1

China

54

36

48

55

55

Rest of Asia

106

98

107

117

130

Total
0

2015

EuropeJapan

and valuables generated per unit, bettering this by achieving a 16% reduction.
scrap from the production process are reused as resources by other business sites, and through%Waste and Valuables Generation (Hitachi Group)

1,500

Actions and Achievements

84

Activity amount

463

420

435

455

461

692

618

1,336

1,356

1,384

(FY)

*1 Includes 675 kt (fiscal 2016), 675 kt (fiscal 2017), and 689 kt (fiscal 2018) of a materials company that became a consolidated member ofthe Hitachi Group in fiscal 2016.

Hitachi Sustainability Report 201960

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Resource Efficient Society

Efficient Use of Resources
Recycling of Amorphous Metal Materials(Hitachi Metals, Ltd., Hitachi Industrial Equipment Systems Co., Ltd.)

Reducing Landfill Waste and Increasing Recycling Through Sand Recycling(Waupaca Foundry, Inc.)

Hitachi Industrial Equipment Systems Nakajo Division manufactures amorphous

Waupaca Foundry (WFI) of the United States produces castings that are mainly usedtransformers using amorphous metals to improve the electrical properties of the iron

as automotive parts. Large volumes of spent green sand*1 is generated in the casting

core, thereby greatly reducing energy loss.

process. In order to reduce landfill waste disposal and increase recycling, the company

Amorphous metals are high functional materials manufactured by Hitachi Metals. Unlike

installed a sand recycling system at Plant 5 in September 2016. In 2018, about 75% ofnormal metals and alloys, they inhibit power conversion loss because of their randomsome 26,000 tons of spent green sand generated was recaptured and reused. Moving

atomic structure, and the no-load loss of the core is approximately one-fifth of conventional

forward, WFI plans to reuse 55,000 tons of sand annually.

materials, such as silicon steel plates. Transformers are used over long hours, for many

The sand that can no longer be reused finds new life in applications in construction

years, and in large quantities, so the adoption of the amorphous core, which inhibits

and agriculture and as fill material. WFI recycles some 460,000 tons of sand in such

per-transformer electrical conversion loss, can significantly reduce energy consumption.

ways on a company-wide basis. Aiming to achieve zero landfill disposal, it has set a goal

To promote the efficient use of resources, the amorphous metal scrap generated inof reducing spent green sand by 30% in 2020 compared to 2010 levels. The company

the transformer manufacturing process at Hitachi Industrial Equipment Systems Nakajo

regards these initiatives as valuable opportunities to partner with the local community.

Division and the amorphous cores taken from end-of-life transformers are collected and*1 Spent green sand: Sand used to make molds for casting.

recycled by Hitachi Metals Metglas Yasugi Works. In fiscal 2018, about 120 tons ofamorphous metal waste were used to manufacture amorphous metal materials.
Recycling Scheme for Amorphous Metal Materials
End-of-life
amorphoustransformers

Amorphoustransformer dismantling,core removal

Recycling facility
Crush, sort

Wash, dry

Amorphous
materials

Amorphoustransformers

Recycling system that saves energy and significantly reduces environmental impact(HitachiIndustrial
Equipment
Systems
Nakajo Division)

Amorphous ribbon
manufacturing facility

Sand recycling system.
Amorphoustransformer core

Amorphous ribbon(Hitachi Metals Metglas Yasugi Works)

Hitachi Sustainability Report 201961

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature
Efforts to Achieve a Harmonized Society
with Nature

PolicyTo adequately preserve the ecosystem and achieve a harmonized society with nature so that we

A Timetable for Minimizing Impact

may continue to enjoy nature’s benefits, we have established targets to minimize our impact on

Negative impact

natural capital as part of our long-term environmental targets. Specifically, we classify our activities
into those that have either a negative or positive impact on natural capital with the aim of minimizing

Positive impact (ecosystem preservation activities)

Positive impact (contributions through products)

100

any negative impact by 2050.
We perceive our negative impact activities as including the emission of greenhouse gases andchemical substances into the atmosphere and the generation of waste materials. We make apreservation and by undertaking social contribution activities to protect the environment throughthe preservation of biodiversity and ecosystems.

Reduce negative impact
Impact (%)

positive impact, meanwhile, by providing products and services that contribute to ecosystem

Activities to achieve
long-term targets
Low-carbon society
Resource efficient society
Harmonized society with nature(management and reduction ofchemical substances)

By classifying Hitachi’s activities across the value chain into those with positive and negative

Minimize impact onnatural capital

impact and then quantifying such impact, we are advancing initiatives to reduce our negative
impact and maximize our positive impact.

Ecosystem
preservation activities

Increase positive impact

Contributions
through products

0
2010

2020

2030

2040

2050

Initiatives to Minimize Impact on Natural Capital
Hitachi has identified and quantified the negative impact our business activities have on natural
capital with the aim of reducing such impact. According to our estimates, approximately 40% of
our negative impact in fiscal 2018 was related to climate change, and 20%, respectively, to wastematerials, resource consumption, and urban air pollution. These results suggest that we need tofurther reduce our environmental load to minimize our impact on natural capital, such as byincreasing the energy efficiency of our products and services, advancing factory efficiency, using
resources more effectively, and properly managing chemical substances. Going forward, we will
step up our environmental efforts to achieve our long-term environmental targets for a low-carbon
society, a resource efficient society, and a harmonized society with nature.
Hitachi Sustainability Report 201962

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with NatureManaging and Reducing
Chemical Substances

Frameworks and Systems

Objectives, Activities, and Achievements

Managing Chemical Substances
As for our positive impact activities, we have been advancing social contribution activities likeThe results of Hitachi’s identification of the negative impact on natural capital caused by its

forest conservation and business activities that directly contribute to ecosystem preservation, suchbusiness activities in fiscal 2018 showed that around 20% of that impact was urban air pollution.

as building water treatment plants. We are also looking to quantify the impact of these activities.

We believe that control and reduction of volatile organic compounds (VOCs), one of the causes

We began such an effort in fiscal 2018 by estimating the benefits gained through forest conservation,of urban air pollution, and other chemical substances are important to minimizing our impact onwhich is a major positive impact activity for the Group. We focused on 24 business sites for which

natural capital.

forest areas targeted for conservation activities could be ascertained. Using evaluation methods

In fiscal 2005, Hitachi formulated the Regulations for Environmental CSR-Compliant Monozukuri

commonly used in forestry public works, we calculated the benefits in terms of flood prevention,

to manage chemical substances at all stages of its operations—from design and development,water impoundment, water purification, soil loss prevention, and carbon fixation. We will shareprocurement, and production to quality assurance and shipping. Chemical substances in our

the results within the Group and continue to promote our activities going forward.

products are divided into two categories, prohibited substances and controlled substances, forseparate management to respond to legal and regulatory frameworks at shipping destinations.

Negative Impact on Natural Capital (FY 2018)

With regard to chemical substances used in our business operations, we reduce risk by assigning
three ranks to the use of such substances: prohibited, controlled, and reduced, as well as by

Activities to achieve long-term targets fora harmonized society with nature(management and reduction of chemical
substances)

Ecotoxicity 5%

educating chemical substance handlers and managers on laws and regulations and on proper

Other 4%risk assessment.

Managing Chemical Substances in Our Products
Urban air pollution 19%

Activities to achieve
long-term targets
for a resource
efficient society

Climatechange36%
Resource
consumption
18%

Hitachi designates the chemical substances in our products requiring management as Voluntarily
Activities to achieve
long-term targets for a
low-carbon society

Wastematerials
18%

Controlled Chemical Substances. Within this category, we distinguish between prohibited substances(Level 1), which are basically illegal to use inside and outside Japan in products (including packaging)but which might be found in products from suppliers, and controlled substances (Level 2), which
includes substances we are required to track and manage the use of and substances requiring
attention to recycling or appropriate disposal methods. The list of managed substances andlevels is regularly revised based on updates to Europe’s REACH*1 and other regulations.

Note: Calculated using version 2 of the Life-cycle Impact Assessment Method based on Endpoint Modeling (LIME2).

Because four types of phthalic esters were to be added to the list of restricted substances in
Europe’s RoHS directive*2 in July 2019, we designated them as prohibited substances in a January

Scope of Negative Impact Calculations

Hitachi Sustainability Report 201963

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature

2019 revision. As a result, the list of Voluntarily Controlled Chemical Substances now contains 22

Integrated Management System for Chemical Substances Contained in Products

prohibited substances and 22 controlled substances.
Suppliers*1 REACH: The European Union regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals.
*2 Europe’s RoHS directive: The European Union’s Restriction of the Use of the Certain Hazardous Substances in Electrical and Electronic
Equipment, such as computers, communication devices, and home appliances.

Environmental information
Survey/register

Hitachi Group’s Voluntarily Controlled Chemical Substances

Integrated Management System for Chemical Substances Contained in Products
Registration database

Working with the Supply Chain to Manage Chemical Substances

Aggregated database

Manage amounts of designated chemical
substances in a product by material and part

Manage total amounts of designated chemical
substances by product and business

Disclose

To ensure that we understand what chemical substances are used in our products—from design

Customer/society

and development, procurement, and production to quality assurance and shipping—and to

Environmental information

respond to legal and regulatory frameworks at shipping destinations, since fiscal 2005 we haveworked with suppliers to gather and manage information on chemical substances in materials,
components, and products via the Integrated Management System for Chemical Substances
Contained in Products. As of March 31, 2019, chemical substance information for more thanManaging Chemical Substances in Our Business Operations

1.54 million parts and products was registered under this integrated management system.
The Integrated Management System for Chemical Substances Contained in Products was

Since fiscal 2016, we have been cutting emissions of chemical substances from our factories

upgraded in April 2017 to incorporate the chemSHERPA format.* Accordingly, between Julyand other sites through stricter management, such as by expanding the number and scope of2018 and March 2019, we held 13 briefings on chemSHERPA tools and our system for suppliers

controlled chemical substances. Initiatives in fiscal 2018 to reduce emissions of chemicalusing the system at Healthcare Kashiwa, Omika Works, Mito Works, and Hitachi IE Systems. The

substances included switching from paints containing volatile organic compounds (VOCs) tobriefings were attended by approximately 1,500 persons and helped to deepen understanding ofwater-soluble and powder paints as well as expanding their use and altering the painting andthese tools.

washing processes. These efforts enabled us to successfully achieve our reduction targets.

1*1 chemSHERPA: A standard developed by the Japanese Ministry of Economy, Trade, and Industry to facilitate the management of chemical
substances in products by creating a shared transmission scheme throughout the supply chain.

Information on our efforts has been translated into English and Chinese and shared globally with
Hitachi Group members. We also follow legally prescribed procedures in measuring and managing
emissions of sulfur oxides (SOx) and nitrogen oxides (NOx),*1 whose measurement is required
under the laws and regulations of our business site locations, and are advancing efforts to further
restrict emissions.
We comply with Japan’s Pollutant Release and Transfer Register (PRTR) Law*2 throughGroup-wide monitoring of chemical substances released into the atmosphere or into public
Hitachi Sustainability Report 201964

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Naturewaters, removed outside our plants as waste, or discharged into sewage systems, reporting theresults to local governments for each office or plant. Although some substances are exempt from
reporting due to their small quantities, our policy is to keep data on the handling, emission, andtransfer of all PRTR substances totaling 10 kilograms or more per year, recognizing the need tocontrol these substances as well.
*1 Emissions of SOx and NOx: Calculated by multiplying their concentration and exhaust volume.
*2 PRTR Law: Act on Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements
to the Management Thereof.

Reducing Atmospheric Emissions of Chemical Substances (Hitachi Group)

5,000

40

%
reduction

3,615

4,000

3,000

3,000

2,000

2,000

1,000

1,000

2014

2015

2016*

1

2017*

1

2018*

1

(FY)

(FY)
2014

2015

2016 *1

2017 *1

2018 *1

Europe

12

9

57

58

64

Americas

66

113

187

178

142

China

281

199

291

246

184

Rest of Asia

604

373

662

899

966

3,452

2,921

3,183

3,010

3,036

4,415

3,615

4,380

4,391

4,392

Japan
Total

0

To ensure the proper management of chemical substances used in its business operations,
Hitachi has operated a database for chemical substance management called CEGNET since 1998

FY 2006 (base year)

FY 2018

Emissions 5,901 t

Emissions 4,392 t

%

5,000

4,392

The CEGNET Chemical Substance Management System

From base year

100

4,391

4,380

*1 Since fiscal 2016, the scope of controlled chemical substances has been expanded from 41 to 50 substances.
Note: Atmospheric emissions of VOCs and other chemical substances are calculated from the content rate included in the ingredients.

Reduction in Atmospheric Emissions of Chemical Substances per Unit (Hitachi Group)

Activity amount

4,415

4,000

0

Key Indicators

Breakdown by Region (t/year)(t/year)

Activity amountto keep track of the latest laws and regulations and the company’s own voluntary regulations.

60

CEGNET also collects and aggregates data on the amount of chemical substances handled,%emitted, and transferred in our operations, helping to reduce the volume of chemicals that
we handle.
Chemical Substance Management System (CEGNET)
Regulatory/voluntary control
information

New chemicalrisk searches

Chemical data

Network

Registration ofamounts handled/data collection

Hitachi Group business sites

Hitachi Sustainability Report 201965

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature

Reducing Chemical Substances in Our Business Activities
Reducing VOC Usage and Emissions (Hitachi Rail SpA)

Reducing VOC Emissions (Hitachi Chemical Group)

Hitachi Rail manufactures technologically advanced rolling stock, ranging from high

The Hitachi Chemical Group produces a diverse array of functional materials andspeed trains to driverless metros. It works metal sub-components, welds car bodies,advanced components and systems. This requires the use of around 130,000 tons ofapplies paints, assembles equipment and interiors, and conducts electrical andchemical substances every year as raw materials for its products and as additives in thefunctional tests.

production processes. The chemicals used include around 60,000 tons of volatile organic

At the Pistoia and Reggio Calabria Plants in Italy, painting products were switchedmany years ago to a high-solid paint that emits fewer volatile organic compounds(VOCs), thereby minimizing VOC usage in the production process.

compounds (VOCs) that are the cause of photochemical oxidants and suspended
particulate matter.
Hitachi Chemical (Nantong) mainly produces functional resin and chemical raw materials.

Over the past year, the solvents used for the pre-painting degreasing treatment of

Nearly 100% of the VOCs volatilized during the production process are detoxified by ametal surfaces were substituted by a new ecological product that is completely VOC-free.

combustion deodorizer and then discharged into the atmosphere. In fiscal 2018, its entire

VOC usage was further significantly reduced through the adoption of a low-VOC cleaning

plant engaged in Leak Detection and Repair (LDAR) activities to further reduce the emission

solvent and solvent-reutilizing equipment for the cleaning of spray guns.

of VOCs. A simplified VOC measurement device was used to identify leaks from valves

These new technologies have helped reduce total VOC usage in 2018 by about

and piping joints, and appropriate repairs were made, leading to the detection and sup-16 tons compared to 2017, corresponding to a reduction of about 40 % in the totalpression of minute VOC emissions that had been overlooked in the past. As a result,

VOCs used at the two plants.

atmospheric emissions were reduced by 1.3 tons compared to the previous fiscal year.
Moving forward, efforts will actively be made by the Group as a whole to further
limit emissions.
LDAR Activities

Pre-painting degreasing treatment usinga VOC-free solvent.

Detecting a VOC leak.

Making repairs.

Hitachi Sustainability Report 201966

Contents

Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature

Preserving Ecosystems
Initiatives to Preserve Ecosystems
At Hitachi, we seek to reduce the burden (negative impact) on natural capital caused by

Ecosystem Preservation Activities Menu

business activities and to promote the positive impact, such as by undertaking social contribution
activities to protect nature and providing products and services that help preserve the ecosystem,

Category

Numberof Items

Activities Taken

thereby minimizing our impact on natural capital by fiscal 2050 and realizing a harmonized society

Production

Reducing use of resources that cannot be reused

4with nature.

Transportation

Using packaging that takes ecosystem into consideration

7

In fiscal 2016 Hitachi created an Ecosystem Preservation Activities Menu citing the specific

Business sites

activities to be undertaken to promote the preservation of the ecosystem, including not only CO2

Collection, disposal, and recycling Reducing hazardous materials in products

2

Product planning, development,
and design

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

3

Site management

Using native species, setting up biotopes

17

Water use

Using rainwater

1

that are difficult to quantify but are nonetheless important, such as the protection of rare species

Investment and acquisition1and efforts to make biodiversity a criterion when making investment decisions. We are encouraging

Confirming impact on biodiversity when investing in or acquiring abusiness, and implementing measures to minimize such impact

Market entry and expansion

Including biodiversity as an investment criterion

1each business site to advance their own initiatives. This menu was created by referencing theBusiness development

Developing products and services to purify water, air, and soil andexpanding such businesses

1

Procurement

Preferentially procuring paper and other office supplies that takebiodiversity into consideration

17

Transportation

Implementing ballast water measures during marine transportation

2

Sales

Implementing sales expansion of products that take biodiversity
into consideration

9

emission reductions, resource recycling, and chemical substances management but also activities

pioneering activities of other corporations and organizations and consists of 116 items covering
all aspects of our business operations, including the value chain. Each business site selects

Value chain

those activities it will undertake from the menu, and the total number of initiatives becomes theGroup’s target for ecosystem preservation. Our goal for new initiatives in fiscal 2018 was 600,
and 953 were actually launched.
Initiatives based on the Ecosystem Preservation Activities Menu have now become
well-established, so no new Group-wide goals will be set for fiscal 2019 and beyond. Rather,ecosystem preservation activities will be advanced in accordance with the goals set by eachbusiness site.

Community
Water use thattakes watershedecosystem into
consideration

Collection, disposal, and recycling 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 ecosystemdepending on intake volume)

14

Water discharge

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

14

Hitachi Sustainability Report 201967

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Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature

Promoting Ecosystem Preservation
Tokyo Waterworks—Corporate Forest: Forest Maintenance Activities toConserve Tokyo’s Water Resources(Water & Environment Business Unit, Hitachi, Ltd.)“Arakawa Clean Aid” Aimed at Addressing the Problem of Ocean Plastic
Waste (Hitachi Building Systems Co., Ltd.)

Hitachi provides water and sewerage systems and other water environment solutions, andspecified nonprofit organization that promotes cleanup activities along the Arakawa

it also promotes forest maintenance activities toward the conservation water resources

riverbed to restore its rich natural environment. The Arakawa River is one of the major

to ensure supplies of safe and high-quality water. The Tokyo Waterworks–Corporate

water sources for the Kanto Region, which includes Tokyo.

Hitachi Building Systems supports the activities of the Arakawa Clean Aid Forum, aForest project is part of the implementation plan for the Water Resource Forest Created

The Arakawa Clean Aid Forum examines the kinds and volume of trash that are

by Everyone, an initiative announced by the Tokyo Metropolitan Government Bureau ofcollected to ascertain the causes of litter and to identify amelioration measures with theWaterworks in March 2017 to conserve water resources. Hitachi and other participating

aim of reducing damage to the ecosystem.

companies support this project by carrying out planting, thinning, and other maintenance

These cleanup activities, organized jointly by the Arakawa Clean Aid Forum and theactivities in the water conservation forests along the upper basin of the Tama River.

Ministry of Land, Infrastructure, Transport, and Tourism, are held at more than 100

The activities started in June 2017 and are being implemented over a period of three years.

locations each year and attract a total of more than 10,000 participants.

Of the water conservation forests providing water to the Tokyo metropolitan area,

Hitachi Building Systems initially participated with a handful of employees, but since

Hitachi employees work together to help maintain 3.19 hectares in the city of Koshu,

2015, when the riverbed cleanup became part of a new employee training program,

Yamanashi Prefecture, which we have named the Water Resources Forest “Kinopon.”more than 400 people have participated over several days each year. The cleanup is

Participating employees get an opportunity to learn about the history and methods offollowed up with group work, including a meeting where the results of analysis and theforest conservation that go back more than 110 years from members of the Tokyo

opinions of participants are reported. Such meetings allow new employees to experience

Waterworks Bureau, as well as about the changes that occur through the seasons.

the full meaning and impact of CSR. In 2017 and 2018 Hitachi Building Systems

Working in the forest enables participants to gain a deeper understanding of water

employees accounted for some of the largest volume of trash collected and wereresources and forests and to develop a greater awareness of the environment.

honored with awards from the Arakawa Clean Aid Forum.

Hitachi contributes to theconservation of the environment toParticipants pose next to a sign for the Water Resources Forest “Kinopon.”

Much of the plastic waste in the ocean flows in from rivers. Hitachi Building Systems
views the riverbed cleanup as contributing directly to resolving this increasingly serious

ensure safe, stable, and high-quality

global concern and will

drinking water by planting trees

continue to support

for the next generation and by

Arakawa Clean Aid inprotecting and nurturing forests.

the future.

New employees who participated in Arakawa Clean Aid.

Hitachi Sustainability Report 201968

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Introduction

Environmental  Management

SocialGovernance

Data

Achieving a Harmonized Society with Nature

Tree-Planting Activities at Business Sites Outside Japan (Systems & Services Business, Hitachi, Ltd.)
Hitachi Computer Products (America), located in Oklahoma, has been engaging in afforestation

saplings in their own yards or on company grounds. In 2018, 700 saplings were distributed

activities since 1986. In 1990, the company began cultivating saplings on its grounds andto 300 employees.

transplanting them around buildings and along roads. Members of the Green 21 Team of

In China, meanwhile, Hitachi Financial Equipment System (Shenzhen) has been taking

employee volunteers led an effort to plant 400 fruit tree saplings in 2018, bringing the total

part in various tree-planting activities since 2009 in response to an appeal made by thearea covered by planted trees to around 15 acres (approximately 60,000 m2). Wildflowers

municipal government. In 2018, 40 employees and family members planted 50 trees inalso grow around these trees, creating a habitat for butterflies, bees, and other pollinators.

Zhongshan Park in the Nanshan District, bringing the total number of trees planted throughThe company plans to continue planting an additional 600 trees over a 3-acre area by 2024.

the company’s activities to 1,030.

In addition, the company has been distributing saplings to its employees every year on
Oklahoma’s Arbor Day, a tree-planting holiday, since 2013, encouraging them to plant theTrees and wildflowers growing on the grounds of Hitachi Computer Products (America).

These activities not only contribute to CO2 absorption and ecosystem preservation but
also help to raise environmental awareness among employees and their families.

The grounds have become a habitat for pollinators like this monarch butterfly.

Employee volunteers from Hitachi Financial Equipment System (Shenzhen) andtheir family members who took part in tree-planting activities.

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Introduction

Environmental  Management

SocialGovernance

Data

Environmental Data
Environmental Load
Through the Value Chain
Procurement of Raw Materials and Parts

Production

Transport, Use, Waste Disposal/Recycling

Objectives, Activities, and Achievements

Calculation of GHG Emissions Throughout
the Value Chain

Scope 3

Scope 1

Scope 3

Upstream

Direct emissions

Downstream

We calculate greenhouse gas (GHG) emissions throughout theentire value chain in conformance with GHG Protocol standards
to more effectively reduce these emissions. As a substantial

1 Purchased goods and services

amount of emissions comes from use of the products we sell,

Suppliers, etc.

we make an ongoing effort to reduce emissions by enhancing

2 Capital goods

the efficiency and energy-saving features of our products andConstruction companies, etc.

services during their use.
Scope 1

Scope 2

Direct emissions from in-house fueluse and industrial processes
1.87 Mt-CO2e (1.3%)

Indirect emissions from productionof electricity and heat purchasedby the company
2.60 Mt-CO2e (1.9%)

%

1.0%
0.2%
0.1%

Scope 211 Use of sold products
Product end users

141.496 Business travel

1.9

0.0%
0.0%

8 Upstream leased assets
Leasing companies

13 Downstream leased assets

Included in Scope
1 and 20.0%

14 Franchises
Franchise members

7 Employee commuting

Other indirect emissions not coveredby Scope 1 and 2(Emissions by other entities related tothe company’s activities)
11.54 Mt-CO2e (8.2%)

0.3%

Scope 3 factors outside the value chain

Users of leased assets

Transportation companies, etc.

%

%

0.1%

Transportation companies, etc.

Scope 3: Upstream

88.3

12 End-of-life treatment of sold products

5 Waste generated in operations

Other indirect emissions not coveredby Scope 1 and 2(Emissions by other entities related tothe company’s activities)
125.48 Mt-CO2e (88.6%)

N/A

Waste treatment companies
Indirect emissions
from productionof electricity andheat purchasedby the company

Waste treatment companies

Scope 3: Downstream

0.0%

Processors of intermediate products

Energy-related
indirect emissions

Total GHG
Emissions
Mt-CO2e9 Downstream transportation and distribution
Shipping companies

10 Processing of sold products

4 Upstream transportationand distribution
Shipping companies

1.3

6.8%

3 Fuel- and energy-related activities
not included in Scope 1 and 2
Extraction companies, etc.

Direct emissions
from in-house fueluse and industrial
processes

N/A

15 Investments
Investment destinations

0.0%

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

SocialGovernance

Data

Environmental Data

GHG Emissions Throughout the Hitachi Value Chain (Hitachi Group)
Category

Description

Calculation Results (Mt-CO2e)

Scope 1*1
Direct emissions

Direct emissions from in-house fuel use and industrial processes

1.87 (1.3%)

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

2.60 (1.9%)

1 Purchased goods and services

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

9.51 (6.8%)

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

1.45 (1.0%)

3 Fuel- and energy-related activities not included in Scope 1 and 2

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

0.24 (0.2%)

4 Upstream transportation and distribution

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

0.10 (0.1%)

5 Waste generated in operations

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

0.11 (0.1%)

6 Business travel

Emissions generated from fuel and electric power used by employees for business travel

0.07 (0.0%)

7 Employee commuting

Emissions generated from fuel and electric power used in employee commuting

8 Upstream leased assets

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

Scope 2*2
Energy-related indirect emissions
Scope 3: Upstream (other indirect emissions)0.06 (0.0%)
Included in Scope 1 and 2

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

Emissions from transportation, storage, loading and unloading, and retail sales of products

10 Processing of sold products

Emissions by downstream companies during processing of intermediate products

0.01 (0.0%)
N/A*3

11 Use of sold products*4

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

125.05 (88.3%)

12 End-of-life treatment of sold products*4

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

0.31 (0.3%)

13 Downstream leased assets

Emissions from operating assets owned by the reporting company as lessor and leased to other entities

0.03 (0.0%)

14 Franchises

Emissions by franchises under Scope 1 and 2

15 Investments

Emissions related to management of investments

N/A
0.08 (0.0%)

Total

141.49 (100%)

Note: Figures in parentheses are percentages of GHGs emitted throughout the value chain.
*1 Includes SF6, PFC, HFC, N2O, NF3, and CH4. The gas and fuel conversion factor is based on the list of emissions and calculation methods published by Japan’s Ministry of the Environment.
*2 The CO2 electrical power conversion factor uses the 2005 emission coefficient for Japan published by the International Energy Agency (IEA) in the 2010 edition of CO2 Emissions from Fuel Combustion.
*3 Cannot be determined due to insufficient information on processing.
*4 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).

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Introduction  Management

Environmental

SocialGovernance

Data

Environmental Data

Environmental Load from OperationsObjectives, Activities, and Achievements

Data on Environmental Load from Operations (Hitachi Group, FY 2018)
The data below shows the resource inputs and the environmental load for Hitachi Group operations in fiscal 2018.
Products shipped: 2,843 kt

INPUT

Total Energy Input(crude oil equivalent)

2.27

OUTPUT

Total Input of Resources

4,523

Gas 24%

GL
Electricity 66%

Raw Materials Input

4,403

Plastics
4%

Other GHG
emissions
1%

Greenhouse Gas Emissions

Solid fuel 6%

Fuel oil 4%

Total Output (Environmental Load)kt-CO2e*1

Operations

Other materials
5%

CO2 emissions 99%

Total Volume of Waste
and Valuables

1,384

kt

Landfill 17%

kt
Recycle 76%

Metals 91%

Total Water Input

37.02

Groundwater, etc.
34%

Tap water 21%

Total Volume ofWater Effluents Discharged

Water recycling

38.94

million m3

Waste
reduction 7%

million m3

34.10

Industrial water, river water
45%

Underground infiltration,
evaporation, etc. 10%
Sewerage24%

million m3
Public water 66%*1 CO2e: CO2 equivalent.

Click here for detailed information.

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SocialGovernance

Data

Environmental Data

Detailed Data on Resource Input and Environmental Load Output
Total Input of Resources
Total resources input from Hitachi Group operations.

Total Energy Input

Energy consumption: (crude oil equivalent) 2.27 GL
FY 2017

FY 2018

Renewable energy

Electricity

3.1 GWh (11.2 TJ)

7.1 GWh (25.6 TJ)

Non-renewable energy

Electricity

6,020 GWh (21.7 PJ)

6,021 GWh (21.7 PJ)

For heating

130 GWh (0.5 PJ)

128 GWh (0.5 PJ)

For cooling

277 GWh (1.0 PJ)

273 GWh (1.0 PJ)

To generate steamGas

644 t (1.5 TJ)

648 t (1.5 TJ)

0.19 Gm3 (8.6 PJ)

0.18 Gm3 (8.0 PJ)

For heating

18.4 Mm3 (0.8 PJ)

18.6 Mm3 (0.8 PJ)

For cooling10.3 Mm3 (0.5 PJ)

10.5 Mm3 (0.5 PJ)

Natural gas

To generate steam

560 kt (1.3 PJ)

567 kt (1.3 PJ)

269 kt (14.5 PJ)

251 kt (13.5 PJ)

Fuel oil (heavy oil, kerosene, etc.)

117 ML (4.5 PJ)

87 ML (3.4 PJ)

Solid fuel (coke)

179 kt (5.3 PJ)

189 kt (5.5 PJ)

LPG, LNG, etc.

Raw Materials Input

Materials: 4,403 kt
FY 2017

Materials

Metals

4,031 kt

New materials

1,571 kt

1,624 kt

Recycled materials, etc.

1,817 kt

2,407 kt

151 kt165 kt150 kt163 kt

Plastics
New materials
Recycled materials, etc.
Other materials
New materials
Recycled materials, etc.
Chemicals

FY 2018
3,388 kt

PRTR substances*1 handled

1 kt

2 kt

258 kt207 kt

250 kt201 kt8 kt

6 kt

205 kt189 ktOzone-depleting substances handled

77 t

130 t

Greenhouse gas substances handled

5,656 t5,640 t*1 PRTR substances: The 462 chemicals designated in Japan’s Pollutant Release and Transfer Register (PRTR) Law.

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Environmental

SocialGovernance

Data

Environmental Data

Total Water Input

Water use: 37.02 million m3
FY 2017

Water provided by municipality or other sources

FY 2018

Tap water

7.40 million m3

7.61 million m3

Industrial water, river water

17.46 million m3

16.63 million m3

Groundwater

13.56 million m3

12.74 million m3

Rain water

0.02 million m3

0.01 million m3

Recycled water (recycled from the wastewater of other organizations)0.10 million m3

0.03 million m3

Hitachi Sustainability Report 201974

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Introduction

Environmental  Management

SocialGovernance

Data

Environmental Data

Total Output of Environmental Load
Environmental load output from Hitachi Group operations.

Greenhouse Gas EmissionsGreenhouse gases: 4,523 kt-CO2e
FY 2017

CO2 emissions
Other GHGs

FY 2018
4,663 kt-CO2

4,470 kt-CO2

SF6 (sulfur hexafluoride)

40 kt-CO2e

35 kt-CO2e

PFCs (perfluorocarbons)

4 kt-CO2e

5 kt-CO2e

HFCs (hydrofluorocarbons)

7 kt-CO2e

3 kt-CO2e

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

1 kt-CO2e

3 kt-CO2e

CO2 from non-energy sources

3 kt-CO2

7 kt-CO2

Notes:• The CO2 electrical power conversion factor uses the 2005 emission coefficient for Japan published by the International Energy Agency (IEA) in the 2010 edition of CO2 Emissions from Fuel Combustion.
• The gas and fuel oil conversion factor is based on the list of emissions and calculation methods published by Japan’s Ministry of the Environment.

Total Volume of Waste and Valuables

Waste and valuables generation: 1,384 kt Nonhazardous: 1,348 kt (hazardous*1: 36 kt)
FY 2017

Waste reduction
Recycling

Reuse
Materials recycled
Thermal recovery

Landfill
Chemicals

FY 2018
83 kt (9.0)

PRTR substances discharged or transferred
SOx (sulfur oxides)
NOx (nitrogen oxides)
Ozone-depleting substances emitted (CFC-11, etc.)

94 kt (5.6)

1 kt (0.4)

1 kt (0.0)

1,038 kt (20.2)

1,044 kt (25.6)

11 kt (1.4)

13 kt (1.4)

223 kt (5.2)

232 kt (3.7)

4.2 kt4.1 kt107 kNm3*2

96 kNm3*2

469 kNm3

452 kNm3

1 t (0 t-ODP*3)

1 t (0 t-ODP*3)*1 Waste materials that pose a threat to human health or the living environment. We dispose of all such materials in accordance with the laws and regulations of each country and region.
*2 Includes SOx generated by a materials company that became a consolidated member of the Hitachi Group in fiscal 2016.
*3 ODP (ozone depletion potential): A coefficient indicating the extent to which a chemical compound may cause ozone depletion relative to the depletion for CFC-11 (trichlorofluoromethane, ODP = 1.0). The emissions factor uses the ODP and global warming potential ofJapan’s Ministry of the Environment.

Total Volume of Water Effluents Discharged

Water effluents discharged: 34.10 million m3
FY 2017

FY 2018

Public water

23.12 million m3

22.44 million m3

Sewerage

8.62 million m3

8.18 million m3

Underground infiltration, evaporation, etc.

3.39 million m

3.48 million m3

Water quality

3

BOD (biochemical oxygen demand)

392 t

390 t

COD (chemical oxygen demand)

617 t

1,701 tHitachi Sustainability Report 201975

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Introduction

Environmental  Management

SocialGovernance

Data

Environmental Data

Environmental AccountingObjectives, Activities, and Achievements

Hitachi discloses environmental accounting data based on a set of environmental accounting
procedures conforming to the Japanese Ministry of the Environment’s Environmental Accounting
Guidelines. We use the environmental accounting data to raise the efficiency of our environmental
investments and activities, more effectively allocating management resources to our ongoingenvironmental efforts.

Achievements
Environmental Investments, Environmental Protection Costs, and Economic Effects

Fiscal 2018 Environmental Investments by Countermeasure (Hitachi Group)(Hitachi Group)

Other

1%

(billions of yen)
150
125

Pollution prevention

112.0

25%

Climate change response

71%

107.6

100

94.2

92.5

89.5

Waste reduction

3%

75
50
25

15.2

4.5
0

2014

Environmental investments

14.1

7.5
2015

Environmental protection costs

12.7

5.1
2016

21.4

11.0

16.1

9.9
2017

2018

(FY)

Environmental protection effects (economic effects)

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Environmental  Management

SocialGovernance

Data

Environmental Data

Environmental Investments(billions of yen)
Description

Total investment

Investment in energy-saving equipment and equipment that directly reduces environmental load

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

4.46

7.50

5.12

10.99

9.86

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

Environmental Protection Costs
Item

Description(billions of yen)

Expenses
Business area

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

26.90

24.22

19.19

22.17

23.57

Upstream/downstream

Green procurement expenses, recovery and recycling of products and packaging, recycling expenses

1.09

0.97

0.63

0.72

0.68

Administration

Labor costs for environmental management, implementation and maintenance of environmental
management system

6.47

5.97

5.12

5.69

6.72

Research and development

R&D to reduce environmental burden caused by products and production processes, productdesign expenses

76.12

75.71

63.13

62.55

61.86

Social activities

Planting, beautification, and other environmental improvement expenses

0.36

0.45

1.21

1.00

0.93

Environmental remediation

Environmental mitigation costs, contributions, and charges

1.03

0.27

0.22

0.33

0.40

111.97107.59

89.50

92.46

94.16

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018
8.35

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

Environmental Protection Effects
Economic Effects*1(billions of yen)

Item

Major FY 2018 Activities

Net income effects

Recovering value from waste by sorting and recycling

7.54

7.27

4.96

6.90

Reduced expenses effects

Installing high-efficiency equipment (lighting, power supply)

7.65

6.78

7.77

14.54

7.70

15.19

14.05

12.73

21.44

16.05

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

68

59

51

41

55

Total
*1 Economic effects include:• Net income effects: Benefits with real incomes, including incomes from the sale of resalable materials and incomes from environmental technology patents.
• Reduced expenses effects: Reduction in electricity, waste treatment, and other expenses through environmental load reduction activities.

Physical Effects*1(million kWh)

Item

Major FY 2018 Activities

Reduction in energy used during production

Installing LED lighting, upgrading air-conditioning equipment, etc.

*1 Physical effects refer to the annual amount of reduction in electricity consumption due to measures invested in during each fiscal year.

Environmental Liability
We have appropriated 7.2 billion yen in expenses for the disposal of PCB-containing waste and 1.5 billion yen to clean up contaminated soil as the amounts that we can reasonably project as of March
2019 as future environmental liabilities.
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SocialGovernance

Data

Striving to Increase Social Value

SocialIn order to grow sustainably and improve social value, Hitachi must meet a range of social
expectations. As well as creating the innovation sought by society, we need to establish a working
environment where diverse talent can shine, and rigorously implement fair business practices andrespect for human rights throughout the value chain. We also aim for greater involvement in anddevelopment of the communities related to our businesses.

CONTENTS
79

Innovation Management
79
82

85

Research and Development (R&D)
Intellectual Property

Human Capital
85 2021 HR Strategy
86 Developing Global Human Capital
91 Diversity and Inclusion
96 Work-Life Management
100 Occupational Health and Safety

107 Human Rights
107  Respect for Human Rights Throughout the Value Chain
111 Freedom of Association and Collective Bargaining

113 Value Chain Management
113 Responsible Procurement
119 Quality and Safety Management
122 Rigorous Information Management
123  Use of Personal Data and Protection of Privacy
124 Customer Satisfaction

127 Community
127

Social Contribution Activities

Our third Global Women’s Summit had the theme “Leading Through Diversity & Inclusion” (October 2018, Singapore).

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SocialGovernance

Data

Innovation Management
Hitachi’s Approach

Research and Development (R&D)

Hitachi will strengthen its Social Innovation Business, which has been the
key focus under Hitachi’s Corporate Credo “to contribute to society
through the development of superior, original technology and products,”
and will contribute to the sustainable development of society by utilizing
its internet of things (IoT) and artificial intelligence (AI) capabilities, thus
helping to achieve the Sustainable Development Goals (SDGs) through therealization of Society 5.0. To this end, we will help resolve customer issues
by further enhancing Lumada and NEXPERIENCE, a methodology forcollaborative creation with customers. “Kyōsō-no-Mori,” a new research
initiative for open collaborative creation, will also support our customers in
resolving their challenges, and we will promote open innovation throughvigorous activity in the field of intellectual property (IP).

Hitachi’s R&D Initiatives and R&D
Policy for Fiscal 2019

PolicyFrameworks and Systems

Hitachi has established an R&D policy for fiscal 2019 of becoming a global innovation leader inthe fields of SDGs and Society 5.0. With Lumada as a base, we will fully utilize our expertise inoperational technology (OT), IT, and products, along with the technological foundation establishedby our R&D department, to create solutions through collaborative creation with customers in thefive sectors of mobility, smart life, industry, energy, and IT. We will create social, environmental,
and economic value for our customers, as well as improving people’s quality of life.
In order to accelerate collaborative creation with customers, in fiscal 2015 we realigned our
R&D structure under a customer driven model, developed NEXPERIENCE, and strengthened our
digital solutions development.
NEXPERIENCE is a systematized methodology for collaborative creation that allows us to

Our Impact on Society

precisely identify social challenges in business areas, design business models based on incubated

R&D Personnel

cases and selected OT- and IT-based customer cases. In fiscal 2018 we released a tool that uses

ideas, and assess profitability. It helps expand solution core templates based on Lumada customer

2,650

AI to identify the most appropriate stored customer cases for resolving a given customer’s issues,
and we will continue to evolve NEXPERIENCE to create new value.
In April 2019 we opened “Kyōsō-no-Mori,” a facility for global collaborative creation inharmony with the surrounding environment, within our Central Research Laboratory. Kyōsō-no-Moriaims to develop open innovation ecosystems through open collaborative creation, connecting
our researchers and designers to stakeholders including customers and academic research

Our Performance

institutions around the world. We also concluded a comprehensive partnership agreement with

R&D Expenditure (consolidated)

323.1

billion yen

Kokubunji City, where Kyōsō-no-Mori is located, to explore future societal systems supporting
the sustainable development of regional communities.
In pursuing our R&D policy to become a global innovation leader in the fields of SDGs andSociety 5.0, we will focus on three areas: the Global Center for Social Innovation (CSI) will takethe lead in enhancing co-creation of global solutions, the Center for Technology Innovation (CTI)
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SocialGovernance

Data

Innovation Management

will be primarily responsible for creating the world’s No. 1 technologies for solutions and products,

Also, in May 2019, the Hitachi America R&D division was relocated to Hitachi Vantara’s newand the Center for Exploratory Research (CER) will promote basic exploratory research to resolve

office in Santa Clara, California, to strengthen collaboration and provide a development center for

issues in society.

digital solutions to improve people’s quality of life through open collaborative creation.
In addition to the current approach of industry-academia-government cooperation to create

R&D Policy for Fiscal 2019

vision and develop rules, initiatives such as open forums and ideathons are being used to create
new services and ideas, as well as hackathons to develop solutions and real-world verification, in

Become a global innovation leader in the fields of SDGs and Society 5.0

our efforts to promote collaborative creation through open innovation.
Events held in fiscal 2018 included an event in Singapore to generate ideas based on

CSI

advanced FinTech initiatives and trends in related businesses, and a hackathon with Chinese

Co-creation of global solutions

Global Center forSocial Innovation

startups and academia to identify blockchain application ideas. We will further promote such

Develop business models by means of CV, ideathons/hackathons
Promote open co-creation in solution priorities & focus regions

CTI

Creation of world’s No. 1 technologies
for solutions and products

Center for Technology
Innovation

Value-based creation of world’s No. 1 technologies
Build Lumada ecosystem, including OT, IT, and products

CER

Basic exploratory research to resolve social issues

Center for Exploratory
Research

Generate human-centric value through research resolving social issues
Promote Society 5.0 concept worldwide

activities globally to evolve collaborative creation through open innovation with stakeholders.

Creating the World’s No. 1 Technologies for
Objectives, Activities, and Achievements
Solutions and Products
In order to achieve our R&D policy goals, we believe it is indispensable to create the world’s No.
1 technologies for solutions and products. We have been bringing new value to society by
developing globally top-level products and systems such as high-speed, low-noise trains; theworld’s fastest elevators; particle beam therapy equipment that helps to improve patients’ qualityof life; semiconductor testing and biochemical/immunological analysis devices with top global

Enhancing Co-Creationof Global Solutionsmarket share; industrial machinery such as air compressors and motors; and energy and storage
Frameworks and Systems

Objectives, Activities, and Achievements

systems. In fiscal 2019, our high-speed train for the UK market was recognized with the Imperial
Invention Prize in the National Commendation for Invention, and the Medal with Purple Ribbon

As part of its efforts to promote initiatives in growth areas and social challenges in its regions of

was bestowed on Kazuo Hiramoto of our Research & Development Group for inventing innovative

focus, Hitachi has expanded open collaborative creation spaces to a global level and accelerated

particle beam therapy equipment.

the pace of innovation. Outside Japan, R&D centers are located in Silicon Valley and Detroit in

We are also advancing our technological developments in each of the five sectors specified in

the United States; in London, Cambridge, Copenhagen, Sophia Antipolis, and Munich in Europe;the 2021 Mid-term Management Plan. In the industry sector, we launched the “Hitachi Digitalin Beijing, Shanghai, and Guangzhou in China; and in other cities across India, Singapore, andSolution for Retail,” an integrated service for the retail distribution industry that collects and stores

Australia. These regional centers aim to contribute to global society by collaboratively resolving

data from customers, analyzes it with AI, and proposes measures to optimize the value chain.

regional and customer issues.

For the manufacturing industry, we launched the “IoT Compass,” a solution developed throughHitachi Sustainability Report 201980

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collaborative creation with a car manufacturer. This solution facilitates seamless and timely AI

people can fully participate in, the Hitachi Kobe Laboratory succeeded for the first time in theanalysis and simulation by combining operational and environmental OT data from production

world in automatically culturing human iPS cells into sheets of retinal pigment epithelial cells.

equipment with IT data such as production plans and inventory management, thus optimizing the

Additionally, the Hitachi Cambridge Laboratory developed the world’s first technique for

entire production process.

selectively controlling silicon quantum bits using hybrid circuits, as part of their efforts toward

In the IT sector, we developed and deployed solutions for digital administration and cashless
settlement in India and North America. India saw the launch of Hitachi MGRM Net, which will help

creating a data processing environment that can support future societies.
The Hitachi-UTokyo Laboratory promotes “Habitat Innovation,” aiming to design cities that

digitalize a broad range of administration services, from education and healthcare to agriculture

strike a balance between efficient urban infrastructure and improved quality of life, alongside

and insurance, under the Digital India project led by the Indian government. Hitachi America’s

energy system projects supporting data-driven society. The laboratory is working with other

Financial Innovation Laboratory is participating in the Hyperledger project to jointly develop andacademic research institutions to prepare policy recommendations and build social consensus

standardizes OSS blockchain technologies and develop control and management systems for

toward achieving the SDGs and Society 5.0. At Hitachi Kyoto University Laboratory, infinancial institutions.

response to Crisis 5.0, a work released in 2017 depicting future challenges in 2050, we haveMoving forward, we will invest intensively in technologies including these, as well as others
combining the five sectors of mobility, smart life, industry, energy, and IT with Lumada. Also, by
drawing on our combined expertise in OT, IT, and products, we will strive to develop the world’s
No. 1 technology and provide high value to our customers.

been working with Kyoto University on global public policy recommendations using AI to improvesocial sustainability.
We will continue to promote these initiatives, grow our open innovation ecosystems, andexplore new business opportunities and disruptive technologies through basic exploratory
research to resolve social issues.

Promoting Basic Exploratory Research
to Resolve Social Issues

Objectives, Activities, and Achievements

R&D Investment and Digital
Human Capital

Objectives, Activities, and Achievements

In order to create economic, environmental, and social value for our customers as specified in the2021 Mid-term Management Plan, and for the continued growth as a company, we believe weHitachi allocates about 4% of revenue to R&D aimed to strengthen our capabilities in the five core

must create new value in harmony with a human-centric society and environment. To meet this

sectors of our Social Innovation Business. We invested approximately one trillion yen under thechallenge, the mission of the Center for Exploratory Research (CER) is to generate human-centric2018 Mid-term Management Plan, but will strengthen our R&D by increasing that amount to 1.2

value through basic exploratory research to resolve social issues and promote such concepts totrillion yen under the 2021 Mid-term Management Plan. Regarding corporate-led R&D, we will

the world, and they are accelerating the development of disruptive technologies to lead Society

invest in collaborative creation with customers, developing world-leading technologies, and basic

5.0 through vision-creating open innovation. To this end, we will continue our cooperation with

exploratory research. We will also expand our digital common platform and enhance R&D

academic research institutions at our collaborative research bases, such as the Hitachi-UTokyo

resources outside Japan to ensure the N-fold expansion of our growth engine, the Lumada

Laboratory, the Hitachi Hokkaido University Laboratory, the Hitachi Kyoto University Laboratory,

business, and to expand our global footprint.

and the Hitachi Kobe Laboratory.
In the matter of creating human-centric value with the aim of realizing a society in which all

At the same time, we are working to develop digital human capital, including top-class digitaltalent in AI-related areas, to respond to society’s needs accompanying recent advancement in
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digitalization. The R&D group is focusing on developing digital talent in the field of AI, and plansdeveloping an IP management framework for establishing win-win relationships with our

to increase its headcount from 226 in fiscal 2018 to 350 by fiscal 2021.

customers while respecting their IP rights.
Globally, however, the situation around IP has been changing and the change is accelerating.
Attention has been drawn to liabilities and ethical issues arising from the application of AI, robots,

R&D Investment (Hitachi Group)(billion yen)(%)

autonomous driving, and other advanced technologies. The issuance of AI Ethics Guidelines in

500

5Japan, the United States, and Europe is just one example of the growing demand for a response4

to these new technologies. There is also a growing trend toward data localization, as seen in the3

European General Data Protection Regulation (GDPR). And, of course, handling IP has become2

one of the issues in the trade war between the United States and China. Under the circumstances,

450

3.5%

3.6%

323.9

332.9

3.4%

400
350

323.1

0

we must consider the geopolitical risks when we engage in IP activities. In addition, we are

1

300

2016

2017

2018

1 trillion yen
R&D investment (left scale)

2021

(FY)

prompted to develop IP strategies based on a balance between competition and collaboration,0

responding to the rise of IT platform giants, increasing global M&As, and the advance ofopen innovation.

1.2 trillion yen

With all this in the background, we will accelerate our IP activities for a new era by accumulating

R&D investment as % of revenue (right scale)findings and knowledge about new technologies and national and regional rules and regulations,aiming to create solutions that will deliver value to customers and resolve social issues in line withinitiatives like the SDGs and Society 5.0. Regarding IP highly public in nature, for example, we will

Intellectual Property

actively work on making it more publicly accessible, contributing to designing a future society inorder to establish “IP for Society,” a new IP strategy for a new era.

Hitachi’s IP Strategy and Vision

PolicyIntellectual property (IP) is a key element of Hitachi’s business strategy. From fiscal 2019, Hitachi

Hitachi’s IP Activities for a New Era

Policywill promote IP activities to create solutions that enhance value for customers in line with the2021 Mid-term Management Plan and resolve social issues in line with initiatives like the SDGs

In the Social Innovation Business, Hitachi plans and implements IP strategies appropriate to eachand Society 5.0.

area of its product and digital solution businesses.

We have made a shift in recent years from IP strategy designed to enhance our competitivenessIn the product business, where IP strategies are crucial for competitiveness, we are actively

in the product business to IP strategy designed to promote partnerships centered on our digital

working toward obtaining and using patent and other intellectual property rights (IPRs), andsolution business. This has advanced our collaborative creation strategy focused on IP in theenhancing our competitive edge by planning and implementing an “IP Master Plan” customized

broader sense, including data, putting us ahead of other companies. Based on this collaborative

to the nature of our business.

creation strategy, we have engaged in more than 300 business cases of collaborative creation
with our customers annually. Through these cases we have recognized the importance ofIn the digital solution business, on the other hand, we have promoted collaborative IP strategies.
As opportunities to co-create with our customers and partners using the Lumada IoT platform
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Protecting Our Designs and BrandPolicyincrease, we believe it is important to use IP to promote partnerships and to build ecosystems.

Protecting Hitachi’s designs and brand is crucial for promoting our Social Innovation BusinessIn order to leverage our IP activities and create solutions, we take a broader view of “intellectualand supporting our global operations. We operate a rigorous regime against such infringements

property,” which goes beyond patents, copyrights, and trade secrets to include data andas making and selling counterfeit goods copying our designs or carrying the Hitachi brand andinformation assets as well.

illegally applying for or registering trademarks similar to the Hitachi brand.

Moving forward, we will make continued efforts to create solutions through IP activities.

Until recently, most counterfeit goods were manufactured in China, but over the past several

Our Intellectual Property Division will participate in developing ways to promote new methods ofyears manufacturing methods and sales routes have become more sophisticated and diverse,

collaborative creation, turning patent information into new technologies and cultivating data

which has spurred us to take further action.

scientists capable of utilizing data for IP activities.
Additionally, in order to advance our open innovation activities designed to create solutions,such as the Ideathon and Hackathon, we have formulated the “Kyōsō-no-Mori” IP Guidelines,

Framework for IP Activities

Frameworks and Systems

and will further evolve our IP Master Plan with the aim of combining our product and digitalsolution businesses.

As of fiscal 2018, we had IP offices in New York and Santa Clara, California, in the United ,3YLVLRQVFRQWULEXWLQJWR6'*V
27

3URGXFW2 0

States, Beijing and Shanghai in China, and London in the United Kingdom to cover our globalized,3sWUDWHJ\IRUnHZeUD 2SHQ

,7 6,,R7 'LJLWDOsROXWLRQ&RPSHWLWLRQ
sWDJH

&ORVH

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Going forward, we will make efforts to seek cooperation with major sites around the world,
forming global human capital networks in which the new department plays a central role, and+LWDFKL&XVWRPHU

building close ties with our newly established Corporate Venturing Office in addition to our strategy
planning division and the government and external relations division in Hitachi, Ltd.

3DUWQHU+LWDFKL&XVWRPHU

3DUWQHU,30DVWHU PODQ&RFUHDWLRQ,3DFWLYLW\

Hitachi Group Codes of Conduct: 6. Protection of Intellectual Property and Brand

focus sectors and regions for investment under the 2021 Mid-term Management Plan, in
fiscal 2019 we established the IP Strategy Department within the Intellectual Property Division.

,3IRUVRFLHW\,3IRUFXVWRPHUSDUWQHU+LWDFKL

business. As a “control tower” for reviewing and implementing new IP activities based on the,QWHUQDWLRQDO *RYHUQPHQW
aJHQF\

6WDQGDUG
8QLYHUVLW\L]DWLRQ・・・

To develop globally minded IP human capital, since fiscal 1964 the Intellectual Property Divisionof Hitachi, Ltd. has operated an international job training system, sending trainees to IP law firms
and Group companies in Europe and the United States to study abroad. In fiscal 2018, one
employee went to the United Kingdom and one to Singapore for business training, while one
employee was sent to Hong Kong in China to study.
Hitachi protects innovations generated from R&D activities under this framework. Specifically,
we increased our patent application ratio outside Japan from 47% in fiscal 2009 to 58% in fiscal
2018. We will make further efforts to increase the number of solution patent applications in the
United States and China during the 2021 Mid-term Management Plan, aiming to become one of
the top patent holders in terms of quality and quantity in the field of social innovation. Goingforward, we will continue to efficiently build and maintain our global patent portfolio.
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Innovation Management

Reward System for Employee Inventions

Frameworks and Systems

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, as well as opinions on the reward system.
We have established a special division within the Intellectual Property Division to plan andoperate 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. The system includes an invention information channel to promote
communication between inventors and the business divisions implementing the resulting patents.
Inventors can ask the business divisions for information about patent implementation and checkthe evaluation standards used to calculate the rewards for their inventions. To ensure transparency
and inventor satisfaction, we also set up an Arbitration Committee for Invention Rewards,
composed similarly to the Invention Management Committee. Inventors can appeal to thiscommittee if they disagree with the amount they have been awarded.
From fiscal 2005, we have given President’s Awards to the top 100 inventors. Since fiscal
2006, we have also given awards to the top 50 young inventors (under 35 years old) based on
patent application rewards received within five years of their joining Hitachi.

Achievements Through IP Activities

Objectives, Activities, and Achievements

Our active promotion of IP activities, including efforts to formulate an IP Master Plan and plan
IP activities for collaborative creation with customers, have been highly acclaimed by externalorganizations. In recognition of these efforts, Clarivate Analytics included Hitachi in its Top 100
Global Innovators for the eighth consecutive year, and the Japan Institute of Invention andInnovation presented Hitachi with the 2019 Imperial Invention Prize for our design of the Class
800 high-speed train for the UK. This is the third consecutive year that we have received highhonors from the National Commendation for Invention, a prestigious Japanese award forinvention established in 1919, and the first time that the Imperial Invention Prize, the highest
prize offered by the National Commendation for Invention, has been awarded in recognition ofoutstanding design. Hitachi, Ltd. has been honored by the organization eight times in total,
more than any other recipient.
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Human Capital
Hitachi’s Approach

2021 HR StrategyThe source of sustained growth in the global and digital era is diverse
talent to engender innovation and create new value. We at Hitachi seek toattract, develop, and organize our employees by building good relations
with them, respecting their fundamental rights, providing equal opportunities,
ensuring occupational health and safety, and optimizing the work-lifebalance. We also actively engage in dialogue regarding compensation andcareer development.

With a mission to contribute to business through talent and organization, Hitachi’s human

Policyresources division formulated its 2021 HR Strategy, based on the 2021 Mid-term Management
Plan that was announced in May 2018. The strategy sets out goals for our diverse employees
around the world to grow through their work, to feel proud and happy about working at Hitachi,
to respect diverse values, and to contribute to the creation of safe and vibrant workplaces eachin their own way.
We are working to build a company where talent with diverse cultural backgrounds, experiences,and ideas can play an active role. We are cultivating a common Hitachi Group Identity in all
employees worldwide so they may share the values of Harmony, Sincerity, and Pioneering Spiritthat comprise the Hitachi Founding Spirit, working as One Hitachi across countries, regions, and

Our Impact on Society

divisions to contribute to society. We are visualizing talent and organizational data to achieve

Ratio of male to female employees

analytics featuring HR technology*1 to the accumulated data, and improving the efficiency of

optimized placement, promoting communication and collaboration among employees, applying

82 18
%

to

our operations.
Toward fiscal 2021, we will promote the following enhanced measures around the four key
themes of “Talent,” “Culture,” “Organization,” and “HR Transformation.”%*1 Technology that creates new value by applying big data analytics, AI, and other IT approaches to the domain of human resources.

Our Performance
No. and % of female managers (Hitachi, Ltd.)635 (4.8 )%Hitachi Sustainability Report 201985

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Developing Global Human Capital
Main Enhanced Measures of the 2021 HR Strategy
4 Key Themes of the HR Strategy

Frameworks and Systems

A major component of our strategy for managing global human capital is the Global Human

Main Enhanced Measures Toward FY 2021

Capital Database of full-time, regular Hitachi Group employees. This database enables us toTalentAttract, retain, and develop diverse talent to leadbusiness growth

Develop digital human resources*1
Develop mindset and skills to become global leaders
Promote diversity*2

visualize our worldwide Group human capital and to understand the human resources data in

CultureTransform organizational culture and employee
mindset to encourage proactivity andindividual growth

Build Hitachi culture globally*3
Foster a culture of career ownership

it as a common platform for job evaluations throughout the Group and as a common standard for

Organization
Reform organization and transform employment
policies to adapt to environmental changes; takeaction on organizational reshuffling

Ensure safety, health, and compliance*
Build job-based HR management*5

HR Transformation

Execute HR transformation
Implement HR career development and mindset transformation
Shift to digital HR

*1
*2
*3
*4
*5

macro terms. We have also built a grading system that applies to all managers and higher, using
assessing the value of management duties. In addition, we are implementing a global performance4

Developing Human Capital for Frontline and Digital Operations
Diversity and Inclusion
Solidifying the Hitachi Group Identity
Occupational Health and Safety
Developing Global Human Capitalmanagement system to align business objectives with individual goals and to promote thesustained improvement and growth of both individuals and businesses.
We are also working to develop the human capital to drive global business growth. We
implemented “Hitachi University,” the global common platform for learning opportunities
throughout the Group, where everyone is encouraged to learn for growth. In addition, with an eye
to supporting the recruitment of full-time, regular employees as our operations expand globally,
we have adopted a common recruitment support system worldwide to secure talented humancapital, boost efficiency, and reduce hiring costs.
In addition, as a way of integrating the various existing measures for the management ofDeveloping Global Human Capital

global human capital, we have built a platform containing an array of information about the skills,
career orientations, and other aspects of our human capital. The platform will enhance thevisualization of our organization and human capital, leading to globally optimized placement,

Hitachi’s Approach to Global Human Capital Management Policy

the identification and nurturing of management leaders of the future, and stronger manageremployee communication. This will help us build a human capital management system more

The source of innovation and corporate growth is human capital. In seeking to become a worldaligned with the career and skills development orientation of individual employees.

leader in the Social Innovation Business, we at Hitachi implement a global, Group-wide strategy
for the management of our diverse and highly engaged human capital, encouraging them to work
across countries and regions and companies and maximize both personal and organizational

Ensuring Fair Evaluation and Compensation

Frameworks and Systems

performance. Further growing the Social Innovation Business on a global basis requires an optimized
system for the hiring, promotion, and development of human capital. We thus have globally unified

With the globalization of business, there is an increasing need to establish a fair system ofcriteria for the evaluation of performance and offer a common leadership development program

employee evaluation and compensation on a worldwide basis. Hitachi is building a management

for employees around the world. In 2015 we announced a new theme for our efforts to build

system based on consistent principles across all areas to attract diverse and highly engaged

a corporate culture leading to enhanced global competitiveness that focuses on stirring thehuman capital regardless of nationality. In terms of compensation, for example, we have establishedmindset and heightening awareness of each and every employee.

a Global Compensation Philosophy shared by all Group companies based on the principles of
ensuring market competitiveness, pay for performance, and maintaining transparency.
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Framework for Developing Human Capital for
Frontline and Digital Operations

Frameworks and Systems

We have developed a performance-based compensation system for full-time, regular

Before reorganizing our frontline operations in 2016, we established a committee of officers andemployees that is fair and competitive in the context of the labor market for each national or

business unit managers in 2015 to identify the frontline functions, roles, and human capital to beregion industry. Every year, the individual achievements of all employees are reviewed to set theirstrengthened going forward. Based on these discussions, in 2016 we created a four-phasecompensation, and feedback on their evaluation results is provided to inspire them to develop

Social Innovation Business Front Talent Development Program covering everyone from top leadersand grow even further.

to on-site staff. The program includes many forms of instruction, including action learning, group

We ensure compliance with the laws and regulations of each country and region in which

training, and e-learning. The first two phases for leaders of Hitachi’s collaborative creation business

we operate when determining compensation. Starting pay for new graduates in Japan—who

focus on action learning based on actual projects. Building on these results, the third and fourth

represent about half of all new employees hired each year across the Group’s global operations—

phases offer training for all Hitachi Group employees worldwide.

is roughly 20% higher than the weighted average of Japan’s regional minimum wage.

Aiming to further develop and strengthen our frontline and other personnel engaged digital
operations, in April 2019, we consolidated our various training institutes into the Hitachi Academy,
a new company charged with developing the human capital to drive the digital transformation.

Developing Human Capital for Frontline andDigital OperationsThe academy will establish a new training system for digital operations and implement measures
PolicyIn order to grow the Social Innovation Business, we reorganized our operations in April 2016

incorporating on-the-job training to accelerate the global growth of our Social Innovation Business.
Four-Phase, Social Innovation Business Front Talent Development Program

to enhance frontline functions and accelerate collaborative creation with customers. Frontline
personnel are expected to work closely with customers and draw on Hitachi’s technology andknow-how to develop new services and facilitate their implementation. We have thus bolstered
our efforts to develop the human capital needed to lead the Social Innovation Business asfrontline staff.

I
Leaders of important
projects (40 employees)

IICore human capital(I + II =120 employees)

III
Frontline generalmanagers or above(1,000 employees)

IV
All frontline personnel(42,000 employees)

All Group
personnel

Phase III
Since Oct 2016
Practical training using
actual projects

Phase IV
Since Oct 2016
Building foundations andraising overall standards

Enhancing all employees’
understanding of
the Social Innovation
Business

While many companies understand the need for a digital transformation involving digitaltechnologies like AI and IoT and the utilization of big data, there is a global shortage of data
scientists with specialist knowledge of data analysis. So in addition to offering digital solutions by
combining our operational technology (OT) and IT—the core strength of our Social Innovation
Business—we have also launched an initiative to develop the human capital needed to drive sucha digital transformation. We have set a goal of bolstering our Group-wide, worldwide force ofPhases I and II
Mar–Sept 2016
Development of leaders ofcollaborative creation businessdata scientists to 3,000 by fiscal 2021 to strengthen our support for customers and to advancethe global expansion of our digital solutions business.

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Future Activities in Developing Human Capital for
Objectives, Activities, and Achievements
Frontline and Digital Operations
Since the fiscal 2016 launch of the Social Innovation Business Front Talent Development Program,

We also held the Global Leadership Acceleration Program for Managers (GAP-M) andsome 1,300 employees have undergone group training in the three years up to fiscal 2018.

the Ready to Lead (R2L), the standard leadership training courses for general managers andAn additional 42,000 employees have taken e-learning courses that summarize the basic

new managers that started in fiscal 2014. In fiscal 2018, around 3,100 people worldwide took

concepts of the Social Innovation Business. The content of the training provided in phases III andpart in these courses across our Group. As a result, the total number of participants has

IV will henceforth be used to give all human capital in digital operations a common, basic grounding

exceeded 17,000.

in the Social Innovation Business. Some e-learning courses will be translated into English andChinese and broadly made available at Group companies worldwide.

In fiscal 2019, we plan to launch the Global Group Executive Development Course (Global
GEC) for new leaders of Hitachi subsidiaries outside Japan. This e-learning course fosters a basic
understanding of Hitachi’s management and provides the latest information on relevant topics.
We will continue to cultivate global leaders to guide Hitachi’s business by strengthening and

Globalizing Management TrainingObjectives, Activities, and Achievements

Along with the rollout of global human capital management, we are also globalizing our programs
to develop management-level human capital.
We began to thoroughly revise our training of management candidates in fiscal 2015,
implementing the Global Leadership Acceleration Program for Key Positions (GAP-K) to accelerate

expanding training programs for management personnel.
Number of Participants of Global Management Training Programs(people)
4,500
4,000
3,500

their development. GAP-K helps participants to look at themselves objectively through three

3,000

modules and to gain a deeper understanding of the Hitachi Group Identity and their own role in

2,000

maintaining it. They commit themselves to vigorously and fully resolving business issues andchallenges with a sense of mission and purpose, share values and goal-oriented thinking while
inspiring others, and declare, in their own words, how they will put their skills into practice.

3,362

3,530

3,821

3,844

2017

2018

2,496

2,500
1,500
1,000
500
0

2014

2015

2016

(FY)

Participants also discuss strategies for global business expansion, with special reference toemerging markets, and explore how these strategies can be applied to Hitachi’s existing
businesses and further growth. In fiscal 2018, 31 people were selected to participate in GAP-K
over a three-month period in Japan and India.
Additionally, Hitachi has held the Global Advanced Program for Leadership Development(GAP-L) in Singapore every year since fiscal 2012. The program mainly targets local humancapital with potential for leadership at the respective overseas subsidiaries. It is aimed at fostering
a deeper understanding of the Hitachi Group’s global growth and developing the leadership,
thinking, and skills needed for such growth. In fiscal 2018, GAP-L was expanded into a biannual
program, and 52 leaders from around the world took part.
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Average Amount Invested in
Education per EmployeeObjectives, Activities, and Achievements

Hitachi’s Approach to Career Development SupportPolicyIn fiscal 2018 the average amount invested for employee education by Hitachi, Ltd. and 13 major

There are differences among individual employees with regard to what they find fulfilling in theirGroup companies in Japan was 127,800 yen per employee, an increase of about 8% overlives and careers. Bearing this in mind, Hitachi has developed a broad range of career development

fiscal 2017.

support that focuses on employees’ “internal careers,” namely, their individual values and viewson the significance and meaning of their work. In addition to ensuring that these individuals canfulfill their potential and maximize their creativity, our aim is also to link that individual growth toProviding Younger Employees with
Overseas Experiencethe positive outcomes and growth of the organization, thereby enhancing our corporate value.
Objectives, Activities, and Achievements

Along with promoting self-understanding and fostering strong individuals with the independence
and autonomy to think and act for themselves, we are also providing support to create a

Hitachi maintains a broad array of programs to systematically cultivate and secure people whoframework that will capitalize on the engagement and motivation of individual employees and to

can succeed in global business. To develop the careers of people capable of understanding andenhance mutual understanding as a way of fostering the teamwork needed to enhance

adapting to local cultures and lifestyles, we offer a program enabling younger employees to liveorganizational strength and performance.

outside Japan. We have dispatched around 5,000 Group employees over eight years beginningIn pursuit of becoming a major global player, we are upgrading individual and organizationalin fiscal 2011, allowing them to take part in more than 80 programs designed to promote

performance as one of our top priorities. We respect employees’ individuality and personalunderstanding of other cultures and to engage in language studies, local field studies, andaspirations in promoting career development and implement Hitachi’s Global Performanceinternships, as well as to provide opportunities to work with local people to resolve social issues.

Management (GPM) grounded in diversity and the individual. We are also committed to supporting

In fiscal 2015, we shifted our focus to a practical, work-related model of overseas postings

career development by fostering communication and mutual understanding between employees

instead of the former emphasis on language learning and cross-cultural activities. And in fiscal

and their organizations based on programs encouraging individual employees to take greater

2019, we moved to encouraging employees to engage in opportunities for leadership training tocontrol of developing their own careers. In these ways, we provide the resources and tools that

accelerate the development of employees ready to take on global challenges.

enable a wide range of people to work together with enthusiasm.

Skills Development of Chinese Employees

Objectives, Activities, and Achievements

The Hitachi Group in China is working to improve the expertise and overall skills of local employees

Career Development Management

Frameworks and Systems

through the Hitachi University curriculum, on-the-job training, and e-learning. The content andtiming of the training program is determined scientifically in accordance with employee workplace

For Hitachi, the center of career development is the work that employees perform daily in theand job classification. In addition to these programs, in fiscal 2018, the Hitachi Group conducted

workplace. Based on GPM, we implement a cycle aimed at the growth of each employee through60 group training sessions in China to improve and develop the skills of its employees; overa process in which goals for daily tasks are set and then pursued, followed by the evaluation of

1,000 people participated in these sessions.

the results to formulate the next objectives. Every fiscal year we also conduct “performanceplanning,” in which individual employees work with supervisor guidance and support, consultingwith their supervisors to reach a consensus regarding short-term objectives. These consultations
include discussions about past work and evaluations of the content of the work performed to
Hitachi Sustainability Report 201989

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capitaldate and the degree to which employee goals were met, followed by the setting of goals for

In addition to those programs, Hitachi also offers programs targeting specific age groups,

the next fiscal year. Repeating the GPM cycle improves individual performance and further

such as career education for younger employees and training for middle-aged or older employees

increases motivation and creativity, spurring individual growth and improving organizational

to help them prepare for the changes ahead in their careers. Regarding training for employees

results. Along with GPM, employees also take part in career consultations with their superiors

aged 50 and over, a survey conducted between October 2017 and March 2019 found that 90%

to discuss their medium- and long-term career plans regarding such matters as requests forof participants felt that the training had been beneficial. One respondent noted, “I was able totransfers or overseas postings.

grasp my current situation and look at myself with fresh eyes,” while others said, “It was a good

In addition, Hitachi administers the Career Counseling Center as part of career development
support, in order to provide employees with professional counseling services to help them proactively

opportunity to rethink my attitude toward work and financial planning” and “I would like to makethe most of and nurture my career and strengths.”

address concerns related to such issues as their jobs, career plans, or personal relations.

Conducting Career Development
Workshops

“Make a Difference!” Project
Objectives, Activities, and Achievements

Objectives, Activities, and Achievements

Hitachi believes that raising awareness of each and every employee holds the key to achieving
the corporate reforms needed today to remain strong 10 years from now. We thus launched a

Along with our workplace career development, we also provide direct support for individual

three-year “Make a Difference!” project in fiscal 2015 involving all Group employee to cultivate an

career development through our career development programs. Our key program is the Hitachi“I will” mindset in line with the 2018 Mid-term Management Plan. In fiscal 2015, the first year of

Career Development Workshop (H-CDW), launched in fiscal 2002 as a Group-wide initiative inthe project, we organized a contest for new business and internal-reform ideas with the aim ofJapan. Around 12,600 people have participated in the program so far (as of March 31, 2019),

encouraging employees to think and act independently. More than 600 entries were submittedwith a focus on technicians, managers, and researchers in their 30s. Participants use self-analysis

from around the world. In fiscal 2016, the second year, the contest evolved into one of proposing

to deepen their self-understanding with an emphasis on their “internal careers,” affirming theirbusiness plans, as many expressed a desire to actually implement their ideas. We believe thiscareer direction, goals, and paths so that they can direct the development of their own careerhelps employees gain new insights as they put their ideas into action, and the experience can beand skills. H-CDW has gained recognition as a high-quality program for in-house careeran opportunity to think on one’s own, make decisions, and see a project through to completion.

development that has built up research and improvements during a period of over 40 years.

Even those applications that did not pass the screening stage were given feedback on how they

According to the survey conducted of the participants for fiscal 2018, about 90% of theanswers agreed that “H-CDW has been helpful to my career development and work.” Specificcould be improved to encourage further growth in the applicant.
We received numerous applications from within and outside Japan during the three-year

responses received include “Reflecting on my inner career reaffirmed my view of career development

project, including proposals from teams spanning business units and divisions. Some(working life) and the meaning of the work I do,” “I learned more about myself and began toaward-winning projects have actually been adopted as in-house pilot programs. Examples

seriously think about where I want to be 5 or 10 years from now,” “I gained a renewed awarenessinclude Mobile Subscriber Analytics, a cellphone analytics program that can help carriers acquireof the importance of my position and responsibilities,” and “I was able to make concrete plansor retain customers; and MyLifePal, a healthcare app that not only manages sleep and diet data

for my future steps.”

but can also measure pulse and stress level by analyzing facial images.

Hitachi Sustainability Report 201990

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human CapitalIn fiscal 2019, we launched “Make a Difference! 2.0” in line with the 2021 Mid-term Management

Survey results are sent directly to immediate section and department heads so that they canPlan that retains the focus on cultivating an “I will” mindset and the framework of the business

confirm the survey results and communicate with team members. This can lead to concrete

plan contest while seeking to expand the number of participants who have a strong desire to rise

initiatives through the PDCA cycle, further enhancing the level of engagement within Hitachi as

to stimulating challenges.

a whole.

Number of Applications for the “Make a Difference!” Contest*1 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 bring about results.

FY 2015(idea contest)

FY 2016(business plan contest)

FY 2017(business plan contest)

FY 2019(business plan contest)

Japan

556

315

251

566

Outside Japan

77

49

115

175

Total

633

364

366

741

Statement on Diversity and InclusionNote: The contest was not held in fiscal 2018 while the project was under review. It was resumed in fiscal 2019.

Conducting a Global Employee Survey

Diversity and Inclusion
PolicyDiversity and Inclusion Open Our Future
Frameworks and Systems

Diversity is the wellspring of our innovation and our growth engine. Hitachi regards personal
differences such as—gender, nationality, race, religion, background, age, and sexual orientation—

Since fiscal 2013, we have been conducting the annual global employee survey, Hitachi Insights, as

as well as other differences, as facets of people’s individuality. By respecting our employees’

a way of measuring employee engagement.*1 In September 2018, the survey was administeredindividualities and positioning them as an advantage, Hitachi frames its diversity and inclusion

for the sixth time. Around 210,000 employees worldwide were sent the survey in one of 14 different

as conducive to both the individual’s and the company’s sustainable growth. With a diverse

languages, and roughly 180,000 responses were received.

workforce, strong teamwork and broad experience in the global market, we will meet our

According to the aggregate results, the overall rating has improved for the fifth consecutive

customers’ needs.

year. Scores were particularly high for “pride in your company,” “delegation of authority,” and“management of supervisors,” suggesting that employees are proud to be part of a company
that is aiming to digitally transform the social and business infrastructure and advance the Social
Innovation Business to become a global leader. On the other hand, scores for “resources andsupport” remained low from fiscal 2017, although there was a slight improvement. We willcontinue to address this issue through work-life reforms, introduction of new tools, and deepeningof communication with employees.

Hitachi Sustainability Report 201991

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Diversity Management Initiative:“Diversity for the Next 100”
Roadmap for Developing Diversity Management

PolicySince the 1990s, we have been at the social forefront, supporting women and other members of
our multifaceted workforce. This includes setting up systems to help balance work with child andnursing care. Entering Phase 3 of our diversity management roadmap, we are embracing diversity

Phase 3:Phase 2:

Diversity promoted asa management strategy

as a management strategy under the initiative slogan “Diversity for the Next 100.” This means

2012

skills in leadership and business management. From fiscal 2018, we began working to more

“Diversity for the Next 100”
launched

effectively share our diversity promotion policies across the entire Hitachi Group, with employees

creating an environment where women and other members of our varied workforce can use their

From “women” to “diversity”

Phase 1:

Support for women’s
career advancement

2009

around the world coming together as one to accelerate the initiative.

Diversity & Inclusion
Development
Center set up

2000

2006

FF Plan*1

Diversity Promotion
Project
FF Plan II

Support balance between workand nursing care, etc.
Strengthen senior management
commitment
Accelerate promotion
throughout Group, including
outside Japan

Enhance Hitachi Group
partnerships

Promote timeand location-freework

Reduce overtime; review
workstyles

Development Structure of Diversity Management

Frameworks and Systems

The Diversity Development Project, launched in fiscal 2006 under the president’s direct control,
was replaced in fiscal 2009 with the Diversity & Inclusion Development Center, which currently
operates under the direct supervision of the Human Capital Group of Hitachi, Ltd.
Hitachi, Ltd. and 15 Group companies jointly operate the Advisory Committee and theDiversity Development Council to accelerate awareness across Hitachi as a whole, including
support for diverse human resources and work-life management. The Advisory Committee
ensures follow-through on our diversity management policy, while the Diversity Development

Promote diversity awareness; reform work environment

Council discusses specific activities and shares best practices. Both meet every six months.
Group companies and business groups/sites have also set up their own diversity-promotion

Strengthen women’s careerdevelopment

Support work-life balance; support women’s career advancement

organizations and projects, such as those to help develop women’s careers, in order to enhance
initiatives geared to the challenges faced by individual workplaces.

Introduce, expand support systems for work-life management

Alongside diversity management promotion within each Group company according to its
individual challenges and circumstances, we are also accelerating Group-wide global initiatives
1990

2000

2006

2009

2012

2018

*1 The Gender-Free and Family-Friendly (FF) Plan is an initiative to create a better work environment by supporting efforts to balance work andfamily life and supporting women in the workplace.

such as the Global Women’s Summit.
We also hold regular meetings to exchange opinions on diversity with labor unions.

Hitachi Sustainability Report 201992

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Expanding the Scope of Diversity Management

Hitachi Group Diversity Structure

Gender, etc.

Hitachi, Ltd. President

Men and women, family composition,
marital status

Nationality, etc.

Age
Senior, middle-aged, young

Nationality, race, ethnicity,
language

Widening Scope ofDiversity
Disabilities

LGBT

Physical, intellectual,mental disability

Lesbian, gay, bisexual,
transgender status

Advisors: External directors

Advisory Committee:
Chief Human Resource Officer (CHRO)
Executive officers and general managers in chargeof personnel affairs and labor administration inGroup companies
General managers in charge of personnel affairs andlabor administration in business units

Hitachi Group Diversity Development Council
Step 1

Integration

Step 2

Legal Compliance

Step 3

Respect for Diversity

Step 4Competitive Advantage
Diversity promoted as management strategy

Section managers in charge of personnel affairs
and labor administration in Group companies,business units, and business groups/sites

Minorities integrated into existingorganizational culture, systems,
methods, customs

Discrimination banned through force oflaw (Japan’s Equal Employment
Opportunity Act)

Organizations and projects at
companies and businessgroups/sites to advance diversity(including issues related to
women in workplace)

Diversity & Inclusion
Development Center(dedicated organization)
Human Capital Group* Participating enterprises(15 companies as of March 2019):
Hitachi Metals, Hitachi Chemical,
Hitachi Capital, Hitachi
Construction Machinery, Hitachi
High-Technologies, Hitachi
Transport System, Hitachi Urban
Investment, Hitachi Appliances,
Hitachi Automotive Systems,
Hitachi Consumer Marketing,
Hitachi Industrial Equipment
Systems, Hitachi Systems, Hitachi
Solutions, Hitachi Insurance
Services, Hitachi Life

Around50 projects

Companies, organizations educate
staff about discrimination so differences
are actively embraced, respected

Evolution from respect for differences
to organizational reform as part ofstrategy to forge varied strengths into
competitive advantage

KPIs to Develop Women’s Careers

Objectives, Activities, and Achievements

Hitachi, Ltd. has created two key performance indicators (KPIs) to enable as many female
Deepening Diversity Management

employees as possible to take up leadership positions and to participate in management
decision making.
In fiscal 2013, Hitachi set a goal of promoting women to executive positions by fiscal 2015.
In April 2015, the company appointed its first female corporate officer, a position equivalent to the
executive level. We will continue to promote this goal to ensure that diverse views and values will
be reflected in our management. In fiscal 2017, we publicly announced our commitment toincreasing the rate of female executive and corporate officers to 10% by fiscal 2020.*1 We arealso working to promote more female employees to managerial positions, aiming to double the
Hitachi Sustainability Report 201993

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

number of female managers to 800 by fiscal 2020 compared with fiscal 2012. These efforts

Number and Ratio of Female Managers

demonstrate our commitment both internally and to the world to further advance women in the(people)workplace and improve our diversity management.

(people)

3,727

3,670

800

3,365

In addition to reinforcing existing programs, we will use the Hitachi Group Women’s Career
6.0%

600

Success Survey to highlight progress with initiatives and outstanding issues in each business

434

division and to set numerical targets for each division, strengthening our management commitment.

400

3.7%

We will also boost women’s individual ambitions and morale through programs such as the
200

Hitachi Group Women Leaders’ Meeting, which targets female employees at the supervisorylevel and above, and the Roundtable Conference with Female Outside Directors. We intend to0

create an environment where as many women as possible are able to optimize their potential inwith the aim of transforming our corporate culture.
Employee compensation is set according to each individual’s roles and achievements, with nodivisions or differences based on gender or age.

4.0%

3,459

4,000

6.8%

6.4%

509 6.3%
4.1%

3,638
635

3,000

4.8%

4.2%

2,000
1,000

73
2000

2014

2015

2016

2017

0

2018 (FY)

Female managers, Hitachi, Ltd.* (left scale)
Female managers, Hitachi Group* (right scale)
Percentage of total, Hitachi, Ltd.*1
Percentage of total, Hitachi Group*2
1

management positions. Alongside these efforts, we are working to change the mindset ofmanagers and male staff regarding gender parity and examining our working style as a whole

6.4%
474

577

2

Note: Figures include section managers and above.
*1 Since fiscal 2017, “Female managers” has included managerial employees dispatched from Hitachi, Ltd. to other companies and those
accepted from other companies by Hitachi, Ltd. Earlier figures include regular managerial employees dispatched to other companies but exclude
those accepted from other companies.
*2 All full-time, regular female managers excluding those dispatched to non-Group companies.

*1 As another goal, Hitachi aims to achieve a 10% ratio of non-Japanese executive and corporate officers by fiscal 2020.

Ratios for Female and Non-Japanese Executive and Corporate Officers (Hitachi, Ltd.)
Goals for Hitachi, Ltd. (KPIs)

June 2017

Achieve a 10% ratio of both female and non-Japanese executive officers and corporate officers by fiscal 2020

Number of female executive and corporate officers(new goal established in fiscal 2017).

Ratio of female executive and corporate officers

Increase the number of female managers in Japan to 800 by fiscal 2020 (twice the number at the end of fiscal
2012; goal revised in fiscal 2017).

Hitachi’s Diversity Goals

June 2018

Number of non-Japanese executive and corporate officers
Ratio of non-Japanese executive and corporate officers

June 2019

2

2

4

2.4%

2.6%

5.0%

3

5

7

3.7%

6.4%

8.8%

Ratios for Male/Female and Japanese/Non-Japanese Directors (Hitachi, Ltd.)(as of June 2019)
Item
Directors

Total
NumberRatio (%)

Male
11

FemaleJapanese

Non-Japanese

9

2

7

4

81.8

18.2

63.6

36.4

Hitachi Sustainability Report 201994

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Basic Salary and Total Individual Compensation for Female and Male Managers at
Hitachi, Ltd. (Fiscal 2018)
Basic Salary

Total Individual Compensation

100 : 103

100 : 105

Note: Benefits for men and women are identical. Differences between male and female salary and compensation are due to age distribution,
grade distribution, etc.

Global Women’s Summit

previously served as president of a Group company in the United Kingdom and has since
become an executive officer at Hitachi, Ltd. as well. Our railway business is a crucial one, driving
Hitachi’s growth, and we have grown it steadily through M&A and other strategic activities.

Global Recruiting and Globalizing
Human Capital

Objectives, Activities, and Achievements

Objectives, Activities, and Achievements

As a means of developing markets worldwide, we have been accelerating the globalization of
In October 2018, we hosted our third Global Women’s Summit with the theme “Leading Throughhuman capital in Japan through three initiatives: (1) recruiting “global business personnel” who

Diversity & Inclusion.” Held in Singapore, the event was attended by around 170 female employees

can promote global operations, (2) providing younger Japanese employees with experiencefrom Group companies in 17 countries and regions around the world, from junior staff to executives,

outside Japan, and (3) providing globally unified management training.

and featured a keynote speech by an external speaker and messages from President and CEO

Given the globalization of our business, our hiring activities are designed to secure the rightToshiaki Higashihara and outside director Cynthia Carroll. There was also a lively exchange of

personnel. In principle, we categorize all employees graduating from universities and technicalopinions at a panel discussion among female leaders from the Hitachi Group, and three different

colleges as global business personnel who can contribute to driving our global operations. Our

workshops on unconscious bias, career development, and leadership. A subsequent networking

priority in employing such personnel is to attract those who are eager to build their foreign language

reception gave the participants an opportunity to share stories about their careers and the challenges

skills and relish the challenge of working in different cultures, social settings, and work environments.

at their workplace and deepen mutual relationships. At this Global Women’s Summit, not only did
the participants realize a range of challenges, but they also gained a better understanding of the
Hitachi Group’s firm commitment to diversity and inclusion initiatives and of diversity managementby the executives. The next summit, the fourth, is scheduled to be held in Tokyo in fiscal 2019.

Expanding Hiring of People
with Disabilities

Objectives, Activities, and Achievements

Hitachi, Ltd. and Group companies in Japan have worked hard to employ people with disabilities,

Recruiting Local Human Capital for
Senior Management Positionssuch as by holding a special hiring fair and study meetings for Group companies to share
Objectives, Activities, and Achievements

information. We have also worked to expand the range of employment opportunities for people
with disabilities, coordinating with special subsidiaries to develop new positions for such individuals

The railway business is an important business field for which growth is expected in overseas

in IT—specifically, robot process automation (RPA). As a result, as of June 2019 the employment

markets, particularly Europe and Asia. To further solidify our position in this industry, we shifted

ratio of people with disabilities was 2.26%

the primary site of our railway business to London in 2014 and built a global operations framework

Japan. Both of these figures exceed Japan’s legally required employment rate of 2.2%. We will

managed by Hitachi, Ltd. and several other Group companies, with 40% of senior management

maintain our Group-wide drive to hire more people with disabilities.

positions held by European personnel. The CEO of global operations is a London local who*1 Includes two special subsidiaries and 17 related Group companies.

at Hitachi, Ltd.*1 and 2.33% for the entire Group in

Hitachi Sustainability Report 201995

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Work-Life Management
Hitachi’s Work-Life Management ApproachThe aim of Diversity & Inclusion is to maximize our employees’ performance, and to enhance our

Employment of People with Disabilities and Employment Ratio (Hitachi, Ltd.*1)

organizational capabilities as well as to create new synergies, thereby improving productivity andLegally required employment rate*2

2.23(people)
2,000

2.08

2.11

1,600
1,200

1.85

1,332

1,370.5

2.15

1,848

expanding our business. It is necessary to have a comfortable working environment that embraces

2.26

flexible and diverse workstyles, allowing our diverse workforce to perform at their best.

(%)

1,899

1,437

2.2

Hitachi has built on its work-life balance initiative, which promoted a balanced lifestyle, and2.1

now promotes work-life management, which encourages employees to proactively take charge

2.0

of improving the quality of both their work and private lives. We believe that practicing work-life

981
800

1.9

400

1.8

0

2000

2015

2016

2017

2018

2019

Policymanagement will enrich employees’ work and private lives, enhance professionalism and build
personal character, resulting in both individual and organizational growth over the long term.

(FY) 0

Improve productivity and expand business

Employment of people with disabilities (left scale)
Employment ratio (right scale)*1 Includes special subsidiaries and related Group companies. (Two special subsidiaries and 17 related Group companies in fiscal 2019.)*2 The legally required employment rate was 1.8% up to fiscal 2012, 2.0% between fiscal 2013 and 2017, and became 2.2% in fiscal 2018.
Notes:• Data compiled in June 1 of each fiscal year.
• The employment ratio is calculated according to methods prescribed in the relevant laws.

B-BBEE Initiatives in South Africa

Fulfill potential to contribute to businessCompany

Enable diverse ways of working (employee-friendly workplaces)

Employees

PolicyHitachi’s Work-Life Reform Approach

PolicyAs Hitachi expands its business in South Africa, it pursues activities aligned with the country’s
Broad-Based Black Economic Empowerment (B-BBEE)*1 policies to create employment andIn December 2016, Hitachi, Ltd. launched a companywide work-life reform initiative, “Hitachi

economic development. As of the end of fiscal 2018, Hitachi Vantara has achieved a B-BBEEWork Life Innovation,” to promote workstyles allowing talent from diverse backgrounds to work

rating of level 4, while Hitachi Construction Machinery Southern Africa has reached level 8.

with enthusiasm and demonstrate strong performance.

*1 B-BBEE: Companies and organizations in South Africa are scored on their B-BBEE initiatives and contributions and rated on a scale from level
1 (highest) to 8 or as being “non-compliant.”

Hitachi seeks to expand its Social Innovation Business, which aims to resolve its customers’
and society’s increasingly diverse and complex challenges, and to improve people’s quality of life
on a global scale. In order to realize this, we need to have talented, active human capital withdiverse values.
Hitachi Sustainability Report 201996

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Work-Life Reform Initiatives
With the decline in the working-age population due to low birthrates and aging, as well as
workers’ diversifying needs, work-life reform is a pressing issue across all of Japan. We too are

Objectives, Activities, and Achievements

Hitachi, Ltd. is currently addressing work-life reform in three areas: improving work processes,
augmenting management, and promoting time- and location-independent work practices.
Regarding improving work processes, the Meeting/Reporting Innovation Subcommittee

striving to realize our vision of Hitachi’s future by promoting work-life reform.

has reduced meeting time by about 60% by cutting down on the number and duration ofregular meetings attended by business units and general meetings. It has also begun using

Framework for Work-Life Reform

Frameworks and Systems

a support tool designed to improve meeting efficiency and optimize meeting durations andnumbers of participants.

Under the Hitachi Work Life Innovation initiative, labor and management at Hitachi, Ltd. work

On augmenting management, the company is increasing operational transparency using

together to realize work-life reform. In the 2018 spring labor-management negotiations, it was

in-house consultants and an experience-oriented approach to discover issues. Countermeasures

decided to promote time- and location-independent working practices, and we are moving forward

are taken and results are being produced. In fiscal 2017, the experience-oriented approach was

creating systems and working environments in which employees can continue producing results

applied to about 80 teams prone to excessive working hours, resulting not only in fewer

while maintaining work-life balance.

overtime hours but also improvements in such areas as collaboration among team members

In order to put work-life reform into practice, it was determined that reform of administrative

and work instructions from team leaders to staff. In fiscal 2018, the initiative was scaled up to

operations at the company’s headquarters was necessary. Based on requests from business

about 260 teams. The company is also improving its attendance management system forunits and departments and other considerations, Hitachi created three subcommittees to review

compliance enforcement.

both its headquarters’ business operations and processes that affect the whole company: theAs for promoting time- and location-independent work practices, the company is promoting

Budget Innovation Subcommittee, the Internal Audit Innovation Subcommittee, and the Meeting/use of its telecommuting program and has distributed around 30,000 IT tools such as headsets,

Reporting Innovation Subcommittee.

mic speakers, and LCD monitors to create environments where the in-house wireless local area

In 1999, Hitachi implemented telecommuting and satellite office work programs. Today, 70%

network (LAN) can be accessed safely, as well as holding paperless and online meetings. Sinceof all full-time, regular employees are covered, including managerial-level employees, flex workers,

2016, we have been expanding the number of our satellite offices, and as of March 31, 2019, weand career-track employees who need to balance work with child care or nursing care.

have 49 business sites used by more than 50,000 people from across the Group each month.

The programs do not require the applicants to come into the office for a certain amount of time,

Additionally, in July 2018, some 2,750 employees participated in Telework Days 2018, a

nor are there any limitations on the number of times for doing so, allowing employees to work

national event sponsored by the Ministry of Internal Affairs and Communications to promote

from wherever they need to be for child care, nursing care; or, if posted away from their families,

work-life reform.

they can work from their family home. We are also rolling out location-free work for managerial-level
employees, allowing them to perform their duties from anywhere when approved by the company.
Security environments equivalent to the company’s are being prepared at multiple business sites
in the Tokyo metropolitan area as we expand our satellite office facilities for the use of business
units, departments, and Group companies.

Hitachi Sustainability Report 201997

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Work-Life Innovation Initiatives at Hitachi, Ltd.
Items

Work-Life Management Support System at Hitachi, Ltd.

Key components

Top commitment

Send top commitment message within company

Improving work processes

Reform headquarters’ administrative operations
Impose restricted-hour rules for outgoing emails

Augmenting management

Increase operational transparency using in-house consultants(experience-oriented approach)
Improve attendance management system for compliance enforcement

Promoting time- and location-independent
work practices

Expand telecommuting program to allow locations where employees need to be forchild care, nursing care, etc., as well as their homes
Roll out location-independent work for managerial-level employees
Expand satellite offices (49 sites as of March 2019, with over 50,000 monthly users
across the entire Hitachi Group)
2,750 people participating in Telework Days

Companywide promotion

Child-Care Support System
For women

Put up posters, create intranet site
Share best practices by giving awards

Enhancing Work-Life Management
Support Systems

Pregnancy

Since the 1990s, Hitachi, Ltd. has been introducing and expanding an array of programs to
support work-life balance, striving to create a more friendly working environment.
Following the introduction of our Allowance for Balancing Child Care and Work in fiscal 2016,
in fiscal 2018, we launched “Hokatsu Concierge,” the information-providing service supporting
the search for a nursery. With the rise in nursery schools’ waiting lists being a social issue, by

For menFertility treatment leave (1 year total)

Nursingcare leave

Nursing-care leave(up to 1 year;
can be taken on
nonconsecutive days)

Return towork

Shorter working
hours
Work from home
Nursing-care leave(5 days per year)
Family-nursing leave
Child-nursing leave
Half-day leave(unlimited)
Points for Balancing
Nursing Care andWork (1,000 points[100,000 yen] perperson receiving careper year)

Leave for prenatal medical
appointments, pregnancy
problem leave, etc.

Childbirth

Frameworks and Systems

Nursing-Care Support System

Child-careleave

Return towork

Maternity leave (8 weeks
before and 8 weeks afterchildbirth)Paternity leave(5 days total)

Child-care leave (up to 3 years, until the child completes
the first grade of elementary school; can be taken on
nonconsecutive days)

Shorter working hours (generally 6, 6.5, or 7 hours)
Work from home (career-track employees)
Family-nursing leave (5 days per year), child-nursing leave(5 days per child per year)
Half-day leave (unlimited), leave for overseas spousetransfers (3 years or less)
Allowance for Balancing Child Care and Work
(up to 100,000 yen per year per child)providing this kind of support, the aim is to smooth the path for employees return from maternity
and parental leave and create an environment where work and parenting can be balanced with

Cafeteria Plan*1 (child-care and nursing-care menu)

peace of mind.
Additionally, with Japan’s society continuing to age, it is expected that more employees will be
involved in caring for their elderly family members. We have, therefore, declared the years fromfiscal 2018 to fiscal 2020 a period to focus on reinforcement of work and nursing care balance*1 Flextime and discretionary labor systems are also available. The Cafeteria Plan is a system in which employees can select the support that theyneed, when they need it, according to their “Cafeteria Points.”

support, and are expanding programs. In fiscal 2018, we established a new “Points for Balancing
Nursing Care and Work” system strengthening financial support for employees balancing workwith nursing care. We also conducted awareness surveys and work-life balance seminars toencourage employees to prepare for this issue, emphasizing the importance of balancing workwith nursing care and conveying practical know-how on the topic.
Hitachi Sustainability Report 201998

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Sakura Hiroba (Hitachi Chemical Group)

Return and Retention Rates After Maternity and Child-Care Leave (Hitachi, Ltd.)FY 2018
94.3

Established

April 2008

Location

2-27-22 Higashi-cho, Hitachi-shi, Ibaraki, Japan(near Yamazaki Division, Hitachi Chemical)

Return rate (%)

Male
Female97.4

Capacity

23 children

Retention rate (%)

Male

90.9

Ages eligible

Female99.4

Children aged several months up to 6 years old (who have not yet
entered elementary school) of Hitachi Chemical Group employees

Operating hours

7:20–20:20

In-House Child-Care CentersFrameworks and Systems

Hitachi, Ltd., in collaboration with its labor union, has set up in-house child-care facilities as a

Support Systems that Meet Diverse
Employee Needs

Frameworks and Systems

way to support employees in balancing work with child care.
To respond to the diverse lifestyles and needs of our employees, Hitachi, Ltd. has provided awide range of support by introducing benefits that include housing support, such as dormitories,
company housing, and a housing allowance system, as well as group insurance, a consolation
Genki Club

“Genki Club” logo.

payment system, internal sales, cultural and physical education activities, and employee cafeterias.
Full-time, regular employees of Hitachi, Ltd. also enjoy an asset-building savings program,

Established

April 2003

Location

292 Yoshida-cho, Totsuka-ku, Yokohama-shi, Kanagawa, Japan(Yokohama Office, Hitachi, Ltd.)

Capacity

Approximately 70 children

Ages eligible

Children aged several months up to 6 years old (who have not yet
entered elementary school) of Hitachi Group employees who live near orcommute to the Totsuka area in Yokohama

lifestyles and needs, from a list of options, such as skills development, child care, nursing care,

Operating hours

7:30–20:00

health promotion, and donations. Employees can use their Cafeteria Points to select the type ofan employee stock ownership program, a Cafeteria Plan program, allowances for balancing workwith child and nursing care, and retirement and pension plans.
The Cafeteria Plan allows employees to select the benefits they receive, depending on individual

support they need when they need it.
For our retirement and pension plans, defined contribution and defined benefit plans havebeen introduced across the Hitachi Group in response to the diversification of lifestyles among
the elderly and the changes in forms of employment.
Enhancing Work-Life Management Support Systems

Excursion (sweet potato digging).

Christmas party.

Hitachi Sustainability Report 201999

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Creating Friendly Working Environments in China Frameworks and Systems
In fiscal 2018, Hitachi (China) supported its employees’ work-life balance with leisure activities
such as outdoor experiences, health seminars, photography contests, and a healthy walking

Hitachi Group Health and Safety Policy“Health and Safety Always Comes First.”

meet. Hitachi (China) has also signed a female employee special protection agreement to protect

Policies

its female employees. The agreement is reviewed every three years to take current circumstances

In accordance with our mission, “Contribute to society through the development of superior, original technology

into account, and has resulted in the enhancement of facilities for women based on the agreement,

and products,” the Hitachi Group will endeavor to ensure safe and healthy workplaces under the principle ofsuch as building a milk expression room for lactating female employees. In addition to this, the“Health and Safety Always Comes First.”

company is developing systems such as medical relief grants and compassion fund to help

To accomplish this, we will:

employees facing difficulties.

1. Continually be involved in health and safety activities in order to prevent work-related injuries and sickness bydesignating the health and safety of employees as management’s top priority.
2. Comply with the local laws and regulations in each company regarding health and safety.

Occupational Health and Safety
Basic Principle for Occupational Health and Safety

3. Develop a safe and comfortable work environment by encouraging employees to maintain their own healthand taking a proactive stance on health and safety activities in the workplace.
4. Require an understanding of Hitachi’s principle and the promotion of health and safety awareness from all
Policybusiness partners of the Hitachi Group.
5. Contribute to the creation of a safe and pleasant society by emphasizing activities that make health and safety

Ensuring the health and safety of all employees is the basic principle underlining the Hitachi

a top priority in all of Hitachi’s business activities.
Revised November 2013

Group Health and Safety Policy, which is shared by all Hitachi Group companies around theworld. Employees work together to create healthy, safe, and secure work environments that aim
to be accident free.

Establishing the Safety Management Division

Frameworks and Systems

In April 2019, aiming to become an organization whose employees spontaneously promote safety
activities with the direct participation of management, Hitachi, Ltd. established the Safety
Management Division, which reports directly to the president on matters of safety management.
This division will hold an annual Safety Strategy Congress, attended by safety officers from eachGroup company and representatives from each division. The congress will set budgets andobjectives for companywide safety strategy and review the structural situation of the HitachiGroup’s safety management systems, making them an opportunity for top management to shareits own commitment to safety as the highest priority. The Safety Strategy Promotion Council,
attended by safety department managers from each business unit and Group company, is held
monthly and examines the promotional frameworks for safety activities and education in eachdivision alongside standards to be shared across the Group.
Hitachi Sustainability Report 2019100

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Safety Management Framework

management-driven and bottom-up initiatives to formulate specific plans, and the progress ofthese plans is monitored by safety officers, who also lead initiatives to prevent recurrence.
Business unit/
Group company

Hitachi, Ltd. headquarters

Business site/Works

Additionally, because the risk of accident is higher for workers not yet accustomed to theirwork or environment, employees and temporary workers receive individual health and safety
training and on-the-job training before work begins, to help prevent accidents by ensuring that

Safety Management Division

they understand work procedures and dangers. At the same time, on occasions of businessrestructuring, we share the details of the health and safety management frameworks andSafety Strategy Congressinitiatives of the organizations to be merged in advance, and, paying all due respect for the safety

Safety officers and representatives attending

cultures on both sides, ensure that safety is always preserved during the execution of a smoothbusiness launch.

Safety Strategy Promotion Council
Safety department managers attending

Sharing and Using Information toPrevent Accidents
Initiatives for Preventing
Work-related Accidents

Frameworks and Systems

Since 2012, the Hitachi Group Health and Safety Portal System has allowed every Hitachi
Frameworks and Systems

Objectives, Activities, and Achievements

Group company in Japan to track the occupational health and safety performance of the entire
Hitachi Group.

Hitachi views occupational health and safety as vital employment conditions for advancing its

When a work-related accident occurs in Japan, depending on its level, the results of analysis

business. Based on the policy above, to prevent work-related accidents among our roughly

on its causes and examples of countermeasures are registered in the system and shared with

300,000 Group employees worldwide, we set and apply our own safety standards to be

the entire Group as part of the knowledge base. Know-how gained in this way is used globally.

observed at manufacturing sites around the globe, where the risks of work-related accidents are

By analyzing from many angles the detailed information about accidents gathered in the system,

high, as well as advancing health and safety measures tailored to the operations of individual

similar accidents can be prevented. In 2014, we also began surveying the number of accidents

companies. In particular, since the establishment in April 2019 of the Safety Management Division,

outside Japan in order to grasp the global situation regarding accidents. We intend to expand

we have worked to improve our safety measures in terms of both policy, by examining andthe use of the Hitachi Group Health and Safety Portal System globally in future.

improving our risk assessment frameworks, and technology, by using IT and digital technology toprevent accidents.
We had already introduced the Hitachi Group Key Safety Management Designation System,
which promotes the improvement of safety measures and reinforcement of safety activities at
Hitachi Group companies and business sites that have experienced serious work-related accidents.
Under the leadership of top executives, these companies and business sites take on both

Since 2018, in order to promote the management-driven reinforcement of Group-wide
occupational health and safety activities, the state of occupational health and safety management
has been reported regularly to the Senior Executive Committee and meetings of business unit
and Group company presidents.
Additionally, the Safety Strategy Congress for safety officers from each Group company andrepresentatives from each division has so far seen around 350 attendees in all. Activity promoters
Hitachi Sustainability Report 2019101

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capitalfrom all areas have shared information and exchanged opinions about policy details, allowing the

Hitachi Group’s Global Safety Figures (Occurrence Rate*1)

congress to serve as a forum for discussion of Group-wide initiatives.

Actions and Achievements

2016

Objectives, Activities, and Achievements

2017

2018

North America

27.65

24.33

Central and South America

2.33

1.62

27.96
0.44

Europe

10.70

10.82

6.08

India

2.07

1.44

1.44

China

1.59

1.53

1.46

In Japan, a health and safety commission—composed of business owners, labor union officials,

Asia (excluding India, China, and Japan)

5.43

4.41

3.34

and employees—is convened at each business site every month to discuss and share information

Oceania

39.07

24.41

21.94

Africa

17.26

9.93

11.76

Overseas total

7.76

7.42

7.43

Japan

1.57

1.85

1.64

Global total

3.95

4.22

4.20

related to such issues as work-related accident cause analysis and countermeasures and healthand safety activities in light of the situation regarding employees who have taken sick leave.
This initiative allowed us to achieve zero fatal work-related accidents worldwide in 2018, but
we have not yet eliminated accidents altogether. Taking an honest view of our present situation,
we are continuously striving to improve our safety management system, making use of external*1 Occurrence rate is the rate of work-related accidents per 1,000 directly contracted employees resulting in fatality or work-time loss of one
day or more.

consultants to bring in objective, third-party perspectives, improving our ability to determine thecause of accidents, and reviewing our risk assessments.

Approach to Improving Employee Health

PolicyOccupational Accident Frequency Rate
2.0

1.66

1.61

1.06

1.06

0.41

0.54

0.27

0.22

2014

2015

1.5

1.63
1.15

1.66

Hitachi believes that health is the foundation for employees being able to work with energy and1.83

peace of mind. The basic principle of the Hitachi Group Health and Safety Policy, shared by all
Group companies globally, is that “Health and Safety Always Comes First.” Based on this principle,

1.20
1.02

we strive as one to create working environments that allow workers to do their jobs without

1.0
0.5
0

All industries

0.51
0.18
2016

Manufacturing industries

0.45

0.58

anxiety over their mental or physical health. In particular, within Japan, we are promoting support

0.20

for identifying employees struggling with physical and mental issues, not just work-related but

0.25
2017

also private, and work with the Health Insurance Society to promote the individual support

2018

Electrical machinery sector

provided to each employee.
Hitachi Group

Notes: O ccupational accidents are defined as those involving fatality or work-time loss of one day or more. Hitachi Group figures for Japan,
including Hitachi, Ltd., are for 251 Group companies in 2014; for 240 Group companies in 2015; for 200 Group companies in 2016; for
201 Group companies in 2017; and for 188 Group companies in 2018.

Hitachi Group Health and Safety Policy

Hitachi Sustainability Report 2019102

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Framework for Promoting Health andProductivity Management

Frameworks and Systems

In Japan, occupational healthcare workers, human resources divisions, and the Health Insurance

Hitachi Work Life Innovation
Diverse individual workstyles will build a creative future

Society work together to promote a range of health support and appropriate health managementin accordance with Japan’s Industrial Safety and Health Act.
In Ibaraki, Tokyo, and Kanagawa Prefectures, where many Hitachi Group business sites areconcentrated, a system of health-management centers has been put in place, staffed withoccupational doctors, nurses, and other occupational healthcare personnel. The center promotes
occupational healthcare activities unified at the regional level. In other location, occupational
doctors and nurses work in cooperation with human resources divisions to maintain and improve

The foundation of work-life balance is healththe health of employees.
Conceptual diagram for “Hitachi Work Life Innovation” activities.

Additionally, Hitachi Group occupational healthcare workers and human resources officers
provide opportunities for the qualitative improvement of occupational healthcare activities and thehuman capital development of occupational healthcare workers at all sites by regularly holding
meetings, study groups, and training sessions to hold debates and report research results on thetheme of maintaining and improving the health of employees.

Initiatives Toward Improving
Employee Health

Objectives, Activities, and Achievements

At each Hitachi Group company in Japan, the health maintenance of employees is supported

Raising Health Awareness in Conjunction with
Work-Life Reform

through the provision of health maintenance measures based on periodic medical exams andFrameworks and Systems

other examinations to prevent serious disease, as well as medical interviews and advice toprevent mental and physical disorders among employees working long hours.

Hitachi is conscious of the importance of employee health and the health of their families as the

We are also taking steps to improve health awareness through consultations and guidancefoundation of employee self-development in both their private and working life. This thinking has

by occupational healthcare workers that can help relieve employees’ health concerns andbeen refined within the concept of our “Hitachi Work Life Innovation” activities so that both theencourage regular exercise.

company and its employees can work to implement work-life management and improve theirproductivity with shared awareness of the importance of health.

In addition, we are proactively implementing the stress checks specified by law at all businesssites in Japan—even those employing fewer than 50 employees, which are only required to makeefforts toward compliance—to promote awareness of stress among all employees. Group analysis
results from these stress checks will also be used by workplace health and safety committee
members, occupational healthcare workers, and human resources divisions to improve work
environments. In combination, these efforts are expected to help prevent mental health issues
and revitalize workplaces.

Hitachi Sustainability Report 2019103

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Initiatives Addressing Mental Health at Hitachi
Occupational
doctors andoccupational
healthcare
staff

Self-careLine care(individual)(superior)

Human resources
divisionStress-check system specified in law

Working environment improvement
workshops, etc.

(while healthy)

(%)
1.00

0.56

0.60

Stress coping seminars
EAP*1 consultations and otherconsulting services

Healthimprovement
activities(Seminars andhealth guidance
fromoccupational
doctors)

0.64

e-learning; “Thinking about
mental and physical health”
versions 1–3

0.50

0.24

0.26

0.24
Indicator
management

0.00
Mental

2016

2017

2018

(while mentally
unhealthy)

Mental healthconsultations
during medical
exams

Health consultations
Health exams of various types

Addressing Mental Health
Hitachi has established measures addressing mental health to be taken by employees, workplace

Condition
management

Regularconsultations(at beginning of andduring absences
and leave)

Support for
returning toworkManagement toprevent recurrence

Programs
supporting
return to work(from decision to return
to after returning
to work)managers, occupational healthcare workers, and human resources divisions, and is working to
spread basic mental health knowledge and understanding of ways to deal with stress, as well as
to reinforce the ability of those in each position to respond to these issues.

Repetition
management

Workplacemanagement

Workplacemanagement

Workplacemanagement
guidance

Promotion of various
types of healthexams

Healthconsultations

Physical

Note: 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).

Promotion oftraining andeducation

EAP*1 corporate
diagnosis
Line care training
360FBP*2

Leave system

Trial return system

Regularconsultations

Regularconsultations(during repetition
after return to work)

Reduction oflong working
hours

Managementof thoseworking
extensive
overtime

Regularconsultations

Managementof employees
on leave

Consideration of tasks upon
returnRegular consultations
Follow-up status checks after
return to work

Programs
supporting
return towork

Training for human resources officers

Absences

Preventive
management

Handbooks for employees taking
leave

Health committee members and healthcare workers discuss environmental
improvement measures with HR staff.

Handbooks for managers
e-learning for managers

Mental health education

Regularconsultations

Collaboration to support return to work

Guidance to external facilities
supporting return to work

*1 EAP: Employee Assistance Program.
*2 360FBP: 360-degree Feedback Program.

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Health Promotion Initiatives for Employees and Their Families

evaluated on an annual basis, with recognition of the most accomplished companies and businessTo encourage healthy lifestyles among employees and their families, the Hitachi Health Insurancesites within the Group heightening the motivation among business owners and employees toSociety has established a portal site for individuals entitled “My Health Web.”pursue such activities.

By providing information on health exam results and a system of incentive points allowing

We are also actively engaging with the Certified Health and Productivity Management

employees to receive rewards for entering health-related activities, the site raises health awareness,

Organization Recognition Program promoted within Japan. In February 2019, the program granted

helps employees understand the state of their own health, and offers a range of support forrecognition to 21 Group companies in the large enterprise category and 27 in the SME category.

adopting a healthier lifestyle.

*1 Collabo-Health: A concept involving insurers like the Health Insurance Society proactively working with business owners, with a clear divisionof labor and a good working environment, to effectively and efficiently improve the health of insured persons (employees and their families),
including with preventive strategies.

Health events at business sites.

Health portal site “My Health Web.”
Logo marks for the 2019 Certified Health and Productivity Management Organization
Recognition Program’s large enterprise (left) and SME (right) categories.

Promoting Collabo-Health*1
As well as carrying out individual health improvement initiatives according to their own uniquecharacteristics, Group companies in Japan strive to maintain and improve the health of employees
by taking full advantage of the services offered by the Health Insurance Society. Initiatives are
Hitachi Sustainability Report 2019105

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Capital

Health and Safety Considerations for
Nuclear Businesses
Encouraging Employees to Receive Medical Exams and Vaccinations

PolicyFrameworks and Systems

In 2008, Hitachi began working with the world’s leading nuclear power plant vendors to develop

In Japan, Hitachi has established a system offering financial support for medical exams by thevoluntary, private principles of conduct covering the exportation of nuclear power plants and

Health Insurance Society, and encourages employees aged 35 and over in particular to receive

reactors. The “Nuclear Power Plant and Reactor Exporters’ Principles of Conduct” were formallythe general physical and other exams specified in law, as well as targeted screening based on

revealed on September 15, 2011. They were adopted by all involved in its development, and wetheir age, in order to promote early diagnosis and treatment.

have also indicated our adherence to them.

Furthermore, as a response to metabolic syndrome, in addition to special health guidance

Regarding our employees and other persons employed at nuclear sites under the Hitachi

made compulsory for the Health Insurance Society, we actively promote policies to prevent andGroup umbrella, we perform exposure management based on our internal management systems,

control conditions such as diabetes, cerebral strokes, and myocardial infarctions. Additionally,and perform evaluation of radiation damage (dose management).
For health management in particular, our management indicators for radiation exposure areeach year on May 31, World No Tobacco Day, we run an anti-smoking campaign aimed atstricter than those set by Japan’s Ministry of Health, Labor, and Welfare. We monitor physicalemployees.
To prevent employees from infectious diseases at overseas destinations, the Health Insurance

and mental health along with exposure dose even for employees of partner companies, andSociety has established financial support frameworks for vaccinations against conditions such asan occupational doctor from Hitachi visits sites to perform examinations and offer health advice.

hepatitis A, tetanus, and cholera, as well as flu vaccinations for employees and their families toprevent the flu spreading in workplaces. As an initiative to prevent employees falling ill or suffering

Nuclear Power Plant and Reactor Exporters’ Principles of Conductfrom serious conditions, we encourage vaccination in the early stage of each illness’s spread.
These programs are used by around 120,000 employees and family members each year.
Medical Exam and Screening Attendance Rates
FY 2016

FY 2017

FY 2018

General physical exam*1

78.1%

78.5%

79.3%

Breast cancer screening*2

50.0%

51.1%

53.2%

Uterine cancer screening*3

35.3%

35.6%

37.1%

Stomach cancer screening*4

78.4%

80.7%

80.6%

Intestinal cancer screening*4

79.0%

81.4%

81.3%

Lung cancer screening*5

93.2%

92.9%

93.2%

*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 FY 2016–2017, men and women aged 50 and over; from FY 2018, changed to men and women aged 35 and over.

Hitachi Sustainability Report 2019106

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Human Rights
Hitachi’s Approach
In order to ensure respect for human rights not just among Hitachi’s
employees but throughout its supply chain and among other stakeholders,
Hitachi formulated the Hitachi Group Human Rights Policy, created anaccompanying framework, and promotes educational and awareness-raising
activities as well as the use of grievance mechanisms to address employee
concerns throughout the Hitachi Group. In recent years, Hitachi has focusedon human rights due diligence and continues to construct and refine systems
for accurately grasping and minimizing risk. In fiscal 2018, too, we expanded
our business and human rights initiatives both inside and outside Japan.

Respect for Human Rights Throughout
the Value Chain
Hitachi Group Human Rights Policy

PolicyHitachi believes that respecting human rights is our responsibility as a global company andindispensable in conducting business. To this end, in May 2013 we formulated the Hitachi Group
Human Rights Policy. In this policy, we clarify our understanding of human rights as being, at aminimum, those outlined in the International Bill of Human Rights*1 and the International Labour
Organization’s Declaration on Fundamental Principles and Rights at Work. This policy shapes
Hitachi’s approach to meeting the responsibility to respect human rights, including implementing
human rights due diligence*2 in line with the UN Guiding Principles on Business and Human

Our Impact on Society

Rights,*3 providing appropriate education to employees, adhering to laws and regulations in all

No. of employees (consolidated)international human rights when faced with conflicts between internationally recognized humanthe regions and countries where we operate, and seeking ways to honor the principles of

295,941

rights standards and national laws.
In fiscal 2014, Hitachi added the perspective of business and human rights to its existing
structures and policies and developed guidelines on human rights due diligence that explain
procedures for everyday business practices. Based on these guidelines, we initiated humanrights due diligence in such areas as procurement in fiscal 2015 and human resources in fiscal
2016, assessing and prioritizing the risks of human rights that Group employees and people in

Our Performancethe supply chain are likely to confront as well as reviewing measures to reduce such risks.

Distributed CEO’s human rights message toincluding business types and models, alongside cross-sectional risk assessment at the Group

Approx.

We recognize the importance of risk assessment based on individual business environments,

258,000

level. Accordingly, in fiscal 2018 we assessed and prioritized human rights risks at some business
units and Group companies and laid the groundwork for a mid-term action plan.

employees

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Rights

Framework for Human Rights
We will continue to incorporate the results of human rights due diligence assessments into

Frameworks and Systems

Hitachi, Ltd. established the Corporate Human Rights Promotion Committee in fiscal 1981 to

the specific measures we take regarding CSR procurement and human resources, as well as

gauge the impact of business activities on stakeholders’ human rights and to deliberate on

promoting human rights due diligence across the Group.

mechanisms and policies for preventing human rights violations. The executive officer in*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: An ongoing process to identify and assess potential and actual human rights negative impacts, take appropriate
action to prevent or mitigate potential impacts, track the effectiveness of actions to address impacts and communicating externally.
*3 UN Guiding Principles on Business and Human Rights: Included in the March 2011 “Report of the Special Representative of the Secretary-Generalon the issue of human rights and transnational corporations and other business enterprises, John Ruggie” (A/HRC/17/31).

Hitachi Group Codes of Conduct
Hitachi Group Human Rights Policy

charge of human capital chairs this body, whose members include representatives from sales,
procurement, human resources, CSR, and other corporate units. Hitachi is improving its
Group-wide human rights awareness based on the guidelines discussed and written by the
Corporate Human Rights Promotion Committee. Policies decided through these deliberations
are shared with business unit and business site committees, led by business unit presidents anddivision heads. Each business site provides consultation services through which employees canseek consultation on issues such as sexual harassment and works to ensure that those whocome forward are treated with respect and dignity.
As a result of initiating human rights due diligence in our human resources divisions, we

Respect for the Rights of Children

reconfirmed the importance of grievance mechanisms. Not only do such mechanisms encourage

Hitachi respects the rights of children as outlined in the United Nations Convention on the Rights

employees to express concerns over working environments, they also help Hitachi grasp andof the Child, adopted by the General Assembly in 1989, and the Children’s Rights and Business

identify violations of human rights and prevent the recurrence of such violations. In fiscal 2018

Principles developed by the United Nations Children’s Fund (UNICEF). We strive to eliminate child

we explored ways of streamlining grievance mechanisms based on the common requirements

labor in the Group and its supply chains as specified in the Hitachi Group Codes of Conduct. We

across the Group in accordance with international standards, and from fiscal 2019 we will begin

have also set forth in other relevant internal regulations our policy of respecting human rights,

the process of rolling out changes globally.

including the rights of children.

In a practice launched in fiscal 2014, we distribute a human rights message by President and
CEO Toshiaki Higashihara every year on December 10, Human Rights Day. In fiscal 2018,

Hitachi Group Codes of Conduct
Work-Life Management

approximately 258,000 executives and employees at Hitachi, Ltd. and Group companies in andoutside Japan received an e-mail message regarding global trends in human rights, Hitachi’s
human rights policy and activities, and the importance of individual employees respecting human

Applying Advertisement Guidelines

rights in their work.
Compliance Reporting System

Hitachi Sustainability Report 2019108

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Rights

Hitachi, Ltd. Framework for Promoting Respect for Human Rights

Group executives and employees globally had participated by March 2019. Using educational
materials developed in line with the Hitachi Group Human Rights Policy, adopted in May 2013,
the program aims to ensure that employees understand Hitachi’s human rights policy and act

Corporate Human Rights Promotion Committee
Chairperson
Vice-Chairperson
Members

Executive officer in charge of human capital

accordingly. In accordance with these goals, the training is provided to all employees once every

Executive officer in charge of legal affairs and risk management

three years on average and regularly revised based on human rights trends worldwide.

 ersonnel in charge of corporate divisions such as sales,P
procurement, human resources and CSR

Executive officers from Hitachi, Ltd. participate in annual officer training sessions on humanrights. In July 2018, 32 executive officers participated in a session titled “From CSR as an Ethics
to ESG as a Strategy—Based on the Perspective of Human Rights,” led by Mariko Kawaguchi,

Business Unit and Business Site Committee
Chairperson

Business unit presidents and division heads

Members

Division managers

chief researcher, Research Division, Daiwa Institute of Research Ltd. The session covered a wide
range of issues from an investor’s viewpoint, including the importance of human rights in the newframework of international society, the global-level challenges that we face, and the backgroundto the growing ESG investment movement.

Business Unit and Business Site Committee
Chairperson

Business unit presidents and division heads

Members

Division managers

Business Unit and Business Site Committee
Chairperson

Business unit presidents and division heads

Members

Division managers

Raising Human Rights AwarenessAmong Executives and Employees

A scene from the officer training session.
Objectives, Activities, and Achievements

Hitachi conducts regular group training and seminars and uses videos to educate employees in

Human Rights Due Diligence Initiatives

Objectives, Activities, and Achievements

each business site and Group company. The target is for each employee to attend these sessionsat least once every three years (equivalent to a yearly participation rate of 33.3%). In fiscal 2018,

In our Hitachi Group Human Rights Policy, we pledged to develop mechanisms for and to

the participation rate came to 66.3% at Hitachi, Ltd. and 49.3% among Group companies.

continue the implementation of human rights due diligence. Toward that end, in fiscal 2013 some

We provide employees at the levels of section manager and above with education for creating abusiness sites launched pilot programs for human rights due diligence to identify key issues thatworkplace free from harassment. In addition to these group sessions, we launched an e-learning

need to be clarified for Group-wide implementation while also analyzing and evaluating humanprogram on business and human rights in October 2016, in which a total of more than 200,000

rights risks in six ASEAN countries. Based on the results of these pilot programs, in fiscal 2014
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Introduction  Management

SocialEnvironmental

Governance

Data

Human Rights

Addressing the Risks of Child andForced Labor

Objectives, Activities, and Achievements

we developed a document offering guidelines for implementing human rights due diligence in

The Hitachi Group Codes of Conduct clearly express Hitachi’s firm stance against the use ofcollaboration with the nonprofit organization Shift.

child labor or forced labor either in Group companies or along our supply chain. The company

In fiscal 2015, we initiated human rights due diligence in the procurement divisions, whose

president’s human rights message for fiscal 2017 also addressed the issues of forced labor andactivities are at risk of negatively impacting the human rights of workers in the supply chain andhuman trafficking, clearly stating that Hitachi as a global company must take preventive measures

local communities. In fiscal 2017, we incorporated the results of human rights due diligence into

in its business and supply chain. Recognizing the growing risks of forced labor amid the ongoing

the revision of our CSR procurement guidelines for suppliers while also thoroughly revising the

globalization of business, Hitachi also developed an e-learning program for all Group executives

questions on the check sheet used in supplier CSR monitoring (self-checks), to better grasp theand employees on the subject of human rights. The program draws on specific case studies

issues related to workers’ rights at suppliers as well as health and safety and the environment.

to convey the importance of preventing forced labor and human trafficking problems before

Fiscal 2016 also saw the launch of human rights due diligence for human resources divisions

they occur.

at Hitachi. The operations in those divisions touch on many issues connected to human rights for

Hitachi’s CSR procurement guidelines for suppliers also clearly forbid the use of child labor or

employees, including working hours, employee treatment, and health and safety. Human rights

forced labor. As part of our efforts to raise awareness all along the supply chain, these guidelines

risks for employees were assessed and prioritized, and mitigation strategies were explored. They

are distributed to tier 1 suppliers of business units and Group companies. In fiscal 2016, a four-partalso investigated grievance mechanisms, analyzing existing procedures and exploring ideas forwebinar*1 series was also held for employees responsible for procurement and human resources

improvement. In fiscal 2018 we initiated human rights due diligence in some business units andin Southeast Asia, where the risk of forced labor is expected to be higher. Speakers fromGroup companies, assessing the risks of human rights violations for each operation, prioritizing

nongovernmental organizations and businesses implementing advanced countermeasures wereaction points, and reviewing measures to reduce such risks. Going forward, Hitachi will further

invited to lead the webinars.

promote human rights due diligence across the Group.

In fiscal 2017, we visited one of our suppliers in Malaysia with the US nonprofit organization
BSR (Business for Social Responsibility) to conduct an assessment on migrant workers, who are

Human Rights Due Diligence in Procurementsocially vulnerable and often said to be exploited by forced labor. The assessment was based oninterviews with managers of human resources and production divisions, recruitment agencies,
and migrant workers, along with inspection of the factories and dormitories.
In fiscal 2018 we assessed the risks of forced labor at about 100 offices of Hitachi Group
companies located in seven Southeast Asian countries (Indonesia, Malaysia, Myanmar, thePhilippines, Singapore, Thailand, and Vietnam). The assessment was conducted with thecooperation of Verité Southeast Asia (VSEA), an internationally active nonprofit organization,using a checklist for suppliers revised in fiscal 2017 based on the Responsible Business Alliance(RBA) Code of Conduct, formerly the Electronic Industry Citizenship Coalition (EICC). The results

A scene from the human rights due diligence workshop led by Shift senioradvisor, David Kovick.

Guidance document for implementing
human rights due diligence.

Hitachi Sustainability Report 2019110

Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Human Rights

Freedom of Association andCollective Bargaining
Respecting the Rights of Employees

Policyof the assessment will be used to strengthen measures against human rights violations and

The Hitachi Group Codes of Conduct were approved by the Senior Executive Committee toimprove the quality of the checklist.

specify the standards of behavior applicable throughout the Hitachi Group. It calls for the*1 Webinar: A portmanteau word combining “web” and “seminar,” used to refer to an interactive seminar held online.

upholding of the fundamental rights of employees in line with the principles of the United Nations
Global Compact.
In Japan, where labor unions are recognized, for example, we espouse the three fundamental

Responsible Procurement

rights of labor unions (to organize, to bargain collectively, and to act collectively) as seen in thecollective agreement between the CEO of Hitachi, Ltd. and the representative of the Hitachi

Response to Technical Intern Training
Program Issues

Workers Union. The union has 25,646 members out of a total of 40,430 employees as of
Objectives, Activities, and Achievements

October 31, 2018.

In 2018, the Organization for Technical Intern Training conducted on-site inspections at Hitachi,Ltd. and 10 Group companies. These inspections identified violations of the Act on Proper

Employee-Management Dialogue

Frameworks and Systems

Technical Intern Training and Protection of Technical Intern Trainees, and the relevant companies
were provided with recommendations for improvement regarding intern training. Additionally, in

The relationship between employees and management at Hitachi, Ltd. and Group companies in

September 2019, Hitachi, Ltd. received an order for improvement regarding the construction ofJapan is stable with healthy ongoing dialogue. At Hitachi, Ltd., the Central Management Council,

its systems for carrying out proper technical intern training according to authorized plans.

the Business Units Management Council, and the Business Sites Management Council work toCompanies that received recommendations or orders for improvement have already taken

enhance mutual communication between employees and management, contributing to smoothcorrective measures. We have taken strict measures to ensure that no further violations will takemanagement and business development, and improving working conditions for union members.

place throughout the entire Group, such as constructing Group-wide policies, guidelines, andWe also hold Hitachi Group management meetings to share information and exchange views

check systems for technical intern training, and we continue to strive to carry out appropriate

and opinions on Group business conditions among the Federation of Hitachi Group Workers

technical intern training in accordance with relevant laws and the aims of the Technical Intern

Unions (FHGWU).

Training Program.

Group companies outside Japan also actively pursue dialogue with individual labor unions andtheir representatives 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.

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Introduction  Management

SocialEnvironmental

Governance

Data

Human Rights

Notification of Work-related Transfers
and Reassignments

Frameworks and Systems

The collective agreement between Hitachi, Ltd. and the Hitachi Workers Union states that any
transfer or reassignment of an employee for work-related reasons should adequately take into
consideration the situation of the employee, as well as requiring the company to promptly informthe Hitachi Workers Union of the decision. More specifically, in cases of large-scale transfers or
reassignments, the company will consult with the labor union regarding the basic issues involved.

Cooperating to Improve Health and SafetyFrameworks and Systems

Hitachi, Ltd. and the Hitachi Workers Union are dedicated to improving health and safety levels
through employee-management cooperation. This includes signing a collective agreement on the
promotion of, among other things, health and safety mechanisms, a health and safety committee,
education and training programs, and health checks for employees.
The committee works to ensure a healthy and safe work environment through initiatives that
include planning and tracking health and safety activities each year, reviewing measures toprevent industrial accidents, and sharing information on whether employees have received theirannual health check-ups.

Hitachi Sustainability Report 2019112

Contents

Introduction  Management

Environmental

SocialGovernance

Data

Value Chain Management
Hitachi’s Approach

Responsible Procurement

As an enterprise that engages in businesses activities in many regions aroundthe world, Hitachi pays close attention to sustainability in the value chain fromits suppliers to business partners and customers. Not only do we require thatall suppliers strictly follow our CSR procurement policies, we also carry out
CSR monitoring (self-checks) and audits to minimize procurement risks.
Additionally, as well as developing products and services that all customers
can feel secure using, we disclose information in a detailed and appropriatemanner. We are also taking proactive steps on privacy protections for theuse of personal data, a topic of much interest in recent years.

Basic Procurement Guidelines

PolicyWe base our procurement activities on the Hitachi Guidelines for Procurement Activities, while
sharing global supply chain issues within the Group. All Group companies follow these guidelines.
The guidelines were created in line with the United Nations Global Compact and include theelimination of discrimination in employment and occupation, the rejection of all forms of child andforced labor, and environmental protection activities. Suppliers are selected strictly in accordancewith the Hitachi Guidelines for Procurement Activities. We intend to revise these guidelines inaccordance with revisions to the Hitachi Group Codes of Conduct and the new Hitachi Group
Global Procurement Code.
In fiscal 2016, based on the results of the human rights due diligence performed by

Our Impact on Society

procurement divisions in fiscal 2015, we released the Hitachi Group CSR Procurement

No. of suppliers

Approx.

Guidelines, a full revision of the 2009 Hitachi Group Supply Chain CSR Deployment Guidebook.

30,000This revision incorporates the provisions of the Hitachi Group Codes of Conduct and also makes
references to version 5.1 of the Responsible Business Alliance (RBA, formerly called EICC) Codeof Conduct, promulgated in January 2016. The next revision is planned for fiscal 2020 or later,companies (66 countries)

with the goal of enabling even more responsible procurement.
We plan to revise these guidelines regularly in the future to ensure that they always reflect thedemands of global society regarding corporate supply chain management.

Our Performance
CSR monitoring (self-checks) of suppliers

345

companies (total of 1,510 companies since FY 2011)

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Introduction  Management

Environmental

SocialGovernance

Data

Value Chain Management

CSR Supply Chain Management FrameworkGuidelines for Procurement Activities
These guidelines define business transaction standards which shall be applied to all HITACHI executives andemployees in connection with their activities purchasing necessary materials, products, services, and informationfrom outside sources.
1. Overall procurement activities of Hitachi shall adhere to the “HITACHI Company Conduct Standards.”
2. HITACHI shall maintain proper partnerships, mutual understanding, and reliable relationships with supplierswith a view to the long term results, giving due consideration to the following:(1) HITACHI shall treat all suppliers impartially and be prohibited from favoritism such as giving unfair priority to
any specific suppliers.
(2) HITACHI respects fair business dealings with suppliers and will avoid any improper act which might causea loss to a supplier apart from normal and customary business transactions.
(3) HITACHI shall keep suppliers’ trade secrets strictly confidential and prevent them from being revealed or
improperly used.
3. HITACHI develops suppliers to maintain competitiveness from a worldwide point of view, with particularattention to the following points:(1) HITACHI responds to all suppliers’ offers sincerely, and is always willing to offer the information necessary
for suppliers to compete on an even playing field.
(2) HITACHI shall periodically check and review suppliers’ performance and will consider offering moreadvantageous business opportunities when comparison with other resources allows.
4. Through a designated selection process, and in compliance with the standards given below, suppliers shall be
evaluated by product quality, reliability, delivery, price, suppliers’ business stability, technical development
ability, fair and transparent information release, compliance with societies’ rules, regulatory compliance,
respect for human rights, elimination of discrimination in respect of employment and occupation, elimination of
all forms of child and forced labor, environmental preservation activities, social contributions, good working
environment, and recognition of social responsibilities with business partners.
(1) HITACHI shall not request quotations from suppliers with whom there is no intention to enter into a futurebusiness relationship.
(2) In accordance with specified internal procedures, the authority and responsibility for specifications, terms
and conditions, and product acceptance and inspection belong to each Requester, Procurement Department,
and Inspection Department.
(3) Procurement Departments shall represent HITACHI when contracting with suppliers.
5. HITACHI members are prohibited from receiving any personal gifts or offers from suppliers.
Revised in 2009

Guidelines for Procurement Activities
Procurement Policy

Frameworks and Systems

Given the global reach of Hitachi’s business, there is a growing likelihood of supply chain risks
creating management problems, and the Hitachi Group is working hard to identify and mitigate
these risks beforehand as much as possible.
CSR supply chain management and green procurement policies and initiatives are discussed
within Hitachi’s Value Chain Integration Division, which is headed by the chief procurement
officer (CPO) and reports directly to the president of Hitachi, Ltd. Policies and initiatives adopted
after this discussion are shared throughout the Group through the Hitachi Group CSR/BCP
Procurement Committee, which includes members from business units and CSR/BCP
Procurement Committees at key Group companies.
To address the issue of chemical substances in products, we have built A Gree’Net, anInternet-based green procurement system for collecting information about substances and otherenvironment-related data from suppliers as soon as it becomes available. The goal is to manage
chemicals carefully. Under this system, in the past, we encouraged suppliers to use the
MSDSPlus*1/AIS*2 reporting templates published by the Joint Article Management Promotion
Consortium*3 to achieve smoother and more efficient transmission of information.
Because the reporting templates became invalid at the end of June 2018, we currently
recommend the use of chemSHERPA*4-CI/AI, a common scheme that facilitates transmission of
information on chemical substances in products throughout the supply chain.
*1 MSDSPlus: A format for reporting chemical substances contained in products created by upstream companies (chemical manufacturers) for
midstream companies (molded product manufacturers, etc.).
*2 AIS: A format for reporting chemical substances contained in products created by midstream companies (molded product manufacturers, etc.)
for downstream companies (assembly manufacturers, etc.).
*3 Joint Article Management Promotion Consortium (JAMP): Established in September 2006 as a cross-industry promotion association of
17 companies endorsing the idea that “it is essential for the enhancement of industrial competitiveness to ensure proper management of
information on chemical substances contained in articles (parts and final products), and to establish and popularize a concrete mechanism forsmooth disclosure and transmission of such information in supply chains.”*4 chemSHERPA: A standard developed by the Japanese Ministry of Economy, Trade, and Industry to facilitate the management of chemical
substances in products by creating a shared transmission scheme throughout the supply chain. The chemSHERPA-CI standard is applicable
to chemical substances contained in chemical products and chemSHERPA-AI to those contained in molded products.

Joint Article Management Promotion Consortium

CSR/Green Procurement

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Introduction  Management

Environmental

SocialGovernance

Data

Value Chain Management

Strengthening Global Partnerships


Frameworks and Systems
Objectives, Activities, and Achievements

Number of Hitachi Group suppliers

A key element of the Hitachi Group Vision is to improve the competitiveness of our value chain based(as of December 2018):

Approx.

30,000on partnerships with our suppliers. Given our business aim to expand internationally, we need tocompanies (66 countries)

extend our procurement globally, looking toward increasing local production for local consumption.
We have appointed procurement officers to oversee local procurement in China, the rest of
Asia, Europe, and the Americas. These officers carry out activities such as CSR audits, CSR

Supply Chain Management Organizational Structure

monitoring (self-checks), and CSR procurement seminars in their respective regions. In this way,
we are expanding our suppliers in emerging nations while also strengthening our response to
CSR-related risks expected to arise from the global expansion of our supply chain.
Local procurement officers are also responsible for addressing environmental risks in China.

President

Through the Institute of Public and Environmental Affairs, an environmental NGO, the officers obtain
Development of CSR/green
procurement policy

Value Chain Integration Division

Procurement office conferences

Conferences for procurement managers

CPO Joint Committee(every two months)

Hitachi Group CSR/BCP Procurement
Committee (biannual)Group procurement
strategy conference(biannual)

Regional procurement
conferences

information about polluting enterprises made public by China’s central and regional government
bodies. They use this information not only for screening businesses who have transactions withthese enterprises but also for urging the enterprises themselves to make improvements.
Rate of Local Procurement of Materials for Main Regions (Hitachi Group)(China/Asia/India: biannual;Europe/Americas: annual)

China

Target price conference(biannual)

88%

Rest of Asia

71%

Implementation by
all procurement members
Business unit procurement members

Major Group company
procurement members

EuropeAmericas

%

%

81

66

Hitachi Sustainability Report 2019115

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Introduction  Management

SocialEnvironmental

Governance

Data

Value Chain Management

Sharing Procurement Policies

Objectives, Activities, and Achievements

Implementation of CSR Monitoring(Self-Checks)

Objectives, Activities, and Achievements

To ensure that the Hitachi Group CSR Procurement Guidelines’ provisions are strictly followed, we
distribute the fully revised fiscal 2016 edition to the approximately 30,000 suppliers of Hitachi businessTo monitor how well Hitachi’s CSR supply chain management philosophy has been adopted

units and Group companies, from whom we request acknowledgment of suppliers’ understandingby our suppliers, since fiscal 2007 we have asked key suppliers to conduct CSR Monitoring

in writing. Tier 1 suppliers are further asked to confirm that tier 2 suppliers also follow the provisions(self-checks) using the JEITA Supply Chain CSR Deployment Guidebook and detailed checklists.

in the guidelines. Additionally, recognizing the global nature of our suppliers, we make the guidelines

After collecting and analyzing the results, we provide feedback for the business operations

available not only in Japanese but also in English, Chinese, and Thai, the latter language added inrelated to the suppliers, and then work with those involved in the operations to resolve issues

fiscal 2018 in response to increasing labor and human rights risks in southeast Asia.

related to the suppliers. Since fiscal 2011, we have expanded the scope to include suppliers in

To procure parts and materials manufactured with reduced environmental impact, so that

China and the rest of Asia, and from fiscal 2017 all checklists were fully updated in accordance

suppliers help to protect the environment, in fiscal 1998, we led the industry in developing Green

with the revisions made to the Hitachi Group CSR Procurement Guidelines. In fiscal 2018 we

Procurement Guidelines. These define our basic position on procuring parts and products that

asked 345 suppliers inside and outside Japan to conduct CSR monitoring (self-check, although

do not have a negative impact on the global environment, as well as our requirements of suppliers,

simplified in some cases) and received survey replies from them. The survey results allowed us

so that we can work together to promote green procurement. The guidelines set out supplierto identify labor-related issues requiring attention, and we will take precautionary measures torequirements for environmental conservation, including building an environmental management

prevent issues arising.

system and acquiring certifications. There are also requirements for reducing the environmental
impact of products supplied to Hitachi, such as conserving resources and energy in production,
recycling, managing chemical substances, and fully disclosing related information.

Implementation of CSR Audits

Objectives, Activities, and Achievements

There is a global trend toward tighter regulations on chemical substances. In fiscal 2013, we
reviewed our categories for controlled chemical substances in our Green Procurement Guidelines

Since July 2012, Hitachi, Ltd. has been auditing the manufacturing bases of its and Groupto comply with the stipulations on restricted substances, authorized substances, and substances

companies’ suppliers in China and the rest of Asia. In fiscal 2018, we conducted CSR andof very high concern (SVHCs) in the European Union’s Registration, Evaluation, Authorization,

environment audits of 24 suppliers in China.

and Restriction of Chemicals (REACH) regulation for managing chemical substances within the

For these audits, we engaged external evaluators such as the experienced CSR auditing

EU. Specific changes include: (1) moving some chemicals to the prohibited substances list, (2)company Intertek Certification.*1 Our audits are based on the international SA8000 certification

further breaking down the controlled substances list, and (3) adopting the industry association

standard developed by Social Accountability International (SAI), an American CSR evaluation

list. In preparation for the EU’s RoHS directive that banned four types of phthalates in July 2019,

institution. These audits investigate our workplace practices, and an RBA-recognized auditor

we banned their use from January of that year. We also distributed the latest version of the Green

checks suppliers’ CSR initiatives from the perspectives of labor and human rights, health andProcurement Guidelines through Group companies and business units to suppliers to ensure thatsafety, the environment, and ethics.

they are fully informed.

No major infringements were found at the suppliers audited in fiscal 2018, but some small
areas needing improvement were noted, such as overtime work exceeding stipulated rules (18Hitachi Group CSR Procurement Guidelines
Hitachi Group Green Procurement Guidelines

suppliers), failure to conduct periodic inspections of machinery and equipment (5), and insufficientmanagement of hazardous waste (3). The relevant suppliers were requested to submit

Hitachi Sustainability Report 2019116

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Introduction  Management

SocialEnvironmental

Governance

Data

Value Chain Management

Human Rights Due Diligencein Procurement

Objectives, Activities, and Achievements

improvement action plans, and Hitachi, Ltd., together with Group companies, will work with andStarting in fiscal 2015, the Hitachi Group Procurement Division began implementing human rights

advise the suppliers until they complete the planned improvements.

due diligence based on the Hitachi Group Human Rights Policy. With the assistance of the*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.

consulting services of the nonprofit organization Shift, we have created a working group centeredon the procurement and CSR divisions at Hitachi, Ltd., which serve as the corporate divisions
overseeing activities throughout the Group, including the procurement and CSR divisions of two

CSR Procurement Activities Implementation Status

in-house companies, now called business units, four Group companies and the CSR division of

FY 2018
CSR monitoring (self-check)
CSR audits
Supplier seminars

Hitachi Asia. The working group has evaluated human rights risks within the supply chain, set

Total to date345

1,510*1

24
126

130*2
235*3

priorities, and considered measures for reducing risks.
In fiscal 2016, we published the fully revised Hitachi Group CSR Procurement Guidelines basedon results obtained from human rights due diligence activities in fiscal 2015 as well as input from

*1 Total from fiscal 2011–fiscal 2018.
*2 Total from fiscal 2012–fiscal 2018.
*3 Total from fiscal 2015–fiscal 2018.

a range of sources and perspectives, including Hitachi Europe, Hitachi (China), and outside experts.
In fiscal 2017, Hitachi further incorporated input from various perspectives into the revised
CSR Monitoring (self-check) checklists for suppliers to prevent supply chain risks. As well as
strengthening and improving existing initiatives in this way, we used the results obtained from theHolding CSR Procurement Seminars

Objectives, Activities, and Achievements

checklists to deepen our communication with suppliers. As part of our efforts to eliminate the useof forced labor, we visited one of our suppliers in Malaysia with members of nonprofit organization

In order to share the philosophy of Hitachi among our suppliers, in fiscal 2015 we introduced

BSR (Business for Social Responsibility) to conduct an assessment on immigrant workers, whoa new initiative to provide suppliers directly with information in a face-to-face format, in addition

are often subject to forced labor. The results of the assessment were shared with the supplierto the information shared on the Hitachi website as well as our CSR monitoring (self-checks),

and related businesses, and we are urging the supplier to improve working conditions where

CSR audits, and other measures. The most recent of these face-to-face events was held insuch improvement is deemed necessary.

March 2019 at our CSR and Green Procurement Seminar held for Hitachi Group partners in East

In fiscal 2018, procurement officers from European Group companies formed the Responsible

and South China. The event was attended by 176 people from 126 companies. At the seminar,

Supply Chain Working Group, sharing perspectives and issues on human rights relevant to

Hitachi explained topics including its fundamental CSR philosophy, the CSR audit situation,

procurement divisions along with Hitachi’s CSR procurement policies, and discussing plans forregulatory trends under Chinese environmental laws, and Hitachi’s related policies. Feedback fromfuture activity.

participants included a comment from one person who was “impressed by the emphasis the

In cooperation with outside experts, we will continue to enhance suppliers’ understanding ofcompany places not only on monozukuri craftsmanship but also on fulfilling its social responsibility

the expectations of Hitachi Group procurement departments and, at the same time, promote

in a range of areas.” Another participant “gained a sense that profitability is not the sole aim andcapacity building at suppliers and take other necessary measures.

that it is important to adhere to environmental laws.” As reflected in the comments, the seminarserved to deepen the understanding of Hitachi initiatives related to CSR and green procurement.

Respect for Human Rights Throughout the Value Chain

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Introduction  Management

Environmental

SocialGovernance

Data

Value Chain Management

Increasing Green Purchasing ofOffice Supplies

Objectives, Activities, and Achievements

We are improving our green purchasing rate*1—the ratio of environmentally conscious products
purchased to total office supplies—by using a Group-wide online procurement system called theE-sourcing Mall since fiscal 2002. This system has a range of environmentally conscious products
and promotes procurement by clearly labeling these products. In fiscal 2018, our green purchasingrate reached 86%.
*1 Green purchasing rate: The ratio, by monetary value, of products with the Eco Mark among all products purchased subject to the Act on
Promoting Green Procurement.

Conflict Minerals Procurement Policy

PolicyHitachi released a Conflict Minerals Procurement Policy in September 2013. Our Request to Our
Suppliers, based on this policy, is published on our website as a clear statement of our position.
In fiscal 2016, we revised this policy to ensure that procurement of components incorporating
conflict minerals does not benefit armed groups in the Democratic Republic of the Congo (DRC)or adjoining countries. The policy now explicitly lays out the measures to be implemented,
including inquiries based on international guidelines, to ensure responsible procurement.

Hitachi Group Conflict Minerals Procurement Policy
Conflict Minerals
There are numerous types of mineral resources buried within the lands of the Democratic Republic of the Congo,
located in central Africa, and its neighbouring countries. Ores containing minerals such as tin which is used insolders to secure electronic parts to printed circuit boards, tantalum which is used in capacitors, tungsten which
is used in superhard materials, and gold which is used in lead frames can be found in this region. The locals
extract these ores, which traders and brokers export to other countries in order to earn valuable foreign currencies,
but part of those foreign currencies are forcibly collected and used as funds to purchase weapons by armed
groups that repeatedly engage in conflict and violate human rights in the same region, which has become a major
problem. As such, the minerals listed above are called “conflict minerals”.
Procurement Policy
The policy for procurement departments in all Hitachi Group companies have always been and will continue to be
to ensure that procurement activities do not result or aid in conflicts within the same region and that the armed
groups described above do not benefit from those activities, while continuing responsible procurement activities
of minerals that are not related to the conflicts in the region based on local laws. Additionally, we will continue tosupport the practice of due diligence based on the “OECD Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and High-Risk Areas” among companies. With these in mind, HitachiGroup would like to request all our suppliers to utilise the Conflict Minerals Reporting Template developed by
RBA/GeSI to continue checking the country of origin and supply chain of minerals, and also to procure from the
CFS (Conflict Free Smelter)*1 listed within.
*1 CFS (Conflict Free Smelter): A list of smelters who have been identified as “not being involved in the conflict within the same region” by the
Responsible Minerals Initiative (RMI), an organization that was founded by the RBA/GeSI, which is a group that aims to solve the conflictminerals problem.

Hitachi Group Conflict Minerals Procurement Policy

Conflict Minerals Response Framework

Frameworks and Systems

Sales divisions, business groups, plants, procurement divisions, and other divisions within
individual business units and Hitachi Group companies work together to respond to investigation
requests and inquiries relating to conflict minerals. We also strive to grasp developments in conflictmineral-related laws and regulations in each country and region and what global society
demands of enterprises, working to share information within the Group.

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Contents

Introduction  Management

Environmental

SocialGovernance

Data

Value Chain Management

Hitachi’s Conflict Minerals Response Framework
Headquarters

Additionally, as a member of the Japan Electronics and Information Technology Industries

CSR division
SupportCoordination

Information
sharing

Grasp global trends

Understandcustomer needs

Checkspecifications

Contacts in business groups/plants(technical divisions, etc.)

Check forpresence of
3TG*1

developing the awareness of conflict minerals among industry.
JEITA Responsible Minerals Trade Working Group

Quality and Safety Management

Raising awareness/
information provision

CSR/BCP
Procurement
Committee

questions from attendees. We will continue striving to cooperate with other organizations in

QA divisions/R&D divisions*2

Coordination

SupportProcurement
division

explaining the latest trends and reporting template related to conflict minerals and responding toSales divisions

Grasp national
regulatory trends

Information
sharing

Responsible Minerals Sourcing Inquiry Briefings for suppliers of JEITA member companies,
Customers

Raising awareness/
information provision

CSR division

Association (JEITA)’s Responsible Minerals Trade Working Group, Hitachi, Ltd. attended JEITA’s

Individual BUs/Group companies

Supplier
investigation

Procurement divisions

Raisingawareness of
supplier

Consultation

Grasp national
regulatory trends

Hitachi’s Approach to Quality Assurance Activities

PolicyProviding products and services that our customers can use with confidence, along with meeting
the requirements and quality standards of our customers in order to achieve this, are important

Grasp global trends

Supplier A

Supplier B

Supplier C

Supply chain due diligence by individual BUs/Group companies*1 3TG: Collective term for four commonly used conflict minerals: tin, tantalum, tungsten, and gold.
*2 May differ depending on business unit or Group company.

values shared by all our employees and codified in the Hitachi Group Codes of Conduct. Our
fundamental philosophy for quality assurance activities is outlined in the Quality AssuranceStandards in our corporate regulations, and each of our employees pursues quality assurance
activities according to this approach.
Maintaining the values of Harmony, Sincerity, and Pioneering Spirit that comprise the Hitachi
Founding Spirit, as well as adhering to basics and ethics and putting right and wrong before

Response to the Conflict Mineral Issue

Objectives, Activities, and Achievements

profits and losses, we place great emphasis on Sincerity in quality assurance activities as part ofearning trust in our products.

Based on the Guidelines for Procurement Activities, each Hitachi business unit and GroupOne integral aspect of this is our unique and longstanding practice of ochibo hiroi, which

company investigates its use of conflict minerals and reports the results to customers whenmeans “gleaning” in English and involves learning from failure to further develop our technologies.

requested. Supply chain investigations are carried out with the cooperation of the relevant entities’

When an incident occurs, our executive officers take the lead in examining things from the cus-sales, procurement, and CSR divisions. In 2017, Hitachi, Ltd. and five key Group companies

tomer’s perspective, not only investigating the technical causes but also thoroughly discussing the(Hitachi Metals, Hitachi Chemicals, Hitachi High-Technologies, Hitachi Automotive Systems, andprocess, framework, and motivating factors leading up to occurrence, along with ways to prevent

Hitachi Industrial Equipment Systems) performed investigations and replied to a total of 1,422

reoccurrence, in order to improve our product reliability and customer satisfaction.

requests from customers.
Hitachi Sustainability Report 2019119Contents

Introduction  Management

SocialEnvironmental

Governance

Data

Value Chain Management

Complying with Technical Laws
To ensure that quality and reliability are maintained, we are strengthening our quality assurance

Objectives, Activities, and Achievements

To supply our customers with products that they can use with confidence, we comply with allactivities from the perspectives of organization and management, technology, and human

product safety and technical laws, including those covering environmental consciousness andresources in every process—from planning and development to design, manufacturing, testing,safety labels. We distribute information on product regulations worldwide, along with amendment

delivery, and maintenance.

trends and enforcement dates, among Hitachi Group companies. We have also created guidelines
for assessment of technical laws and quality assurance systems, sharing them throughout the

Hitachi Group Codes of Conduct

Group. The guidelines include information on the two themes of clarifying product-specific laws
(the product-specific laws map) and regulatory compliance activities and continuous improvementof processes, based on our product compliance management system.

Framework for Quality Assurance

Frameworks and Systems

To ensure full control over quality governance, we have separated the quality assurance division

Product Safety Activities

PolicyObjectives, Activities, and Achievementsfrom the manufacturing division in every business unit and Group company, creating a framework
for activity in which our customers’ safety and trust are the top priorities. Since fiscal 2018, in

Hitachi’s Product Safety Assurance Guidelines state that our highest priority is the safety oforder to strengthen this framework further, we have reinforced the report lines from BU and

our customers, and, based on these guidelines, we promote activities to ensure safety acrossGroup company quality assurance divisions to the quality assurance division at our head office,the Group.

independent from all business divisions, establishing systems for close information sharing

As changes in social norms and the environment bring about the need for higher standards of

between the two. We have also strengthened governance by giving greater authority to thesafety, we are crafting even higher safety standards through Group-wide activities to increase

quality assurance division at our head office.

trust in Hitachi, sharing the latest practical cases within the Group, and cross-evaluating the

Furthermore, to share quality activities and current challenges in our expanding services

product safety activities of each division.

business, we have newly established a Service and Software Quality Enhancement Division.

We are also proactively working to disclose safety information on the use of our products andBy bringing the software development capabilities and expertise in strengthening trust of ourestablish the Guide for Preparing User Instruction Manuals in order to improve risk communication

solutions divisions to our product divisions (embedded software development divisions), we aimwith our customers.

to increase trust in our embedded software even further.

Hitachi is committed to the delivery of safe products and services by combining expertise andtechnologies in such varied areas as planning, research, design, manufacturing, quality assurance,and maintenance. The safety of our customers’ life, health, and property is the top priority in

Accident Prevention Activities

Objectives, Activities, and Achievements

product development. Therefore, we verify safety at every step, from development and production
to sales and maintenance. We also conduct risk assessments from a wide perspective inUnder our approach of making prevention the duty of quality assurance, we are working beyond

collaboration with related business units and research laboratories. In responding to these risks,

recurrence prevention and striving toward preventing accidents from occurring in the first place.

we ensure safety by means of measures to reduce risk through design (fundamental safety

Closely following the changes in a range of business activities, we anticipate quality issues on thedesign), protective measures (safeguards), and usage information (product manuals), in orderhorizon across the entire Group and plan our quality activities accordingly.

of priority.
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Handling Product Accidents

Frameworks and Systems

We conduct product safety risk assessment as well as testing worst-case scenarios—for

When a product accident occurs, the division responsible acts swiftly to resolve the problem

example, deliberately setting a fire inside a consumer appliance to confirm that the fire will notand ensure absolute safety from the customer’s perspective. For an especially severe accident,

spread outside it. Furthermore, along with each product’s full manual, we include a quick start

we report to government agencies in line with legal requirements and publish the incident

guide summarizing key features and operations, and make step-by-step how-to videos available

information on our website and through other channels. At the same time, we promptly submit

on our corporate website as well.

a status report to top management, ensuring fast and appropriate action at all companies across

We will continue to make all our consumer appliances even safer, using our own voluntary

the Group.

action plan for product safety, so that customers can use our products with confidence.

When we determine that retroactive action is necessary, we notify customers via newspaper
advertising and websites in order to carry out the necessary repair or replacement program.

Response Flow in the Event of Product Accident

Accident
occurrence

Hitachi Group
Information gathering

Top management
CustomerliaisonCustomers,
retailers

QA
Division

Emergency
response
authorities

Confirmation of
accident status
Investigative
committee on
serious productaccidents

Investigation of cause

Response andreportingFlow of information

ReportOn-siteinvestigation

ReportProduct
investigation

Investigationof damagescope

Seriousproduct
accident

Consumer Affairs
Agency, etc.

Product recall
Notification via web, media

Decision on
seriousnessof accident

Information sharing

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Quality and Reliability Education

Objectives, Activities, and Achievements

We conduct field-specific technical lectures for engineers engaged in monozukuri craftsmanshipinformation on the operation of social media. An e-learning tool is also available in Japanese,

at a range of levels from beginner to expert.

English, and Chinese to deepen understanding of how social media should be approached andEach business unit also conducts specialized technical courses regarding manufacturing,its risks addressed.

quality assurance, and maintenance at their quality assurance training centers.

Global Quality Assurance Activities

Personal Information Protection Policy

PolicyObjectives, Activities, and Achievements

Hitachi, Ltd. has established a personal information protection management system based on
In order to expand our fundamental principles for quality assurance activities around the globe,

its Personal Information Protection Policy. Through the rollout of this system, as well as the safe

we have created Global Quality Assurance Standards and are strengthening global governancehandling of personal information, programs for all employees, and periodic audits, we are ensuring

across the entire Group.

protection of personal information throughout the company.

Specifically, we are carrying out quality activities globally by sharing our principles, as
described in the Hitachi Group Codes of Conduct and the Hitachi Founding Spirit, as well

Hitachi Personal Information Protection Policy

as through accident prevention activities, recurrence prevention activities, and personnel
training activities.

Management Framework for
Customer Information

Rigorous Information Management

Frameworks and Systems

Hitachi’s customer relations management framework, HiCRM, has been applied to 195 Group

Information Management Policies on the Use of
the Web and Social Media

companies to collect and accurately manage customer and transaction information Group-wide,
Policyin addition to serving as a marketing tool. HiCRM covers more than 80% of the orders received
across the whole Group, with the database enabling us to formulate more effective sales strategies

Hitachi places great importance on its corporate website, social media, and other tools forand offer collaborative solutions by multiple businesses. Going forward, we will consider rolling

promoting its activities and deepening customer understanding as part of developing its Social

out the system more aggressively across the Group.

Innovation Business globally. Effective risk management is required when using these tools toprotect our brand and avoid violating the rights of others, including human rights. To this end,
we have established the Social Media Policy and other policies, which are shared globally. The

Privacy Mark*1 Certification

Objectives, Activities, and Achievements

Hitachi Social Media Policy is an umbrella term that includes the Communication Guidelines,
which stipulate policies on the use of social media; the Communication Guidelines for Employees,

Hitachi, Ltd. first received Privacy Mark certification in March 2007. We have maintained the highwhich specify how employees should approach the use of social media, including rules to belevel of privacy protection needed to renew this certification and we are working toward our sixth

followed and proscribed types of activity; and the Operation Manual, which provide specificrenewal in March 2019.
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Use of Personal Data and Protectionof Privacy
Hitachi’s Approach to the Use of Data andthe Protection of PrivacyThe entire Hitachi Group is committed to personal information protection, with 43 Hitachi Group
companies

having received the Privacy Mark as of March 31, 2019.

PolicyThe term “personal data” has come to be used to mean any data associated with individuals,
such as location information and purchase history, irrespective of whether or not such data can

Hitachi also strives to safeguard personal information globally at Group companies outside

legally be defined as “personal information.” The use of personal data can be expected to create

Japan based on each company’s personal information protection policy and compliance with allvalue going forward, but the privacy of individuals must also be considered carefully. In addition,

applicable laws and regulations as well as the expectations of society at large.

as the amount of personal data collected continues to increase in the IoT era, risks related to

Hitachi experienced one case of personal information leakage during fiscal 2018.
*1 Privacy Mark: A third-party certification established in April 1998 that is granted by the assessment body Japan Information Processing
Development Corporation to businesses that have taken appropriate security management and protection measures related to personal information.

privacy are also likely to change.
In order to create value through safe and secure use of personal data, in 2014 we beganefforts to protect privacy in the use of such data, mainly in departments related to informationand telecommunications systems.

Framework for Implementing Privacy Protection

Frameworks and Systems

In departments related to information and telecommunications systems, which lead our digitalbusiness, we have assigned a personal data manager responsible for managing privacy protectionand established a privacy protection advisory committee to support risk assessments anddevelop countermeasures based on knowledge and expertise of privacy protection. Under thisResponding to Personal Data Protection
Laws Around the World

system, our employees implement privacy impact assessments for processes where personal
Objectives, Activities, and Achievements

data will be handled and take measures to prevent privacy violations. When employees find it
difficult to assess risks on their own, or conclude that risks of privacy violation are high, the privacy

With the increasing risk of privacy violation in recent years due to the advent of the digital age

protection advisory committee will extend support to deal with the case and help reduce risks.

following advances in IT and the globalization of socio-economic activities, lawmakers are actively
seeking to create and modify relevant laws and legislation in countries and regions around theworld. The Hitachi Group pays close attention to relevant laws and legislation on a global basis,including the European General Data Protection Regulation (GDPR), making efforts to comply
with them across the Group. It also monitors relevant legislation and social trends and takes
action in response when necessary.
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Seeking to Ensure the Safety and Security
Objectives, Activities, and Achievementsof Consumers and Customers

Applying Advertisement Guidelines

PolicyBased on its Customer Satisfaction Management Guidelines, Hitachi, Ltd. applies advertisement
To meet consumers’ expectations around privacy protection, Hitachi regularly conducts consumer

guidelines to ensure that its advertising activities comply with laws and regulations showing

opinion surveys on the use of personal data in big data businesses in order to understandproper consideration for society as a whole. We will continue to create advertisements that reflectchanging consumer perceptions and take them into consideration when updating privacy

ongoing changes in society, that provide customers with clear and concise messages, and that

protection measures.

are appropriate for a company committed to contributing to society.

Hitachi has conducted privacy impact assessments in many business fields. In fiscal 2018,

As issues that arise from advertisement activities can have broad impact on the company, we

we conducted 180 assessments in a wide range of fields, including finance, public services,

have established in each business unit a framework for constantly evaluating the acceptability ofsocial infrastructure, and industry/logistics. In order to leverage the expertise built on these

expressions used in advertisements, in collaboration with a division that stands independent ofexperiences when conducting business with our customers and promote social consensus on thethe ad production line. Following this institutional check, we also evaluate advertisements touse of personal data, we have made publicly available a whitepaper on Hitachi’s privacy protection

ensure that they are socially appropriate.
We designed our advertisement guidelines to be flexibly adjusted and applied to the entire

initiatives in the use of personal data, which summarizes our privacy protection efforts.

Hitachi Group’s diverse operations. At our business locations outside Japan, where languages
and customs vary, we strive to ensure appropriate advertising activities by confirming all items on

Customer Satisfaction
Hitachi’s CS Improvement Approach

the checklist included in the guidelines.
PolicyFramework for Reflecting Customers’ Voices

Frameworks and Systems

Using the Customer Satisfaction Management Guidelines, one of the pillars of the company’sbusiness management, Hitachi continues to improve customer satisfaction (CS) with the goal of

The sales and marketing divisions at Hitachi, Ltd. use customer input in developing management,

creating innovation through collaboration with customers.

product, and solution strategies. We identify key customers who will help grow our business,then assign an account manager (AM) to each one. The AMs serve as customers’ “portals” into
Hitachi Group companies in Japan, and the whole Group works with them to build closer relations

Customer Satisfaction Management Guidelines

with customers and to boost CS.

1. Listen to our customers, who determine the value of products and services

We hold executive seminars for local customers at our operations across Japan. Through

2. Review information from our customers is another source of improvement
3. Offer prices and quality that are competitive

direct dialogue with customers participating in these seminars and lectures, we incorporate their

4. Respond rapidly to keep our promises to our customers

expectations for Hitachi and their opinions into product strategies.
To accelerate collaborative creation with customers in Hitachi’s evolving Social Innovation

5. Adopt systems that prevent accidents and minimize their impact
Formulated in 1994

Business, we also hold Hitachi Social Innovation Forums in and outside Japan, providing
lectures, exhibits, and more. Our sales teams invite our customers to these events to deepen
their understanding of Hitachi’s business. We also collect feedback from these events to improve
our future operations.
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Our R&D Technology Community program provides opportunities for collaborative creation

used to improve daily activities and actions and build business, sales, and product strategies.

with customers. In Japan, project leaders invite customers to their research labs and show themIn the Customer Satisfaction Survey 2018–2019 published in the September 13, 2018,

exhibits of products and systems currently being developed. This program provides opportunities

issue of Nikkei BP’s Nikkei Computer, we were ranked top in five categories: IT consulting andfor researchers to speak directly with customers, contributing to collaborative creation of new

upper-stream design services, system development-related services, PC servers, enterprisebusinesses based on customer needs and Hitachi technology.

servers, and integrated operation management software.

Providing Customer Support OnlineFrameworks and Systems

Improving CS in ElectricHome Appliances

Objectives, Activities, and Achievements

Hitachi offers comprehensive customer support on its website. This enables us to process
customer inquiries, opinions, requests, and complaints—in collaboration with the customer

The Electric Home Appliances Customer Satisfaction Division provides services and solutions to

support offices of Hitachi Group companies in Japan—to improve our business operations, as

improve quality of life for people of all ages—both at home and in the city. In Japan, thesewell as our products and services. We also conduct training courses to provide better handling of

initiatives are carried out under the slogan, “360° Happiness: Encircling People and All Theirthese inquiries. In fiscal 2018 we had 3,831 customer inquiries globally.

Dreams for the Future.”

As one initiative, we have been holding the Web Inquiry Responsiveness Improvement Course

Our call center and website handle about 2.22 million customer inquiries, repair requests, andsince fiscal 2009. In fiscal 2018, 32 Hitachi Group company employees took the course (bringing

complaints about washing machines, LCD TVs, and other appliances per year.*1 We havethe cumulative total to 827 participants), which features case studies on responses to inquiries.

undertaken a number of initiatives to better respond to inquiries and to reflect customer feedback

Going forward, we will strengthen coordination among Group companies to respond morein our monozukuri craftsmanship, including improving the contact success rate by using

quickly and effectively to customer inquiries, using the website as an important contact tool.

outsourcing; creating a database of customer feedback, including consultations, inquiries, andcomplaints; and enhancing our website’s FAQ section.
We also conduct semiannual customer service evaluation surveys at approximately 90 service

Customer Survey by Information andTelecommunication Business

centers in Japan. Based on the answers, we improve services through CS training courses andObjectives, Activities, and Achievements

other programs.
With the expansion of Hitachi’s markets outside Japan, sales offices have been opened in ten

The Systems & Services Business at Hitachi, Ltd., which provides information andcountries in Asia and the Middle and Near East. We are also working on unifying management oftelecommunication systems, has been conducting a customer survey regularly since 1995

operations outside Japan.

with the aim of accelerating collaborative creation with customers and providing better*1 Since fiscal 2013, technical inquiries from suppliers and parts orders have been excluded from these statistics.

solution services.
The survey seeks customers’ views and opinions on sales personnel, engineers, andmaintenance staff and their expectations for Hitachi. Overall evaluation results and individual
customer opinions are shared with relevant divisions centered on responsible sales divisions andHitachi Sustainability Report 2019125

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Customer Contact Cases, Call Completion Rate (12-Month Average)(Cases per month)(%)

100,000

100

82.1

76.4

74.8

80,00082.3

82.3

Flow of Customer Service
Individual
business group
Repair request

80
60

60,00037,15840,000

4,782

20,00036,19732,37636,9194,050
32,14738,8173,500
33,4193,049

36,40735,768

Repair

40

2,539

20

33,868

Information on repair service

RepairContact
CenterQuality assurance
division

Feedback on improvements

Customers

Designdivision

Inquiry

0

2014

2015

2016

2017

2018

(FY)

White goods (electric home appliances and other products) (left scale)
Brown goods (electronic equipment) (left scale)
Call completion rate (right scale)0

Customer Support
Contact Center(no repair)

Input indatabase

Feedback

Response

Manufacturing
division

Results of Evaluation Survey for Customer Repair Services (CS)
Response activity(%)

Flow of information

Information sharing

100
95

97.2

97.3

97.4

97.3

97.3

2014

2015

2016

2017

2018

90
85
80
75
0

(FY)

Note: Evaluation survey for fiscal 2018 carried out in June–July 2018(35,400 respondents; 32.8% response rate) and December 2018–January 2019(28,800 respondents; 33.8% response rate).

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Community
Hitachi’s ApproachSocial Contribution Activities

Our diverse operations span the globe and involve a wide range ofcommunities. To build long-term relationships with all communities involvedin our business and to contribute to their development, we carry out various
social contribution activities in the key fields of human development, theenvironment, and community support. In recent years, we have focused on
STEM (science, technology, engineering, and mathematics) education tofoster the next generation of human capital who will lead the future, and in
fiscal 2018 we carried out a diverse range of activities drawing on therespective strengths of each Group company.

Policy on Social Contribution Activities

PolicyIn an effort to achieve the 2021 Mid-term Management Plan, Hitachi is working to create socialand environmental value through the Social Innovation Business. Social contribution activities
lead to the creation of social and environmental value and can support the sustainable developmentof society and continued business growth. We thus actively promote activities in the key fields ofhuman development, the environment, and community support, which are outlined in the policy
on social contribution activities shared by the Group. As a company aiming to solve social issues
through innovation, we believe we have an important mission to foster not only our own humancapital but also people in the fields of science and technology more broadly. Also, as a global

Our Impact on Society

company, we believe it is essential for employees to actively volunteer their time to address local

Funding for social contribution activities

has benefits for employees as well, as it can heighten their awareness of social issues and—by

issues and needs, building trust with the local community as a good corporate citizen. Volunteering

1,888.11

million yen

helping resolve those issues—enhance their motivation to work. This can, in turn, become adriving force for the Social Innovation Business and our many other operations.
Policy and Statement on Social Contribution Activities
Policy on Social Contribution Activities
The Hitachi Group promotes interactive communication with local society through social contribution activities
related to business activities, employee volunteers, and charitable activities in the key fields of human development,

Our Performancethe environment, and community support.
Statement

No. of participants

54,629“Nurturing People, Connecting to the Future”
The statement was set down to succinctly express the meaning of the policy so that its orientation may be sharedby employees, the community, and various other stakeholders so that it can reach as many people as possible.

(approx. 18.5% of total employees)

Social Contribution Activities

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Funding for Social Contribution Activities

Objectives, Activities, and Achievements

Advancing STEM Education as
One HitachiObjectives, Activities, and Achievements

In fiscal 2018, Hitachi and the Hitachi Global Foundation provided about 1.9 billion yen in funding
toward social contribution activities worldwide. Additionally, 54,629 Hitachi Group employees

The rapid advance of AI, big data analytics, and other information technologies has made the(around 18.5% of the total) participated in social contribution activities.

development of IT personnel an urgent priority. There is growing worldwide recognition of theimportance of STEM (science, technology, engineering, and mathematics) education to foster
human resources capable of utilizing IT and other cutting-edge technologies to enhance their

Breakdown of Funding for Social Contribution Activities

creativity, expressivity, and problem-solving skills. We are implementing various STEM-related

Other

28.2%

Human development(including 6.9% for disaster relief)

49.3%

social contribution activities to foster a new generation of human capital to lead the future.

STEM Education to Develop Engineers in the United Kingdom(Hitachi Rail Ltd.)1,888 million yen*1

In response to a serious shortage of engineers in the United Kingdom, Hitachi Rail launched abrand new educational program in October 2018, partnering with Primary Engineer, a non-profit

Community support

20.5%

organization that delivers STEM educational programs for education institutions, targeted at 5- toEnvironment

2.0%10-year-old primary school pupils.
The program delivers training to teachers with the company’s engineers at about 50 primary*1 Japan: Hitachi, Ltd., 141 Group companies, and the Hitachi Global Foundation.
Outside Japan: 152 Group companies. Funding includes monetary and in-kind donations, independently organized programs, participation or
dispatch of employees, community use of facilities, and employee donations; excludes personnel costs incurred from the participation or
dispatch of employees.

schools in Ashford, Doncaster, Bristol, Newton Aycliffe, and West London, where Hitachi’s railway
business sites are located. Approximately 3,000 pupils will benefit from this educational experiencein the 2018–19 academic year.
This program is funded for three years by Hitachi Rail. In year two, the existing 50 schools will
be supplied with the materials to continue with the program while a new cohort of 50 schools willbe trained and enabled to run the rail-oriented engineering projects in the classroom. Within thethree year program, over 16,000 pupils will have engaged with this program.
Hitachi Rail recognizes the importance of working with schools to raise children’s awarenessof exciting career opportunities in engineering fields. Therefore, this STEM program is linked tothe school curriculum, implemented by a team of school teachers and the company’s engineers.
Using rail train models, the children learn rail engineering directly from the engineers of Hitachi Rail.

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Parliamentary Under Secretary of State for Transport Nusrat Ghani said that this program is

Working with an original textbook, schoolchildren use tablets to learn a basic robot operating

a fantastic demonstration of collaboration for nurturing next-generation engineers, working inprogram. The program is then applied to run ball-shaped robots on a course the children

partnership with industry and the education and charity sector.

themselves have created. This exercise is intended not only to stimulate interest in IT but, throughHitachi Rail will continue to tackle with the lack of skilled workers in engineering fields by

the sharing of the programs the children created, to cultivate their presentation skills. Goingdelivering the STEM program, which will lead to the company’s growth and supporting theforward, there are plans to fine tune the program for different age groups and to hold classes ingovernment’s Industrial Strategy in the United Kingdom.

cities other than Tokyo. Consideration is also being given to inviting the participation of children
outside Japan by linking classrooms via the internet.

Participating pupils celebrate the completion of the program.

Programming Classes for Schoolchildren (Hitachi Consulting Co., Ltd.)There is a growing interest in programming in Japan, as courses in the subject will start in earnest

One aim of the program is to enhance the presentation skills ofparticipating schoolchildren.

at elementary and junior high schools under the education reforms of 2020.
Believing in the importance of STEM education to foster the next generation of IT personnel,
Hitachi Consulting has developed an original programming curriculum that draws on the company’s

Hitachi Professional Engineers Association

IT skills and content to cultivate an ability to think logically. The classes, taught by volunteering

The Hitachi Professional Engineers Association*1 was established in 1984 to contribute to society

employees, are for the children of Hitachi Group employees in grades three to six and are held atand business operations in many ways, such as offering society the technological expertise of

the offices of Hitachi Consulting and Hitachi, Ltd. Classes were held four times in 2018 with theits members through the Social Contribution Promotion Committee. One of the association’s

participation of approximately 100 children and their parents.

activities is the Science Dream Club, aimed at cultivating an interest in science among children
who will lead the next generation. Using original content, the club conducts workshops at various
science-related events that allow participants to experience the mechanisms of science. In fiscal
2018, 21 workshops were held in Osaka, Hamamatsu, and the Greater Tokyo area. In December
2018, the club participated in a program organized by the University of Tokyo (with the support of
the Japan Science and Technology Agency) to develop engineers of the future. Using Raspberry
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electronic workshop at Kawaguchi Municipal High School to learn the basics of programming

Hitachi Scholarship Program for the Asian University for Women(Hitachi, Ltd.)and IoT. Future workshops will aim to provide opportunities not just to experience programming

Hitachi, Ltd. has been providing scholarships to students at the Asian University for Women

but also to acquire practical IoT and scientific skills in line with specific goals.

(AUW) since fiscal 2014. AUW is an international university in Chittagong, Bangladesh, that was

Pi—a business-card-sized PC—about 30 junior high school students participated in an*1 A group of highly qualified engineers certified by the Japanese government as either “professional engineers” or “associate professional
engineers.” Chaired by the CEO of Hitachi, Ltd., it is one of the largest corporate associations of professional engineers in Japan.

established in 2008 to provide higher education opportunities to socially or economicallydisadvantaged women from South and Southeast Asia. Three students having high aspirations
and a strong motivation to address such social issues as poverty, education, and gender inequality
were selected as Hitachi Scholars and have been provided with scholarships and support since2014 during their four-year undergraduate years. Six new students majoring in the fields of scienceand technology will be selected and provided with support from 2018.
Through our support of Asian women in higher education, we will promote greater diversity
among community leaders and people with scientific or technological expertise, helping address
issues in social sustainability and contributing to regional development.

Hitachi Young Leaders Initiative (Hitachi, Ltd. and Hitachi Asia Ltd.)A workshop for junior high school students using Raspberry Pi.

The Hitachi Young Leaders Initiative (HYLI) was launched in 1996 with the aim of nurturing thenext generation of leaders in ASEAN and Japan. Held for the fifteenth time in July 2019, HYLI
brings together outstanding undergraduate and graduate students from seven ASEAN countries

Development of Next-Generation Leaders Objectives, Activities, and Achievements(Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and Japan toparticipate in a program featuring speeches and panel discussions by top experts, group work,

One priority in Hitachi’s social contribution activities is the development of human resources. Our

and community activities. The participants come to recognize and reach a common understanding

initiatives are not just in the field of science and technology but also focus on fostering the next

on the various issues confronting ASEAN, and they hold discussions and offer proposals on ways

generation of leaders to tackle issues at the global and local levels and bring about positive

to address those issues. The program’s over 340 alumni through fiscal 2018 are now active inchange in society.

a variety of fields, including international organizations, government, corporations, and NPOs.
Social Contribution Activities

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Contributing to Society Throughthe Hitachi Global Foundation

Frameworks and Systems

The Hitachi Global Foundation conducts social contribution activities around the three pillars of

In addition, a new website called My Tomorrow aimed at female junior high and high school“promotion of academic research, science, and technology,” “human development,” and “support

students was launched to raise interest in science and engineering careers. It features interviewsfor local communities.”(called Pioneer Talk) with leading women professionals, focusing on their experiences, work, andideas. The third interview uploaded in September 2018 is a dialogue between Yuki Igarashi, PhD,
Associate professor, Department of Future Media Science, School of Interdisciplinary Mathematical

Activities of the Hitachi Global Foundation

Objectives, Activities, and Achievements

Sciences, Meiji University, known as a programming genius, and Yukiko Araki, Corporate Officer,
Hitachi, Ltd.

The Hitachi Global Foundation conducts 14 social contribution projects based on the three corepillars of “promotion of academic research, science, and technology,” “human development,” and“support for local communities.” Some of the most prominent projects conducted in fiscal 2018
include the following.

In a related project, 18 junior high school girls participated in a workshop to create their own
dolls using computer graphics programmed by Igarashi.
In the field of “support for local communities,” the foundation publishes Mirai (Future), a web
magazine that examines regional and social issues of high public interest. The third issue

In the field of “promotion of academic research, science, and technology,” the foundation

focused on the issues and challenges of a declining birthrate and featured a dialogue between

provides Kurata Grants, which support researchers engaged in the pursuit of solutions to global

the foundation president and Toko Shirakawa, a journalist and book author on such topics as thesocial challenges. On March 1, 2019, an award ceremony for the 50th Kurata Grants was held,

declining birthrate and work-life reform. Other articles included a report on a symposium on

with prizemoney totaling 30.8 million yen. The 30 winners in the natural sciences and engineeringsurviving the era of a declining birthrate and opinion pieces submitted by experts, including

were 12 projects in the category of energy and the environment, 5 in urban development andTomiyo Kagami, professor of comparative literature and cultures in the Graduate School oftransportation, and 13 in healthcare (with 7 being interdisciplinary studies incorporating research

Humanities and Sciences, Ochanomizu University.

in the humanities and social sciences). To commemorate the 50th anniversary of the awards,
the winners also received a booklet containing the names and photos of all grant recipients over

The Hitachi Global Foundation will continue to implement projects in the public interest that
contribute to resolving the biggest social challenges of our time.

the full history of the Kurata Grant and a crystal magnifier-paperweight inscribed with the nameof the winner.

The Hitachi Global Foundation

As for “human development,” the Hitachi Future Innovator Program to promote thedevelopment of science and engineering human resources entered its third year. Aimed at
Japanese schoolchildren in the upper grades of elementary school, the program was expandedfrom two schools to three, and its content was enriched. This project-based learning program
has been highly praised not only for enhancing the problem-solving ability of schoolchildren but
also for promoting the development of teachers.

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Environmental

SocialGovernance

Data

Striving to Increase Corporate Value

GovernanceNot only is Hitachi strengthening its corporate governance in areas like the role and composition of theBoard of Directors and standards for determining the suitability and independence of its independent
directors, it is also taking self-directed action to enhance corporate value by sharing its Codes ofConduct and values across the Group, ensuring compliance with laws and regulations, and advancing
risk management. In this way, we contribute both to the company’s own sustainable growth and thedevelopment of the economy as a whole.

CONTENTS
133 Corporate Governance
141 Compliance142  Sharing Our Codes of Conduct and Values Acrossthe Group144  Promoting Work Practices in Line with International
Ethics Codes

146 Risk Management
146
150
151

Addressing Risks and Opportunities
Stable Provision of Products and Services
Information Security

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Introduction  Management

Environmental

SocialGovernance

Data

Corporate Governance
Hitachi’s Approach

Basic Approach

Hitachi not only strives to ensure the legality, soundness, and transparencyof its business but also endeavors to respond rapidly to constantly changing
economic and social conditions and efficiently conduct operations. We seek
to increase corporate value by formulating and executing business strategies
to enable the Group to demonstrate its collective strength, bolstering mutual
collaboration within the Group, and improving management oversight ofGroup companies. We maintain and reinforce a management structure
enabling us to fulfill our social responsibilities in line with the Corporate
Governance Guidelines, formulated to provide a framework for corporate
governance and direction for our reinforcement efforts.

Hitachi is a company with nominating committee, etc. under the Companies Act of Japan.

PolicyIn June 2003, we changed our organizational design, separating the oversight of managementfrom execution of management. By demarcating responsibilities for management oversight andthose for the execution of business operations, Hitachi is working to create a framework for
nimble operations, while making management highly transparent.
In June 2012, we ensured that 7 of the 13 members of our Board of Directors were independent
directors*1, and that some of these independent directors were non-Japanese. These changes
will help us to establish management that reflects diverse global perspectives and strengthen our
supervisory functions.
Starting in June 2015, Corporate Governance Code of Japan (the “Code”) was applied tocompanies listed on Japanese stock exchanges. In 2012, Hitachi formulated and published

Our Impact on Society

Corporate Governance Guidelines as a set of enhancing principles and as a framework for

No. of consolidated subsidiaries

Board of Directors, director appropriateness and the independence of independent directors.

181

Japan:

Outside Japan:

corporate governance that includes criteria for determining the roles and composition of the

622

Hitachi agrees with the basic approach of the Code, which is that the Code’s appropriate
implementation will contribute to the development and success of companies, investors and theJapanese economy as a whole through individual companies’ self-motivated actions, so as toachieve sustainable growth and increase corporate value over the medium- to long-term. Moving
forward, Hitachi will work to further strengthen corporate governance.
*1 The “Independent Directors” are the directors who fulfill the qualification requirements to be outside directors as provided for the Companies
Act of Japan and also meet the independence criteria defined by the Company and those provided by Japanese stock exchanges where theCompany is listed.

Our Performance
Ratio of non-Japanese directors

36.4

%

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Environmental

GovernanceSocialData

Corporate Governance2019
Acceleration of Social Innovation
Business across 5 Growth Fields

Start of application of Corporate Governance CodeDevelopment of Stewardship Code

2015

2016

Representative vice presidents wereplaced in 5 sectors

Enhancement of Dissemination ofInformation about Medium- to
Long-term Sustainable Growth2014

Publication of an integrated report

Development of Guidelines forStrengthening Governance

Implementing All of the Principles of
the Corporate Governance Code

We are implementing all of the principles of the Corporate Governance Code.

Analysis and Evaluation of theEffectiveness of the Board of Directors

Acceleration of Global Management
Enforcement ofrevisedCompanies Act

2006• Independent directors including foreign
directors were increased• Independent directors comprised the
majority of directors

2010
Enhancement of Interactions with
Capital Markets

2003

Hitachi IR Day (briefing on businessstrategy by division) was launched• Clarification of commitment of top
management of the business units
to the capital markets

continuous effort to maintain and improve its functions.
Fiscal 2018 Evaluation Process

1. Questionnaire-based
self-assessment for each director(February–March 2019)

2. Discussions held by independent
directors (March 2019)

Independent directors held an exclusive meeting to discuss the effectiveness of the Board of Directors.

3. Discussion and review within the Boardof Directors (May 2019) he Board of Directors holds a discussion based on the results of the questionnaire-based self-assessment
Tand discussions conducted in the exclusive meeting attended by independent directors, comparing theseresults to those of the previous year and considering the statuses of related initiatives. Through this discussion
the Board of Directors analyzes and evaluates its overall effectiveness and identifies policies through which it
can increase this effectiveness.

Evaluation Results and Future Initiatives

Overall evaluation in
fiscal 2018

Shifted to a company with committees(currently a company with nominating
committee, etc.)• To increase management speed andimprove management transparency

Introduction of Objective
Perspective

Points of evaluation
Composition of Board of Directors:	Member diversity, numbers and ratios of independent directors and insidedirectors, etc.
Operation of Board of Directors:	Meeting frequency, discussion time, proposal selection, role ofchairperson, etc.
Contribution:	Contribution to management strategy formulation and other matters, member
demonstration of experience and knowledge, etc.
Status of committee activities:	Composition, responsibilities and roles, collaboration with Board of
Directors, etc.
Operation supporting system:
delivery of information e.g., provision of documents for the Board

Overall evaluation in fiscal 2018

Demarcation of Management
Oversight and Execution

1999

Objectives, Activities, and Achievements

The Company evaluates the effectiveness of its Board of Directors as a whole each year, in a

Development of Corporate
Governance Guidelines

2012

Objectives, Activities, and Achievements

Fiscal 2018 evaluations determined that membership in our Board of Directors was sufficiently diverse. They also indicatedthe Board of Directors’ overall effectiveness was satisfactory due in part to its active discussions aimed at medium- tolong-term growth in corporate value. Each director was found to have contributed his or her own knowledge to these
discussions, which were primarily focused on points related to management strategy, including the Mid-term Management Plan.
Future initiatives

History of Hitachi’s corporate governance reform

Maintenance and improvement ofBoard of Director functions

Determine the Company’s medium- to long-term strategic direction and further contribute to the formulation ofbusiness strategies
Raise contribution to CEO succession planning
Conduct thorough and continuous monitoring of important matters

Enhancement of support tooperation of the Board of Director

Continue to create opportunities to share information, including independent directors visit to Group locations
Apply ingenuity to improve the design and content of documents and work to consistently provide them in advanceManagement Advisory Committees•P ractical advice from experts in Japanand overseas

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Environmental

GovernanceSocialData

Corporate GovernanceCorporate Governance Framework

Frameworks and Systems

Within the Board of Directors, there are 3 statutory commit-

Senior Executive
Committee
General Meeting of
Shareholders
Appointment

Reporttees—the Nominating Committee, the Audit Committee, andthe Compensation Committee—with independent directors

President & CEO

accounting for the majority of members of each committee.

Appointment/
Oversight

The Board of Directors meetings were held on 12 days during

Executive Vice Presidents and Executive
Officers/Senior Vice Presidents andExecutive Officers/Vice Presidents andExecutive Officers

Board of Directors

the fiscal year ended March 31, 2019, and the attendance rateof directors at these meetings was 96%. The attendance rates
for each independent director were as shown in the table on the

Nominating Committee

next page. To assist with the duties of the Board of Directors

Audit

Compensation
Committee
ReportInternal
Auditing
OfficeAudit Committee

Executive
Officer
Department
in Charge

and each committee, staff who are not subject to orders andExecutive
Officer
Department
in Charge

Department
in Charge

Department
in Charge

instructions from executive officers are assigned.

(1) Nominating Committee
The Nominating Committee has the authority to determine

Audit

proposals submitted to the general meeting of shareholders

Audit

for the election and dismissal of directors. The Nominating

ReportAccounting Auditors

Committee consists of 4 directors, 3 of whom are independent
directors. The Nominating Committee meetings were held on 9days during the fiscal year ended March 31, 2019.

Board of Directors

Frameworks and Systems(2) Audit Committee
The Board of Directors approves basic management policy for Hitachi Group and supervises the

The Audit Committee has the authority to audit the execution of duties of directors and executive

execution of the duties of executive officers and directors in order to sustainably enhance corporate

officers and to decide on proposals submitted to the general meeting of shareholders for thevalue and shareholders’ common interests. The basic management policy includes the Mid-term

election and dismissal of accounting auditors. The Audit Committee consists of 5 directors,

Management Plan and annual budget compilation. The Board of Directors focuses on strategic

including 4 independent directors and 1 standing Audit Committee member. The Audit Committee

issues related to the basic management policy as well as other items to be resolved that aremeetings were held on 17 days during the fiscal year ended March 31, 2019.

provided in laws, regulations, the Articles of Incorporation, and Board of Directors Regulations.
The Board of Directors was made up of 11 directors, 2 of whom concurrently serve as executive(3) Compensation Committee

officers. Hitachi aims to reinforce the oversight function of the Board of Directors, of which 8

The Compensation Committee has the authority to determine remuneration policies for directors

independent directors, including non-Japanese, account for the majority, reflecting their global

and executive officers and remuneration for individuals (including amounts of remuneration)and diverse viewpoints. The term of office for directors is 1 year.

based on them. The Compensation Committee consists of 4 directors, 3 of whom are independent
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Corporate Governance

Executive Officers

Frameworks and Systems

directors. The Compensation Committee meetings were held on 6 days during the fiscal year

Executive officers decide on matters delegated to them by the Board of Directors and execute

ended March 31, 2019.

Hitachi’s business affairs within the scope of assignments determined by the Board of Directors.
As of the end of June, 2019, Hitachi has 39 executive officers.

The Board of Directors continuously supervises succession planning for the CEO. The CEO isappointed or dismissed in line with the proposal of the Nominating Committee in consideration of

Senior Executive Committee

Frameworks and Systems

the matters: 1) that the candidate has the highest personal and professional ethics, integrity,
insight, and leadership, and 2) that the candidate is believed to be the one most qualified to realize

The Senior Executive Committee is a council to ensure that the President deliberately decides onsustainable enhancement of the Company’s corporate value and shareholders’ common interests,

important managerial matters, which may affect the business of Hitachi or the Hitachi Group,with rich experience and a distinguished record in the area of corporate management.

through discussion from diverse viewpoints. This committee consists of 12 members as of the

Furthermore, Hitachi formulated and published Corporate Governance Guidelines outlining theframework of corporate governance, such as the function and composition of the Board of

end of June, 2019: the president and CEO, 6 executive vice president and executive officers, 4senior vice president and executive officers, and 1 vice president and executive officer.

Directors, qualifications for directors, criteria for assessing the independence of independent

Director and Executive Officer Compensation

directors, and rules on those serving concurrently as officers at other companies.
Corporate Governance Guidelines of Hitachi, Ltd.

PolicyBasic Policy
Compensation shall be such that it enables the Company to attract necessary personnel to achieve an

Attendance at Meetings of the Board of Directors by Independent Directors in the
Fiscal Year Ended March 31, 2019improvement in corporate value through global business growth.
Compensation shall be commensurate with roles and responsibilities of each Directors and Executive Officers.
Compensation for Directors shall be such that it enables them to exercise functions of supervision of

Attendance / Number of days on which the meetings were held*1

management effectively.

Board ofDirectors

Nominating
Committee

Audit
Committee

Compensation
Committee

Compensation for Executive Officers shall be such that it enables them to contribute to sustained improvement

Katsumi Ihara

100%

—

100%

100%

Cynthia Carroll

100%

100%

—

—

The level of compensation shall be determined taking into account compensation levels at other companies as

Joe Harlan

100%

—

—

—

George Buckley

100%

—

—

—

well as economic and market trends.

Louise Pentland

100%

—

—

—

Harufumi Mochizuki

◎100％

◎100%

100%

◎100%

Takatoshi Yamamoto

100%

—

100%

100%

Hiroaki Yoshihara

92%

100%

◎100%

—

Name

in corporate value through the execution of business and employs an appropriate balance between short-term
performance and medium- and long-term performance.

The Compensation Committee utilizes external experts to gain expert advice and an objective viewpoint, if
necessary, for considering the details and amounts of compensation.

*1		Number of days during term of office during on which Board of Director meetings were held: 12 (9 in the cases of Mr. Ihara and Harlan)
Number of days during term of office on which Nominating Committee meetings were held: 9 (7 in the case of Mr. Yoshihara)
Number of days during term of office on which Audit Committee meetings were held: 17 (11 in the case of Mr. Ihara)
Number of days during term of office on which Compensation Committee meetings were held: 6 (5 in the case of Mr. Ihara)◎ Indicates role as board or committee chairperson

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Corporate GovernanceCompensation to Executive Officers (FY2019)
Compensation Structure

Frameworks and Systems

Total remuneration
Variable pay(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 full-time 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.

Fixed pay
(Basicremuneration)

Compensation for executive officers consists of basic remuneration as fixed pay, and short-term
The basic amount of each type of compensations is set based on the ratio of 1:1:1 as the standard
from compensation for the fiscal 2019, taking into account the composition of executive
compensation for major global companies, in order to improve corporate value through thegrowth of global businesses. The higher position of executive officers holds, the higher proportionof variable pay is set to the total annual compensation.
If it is found that an executive officer has been engaged in misconduct during his/her term ofoffice, compensation for executive officers that has been already paid shall be returned to theCompany (clawback provision).
Please refer to Compensation to Directors and Executive Officers on P. 75–80 ofMedium- and Long-term incentive compensation

The amount of short-term incentive compensation isdecided within the range of 0 to 200% of a basic amount
set according to the relevant position by adjusting thatamount to reflect financial results and individual
performance.

The shares of restricted stock are granted in order to propel
management from a medium- and longterm 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 theholding of shares during their term of office.

Individual
target-linked
component(2) Executive Officers
incentive compensation and medium- and long-term incentive compensation as variable pay.

Short-term incentive compensation

Set according to
the relevant
position byadjusting thatamount to reflect
financial results
and individual
performance.

Varies according
to the evaluationof the level ofachievement of
individual target
for each executive
officer determinedbased on his/her
responsibility.

Performance-linked
component
Company
performance

Division
performance

Evaluated referring
to consolidated
revenues,
adjusted
operating income,
EBIT, and net
incomeattributable to
Hitachi, Ltd.
stockholders inorder to measure
the level ofachievement ofconsolidated
financial forecasts
disclosed to
stakeholders,
includingshareholders andinvestors.

Evaluated referring
to adjusted
operating income
and operating
cash flows foreach division,
among otherindicators, tomeasure the levelof achievement oftargets under the
Midterm
Management Plan
and the annual
budgets fordivisions.

The shares of restricted stock

The restriction on transfer shall be lifted if executive officers
resign from all of the positions of the Company’s executive
officer, director, and corporate officer.
With regard to one-half of granted shares of restricted
stock, the number of shares whose transfer restriction islifted shall be determined after ex-post evaluation in which
the total shareholder return of Hitachi stock is compared to
growth rate of TOPIX. Lifting of transfer restrictions shallapply to all granted shares if the TSR/TOPIX Growth Rate
Ratio is 120% or more. Lifting of transfer restrictions shallapply to part of granted shares if the TSR/TOPIX Growth
Rate Ratio is between 80% or more but less than 120%*1.
Transfer restrictions shall not be lifted for any shares if the
TSR/TOPIX Growth Rate Ratio is less than 80%. Shares
whose transfer restrictions are not lifted shall be acquiredby the Company without consideration.

*1	Number of shares whose transfer restrictions are lifted	= Number of granted shares × { (TSR/TOPIX Growth Rate
Ratio × 1.25) - 0.5}

Annual Securities Report.
Annual Securities Report

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SocialGovernance

Data

Corporate GovernanceInternal Control over Financial Reporting

Frameworks and Systems

To ensure the reliability of its consolidated financial reporting, the Hitachi Group is establishingand implementing relevant internal controls. We evaluate their effectiveness by adhering to standards for the evaluation of internal controls related to financial reporting that are generally
accepted as fair and reasonable.
Furthermore, we have established the J-SOX Committee with the goal of raising the effectivenessof these internal controls. This committee evaluates internal control effectiveness and establishes
frameworks designed to improve and strengthen them.
Internal Control Assessment Framework

Financial Services
AgencyInternal
ControlReportHitachi, Ltd. President & CEO
Chief Financial Officer
ReportAudit
Committee

ReportReportJ-SOX Committee
Cooperation

Accounting
Auditors

J-SOX Committee Office
ReportInternal Auditing
OfficeExternal
AuditsBusiness Units and Major Group Companies
ReportSubsidiary Companies

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Environmental

GovernanceSocialData

Corporate Governance

Enhanced Collaboration ThroughTripartite Audits

Building a More Effective andEfficient Auditing System

Frameworks and Systems

Frameworks and Systems

In pursuit of sustainable growth in corporate value, Hitachi’s Audit Committee and internal audit

Our Audit Committee formulates audit plans in accordance with its risk-based approaches andsection collaborate with third-party accounting auditors to strengthen its “tripartite auditing,”

conducts audits for each consolidated business unit. Audit Committee members meet directly

which aims to increase the effectiveness of internal controls. Our Audit Committee takes the leadwith business unit heads before the internal audit section’s audits are carried out. Then, thesein this regard, as the three parties communicate closely to share risk information and assessments

members inform the internal audit section about concerns and issues related to the implementation

concerning risk response while securing transparency and ensuring appropriate checks andof business strategies aimed at achieving sustainable growth that require attention. At this time,balances.

Hitachi also verifies matters that carry high levels of risk in termsof quality, measuring these risks through employee awarenessImproving Internal Control Through a “Tripartite Audit” Function

surveys and thorough implementation of business strategies.
Hitachi’s internal audit section performs regular internalGoals

 1 Leveling of audit methods
2 Improving efficiency and transparency
in audit processes with arisk-based approach

Audit by the Audit Committee
based on the risk approach

Audit Committee

Assessment of content of audit

audits at each business site and location. This section reports
directly to the CEO and is independent from organizations that
Assessment of content of audit

are subject to its audits. The internal audit section also formulates
audit plans based on past audit records and the most recent
business circumstances. Additionally, this section performs
audits upon receiving direction from the Audit Committee,

Report status of internal audit

Sharing of risk information andassessment of responses to risk

Request that internal auditors undertake detailed audit of problems foundas a result of audit by Audit Committee

Report status of financial audit

operations, including those related to accounting, production
management, sales, purchasing, IT systems, compliance andpersonnel labor. Furthermore, employees are well versed in theReport important indications related to financing

Periodic internal audit
by office and baseideas and policies of our management and, acting on behalf ofAccounting Auditors(Internal Audit Office)Assess content
of audit

Extract problems based on
results of internal audits
and assess significance of riskof improper accounting

The internal audit section at Hitachi is responsible for
confirming the legality and appropriateness of all business

Exchange opinions about audit
plans, auditors’ remuneration, risk
assessment, etc.

Internal audit section

ensuring their effectiveness.

our management team, confirm whether operations are being
carried out based on these ideas and policies and if businessAccounting audit centered on
accuracy and reliability of financial
statements

strategies are being implemented in a way that will efficiently
lead to sustainable growth.
To further raise audit effectiveness, we implemented a“executive auditor” system in each of our 5 growth sectors(IT, energy, industry, mobility, smart life) in April 2019. We alsoestablished internal control systems which are headed by
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Data

Corporate Governanceexecutive auditors who report to the vice presidents who manage each sector. Although these
executive auditors do not act as legal agents under the Companies Act, they still assume
responsibility for governance in each sector. They also function as a reporting line for statutory
auditors at Hitachi subsidiaries who are legal agents under the Companies Act and are working
to improve the efficiency of our internal control systems.
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 building a system that will allow our internal audit section to share information
with professional accounting auditors using the Lumada platform’s data lake and expect it to becomplete sometime in fiscal 2020. When reading audit reports submitted by the internal audit
section, our CEO must be able to quickly understand the issues identified by these reports andmake prompt judgments concerning whether immediate action is required. In the future, ourinternal audit section will continue to maintain its transparency and independence while working
to improve audit efficiency as one member of our tripartite audit system.
Our accounting auditors perform audits that focus on the accuracy 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 then determine the scope and methods of theaudit, formulate an audit plan and share opinions with the Audit Committee. Next, based on
the audit plan, they perform audits on each of the 5 growth sectors and the business units thatcomprise them, enabling effective and efficient understanding of data related to Hitachi’s financedepartment and each of its 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 progress on response from related divisions
with the Audit Committee and internal audit section. They also work to improve and raise theeffectiveness of audits by submitting “management letters” containing points of concern andimprovement suggestions through the accounting department. Recently, they have also beenworking to raise the efficiency of checks on the accuracy of numerical figures by using IT systems
to investigate all cases, rather than performing test-checking through sampling.

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Environmental

SocialGovernance

Data

Compliance
Hitachi’s ApproachWith the globalization of the economy, borderless corporative activities—
spanning countries and regions with different governmental and economic
frameworks, trade practices, and sets of values—are increasingly vital.
Spreading understanding of and respect for norms among all Hitachi Group
employees is a fundamental management issue as we seek to rigorously
implement fair business practices and avoid risks around the globe.
Hitachi has formulated in-house regulations in line with widely acceptedinternational standards to govern important business practices such asbribery prevention and the ensuring of fair competition, and these regulations
are conveyed and strictly enforced across the Hitachi Group.
Additionally, as we pursue sustainable management, in order to realize value
creation that contributes to the resolution of social issues, we disseminate
and share both the Hitachi Group Identity, an integrated set of principles
including our management vision and values, and the Hitachi Group Codesof Conduct, which spell out decision-making procedures and actions for all
Hitachi Group executives and employees.

Our Impact on Society
No. of employees (consolidated)

162,000
133,000

Japan:

Outside Japan:

Our Performance
No. of participants of compliance e-learning for preventing
bribery and corruption and violations of fair competition
laws (8 languages)

150,000

More than

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Compliance

Sharing Our Codes of Conduct andValues Across the GroupThe Hitachi Group Codes of Conduct

PolicyHitachi, Ltd. formulated the Hitachi, Ltd. Standards of Corporate Conduct in 1983, followed by

Hitachi Global Compliance Program, a new integrated system of rules headed by the Hitachi

the Hitachi Group Codes of Conduct in 2010 that the entire Group pledges to uphold.

Group Codes of Conduct. This program is being implemented seamlessly across the

In April 2018, we revised the Hitachi Group Codes of Conduct based on our philosophy that

global organization.

corporate activities should meet the needs of the times, such as the SDGs, toward a sustainable

To implement this program, we have appointed a senior executive as the head of risksociety, human rights and building a work environment, and various types of crisis management.

management for the entire Hitachi Group, to supervise management-level risk management
executives from business units and key Group companies. Under this system, policies andHitachi Group Codes of Conduct

measures are shared through the Compliance Management Conference, composed of these risk
management executives. Each executive is assisted by a compliance manager who implements
practical support measures. We also support Group companies outside Japan and have

Ensuring Awareness of the Hitachi Group
Objectives, Activities, and Achievements
Codes of Conduct

appointed compliance heads in 11 regions, responsible for implementing education and sharing
information as well as arranging consultation services with outside attorneys.
Issues in the promotion of compliance measures are clarified through individual dialogue withThe Hitachi Group Codes of Conduct are available in Japanese and 13 other languages—

business units and key Group companies, while the internal audit section regularly conducts

including English and Chinese—and shared with Hitachi Group employees around the world.

Group-wide reviews to verify that each area of compliance is being appropriately operated. In

The Codes of Conduct are based on global standards in a range of areas, including the SDGs,

cases where these reviews identify necessary improvements, corrective measures are swiftly

and an e-learning tool has been made available in Japanese and 13 other languages to encourage

implemented. Hitachi, Ltd. also convenes an Advisory Committee of outside experts to gaina deeper understanding of them.

new insights into compliance and apply them proactively in its own efforts.

Additionally, the Hitachi Group performs an annual employee survey on awareness of matterssuch as business ethics and compliance as part of its efforts to cultivate a healthy corporate culture.

Compliance Reporting System
Compliance Framework

Frameworks and Systems

Frameworks and Systems

Hitachi has instituted a Compliance Reporting System allowing reports to be made to thecompliance section or directly to external lawyers to prevent illegal and unethical behavior, toAs an organization with global business activities, Hitachi is expected to have a complianceframework based not only on the laws and regulations in the regions and countries where we

promptly address infractions, and to enhance its ability to self-regulate.
This system can be used not only by employees within the Hitachi Group but also by temporary

operate but on global standards. In 2016, Hitachi reviewed and reorganized the regulations andstaff and business partners, such as suppliers and distributors. Reports can be made about

guidelines including on compliance with competition laws, prevention of antisocial transactions,matters that contravene social justice, such as improper treatment—including acts that are illegal

and prevention of bribery and corruption that had been set independently, and established theor against regulations—and human rights issues. Suspected violations of competition and
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Complianceanti-bribery laws can be reported anonymously.

from antisocial forces in partnership with external specialist institutions (the National Center for

The facts related to all reports are subject to thorough investigation and checking, and people

the Elimination of Boryokudan or the police).

who have identified themselves in the reports are informed of the investigation results. We makeevery effort to deal with situations as appropriate, including taking remedial action where necessary.
We will continue to maintain and review the system, prioritizing the protection of whistleblowers.

Thorough Export Controls

PolicyFrameworks and Systems

In fiscal 2018, in Japan, we applied for recognition under the Whistleblowing ComplianceManagement System (with self-declaration of conformity) implemented by the Consumer Affairs

For basic export control policies, we have adopted the Hitachi Group Codes of Conduct, which

Agency, and our registration was accepted in July 2019.

state: “We will help maintain international peace and security through compliance with all applicable

In addition, we have implemented the Channel to the Board of Directors system to allow alllaws and regulations concerning import and export, and will operate appropriately according to

Hitachi, Ltd. employees to directly report problems anonymously or under their real names toour internal rules and policies.” Hitachi, Ltd. has established Corporate Regulations concerning

Hitachi directors in cases where they see any illegality or extreme inappropriateness in business

Security Export Control based on this policy to carry out strict export control practices in line with

conduct by division heads, executive officers, or other management personnel.

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 and end users.
We provide guidance and educational support for the formulation of regulations and theCompliance Reporting Achievements

Objectives, Activities, and Achievements

establishment of frameworks to Hitachi Group companies in Japan and around the world toensure that all Group companies follow the same export control policies in accordance with

In fiscal 2018, we received 462 reports from all Group companies in Japan and around the world.
Additionally, the Hitachi Group performs an annual employee survey on awareness of mattersrelevant laws and regulations.
At present, as part of our educational program for all Group companies within and outsidesuch as business ethics and compliance as part of its efforts to improve the effectiveness of theJapan, we host training sessions and workshops on export control in addition to the implementation

Compliance Reporting System.

of an e-learning program in Japanese, English, and Chinese. Moving forward, we will continue tomake an effort so that export control is thoroughly enforced throughout the Group.

Prevention of Antisocial Transactions

PolicyFrameworks and Systems

Solidifying the Hitachi Group Identity

Objectives, Activities, and Achievements

To cut off all relationships with organized crime groups and other antisocial forces, in the HitachiGroup Codes of Conduct we have laid out provisions stating that we will never engage in antisocial

To help us solve social issues through understanding and embodiment of the Hitachi Grouptransactions under any circumstances in any part of the world, and will refuse any improper

Identity, our brand management must engage everyone in the Group. We use channels, including

demands and unfair deals. To this end, we conduct eligibility checks on new as well as existing

our intranet, to ensure that Group employees are clearly aware of what needs to be done tobusiness partners and, in Japan, include antisocial force rejection clauses in contracts so that if it

express the Hitachi Group Identity. To promote understanding of and familiarity with the Hitachi

is determined that a business partner belongs to an antisocial force, we can promptly void theGroup Identity and the Hitachi Brand, we launched the Inspiration of the Year Award in fiscal

contract and end the relationship. The entire Hitachi Group acts decisively to eliminate approaches

2003 to share activities within Hitachi that have demonstrated the Hitachi Group Identity and
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Introduction  Management

Environmental

SocialGovernance

Data

Compliance

Policies for Preventing Bribery and Corrupt Practices

Policymade an outstanding contribution to our brand value. In fiscal 2012, we began evaluating

Preventing bribery and corrupt practices is a big challenge for a company today. In 2008 Hitachi

applications globally, renaming the program the Inspiration of the Year Global Award. In fiscal

established rules against bribery and corruption for the HGCP along with guidelines indicating

2018, the award saw 198 applications from various regions, including the Americas, China,

specific spending thresholds for entertainment, gifts, and other arrangements provided to public

Europe/Middle East/Africa, India, Japan/South Korea/Oceania, and Southeast Asia. Outstanding

officials. We have striven to ensure strict compliance with these rules. In 2016 we introduced aactivities from each region were highlighted on the intranet, and the president presented thepolicy banning facilitation payments, which had not been explicitly regulated, along with revisions

award at a ceremony held at our Tokyo headquarters.

including clarification of due diligence procedures for business partners.

To further instill the Hitachi Group Identity and promote understanding of the Hitachi Brand
among our employees globally, we held brand-training sessions utilizing the Hitachi Brand Book,
which explains the Hitachi Group Identity and Hitachi Brand, and the “Hitachi Group Identity
Movie—I am Hitachi,” a visual depiction of the ways in which Hitachi Group employees are

Educational Activities for Preventing Bribery andObjectives, Activities, and Achievements
Corrupt Practices

working to address society’s challenges.
To ensure awareness of the HGCP rules and policies concerning prevention of bribery and
Hitachi Group Identity

corruption and compliance with competition law, we developed a global e-learning program
about them and made it available in 12 languages—including Japanese, English, and Chinese—for use by Group companies worldwide. In fiscal 2018, more than 150,000 employees acrossthe Hitachi Group, including executives, completed the e-learning program.

Promoting Work Practices in Line
with International Ethics Codes
Framework for Promoting Compliance with
International Ethics Codes

Competition Law Compliance PolicyFrameworks and Systems

PolicyHitachi engages in business based on the principles of conformance with the law and businessethics and fair and open competition. In 2015, we included business standards and guidelines

By periodically matching our list of existing Group-wide business partners against an external

related to these principles in the HGCP, in addition to rules concerning competition law.

compliance database under the Hitachi Global Compliance Program (HGCP) and incorporating
the results into the headquarters’ platform, we are promoting the standardization of due diligencelevels across the Group. To reinforce education at business units and key Group companies, we
also bring together program instructor candidates and provide them with instructor education.
Compliance Framework

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Introduction  Management

Environmental

SocialGovernance

Data

CompliancePreventing Violations ofCompetition LawObjectives, Activities, and Achievements

As with our initiatives against bribery and corrupt practices, we are developing educational activities(2) Group companies effectively, continually, and proactively manage tax-related issues as sociallyglobally using e-learning material available in 12 languages—including Japanese, English, andresponsible organizations, while maintaining Hitachi brand value and seeking to maximize

Chinese—while at the same time ensuring that we comply with the HGCP’s rules concerning

shareholder value.

competition law and other related business standards and guidelines.

(3) Group companies build sincere and positive relations of trust with the tax authorities in the

In 2017, to enhance awareness of ethical principles and practices globally, we created a global

regions where the companies do business, and strive to maintain and develop those relations.

version of our standards regarding contact with competitors based on the standards originallyprepared for use in Japan.
Eliminating violations of competition laws is among our top priorities for regaining trust, andTax Compliance Initiatives

Objectives, Activities, and Achievements

so Hitachi will continue its efforts to prevent the recurrence of any such incident. We have been
providing a collection of case studies for workplace discussion to Group companies since 2012,

To ensure risk management for taxation in response to globalization, Hitachi follows relevant

and in 2018 we added case studies about competition law in three languages, Japanese,

tax-related regulations applicable to the Group as a whole as well as rules for transfer pricing

English, and Chinese, to raise employee awareness.

management. We also manage transfer pricing in accordance with the OECD Transfer Pricing
Guidelines and the laws and regulations on transfer pricing in each country or region where
Group companies are located.

Hitachi’s Tax Compliance Approach

PolicyThe global expansion of Hitachi’s business activities has made it necessary for the Group as a

Violations of Laws and RegulationsObjectives, Activities, and Achievements

whole to build a system of tax governance in order to comply with indications made by the tax
authorities in each country and respond to risks concerning taxation, such as tax-related legal

In fiscal 2018, there were no incidents in which Hitachi violated or was penalized under laws orproceedings. In January 2016, we established a set of tax-related regulations with which theregulations regarding bribery or corrupt practices and competition. Regarding tax compliance,

entire Group must comply, and in April 2017 we set rules for Group transfer pricing management.

Hitachi acts in accordance with all applicable laws and regulations and did not have any significant

In connection with the globalization of our business, we are implementing risk management forfines or nonmonetary sanctions for noncompliance with tax laws and regulations.

taxation that focuses in particular on the points listed below:(1) Group companies strictly comply with all relevant laws and implement tax management whenpursuing their business activities, bearing in mind such international tax-compliance standards
as the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations of theOrganisation for Economic Co-operation and Development (OECD), as well as that body’s
Action Plan on Base Erosion and Profit Shifting (BEPS).

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Introduction  Management

Environmental

SocialGovernance

Data

Risk Management
Hitachi’s Approach

Addressing Risks and Opportunities

Hitachi launched an Investment Strategy Committee in 2017 to ascertain
and minimize risks and to strengthen the quantitative risk management of
its investments. The Executive Sustainability Committee deliberates thesocial and environmental impact of our business activities to clarify any
negative impact our business has on society and the environment and to
identify countermeasures. We are reinforcing business continuity plans(BCPs) and further tightening our information security to ensure the stablesupply of our products and services and to prevent threats to our networks
that could severely disrupt business operations.

Risks and Opportunities

PolicyHitachi’s 2021 Mid-term Management Plan, beginning in fiscal 2019, focuses on expanding ourbusiness while making the best use of the Company’s competitive advantages. In particular, wetarget investment for growth in select, focused areas over the three years through fiscal 2021 of¥2.0–¥2.5 trillion, compared to investment of about ¥500 billion in the three years through fiscal
2018. We believe taking advantage of growth business opportunities and implementing aggressive
management requires a solid risk management system.
Hitachi established the Investment Strategy Committee to strengthen investment risk
management in 2017 and continues to work to better understand risk and take appropriate

Our Impact on Society

action. The Company in the same year established the Executive Sustainability Committee to

No. of employees (Hitachi, Ltd.)

area also included a move to identify issues that could be seen as business opportunities, as well

33,490
Our Performance
Recipients of e-learning programs on information security(Hitachi, Ltd.)

Approx.

40,000focus on the company’s policies in regard to social and environmental issues. Our efforts in thisas the negative effects on society and the environment from our business activities and the measures Hitachi is taking to address them.

Risk Management System

Frameworks and Systems

The business environment is changing day by day, impacted by the continued advance of
information and communications technology, as exemplified by IoT, and geopolitical risks arisingfrom complex shifts in political and economic conditions around the world. Hitachi aims to create
new revenue opportunities while controlling risk. To do this, we maintain a clear understanding andanalysis of the operating environment, taking into account social issues as well as our competitive
advantages and management resources, and conduct risk management with an eye toward themany risks the Company should be prepared for as well as opportunities for growth.

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Introduction  Management

Environmental

SocialGovernance

Data

Risk Management

Decision by Board of
Directors, President
Senior Executive
Committee
Offering of opinions

Understanding of risks
and opportunities

Major risk factors

External risks

Risk management aimed atstrengthening business
Investment Strategy Committee
reviews investments andlarge-scale orders
Quantitative understanding of risk
assets and related initiatives
Qualitative understanding of
geopolitical risks and related
initiatives

Political
Internal risks

Economic

Risk management aimed
at ensuring sustainability

Changes toindustrial
structure

Technological innovation
Portfolio
Quality, compliance
Project management
Securing human resources,etc.

Operatingenvironment

The Executive Sustainability
Committee, the Sustainability
Promotion Meeting, and the
Eco-Management Meeting focus
on understanding and responding to risks impacting society
and the environment, including
climate change and issues
related to human rights.

Legal

Risk management to ensure business continuity

Information security
Promoting information security
governance*1
Information Security
Promoting collaborative
creation by fostering asecurity ecosystem
Hitachi Integrated Report
2019, P. 69

Occupational
health and safety

Business continuity plan
(BCP)

Rebuilding a culture of safety,
establishing a safe workplace
Prevention and countermeasures
for work-related accidents
Occupational Healthand Safety

Establish and maintain BCP
system as a disaster/hazard
countermeasure	Hitachi’s Approach to
Procurement BCPs
Formulate BCPs at major
Hitachi facilities
Creating BCPs in Key
Operations Worldwide

Compliance

Quality assurance

Entrench awareness ofregulations related tobusiness practices throughthe Hitachi Global Compliance
Program
Sharing Our Codes ofConduct and Values Acrossthe Group

Implementation of quality
assurance activities from theperspectives of organizationand management, technology,
and human resources in every
process—from planning anddevelopment to design,
manufacturing, delivery, andmaintenance.
Quality and Safety
Management*1 Information security governance works in support of corporate governance by building and maintaining an organization’s internal control mechanisms related to information security.

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Introduction  Management

Environmental

GovernanceSocialData

Risk Management

Understanding and Responding to
Quantitative Risk

Frameworks and Systems

Understanding and Responding
to Qualitative Risk

Objectives, Activities, and Achievements

In regard to quantitative risk, assumed maximum risk (value at risk) is calculated using statistical

In regard to qualitative risk, including geopolitical risk, we maintain a focus on the global politicalmethods based on the type of asset held. More specifically, value at risk measures the maximum

and economic situation by taking advantage of research from external organizations, and use thisexpected loss based on price movements over a specified period of time (observation period) at

information to analyze the potential risks and opportunities for Hitachi so that we may take action toa given confidence level for a defined period of time moving forward. Visualizing the strength of a

improve our corporate value. In addition, the Investment Strategy Committee examines investmentcompany’s balance sheet and whether that company has the potential for growth, including byprojects and large orders, taking into account qualitative factors in addition to quantitative factors

focusing on whether the maximum expected loss is within the range of net assets or whether

such as those listed below.

there is room to invest in growth, limits the likelihood that opportunities for growth will be missed,

Related technological innovations and competitive conditions

while continued monitoring ensures that risks do not exceed management capabilities.

Hitachi’s past performance in the business

Moreover, analyzing risk by country and sector, while also taking into account future trends,

Trends and market conditions, including prices and costs

allows a quantitative understanding of the concentration of risks in a given country or sector

Business performance from ordering parties and their transaction history with Hitachi, etc.

relative to profitability.

Contractual rights and obligations (transaction terms, reasons and details for damages andpenalties)

The Flow of Quantitative Risk Assessment

Local laws and labor practices in countries in which the business operates

Management strategy

Understanding and Responding to Risks andOpportunities Related to Sustainability Objectives, Activities, and Achievements

Reflected in

Executive level
Periodic reporting

Group risk capacity

Social and environmental issues, including climate change, resource depletion, the curtailment ofComparison with risk tolerance

business activity due to significant disasters, and social instability due to growing inequality, areAmount of risk in the grouphaving a substantial impact on corporate value creation and business models.
Amid such a drastic change in the business environment, companies must have a clear

Quantify using statistical methods
Credit risk

Business
investment risk

Country risk

Risks, including
business assets

understanding of opportunities and risks and take appropriate measures if they are to achievesustainable growth over the long term.

Risk identification and analysis

Hitachi is able to gain a clear understanding of sustainability-related risks, and accordingly

Financial and non-financial data from within the group andinformation from outside organizations

take appropriate action, thanks to the efforts of the Executive Sustainability Committee and otherrelated committees. We remain actively engaged in promoting our own sustainable growth while
contributing to the realization of a sustainable society by seeking out business opportunities contributing to the resolution of important domestic and overseas issues, including those relevant to
the UN Sustainable Development Goals (SDGs) and Society 5.0.
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Introduction  Management

Environmental

GovernanceSocialData

Risk Management

Risk Factors

Objectives, Activities, and Achievements

We conduct business on a global scale across a broad range of business areas and utilize
sophisticated, specialized technologies to carry out our operations. Therefore, we are exposed to

For more information on business risks and other risks, please refer to our 150th Annual
Securities Report.

a wide range of risks related to our operations. The following risks are based on the assumptions
we consider reasonable as of the date this report was issued.

Annual Securities Report

Major Risks and Opportunities
Major risk factors

Details on risks and opportunities

Company actions

Fluctuations in product supply
and demand, exchange rates
and resource prices;
insufficient raw materials,
components

Risks

Price fluctuations, including for products, exchange rate impact and excess inventory
Exchange rate impact and price fluctuations, including for raw materials and components
Impact from significant disasters on supply chain

Building close relationships with multiple suppliers
Ensuring an appropriate response to changes in demand in each region by promoting a local production
and local consumption model for products and services
Heightening resistance to business interruption risks by formulating BCPs at domestic and major
overseas facilities

Rapid technologicalinnovation

Risks

Decreased competitiveness if development of cutting-edge technology, or application to product/
service does not progress as expected
Reduction or elimination of existing market due to technological innovation

Promoting open innovation through industry-academia-government cooperation
Bolstering the digital workforce
Strengthen Lumada
Fostering an innovation ecosystem through the above

Research and Development (R&D)
Developing Human Capital for Frontline andDigital Operations

Securing the highly skilled global workers using a global common standard for personnel
Securing and training the highly skilled workers through in-house educational systems, include Hitachi
Academy, and Hitachi University, the group’s global common learning management system

2021 HR Strategy
Developing Global Human CapitalOccupational Health and Safety

Opportunities
Securing human resources

Risks
Opportunities

Development of advanced technology leads to new business opportunities
Impact on new hires and worker retention due to increased competition to hire and retain the highly
skilled workers
Growth opportunities on the recruitment and retention of highly skilled workers that share the
Hitachi vision

Occupational healthand safety

Risks

Impact on business due to inability to create healthy, safe and secure work environments

Establishing a global occupational health and safety system that includes lessons learned from global
operations, entrenchment of global norms, and the sharing of success stories

M&A, investment in new
projects, etc.

Risks

M&A aimed at strengthening the Social Innovation Business, investment in new projects, R&D
investment/capex, failure related to insufficient project management in large-scale orders

Implementing phase-gate management in each business unit (BU), analysis and discussion of market
trends, strategies, acquisition prices, and the post-merger integration process at Investment Strategy
Committee, Senior Executive Committee, Board of Directors, and Audit Committee

Opportunities

Building a foundation for growth through the acquisition of new management resources

Geopolitical risks

Risks

Impact on Hitachi’s overseas businesses due to global political, economic and social trends

Regularly updating our understanding of global political and economic trends, analyzing the impact on
our business, and swiftly implementing countermeasures on a groupwide basis

Tighter laws and regulations

Risks

Tighter laws and regulations in regard to investment, exports, and customs duties
Example: The effects on business activities from the introduction of new laws and regulations related tothe protection of personal data, such as the General Data Protection Regulation (GDPR) in Europe

Operating of personal information protection systems in line with Hitachi’s personal information
protection policy
Identifying businesses subject to GDPR, assessing risk, implementing appropriate safety management
measures in line with those risks, implementing worker training

Compliance

Risks

Reduced trust and a decline in corporate value as a result of corporate behavior
that deviates from social norms and violates laws, including relating to bribery andanti-competitive activities

Implementing groupwide compliance programs and establishing the highest values in the Codesof Conduct
Strengthening measures to prevent bribery and violation of competition laws

Product quality andresponsibility

Risks

Reduced trust and claims for damages due to defects or a deterioration in product and service quality
as a result of the increased complexity/sophistication of products or services, or the diversification of
production sites or suppliers

Strengthening the quality assurance system
Activities aimed at preventing accidents
Activities aimed at ensuring compliance with laws and regulations related to technology
Intensive risk assessment
Implementing measures to handle product accidents
Conducting quality and reliability-related training

Climate change/significant
disasters

Risks

Impact on business activities due to measures in line with the tightening of international regulations tocurb greenhouse gas emissions and the depletion of energy and resources
Impact on business activities, from production to sales, due to significant disaster affecting major
Hitachi facilities in Japan or overseas

Strengthening measures aimed at achieving the CO2 reduction targets in the Hitachi Environmental
Innovation 2050
Enacting measures in line with an analysis of Hitachi risks and opportunities based on
climate-related scenarios
Formulating BCPs to strengthen our ability to respond to business disruption risks

Information security

Opportunities

Expansion in the decarbonization business through offering climate-change-related solutions

Risks
Opportunities

Computer viruses or other factors adversely impacting information systems
Expansion in revenue opportunities through increased demand for information security measures

Promoting cybersecurity strategies through risk management and value creation

Responsible Procurement
Stable Provision of Products and Services

Independent Director Dialogue, Hitachi Integrated
Report 2019, P. 18
Corporate Governance

Rigorous Information Management
Information Security

Compliance

Quality and Safety Management

Achieving a Low-Carbon Society
Climate-related Information Disclosure (Based on
TCFD Recommendations)
Stable Provision of Products and Services
Information Security
Story of Value Creation in the IT Sector, Hitachi
Integrated Report 2019, P. 54

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Introduction  Management

Environmental

GovernanceSocialData

Risk Management

Stable Provision of Products and Services
Hitachi’s Thinking on BCPs

PolicyGiven the close relation of our business to social infrastructure, we are enhancing our business

2019, based on the scenario of an earthquake striking the Tokyo metropolitan area and significantly

continuity plans (BCPs) to ensure that the impact of risks does not disrupt our business anddamaging its infrastructure, we established a substitute headquarters at our Kansai Area

thereby significantly affect society. In December 2006, we issued the Hitachi Group Guidelines forOperation and conducted initial response drills and joint drills with the response headquarters at

Developing Business Continuity Plans (Overview) in Japanese. In fiscal 2010 this was translated

our Tokyo headquarters according to our action plans.

into English and Chinese for distribution to all Hitachi Group companies worldwide to ensure our
response readiness for large disasters and other risks.

Hitachi appointed personnel with responsibility for risk-response policies at its main overseas
bases in fiscal 2013. By the end of that year, around 300 companies prepared BCPs with thegoal of completing them for key operations. These BCPs are aimed at strengthening our ability torespond to business risks, including large disasters, novel strains of influenza, political instability,

Creating BCPs in Key Operations Worldwide

Frameworks and Systems

and social disruption, as well as acts of terrorism. Moving forward, we intend to further expand
the scope of our BCPs.

When the Great East Japan Earthquake struck in March 2011, quick responses and swift
decision making were enabled by the BCPs that we had developed based on the Hitachi Group
Guidelines for Developing Business Continuity Plans (Overview). However, issues emerged,
including identification of secondary and other suppliers, cloud storage and multiplexing ofproduction information, and the need to secure alternate transportation and fuel sources.
Based on the lessons learned from this disaster, in October 2011 we released and distributed newversions of the Hitachi Group Guidelines for Developing Business Continuity Plans (By Department)
to further improve our BCPs.
By the end of fiscal 2011, Hitachi Group operations in Japan had completed their preparation

Hitachi Group Guidelines for Developing Business Continuity
Plans (By Department).

Earthquake simulation drill.

and review of BCPs for both large earthquakes and novel strains of influenza as appropriate totheir operations.

Hitachi’s Approach to Procurement BCPs

PolicyOn top of these efforts, Hitachi, Ltd. has held annual earth-quake drills simulating a major
seismic event at key operations in Japan since fiscal 1998. In March 2018, we held initial

We have a deep involvement in social infrastructures in places where the suppliers who are our

response drills at our headquarters under the direction of our head of Major Earthquake

business partners can be affected by major earthquakes and other natural disasters.

Countermeasures Office simulating a large earthquake in the suburbs of Tokyo, striving to promote

These disasters can heavily impact not only our business operations and those of our suppliers

understanding of each department’s role and strengthen cooperation among departments. As partbut also society as a whole. To minimize this impact, the procurement divisions in business unitsof countermeasures against large earthquakes striking the suburbs of Tokyo, in December 2017

and key Group companies in Japan have created procurement BCPs that (1) standardize andwe developed action plans including setting up substitute headquarters in the Kansai region in

use generic parts to make procurement as flexible as possible; (2) cultivate multiple suppliers;

case our Tokyo headquarters cease to function temporarily due to such earthquakes. In March
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Introduction  Management

Environmental

GovernanceSocialData

Risk Management

Information Security
Information Security Policies

Policy(3) distribute production across several locations; (4) budget inventory strategically; and (5) consider

The increased connections between things due to development of IoT are creating new value.

substitute products.

At the same time, increasingly sophisticated cyberattacks are widening their focus from traditional
IT to include the IoT/OT field. Managing information security risks is one of the most criticalissues for companies to minimize the risk of business disruption due to factors such as leaks ofCreation of Procurement BCPs

Frameworks and Systems

information or operational stoppages.
The development of the Social Innovation Business has highlighted for Hitachi the vital

To see whether or not procurement BCPs would be effective, we held desktop exercises to discuss

importance of information security governance as a key management issue. The Japan Businessin a group what should be done during and after a disaster, making further improvements as a result.

Federation’s Declaration of Cyber Security Management that was published in March 2018 also

In fiscal 2018, all major Group business sites with production lines (approximately 210 sites inplaced emphasis on cyber security measures as a critical management challenge from thetotal) took steps to maintain and strengthen the procurement BCPs they had created by the

aspects of both value creation and risk management. Hitachi approaches the issue of information

previous fiscal year, thereby contributing to the continuation of Hitachi’s global operations.

security governance based on the same concept.
At the same time, as a global company, we regard cyber security risk as one of ourmanagement risks. Accordingly, to allow us to declare both internally and externally Group

Improving Safety for Employees Sent toDangerous Regionspolicies for addressing this risk, we have formulated Information Security Policies in line with our
Frameworks and Systems

corporate management policies and based on our cyber security risk management.

Responding to the hostage incident in Algeria in January 2013, then President Hiroaki Nakanishi

Information Security Policies

reinforced his policy in February 2013 of ensuring the safety of employees sent to countries and1. Formulation and continuous improvement to information security management regulations

areas at higher risk. Survey missions of in-house and outside experts are now sent beforehand to

2. Protection and continuous management of information assets

areas at high risk of war, terrorism, and other threats. Even after employees are dispatched tosuch areas, we conduct additional local surveys every six months as a means of confirming theeffectiveness of our safety policies. In fiscal 2018, against the threat of terrorism expanding around

3. Strict observance of laws and standards
4. Education and training
5. Incident prevention and management
6. Assurance of fair business practices within the corporate groupthe world and infectious diseases spreading regionally, we had in place a range of safety measures,
including providing timely alerts to employees. This underscores our commitment to ensuring thesafety of our employees working around the globe. Hitachi is also contributing to safety measuresat other Japanese corporations operating outside Japan. To help enhance collaboration between
the private and public sectors in this area, Hitachi executives participated in the Council for
Public-Private Cooperation for Overseas Safety organized by Japan’s Ministry of Foreign Affairs.
Since 2014 Hitachi has taken part in public-private kidnap incident preparatory training exercises.
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Introduction  Management

Environmental

SocialGovernance

Data

Risk Management

Three Principles for Preventing Leakage ofConfidential Information

PolicyHitachi, Ltd. has formulated the Three Principles for Preventing Leakage of Confidential Information

Framework for Promoting Information Security

to ensure the highest level of care for such information and to prevent leaks and other related
incidents. Our policies specify that if an incident does occur, damage must be promptly minimized

President & CEO

by contacting customers, reporting to government agencies, investigating causes, and acting toprevent any recurrence.
Three Principles for Preventing Leakage of Confidential Information
Principle 1: In principle, no confidential information shall be taken outside of the company’s premises.

Information security chief auditor

Chief information security officer

Principle 2: Any person taking confidential information out of the company’s premises when necessary for
conducting business shall obtain prior approval from the Information Asset Manager.
Information Security Committee

Principle 3: Any person taking confidential information out of the company’s premises when necessary for
conducting business shall carry out the necessary and appropriate measures to prevent
information leakage.

Information Security Management
Framework for Promoting
Information Security

Frameworks and Systems

At Hitachi, Ltd. the senior executive with ultimate authority and responsibility regarding thehandling of information security and personal privacy issues is appointed by the president andCEO. Hitachi established a position of chief information security officer (CISO) to oversee promotionof information security for all Hitachi products and internal facilities. In fiscal 2018, the CISO role

Frameworks and Systems

Hitachi Group companies worldwide reinforce their information security in line with our Global
Information Security Administration Rules, which conform to the international ISO/IEC 27001
standard. These rules are globally distributed from the parent company in Japan to Group
companies worldwide. Other measures include the provision of shared security services andrelated support for information security by the regional headquarters in the Americas, Europe,
Southeast Asia, China, and India.

was performed by an executive vice president.
Chaired by the CISO, the Information Security Committee determines all policies andprocedures for information security and personal information protection. These decisions areconveyed to all Hitachi Group business sites and companies, and are implemented by therelevant information security officers.

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Introduction  Management

Environmental

SocialGovernance

Data

Risk Management

Security Monitoring

Details, including a message from the CISO and a list of third-party assessments and

In Hitachi, the Security Operation Center (SOC) monitors security on a 24/7 basis so cyberattacks

certifications, are contained in Information Security Report 2018.

can be detected and countermeasures initiated right away. The Incident Response Team (IRT)
collects and develops threat intelligence*1 and manages the response to any security incidents.
*1 Threat intelligence: An approach to countering cyber attacks using knowledge of new threats gathered from a range of information on
cyber security.

Implementing Rigorous Information Security

Information Security Report 2018

Basic Approach to Information Security Governance
Clearly designate assets to be protected

Frameworks and Systems

Evaluate information assets and conduct risk analysis

The Information Security Committee determines policies and procedures for information security
and personal information protection. The Information Security Promotion Council and other

Improve user literacy

bodies convey decisions internally and to other companies in the Hitachi Group. Information

Supply security education materials

security officers at business sites and companies ensure that these decisions are implemented

Educate managers and staff

Information
assets to beprotected

in the workplace.

Implement preventive techniques
Widely implement administrative
measures
Deploy technological processes

The Hitachi Group emphasizes two points in information security and personal information
protection:
Establish information security system(1) Precautionary measures and prompt security responses
We clarify the principal systems and assets to be secured, using vulnerability and risk analyses to formulatecompanywide business continuity plans (BCPs) for cyber incidents and to implement safeguarding measures.
We also have an emergency process manual for security breaches, based on the assumption that these are

Develop rules (security policy)
Create managerial framework
Establish audit and follow-up system
Ensure solid feedback through extensive PDCA cycles
for prevention and accident response

inevitable, and not just possible.

(2) Promoting stronger ethical and security awareness among data users
We have prepared a program tailored to Hitachi’s various personnel levels and are working to raise theprevailing sense of ethics and security awareness through Group-wide e-learning. We are also conducting
audits to identify and address problems early on.

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Introduction  Management

Environmental

SocialGovernance

Data

Risk Management

Preventing Information Leaks

Frameworks and Systems

Hitachi takes the following IT steps to prevent information leaks: encrypting devices; using thin

Our educational programs, available to Hitachi Group companies in Japan and otherclients;* employing electronic document access control and expiration processing software;

global regions, provide Group-wide education on information security and personal

maintaining ID management and access control by building an authentication infrastructure; andinformation protection.

1

filtering e-mail and visited 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 theprivate sector and the government. We are also enhancing our IT organization by adding morelayers to our leak prevention procedures.

Thorough Information Security Audits
and Inspections 

Objectives, Activities, and Achievements

To ensure the secure exchange of information with our suppliers, we review their information
security measures based on Hitachi’s own standards before allowing them access to confidential

The Hitachi Group has developed its approach to security based on the “plan-do-check-act”

information. We have provided tools to suppliers (procurement partners) for security education(PDCA) cycle for its information security management system. We conduct annual informationand for checking business information on computers. In addition, we require suppliers to checksecurity and personal information protection audits at all Group companies and business units.

and remove business information from personal computers to prevent leaks.
*1 Thin client: A terminal with the minimum necessary software. Thin client computing significantly enhances cyber security by storing applications
and data on the server.

The president of Hitachi, Ltd. appoints officers to conduct independent audits. These officers
are not allowed to audit their own units, underlining our commitment to fairness and objectivity inauditing. There are 220 Hitachi Group companies in Japan, including Hitachi, Ltd., that conduct
audits in the same way as Hitachi, Ltd., and all results are subject to confirmation. For Hitachi

Education on Information Security

Group companies outside Japan, we use a “common global self-check” approach to ensure
Objectives, Activities, and Achievements

Group-wide auditing and inspections. We implement Confirmation of Personal Information
Protection and Information Security Management annually for the voluntary inspection of Hitachi,

Consistently maintaining information security requires all employees to continually develop theirLtd. business unit workplaces. We conduct monthly Confirmation of Personal Information

knowledge of information handling and to remain strongly aware of the issues. For this reason,

Protection and Information Security Management assessments at 606 operations (as of Marchwe hold annual e-learning programs on information security and personal information protection2019) that handle important personal information. This regular control mechanism ensures ample

for all directors, employees, and temporary employees.

safety management and implementation.

Nearly all of the roughly 40,000 employees at Hitachi, Ltd. participate in these programs. We
offer a variety of courses that have different goals and are tailored to different target audiences,including new employees, new managers, and information system administrators. In 2012, we
also began simulation training to educate employees about malicious targeted e-mail attacks andother cyberattacks. Employees are sent examples of targeted e-mail to heighten their awarenessof security through direct experience.

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Introduction  Management

Environmental

SocialGovernance

Data

Data
CONTENTS
156 Indicators and Data
160	
Key Sustainability Challenges and
GRI Standards
161 Main Assessments and Awards
164 Independent Assurance

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Introduction  Management

Environmental

SocialData

GovernanceIndicators and Data
The Key Indicators of Hitachi’s sustainability activities are listed below. Comparative tables with the GRI Standards Content Index, as well as our Policy and Guidelines, are only
available on our website.
Comparative Tables with GRI Standards Content Index
Policy and Guidelines

Financial Results (Consolidated IFRS)Revenue
Adjusted operating income
EBIT*1
Income from continuing operations, before income taxes
Net income attributable to Hitachi, Ltd. stockholders
Capital investment (completion basis)
R&D expenditure

FY 2016

FY 2017(billion yen)
FY 2018

9,162.2
587.3
475.1
469.0
231.2
377.5
323.9

9,368.6
714.6
644.2
638.6
362.9
374.9
332.9

9,480.6
754.9
513.9
516.5
222.5
414.7
323.1

*1 EBIT: Income from continuing operations before income tax, less interest income, plus interest charges.

Environmental

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

—
4,128
46.86
692
4,415

—
3,895
43.91
618
3,615

35
4,577*2
41.34*2
1,336*2
4,380*2*3

33
4,663*2
38.54*2
1,356*2
4,223*2*3

34
4,470*2
37.02*2
1,384*2
4,392*2*3

Achieving a Low-Carbon Society/Achieving a Resource Efficient Society/Achieving a Harmonized Society with Nature
Rate of reduction in CO2 emissions from use of products and services (base: FY 2010)*1 (%)
CO2 emissions from factories and offices (kt-CO2)
Water use (million m3)
Waste and valuables generation (kt)Atmospheric emissions of chemical substances (t)Scope of Data
Hitachi, Ltd. and consolidated subsidiaries.
Number of companies: FY 2014: 996; FY 2015: 1,057; FY 2016: 865; FY2017: 880; FY2018: 804.
Environmental performance data associated with Hitachi’s business operations: Hitachi Group companies whose environmental load comprises
90% of the total (based on Hitachi calculations); data for each fiscal year indicates performance within the given scope for the fiscal year.
*1 New indicator established in fiscal 2016.
*2 Figures include a materials company that has become a consolidated member of the Hitachi Group since fiscal 2016.
*3 The management scope of chemical substances has been expanded from 41 to 50 substances since fiscal 2016.

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Introduction  Management

Environmental

SocialData

GovernanceIndicators and Data

SocialInnovative Management

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

3.4
59

3.3
59

3.5
57

3.6
56

3.4
58

Research and Development/Intellectual Property
Ratio of R&D expenditure to revenue (%)
Patent application ratio outside Japan (%)

Scope of Data
Hitachi, Ltd. and consolidated subsidiaries (including variable interest entities).
Number of companies: FY 2014: 996; FY 2015: 1,057; FY 2016: 865; FY 2017: 880; FY 2018: 804.

Human Capital
Employee Data
Number of employees*1
MaleFemaleAverage age (years)*1
Male
FemaleAverage service (years)*1
Male
FemaleTurnover ratio (%)*1*2

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

31,37526,428
4,947
41.0
41.6
38.0
18.4
19.0
15.4
1.4

37,35331,536
5,817
41.2
41.7
38.4
18.4
19.0
15.6
1.3

35,631
29,921
5,710
41.4
42.0
38.6
18.6
19.2
15.7
1.5

34,92529,220
5,705
41.7
42.3
39.0
18.8
19.4
16.0
1.5

33,49027,828
5,662
42.1
42.7
39.3
19.0
19.6
16.1
1.6

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Environmental

SocialData

GovernanceIndicators and Data

Developing Global Human Capital
Number of young employees participating in training outside Japan*3
Diversity and Inclusion/Work-Life Management
Ratio of female employees (%)*1
Global ratio (number) of female managers*4
Ratio (number) of female managers*1*5
General manager or above
Section manager
Ratio of new female graduates hired (%)*6
Technical
Administrative
Employment ratio of people with disabilities (%)*7
Number of employees taking maternity/ Female
paternity leave*1
MaleFemaleNumber of employees using shorter
working hours for child care*1
Male
FemaleNumber of employees taking
nursing-care leave*1
MaleFemaleNumber of employees using shorter
working hours for nursing care*1
Male
Average number of days
Paid leave*1
Ratio (%)
Average overtime hours/month*1
Occupational Health and Safety*8
Number of fatal accidents
Occupational accident severity rate*9
Occupational accident frequency rate*9

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

720

674

382

378

392

16.3
6.0
(3,670)
3.7
(434)
2.8
(87)
4.1
(347)
21.7
18.3
41.0
2.03
508
236
663
4
8
9
7
3
15.4
64.3
12.2

16.5
6.4
(3,727)
4.0
(474)
3.2
(104)
4.3
(370)
22.8
17.3
45.5
2.08
524
307
668
3
8
9
9
3
15.6
65.3
11.9

16.8
6.3
(3,365)
4.1
(509)
3.3
(113)
4.4
(396)
26.3
20.8
42.1
2.11
664
352
822
2
7
8
9
3
16.3
68.1
12.8

17.2
6.4
(3,459)
4.2
(577)
3.2
(128)
4.6
(449)
26.6
17.2
53.8
2.15
724
426
887
2
7
14
12
3
17.2
72.0
10.9

17.8
6.8
(3,638)
4.8
(635)
3.4
(135)
5.3
(500)
24.2
17.9
51.6
2.23
720
464
893
5
9
9
11
2
18.7
78.3
9.3

3
0.09
0.27

4
0.07
0.22

3
0.18
0.18

5
0.17
0.25

0
0.11
0.20

Scope of Data
*1 Hitachi, Ltd.
*2 Includes only voluntary resignations.
*3 Hitachi, Ltd. and Hitachi Group companies in Japan.
*4 All full-time, regular female managers excluding those dispatched to non-Group companies.
*5 Since fiscal 2017, “Female managers” has included managerial employees dispatched from Hitachi, Ltd. to other companies and those
accepted from other companies by Hitachi, Ltd. Earlier figures include regular managerial employees dispatched to other companies but
exclude those accepted from other companies.
*6 Graduates from universities or colleges (including postgraduate schools and technical colleges).
*7 Including Hitachi, Ltd. and special subsidiaries and related Group companies. Data compiled on June 1 of each fiscal year (2.26%
in fiscal
2019 including 2 special subsidiaries and 17 related Group companies).
*8 January to December each year.
*9 251 Hitachi Group companies in Japan including Hitachi, Ltd. for 2014; 240 Hitachi Group companies in Japan including Hitachi, Ltd. for 2015;
200 Hitachi Group companies in Japan including Hitachi, Ltd. for 2016; 202 Hitachi Group companies in Japan including Hitachi, Ltd. for 2017;
188 Hitachi Group companies in Japan including Hitachi, Ltd. for 2018.

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Introduction  Management

Environmental

SocialData

GovernanceIndicators and Data

Value Chain Management

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

20

20

20

18

24

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

1,218
2,327

889
2,057

527
1,953

948
2,195

841
1,888

Responsible Procurement
Number of audits by external auditing organizations

Community
Social Contribution Activities
Funding for social contribution activities (million yen)*1
Funding for social contribution activities (million yen)*2

Scope of Data
*1 Hitachi, Ltd. and the Hitachi Global Foundation in Japan.
*2 Through to fiscal 2014: (in Japan) Hitachi, Ltd., 136 Group companies (including equity-method associates and joint ventures), and fivefoundations; (outside Japan) 199 companies. For fiscal 2015: (in Japan) Hitachi, Ltd., 136 Group companies (including equity-method associates
and joint ventures), and the Hitachi Global Foundation; (outside Japan) 244 companies. For fiscal 2016: (in Japan) Hitachi, Ltd., 134 Group
companies, and the Hitachi Global Foundation; (outside Japan) 159 companies. For fiscal 2017: (in Japan) Hitachi, Ltd., 141 Group companies,
and the Hitachi Global Foundation; (outside Japan) 196 companies. For fiscal 2018: (in Japan) Hitachi, Ltd., 141 Group companies, and the
Hitachi Global Foundation; (outside Japan) 152 companies.

Governance
Total

Directors*1
Executive officers*1
Executive officers and corporate officers*1*3

11*2
39
80

GenderMale

Female

9
39
76

2
0
4

Nationality
Japanese

Non-Japanese

7
37
73

(5.0%)

42
7(8.8%)*1 As of June 2019.
*2 Including eight independent directors (four from Japan and four from outside Japan).
*3 Positions considered to be at executive officer and corporate officer level within the company.

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Introduction  Management

Environmental

SocialData

Governance

Key Sustainability Challenges and GRI Standards
In reporting the achievements of its sustainability

Material Issues

initiatives, Hitachi seeks to identify issues that are ofto the GRI Standards and the ESG (environmental, social,

Environmental Governance

GRI 201: Economic Performance
GRI 307: Environmental Compliance
GRI 404: Training and Education

Achieving a Low-Carbon Society

GRI 302: Energy
GRI 305: Emissions

Achieving a Resource Efficient Society

GRI 303: Water
GRI 306: Effluents and Waste

Achieving a Harmonized Society with Nature

GRI 304: Biodiversity

Environmental Data

GRI 201: Economic Performance
GRI 301: Materials
GRI 302: Energy
GRI 303: Water
GRI 305: Emissions
GRI 306: Effluents and Waste

Innovation Management

GRI 203: Indirect Economic Impacts

Human Capital

GRI 202: Market Presence
GRI 401: Employment
GRI 402: Labor/Management Relations
GRI 403: Occupational Health and Safety
GRI 404: Training and Education
GRI 405: Diversity and Equal Opportunity

Human Rights

GRI 402: Labor/Management Relations
GRI 406: Non-discrimination
GRI 407: Freedom of Association and Collective Bargaining
GRI 408: Child LaborGRI 409: Forced or Compulsory LaborGRI 410: Security Practices
GRI 411: Rights of Indigenous Peoples
GRI 412: Human Rights Assessment
GRI 414: Supplier Social Assessment

Value Chain Management

GRI 204: Procurement Practices
GRI 308: Supplier Environmental Assessment
GRI 414: Supplier Social Assessment
GRI 416: Customer Health and Safety
GRI 417: Marketing and Labeling
GRI 418: Customer Privacy
GRI 419: Socioeconomic Compliance

Community

GRI 413: Local Communities

We also aim to provide a more detailed account ofEnvironmental

and governance) investment indexes, and reporting isof CSR.

Internal

External

Environmental Vision and Long-Term Environmental Targets

interest to its stakeholders. Selection is made with reference

performed after review by the executive officer in charge

Reporting Boundary

GRI Standards

the topics’ social impact by clarifying the boundaries(importance to internal and external stakeholders) ofeach topic.

GovernanceSocialComparative Tables with GRI Standards Content Index

Corporate GovernanceCompliance

GRI 205: Anti-corruption
GRI 419: Socioeconomic Compliance

Risk Management

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Environmental

SocialGovernance

Data

Main Assessments and Awards
Hitachi actively pursues a range of activities aimed at developing a more sustainable society. These activities have earned the Hitachi Group high marks from numerous external organizations.

Actively Responding to ESG Assessments
The Hitachi Group welcomes external assessments as a target for ESG*1 and sustainability-oriented

Results of ESG Analysis in Fiscal 2018

investment. For ten years in a row, starting with fiscal 2009, the Dow Jones Sustainability Asia

Institution

Index

Companies selected

Pacific Index (DJSI Asia Pacific),* a leading global socially responsible investment index, has

RobecoSAM

Dow Jones Sustainability Asia Pacific Index

Hitachi, Ltd.

MSCIMSCI ACWI ESG Leaders Index

Hitachi Chemical Co., Ltd.

MSCI Japan ESG Select Leaders Index

Hitachi, Ltd., Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.,
Hitachi Construction Machinery Co., Ltd.,
Hitachi High-Technologies Corporation

MSCI Japan Empowering Women Index (WIN)

Hitachi, Ltd., Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.,
Hitachi High-Technologies Corporation

FTSE4Good Index Series

Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.,
Hitachi Construction Machinery Co., Ltd.,
Hitachi High-Technologies Corporation

FTSE Blossom Japan Index

Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.,
Hitachi Construction Machinery Co., Ltd.,
Hitachi High-Technologies Corporation

Euronext Vigeo Eiris World 120 Index

Hitachi, Ltd.

2listed Hitachi, Ltd. as a component stock. Since fiscal 2017, the company has also been
included as a component of the Euronext Vigeo Eiris World 120 Index.*3
Four Group companies (Hitachi Chemical, Hitachi Metals, Hitachi Construction Machinery, andHitachi High-Technologies) were selected for the FTSE4Good Index Series.* Hitachi Chemical
4

was also selected for the MSCI ACWI ESG Leaders Index.*5*1 ESG stands for “environmental,” “social,” and “governance”—key factors in promoting socially responsible investment.
*2 DJSI: A family of ESG indexes developed by Dow Jones & Company (USA) and RobecoSAM (Switzerland) that includes global and regional
indexes with specific compositions. DJSI World, for example, selects on a global basis, while the DJSI Asia Pacific Index covers Japan, Asia,
and Australia.
*3 Euronext Vigeo Eiris World 120 Index: A sustainability index comprising 120 companies from Europe, North America, and the Asia Pacificregion that have achieved the most advanced performance in the ESG areas. Created by NYSE Euronext, which operates several stock
exchanges in the United States and Europe, and an ESG research firm, Vigeo Eiris.
*4 FTSE4Good Index Series: One of the indexes calculated by the London Stock Exchange—owned FTSE Group that selects component stocks
based on their ESG performance, specifically environmental management, climate change mitigation, human rights and workers’ rights, supply
chain labor standards, and bribery and corruption prevention.
*5 MSCI ACWI ESG Leaders Index: A family of indexes developed by US-based Morgan Stanley Capital International comprising companies withhigh ESG ratings relative to sector peers.

FTSE

Vigeo Eiris

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Environmental

SocialGovernance

Data
Main Assessments and Awards

Diversity Management Selection 100
In 2013, Hitachi, Ltd. was chosen for inclusion in the Diversity Management Selection 100, an
initiative of Japan’s Ministry of Economy, Trade, and Industry (METI). The Diversity Management
Selection 100 system chooses and recognizes companies that have achieved high results in*1 Hitachi Group companies receiving Kurumin certification are: Hitachi Construction Machinery Co., Ltd., Hitachi Kokusai Electric Inc.,
Hitachi High-Technologies Corporation, Hitachi Urban Investment, Ltd., Hitachi Systems Ltd., Hitachi Solutions, Ltd., Hitachi SC, Ltd.,
Hitachi Solutions East Japan, Ltd., Hitachi Social Information Services, Ltd., Hitachi Architects & Engineers Co., Ltd, Hitachi Mito Engineering
Co., Ltd., Mito Engineering Service Co., Ltd., Okinawa Hitachi Network Systems, Ltd., and Hitachi Solutions Create, Ltd.

such areas as improving innovation and productivity by using the talents of diverse employees,
including women, different nationalities, older employees, and people with disabilities. Hitachi
was lauded for going beyond simply introducing diversity programs to promote diversity
management Group-wide as a corporate strategy backed by strong management commitment.
In 2015, Hitachi Solutions was chosen for the METI Diversity Management Selection 100.

Eruboshi Certification
The Eruboshi mark is conferred to companies that have submitted action plans under the Act on
Promotion of Women’s Participation and Advancement in the Workplace (which came into effecton April 1, 2016) and are implementing exceptional measures.

Kurumin Certification

On February 28, 2017, Hitachi, Ltd. was awarded Eruboshi certification for promoting diversity
as an important component of its management strategy and for creating work environments

Kurumin certification is granted under Japan’s April 2005 Act on Advancement of Measures toenabling its diverse human capital to play an active role. Companies are assessed in five

Support Raising Next-Generation Children to companies that create action plans for child-carecategories*1 and are grouped into three classes according to the number of standards they clear;

support in line with this legislation and that meet performance requirements.

Hitachi, Ltd. was awarded class 2.*2

In February 2011, Hitachi, Ltd. acquired this certification*1 in recognition of its achievements indeveloping and implementing action plans supporting child care so that employees can workwith the peace of mind that comes from a good work-life balance.

*1 The five assessment categories are (1) recruitment, (2) years of continuous employment, (3) workstyles, including working hours, (4) percentage
in management positions, and (5) diversity of career choices.
*2 Other Hitachi Group companies earning Eruboshi certification are: Hitachi Systems Ltd. (class 3); Hitachi Solutions, Ltd. (class 3); Hitachi
Chemical Co., Ltd. (class 2); Hitachi High-Technologies Corporation (class 3); and Hitachi Solutions East Japan, Ltd. (class 2).

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Environmental

SocialData

Governance

Main Assessments and Awards

Top 100 Telework Pioneers
In November 2018, Hitachi, Ltd. and Hitachi Solutions were selected among the “Top 100 Teleworkadvanced companies enhancing productivity and sustainable growth through work-life reform.

Pioneers” in a contest sponsored by Japan’s Ministry of Internal Affairs and Communications.

From 2018, based on a survey that covers all listed and major unlisted companies across Japan,

The ministry has recognized leading telework pioneers since fiscal 2015 as part of its efforts tothe external review committee began comprehensively evaluating and selecting award-winningpromote telework as a flexible workstyle using ICT free from time and location constraints.

companies based on performance in areas such as human capital development, innovation

Companies receive the “Top 100 Telework Pioneers” award if they meet certain criteria and trackcapability, and business foundation.

records: more than 25% of their regular workforce must be eligible for telework, more than half ofHitachi, Ltd. earned high scores for its use of cutting-edge technologies for its universal talent

their eligible workforce (or 100 employees) must have practiced telework, and the average number

management system, its innovation capability in creating a system that allows development ofof days of teleworking among those practicing telework must be at least four days a month.

the most optimal production plan on-site, and its management in adjusting and transforming its
business with the times, also expanding its solution offerings.

Environmental Communication Awards
In February 2019, Hitachi received the “Global Warming Countermeasure Communication Award(Global Environment Forum Director’s Award)” at the “22nd Environmental Communication
Awards,” co-sponsored by Japan’s Ministry of the Environment and the Global Environmental

Telework Promotion Awards

Forum. These awards aim to promote environmental communication initiatives among business
operators as well as enhance their quality by commending excellent environmental reports.

In February 2019, Hitachi, Ltd. received an honorable mention for telework practice fromThe Hitachi Sustainability Report 2018 was evaluated highly for its clear explanation of how

the “Telework Promotion Awards” hosted by the Japan Telework Association. This was theour policies for a sustainable society are consistently reflected in our entire management struc-19th year of the awards, which were established in fiscal 2000 with the aim of developing andture, from the CEO’s message and environmental vision to information on planning and businesspromoting telework.

activities, as well as the relationship of our business to our risks and opportunities.

We were highly commended for our efforts to reduce overtime and improve meeting productivity
through the “Hitachi Work Life Innovation” initiative, thus building a vibrant environment bringing
the most out of diverse human capital with different views and values.

Nikkei Smart Work Awards

2019

In January 2019, Hitachi, Ltd. won an award in the “Technology Utilization” category of the“Nikkei Smart Work Awards 2019” sponsored by Nikkei Inc. These awards aim to recognize
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Environmental

SocialGovernance

Data

Independent Assurance
To enhance the reliability of the data disclosed in the Hitachi Sustainability Report 2019,

Third-Party Assurance Report

we have received independent assurance of key environmental and social performanceindicators by KPMG AZSA Sustainability Co., Ltd. The indicators that were assured aremarked with a.

The standards, guidelines, and calculation methods used in collecting environmental
data are posted on our website.
Calculation Methods for Environmental Load Data

Hitachi Sustainability Report 2019164Inquiries

Sustainability Promotion Division
1-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-8220, Japan
Tel: +81-3-3258-1111 Fax: +81-3-4235-5835
www.hitachi.com/sustainability/