Hitachi Group
Sustainability Report 2014
FY 2013 Results

Sustainability Report Digest

CONTENTS

01

TOP COMMITMENT Message from Management
Hiroaki Nakanishi, Chairman & CEO,Toshiaki Higashihara, President & COO

03

VISION: Management

Fulﬁlling Hitachi’s
Social Responsibility
Toshiaki Kuzuoka
Senior Vice President andExecutive Officer
Hitachi, Ltd.

Strategies and CSR
Trends in Society and Hitachi Group Identity / 2015 Mid-termManagement Plan: Financial and Non-Financial Highlights /CSR Management

06

FEATURE: Contributing to

A company’s social responsibility has
two aspects: complying with laws andregulations while respecting humanrights to minimize the negative impact ofbusiness activities on society; and creating
new value by providing jobs, protecting
the environment, and contributing tosociety through business. We use two-way
communication with a wide range ofstakeholders, including customers, local
communities, suppliers and NGOs, tofulﬁl the social responsibility that we are
uniquely equipped to handle.

Society through Business
ACTIVITIES:08

FY 2013 Environmental Report10

FY 2013 Governance and Social Report

12

Hitachi Group ProﬁleSymbol Marks Used in This Booklet* Technical terms, proper nouns, etc. in the text requiring explanation† Tables or diagrams, etc. requiring explanation
WEB Indicates the title and URL of the webpage related to the article.

Editorial Policy
The Hitachi Group Sustainability
Report 2014 Digest provides a briefand straightforward summary of theinformation contained in the HitachiGroup Sustainability Report 2014 toencourage as many stakeholders as
possible to read it. It provides an honest
and transparent disclosure of information
for ﬁscal 2013 initiatives and Hitachi’s
approach to addressing the social andenvironmental issues that are vital to thesustainability of corporate management
and society.

Disclosure of Financial
and Non-Financial
Information

Scope of Reporting[Period] The main period covered is ﬁscal 2013 (April 1, 2013 to March 31, 2014)[Companies] Hitachi, Ltd. and 947 consolidated subsidiaries (including modiﬁed entities to which the equity method of
consolidated reporting applies): total 948 companies[Scope of data]
Financial data: Hitachi, Ltd. and 947 consolidated subsidiaries (including modiﬁed entities to which the equity method of
consolidated reporting applies): total 948 companies and 231 affiliated companies that use the equity method
Environmental data: Hitachi, Ltd. and 947 consolidated subsidiaries (including modiﬁed entities to which the equity
method of consolidated reporting applies): total 948 companies. However, for environmental load data generated throughbusiness operations, companies that cover 90 percent of the load (based on Hitachi calculations) are included.
∙ The data for each ﬁscal year indicates the results according to the scope of data in that ﬁscal year.
∙ The base ﬁscal year data has been revised to match the scope of data for ﬁscal 2013.
Key Guidelines Referred to in Preparing this Report
Environmental Reporting Guidelines (FY 2012 version), Ministry of the Environment, Japan
Environmental Reporting Guidelines 2001—With Focus on Stakeholders, Ministry of Economy, Trade and Industry, JapanGRI Sustainability Reporting Guidelines (G3.1), Global Reporting Initiative
ISO 26000: 2010, International Organization for Standardization

Hitachi Ltd. presents information to match the needs of stakeholders reading this report. The Hitachi Group
Sustainability Report presents non-ﬁnancial information, while management and ﬁnancial information is in the
Annual Report. The Hitachi Group Sustainability Report 2014 presents comprehensive non-ﬁnancial information
on management strategies and CSR, governance, environmental initiatives, and social activities as a PDF ﬁle(A4, 192 pages). Key issues are covered in this 16-page A4 booklet: the Hitachi Group Sustainability Report 2014
Digest. Our website also provides up-to-date Hitachi Group information.

WEB Hitachi Group Sustainability Report 2014

http://www.hitachi.com/csr/download/index.html

WEB CSR (Corporate Social Responsibility) http://www.hitachi.com/csr/

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

WEB Social Contribution Activities http://www.hitachi.com/csr/sc/

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

External Evaluations
We were selected in September 2013 for the Dow Jones
Sustainability World Indexes (DJSI World), one of the world’s
leading sustainability investment fund indexes.

Initiatives That We Participate in
We have been a member of the World Business Council
for Sustainable Development (WBCSD) since 1995.

We have been a member of theUnited Nations Global Compact
since February 2009.

Sustainability Report Digest

Top Commitment

Top Commitment Message from Management

Leveraging Hitachi’s Strengths to
Resolve Social Issues“Hitachi delivers innovations that answer society’s challenges. With our talented team andproven experience in global markets, We Can Inspire the World.”
Inspire the world—to meet this challenge, set down in the Hitachi Group Vision in ﬁscal
2013, our emphasis is on winning, maintaining, and growing the trust of global society.
This means not only developing technologically superior products and services to meetcustomer needs, but also observing fair, sound business processes grounded in the law
and corporate ethics, so that we can remain a trustworthy partner in our customers’eyes. In line with the Hitachi Founding Spirit of sincerity, we will pursue integrity andcomplete transparency in our business operations to increase the trust that society placesin us. We will also ensure compliance, product quality, and safety as part of our ongoingcommitment to the principle of Basics and Ethics.

Resolving Social Issues through Business
Global society faces many difficult challenges that cannot be resolved overnight. Whether
it is the worldwide depletion of water resources or climate change, national energy
policies linked to the global political and economic situation, the power shortages comingfrom surging energy demand in emerging countries, the medical and healthcare systems
needed to handle the rapid graying of society or plunging birthrates in the developed01

Hitachi Group Sustainability
Report 2014 Digest

Sustainability Report Digest

Top Commitment

world, be assured that Hitachi’s technologies, experience, and knowhow are alreadyhard at work. We believe that there are two key elements required for Hitachi to provide
solutions to these social issues for meeting the expectations of global society. The ﬁrst
is two-way communication with customers and other stakeholders. To ﬁnd solutions forour customers and for global society, we need a solid grasp of the circumstances in every
country and region as well as the background to their particular ones. The second is theforesight to develop solutions not only for current issues but for potential ones as well.
In addition to rapidly responding to changes in social conditions, our aim is to help build
a sustainable society—ﬁnding the optimal energy mix, for example, among coal-ﬁredthermal power, shale gas, nuclear power, solar power, and wind power. This will requiredeveloping deep insights into global society 50 to 100 years from now, including insights
into demographics and energy and environmental issues. Working together to identify thecomplex issues facing our customers and global society and then leveraging the HitachiGroup’s combined strengths to ﬁnd solutions—that’s how we will Inspire the World.

Globalizing Management
The 2015 Mid-term Management Plan, our business plan for the three years beginning inﬁscal 2013, highlights three key policies: Innovation, Global, and Transformation. We havebeen transforming our business portfolio and expanding our service businesses basedon these key policies. In ﬁscal 2014, we took on the further challenge of globalizing ourmanagement. Over the years we have globalized operations, choosing the best regions
from around the world for procurement and production. We have taken management
closer to our customers to expedite business, including establishing, for the ﬁrst time in
April, a global chief executive officer for our rail systems business in the United Kingdom.
Realizing that global management will also require employing our human capitalworldwide, we have been building a framework for the global deployment of Group
employees based on a common personnel system and evaluation platform. We willcontinue to expand the scope of this framework to employ people in the right place at theright time to be better partners with our global customers.
As of April 2014, Hitachi established a chief operating officer position to work alongside
our chief executive officer, effectively integrating the implementation of our Mid-termManagement Plan with the speedy delivery of solutions to customers and global society,while bolstering our management framework. Drawing on this enhanced leadership
structure, we will continue to address diverse social issues through our Social Innovation
Business, while fulﬁlling our responsibility to global society as a corporate citizen byrespecting human rights, as deﬁned by the United Nations Guiding Principles on Businessand Human Rights, while also ensuring sustained protection of the global environment.

Hiroaki Nakanishi
Chairman & CEO

Toshiaki Higashihara
President & COO

WEB Hitachi to Strengthen Leadership Team to Drive Global Business Expansion in the Rail Systems Business
http://www.hitachi.com/New/cnews/month/2014/03/140320.html
WEB Hitachi Announces Changes of Top Managements

http://www.hitachi.com/New/cnews/f_140108.pdf

02

Hitachi Group Sustainability
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Sustainability Report Digest

Management Strategies and CSR

VISIONManagement Strategies and CSR
As a global company, we share society's values and pursue sustainable growthby integrating management strategies and CSR. We align our CSR activities
with our Mid-term Management Plan to realize the Hitachi Group Vision,
creating both social and economic value.

For Hitachi, CSR is about realizing theworld we envision in our Group Vision.
That is, to contribute through innovation
to both helping to build a safe, secure,comfortable, and fair society and helping
to tackle global challenges: poverty,
inequality in education, diseases, natural
resource and energy issues, population
concentration in cities, and otherenvironmental issues. CSR is one of thedrivers to achieve the goals in our Midterm Management Plan, our action planfor our vision. By implementing this plan,
we fulﬁll our responsibilities as a good
corporate citizen by promoting Social
Innovation Business, and with robust,
diverse governance and a pioneering
spirit as well as the strong ethics of ouremployees. We also comply with nationallaws and work in line with the HitachiGroup Codes of Conduct.
We created our Group Vision in May
2013, at the start of 2015 Mid-termManagement Plan, which draws on the
ethics and values that the Group has
developed over the past 100 years—
encapsulated in our Corporate Credo
and Founding Spirit—to lay out a new
mid- to long-term vision. Recognizing
the changing macro trends in society, thevision shows our commitment to help
solve some of the issues facing the global
community and to realize a sustainable
society. We also merged the Corporate
Credo, Founding Spirit, and Hitachi Group
Vision into the Hitachi Group Identity.

Trends in Society and Hitachi Group Identity
Macro Trends in Society

Hitachi Group Identity• Toward a society centered on
distribution, sharing, and recycling• Expansion of free trade zones• Global economic growth led byemerging nations• Global market structural changes
based on energy resources

Corporate Credo:
Contribute to society through thedevelopment of superior, originaltechnology and products

Hitachi Founding Spirit:
Harmony, Sincerity, Pioneering Spirit

Achieving a Sustainable
Society• Securing water resources, energy,
and food• Replacing aging infrastructure systems• Reducing CO2 emissions• Improving transportation systems• Dealing with the low birth rate and an
aging population• Promoting material recycling

Hitachi Group Vision:
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

Codes of Conduct

Business plans

Companies’ regulations
and standards

03

Hitachi Group Sustainability
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Sustainability Report Digest

2015 Mid-term Management Plan Highlights
The 2015 Mid-term Management Plan focuses on innovation, global, and transformation.
To achieve our targets, we will grow and transform through our Social Innovation Business.
2015 Mid-term Management Plan and FY 2013 Results (Consolidated)
Management Targets
FY 2015 Target*1

FY 2013 Results*2

10 trillion yen

9,616.2 billion yen

EBIT*3 (operating income) ratio

Over 7% (over 7%)

6.0%

Net income attributable to Hitachi, Ltd. stockholders

Over 350 billion yen

264.9 billion yen

Over 70 yen

54.86 yenOver 30%

27.4%

Service revenue ratio (including systems solutions)Over 40%

32%

Overseas revenue ratio

Over 50%45%

Employees in Japan

200,000

196,000

Employees outside Japan

150,000

124,000

Revenues

Net income attributable to Hitachi, Ltd. stockholders per share
Total Hitachi, Ltd. stockholders’ equity ratio (manufacturing, services & others)
Service Revenue Ratio, Overseas Revenue Ratio, Number of Employees

Effects of Hitachi Smart Transformation Project
Total up to FY 2015

Total up to FY 2013

400 billion yen

Cost reduction effect

220 billion yen*1 Assumed exchange rate: 90 yen/US dollar, 115 yen/euro *2 Exchange rate: 100 yen/US dollar *3 EBIT: Earnings before interest and taxes

2015 Mid-term Management Plan and Related Non-Financial Activities
In addition to ﬁnancial activities, non-ﬁnancial activities play a crucial role in achieving the 2015
Mid-term Management Plan goals. We set targets for non-ﬁnancial activities related to key
management policies and started these activities in ﬁscal 2013.
Material Issues for Hitachi

Management Focus

Related Non-Financial Activities
Sustainable Business

Innovation:
Strengthen service businesses
that maximize the utilization of
IT and bring about innovation

ExpandR&D centersoutside Japan

Promote R&D in 7 areas globally (as of June 2014)
Increase R&D staff FY 2013 Result: approx. 290 people

FY 2015 Target 400 people

Strengthen Open Innovation FY 2013 Result: 80 cases outside Japan, 250 cases in Japan
Service business sales ratio

FY 2013 Result: 32%

FY 2015 Target Over 40%

Caring for the Environment
Eco-Product sales ratio

FY 2013 Result: 89%

Diversity Management

Global:Deliver innovation to customers
and society globally

FY 2015 Target 90%

Diversity in directors (as of April 2014, out of 14 directors)• Outside directors: 8 • Non-Japanese: 4 • Females: 2
Female managers (Hitachi, Ltd.)
Female senior executives

FY 2013 418 women

FY 2020 Target 1,000 women

Target to be assigned by FY 2015
Respect for Human Rights

Business and human rights

FY 2013 Results: 2 human rights due diligence pilot programs
Public Policy Initiatives

Stakeholder dialogues FY 2013 Results: Regions, themes expanded; held in 3 regions (Europe, US, and China)
Diversity Management

Transformation:
Transform Hitachi: To deliver
innovation by standardized andspeedy operation

Promotion of global human capital management strategy
FY 2013 Results: Introduction of Global Performance Management / Talent development for global
executives / Introduction of Global Leadership Development program
Sustainable Business
Promotion of Hitachi Smart Transformation Project
Total up to FY 2013 220 billion yen

04

Target outcome (aggregated FY 2011–FY 2015) 400 billion yen

Hitachi Group Sustainability
Report 2014 Digest

Management Strategies and CSR

CSR Management
With our Corporate Credo of contributing to society through the development ofsuperior, original technology and products, we strive to realize a sustainable society byintegrating global social and environmental expectations with our management throughcommunication with stakeholders.
New CSR Management Framework

Hitachi’s CSR Activities
Looking toward the next Mid-termManagement Plan which will startfrom ﬁscal 2016, to further integratemanagement strategies and CSR, we arerevising our CSR Policy to a new frameworkusing ISO26000. From ﬁscal 2014, we willfurther improve communications with our
stakeholders to recognize and fulﬁll oursocial responsibilities. We will also reinforce
the PDCA cycle to ensure execution of ouractivities and to improve the quality of ourmanagement.

Stakeholder Engagement

Recognize
Properly recognize oursocial responsibility

Review and
Improve
Review and improve
CSR activities
through proactive
communicationand stakeholder
engagement

1. Recognition of Social
Responsibility
2. Organizational Governance
3. Human Rights
4. Labor Practices
5. The Environment
6. Fair Operating Practices
7. Customers (Consumer Issues)
8. Community Involvement andDevelopment
9. Review and Improvement of
CSR Activities

Identify, Prioritize
and Act
Identify relevant
issues, establish
priorities foraddressing issues,
and act

Hitachi puts great importance on communication with our stakeholders at various areas ofour business activities. We will further work on developing more effective communication
tools as well as on information disclosure to build trust relationships with our stakeholders.
Communication Tools• CS activities• Marketing• Website• Ads• Announcement of ﬁnancial results• General shareholders’ meetings• IR events

Stakeholders

Stakeholders

Customers

Government,
Municipalities, Industrial
Associations

Local
Communities

Shareholders andInvestors

Hitachi• Procurement activities• Supplier meetings• CSR monitoring• CSR audits

Suppliers

Academic Associations
and ResearchInstitutions

NGOs and NPOs
• Intranet• Employee surveys

Communication Tools• International conference participation• Policy council participation• Contributing to local communities
through business• Participating in volunteer activities• Open innovation (joint research)• Stakeholder dialogue• Dialogue through collaboration

Employees
Global Environment

We use a materiality process based on dialogues
with stakeholders to identify material issues. To
integrate our management strategies and CSR,
we reﬂect, in our activities, material issues related
to the key management policies in our Mid-termManagement Plan and we seek to materialize CSR
in line with our management strategy.

Importance for stakeholders

Material Issues for Hitachi

1. Products that Create a Sustainable
Society (Sustainable Business)
2. Caring for the Environment
3. Public Policy Initiatives
4. Respect for Human Rights
5. Supply Chain Management
6. Diversity Management

Inﬂuence on businessSelection Process for Material Issues
To select our material issues, we evaluate and verify sustainability issues that are identiﬁed through dialogues with stakeholders, suchas international organizations, investors, and NGOs as well as by monitoring public policy trends, from two dimensions: importance forstakeholders and inﬂuence on business. Importance for stakeholders includes human rights, international development, the environment,
reporting, ethics, and regional and international requirements. Inﬂuences on business are assessed from the perspectives of global, fusion,and the environment, the main points of our 2012 Mid-term Management Plan, as well as the perspectives of innovation, risk, reputation,and cost effectiveness.

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Hitachi Group Sustainability
Report 2014 Digest

Sustainability Report Digest

FEATURE

Contributing to Society through Business
Creating value to fulﬁll our Corporate Credo—contributing to society through thedevelopment of superior, original technology and products-has underpinned ourbusiness development for more than a century.
Environmental issues are becoming global: climate change and ecosystemdegradation as well as energy, water, resource and food shortages, urban population
growth, graying of societies, and others. To solve these social issues, as a global
corporate citizen, we create both economic and social value for a sustainable society.

Hitachi’s Solutionsfor Social Issues

Combining our wide-ranging business activities with IT solutions helps us resolve
social issues, including global environment problems.

The Environment
and Energy
The aim of Hitachi’s environmental
management is to “achieve a sustainable
society.” For one key element of thisaim, preventing global warming, we are
reducing CO2 emissions through ourbusiness operations.

Energy-Saving
Products and Systems
We contribute to the reduction of CO2
emissions across society as a whole byproviding products and services withlow energy consumption.

Power Generation
Systems

Biodiversity, Water,and other Resources
Ensuring biodiversity for the next
generation means preserving
ecosystems today. We help topreserve ecosystems throughbusiness operations that clean the air,water, and soil.

We develop wind and solar power
and other renewable energy powersystems. Also, we reduce CO2 emissions
by improving the efficiency of thesesystems.

Integration
through IT
Health and Aging
Responding to aging in societies
worldwide, our medical solutions
maintain and improve health. As well
as diagnostic and testing equipment
for early treatment, we supply
pharmaceutical manufacturing
equipment for safe, effective drugs.

Advanced networks, storage, andcloud computing technologies connect
infrastructures, products, and people.
Hitachi provides optimal solutions toresolve social issues.

Cities and Transportation
Our infrastructure solutions increasesafety and comfort in cities and remoteislands with limited infrastructures.
Solutions include safe, high-speedtransportation networks; highly
stable, efficient power equipment
and transmission networks for diverse
power sources, including renewableenergy; and water systems for a safe,
constant supply of water.

Healthcare

Water Environment
Solutions
Our water environment solutions—purifying polluted water and desalinatingseawater, for example—enable more
efficient use of this limited resource.

Smart Cities
Worldwide, we propose new forms ofcities that are safer, more secure, andmore convenient, and we contributeto the standardization of smart city
infrastructures.

Security Systems
for Buildings
Our security systems cover exit / entry
as well as elevator operations andmaintenance

Advanced
Transportation Systems

We contribute to medical innovation by
providing solutions across the healthcare
cycle, including particle beam therapy
systems and big data systems forpreventive care and diagnostics.

Our safe, convenient railway and traffic
information systems help reduce theenvironmental burden and congestion.

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Hitachi Group Sustainability
Report 2014 Digest

Contributing to Society through Business[Environment and Energy]

Using Renewable Energy
We have a strong record in large power plant
EPC (engineering, procurement, and construction). For the Oita Solar Power Plant, Japan’slargest, operating since March 2014, we handle
the entire process: engineering through procurement, installation, and ﬁnal adjustments.
With 340,000 solar panels on a 105-hectare
site, the 82,020 kW plant could generate 87 million kWh per year—the same as 30,000 households.*1 In ﬁscal 2013, we launched a solutions
business to supply mega solar system packages
from capital funding to EPC. We will supply
these not only in Japan but across the globe.
Our unique wind turbine system has downwind
rotors to catch the wind blowing up along
mountains or hills. Our power generators produce stable power, even when the wind changes, and our charging and control systems operate under the harshest conditions. Thesefeatures should translate into growing demandfor our wind turbine systems. The full-scale offshore Kamisu Wind Farm in Ibaraki had no dam-

aged despite shocks reaching 6+ (JMA seismic
scale) and ﬁve-meter tsunami waves during theGreat East Japan Earthquake. We will supply
safe, reliable wind turbine systems to Taiwan,
the Philippines, and other areas of cycloneprone East Asia from ﬁscal 2015 onward.
*1 Based on monthly household power consumption of 276.1 kWh in ﬁscal
2012 (Source: The Federation of Electric Power Companies of Japan)

Mega solar power from Oita Solar Power Plant’s approximately 340,000
solar panels[Health and Aging Societies]

Hitachi’s Healthcare Business
Tailored to speciﬁc communities, Hitachi’s ITbased integrated healthcare systems help toreduce medical costs as well as improve care,while providing solutions optimized for the individual.
In October 2013, Hitachi and Britain’s National
Health Service (NHS) in Greater Manchester,launched a proof-of-concept healthcare projectusing IT. Hitachi, with doctors and the NHS, willdevelop a system and network for centrally
managing medical records, while safeguarding
security and privacy. We will also develop ITbased programs using the lifestyle and healthcoaching skills developed for our Harasuma
Diet*1 program.
Hitachi Medical Corporation develops patientfriendly equipment, combining products known
for reliability with services and IT to produce anextensive range of healthcare solutions. For example, instead of conventional bore-shaped
MRIs,*2 a new shape better suited to the workﬂow of medical staff accommodates many pa-

tients, including the elderly, infants, and large
or claustrophobic patients. The open architecture uses low-power magnets. The new MRI
system is working in over 150 countries, including emerging areas without stable power. Hitachi Medical supports both patients and medical
staff on many fronts, including training on diagnostic imaging systems in and outside Japan.
*1 Harasuma Diet: A diet program designed by Dr. Nakagawa at the
Hitachi Health Care Center*2 MRI: magnetic resonance imaging

Hitachi Medical’s magnet-based open architecture AIRIS Soleil MRI system

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Hitachi Group Sustainability
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Sustainability Report Digest

ACTIVITIESFY 2013 Environmental Report
With the environment as an important management focus, we are working to
reduce the environmental burden of our business operations.

As a Social Innovation Business company, we set
the Environmental Vision, which helps achieve asustainable society, the focus of our environmental management, aiming to reduce the environmental burden through business.
We are committed to global warming prevention, resource conservation, and ecosystems
preservation as the three pillars of our vision.
Our goal is to achieve a more sustainable society
by promoting global production that reduces
the environmental burden of a product throughout its life cycle.

The Hitachi Environmental Vision

Environmentally Conscious
Products and Services

Hitachi’s Framework for Environmentally Conscious Products

Eco-Products meet criteria set out in the Assessment for DfE (Design for the Environment),
where we evaluate how much the environmental burden of products and services is reduced
throughout their life cycle. We set targets forraising the Eco-Product sales ratio. In ﬁscal 2013,
our Eco-Product sales ratio reached 89 percent,topping the 84 percent target.
Eco-Products that meet even more demanding
requirements are designated as Eco-Products
Select, and we are working to produce more ofthese. In ﬁscal 2013, 210 models were designated Eco-Products Select.

Eco-Products
SelectProducts that meet
DfE assessment*3
criteria

Eco-Products

Products meeting one or more of thefollowing criteria• Either a global warming prevention
factor*1 or a resource factor*2 of 10
or more• Industry-leading level for achieving
an energy efficiency standard orsimilar factor• Recipient of an award outside
Hitachi or officially certiﬁed forenvironmental excellence• CO2 emission reduction rate at least
50 percent greater than ﬁscal 2005
products

Products*1 Indicates the amount of improvement in efficiency of global warming prevention comparedwith a reference product, measuring the extent to which greenhouse gas emissions havebeen reduced and the value of products and services boosted.
*2 Indicates the amount of improvement in resource efficiency compared with a reference
product, measuring the extent to which resource consumption is reduced and the value of
products and services boosted.
*3 Speciﬁc criteria for evaluating the environmental consciousness of products and services atthe design and development stage.

Examples of Eco-Products SelectRef Assist Energy-Saving Spot Cooling System for Data Centers(Infrastructure Systems Company, Hitachi, Ltd.)

Ref Assist

Heat generated in data centers by IT devices iscooled with air conditioning. The Ref Assist
system uses spot cooling to make use of thenatural circulation of refrigerants and reduce
the power needed for fans, slashing air conditioning power consumption. When combinedwith an optional high-efficiency heat source
and a free cooling system,*1 this design can
reduce power consumption by up to 60 percent compared with conventional underﬂoor
air conditioning systems.*2*1 Heat source equipment (such as a chiller) produces chilled water as a coolant.
Power consumption can be reduced by combining this with a high-efficiency
heat source and a free cooling system.
*2 Calculated by Hitachi, Ltd. when compared with a conventional model.

ADWORLD, Long-Term Care Insurance Office Support System(Information & Telecommunication Systems Company, Hitachi, Ltd.)

Service infrastructure•Management of eligibility of
insured persons•Management of payment of
insurance premiums•Management of insurance
service recipients•Management of service
records, etc.

Nursing care insurance procedures
will become increasingly complex. Thissystem supports government workers
with a customer liaison support feature, as well as simple, user-friendly
software for creating spreadsheets,graphs and other materials, and an intuitive operating environment, while
reducing CO2 emissions by around 80
percent.

Typical services of Long-term care insurance
office support system of ADWORLD†For details see the Hitachi Group Sustainability Report 2014 (PDF), pp. 089–092.

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Hitachi Group Sustainability
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Fiscal 2013 Environmental Report

Environmentally Conscious Production
We set targets for energy efficiency, waste, chemical substance emissions, and water toreduce the environmental burden of business activities.
Reduction in Energy Use per Unit

Reduction in Waste and Valuables
Generation per Unit

From base year

From base year

14%

24%

reduction

Energyused
1,746 ML
Activity
amount*=reduction

Energyused
1,712 ML100%

Activity
amountFY 2005=

Amountgenerated

86%

782 kt =Activity

FY 2013(base year)

Amountgenerated

100%

677 kt =Activity

FY 2005

FY 2013(base year)* A value closely related to the emission factor numerators (environmental
burden) of energy use from business activities, etc. (for example,
production quantity, output, building ﬂoor space, and number of
employees, etc.)

All factories and offices are recycling waste materials onsite and, withcustomers, are reducing transportation waste. Under the Zero Emission*1
initiative, which minimizes landﬁll disposal, 121 facilities achieved theirzero emission goal as of ﬁscal 2013.

We reduce the energy use per unit as one way to use energy more
efficiently. In ﬁscal 2013, we reduced this by 14 percent, surpassing the
11 percent target (from the base year ﬁscal 2005). For more reductions,
we installed high-efficiency equipment, from LED lighting to inverter
air conditioners, and are cutting energy by improving manufacturing
processes.

Creating Eco-Factories &Offices SelectFactories and offices with a highlevel of environmental consciousness and outstanding results receive Eco-Factory & Office Selectcertification. Certified factories
and offices are re-evaluated every
year to conﬁrm that they meet thecriteria. In ﬁscal 2013, 19 facilities
obtained new certiﬁcations and
36 facilities had their certiﬁcations renewed.

76%*1 Zero emission: A ﬁnal disposal rate (landﬁll disposal/waste) of lessthan 0.5 percent in any given year.

Eco-Factories & Offices Select Certiﬁcation Criteria

Eco-Factories& Offices SelectFacilities that have
met their targets
for each ﬁscal year
under the GREEN 21
evaluation system

Eco-Factories& Offices

An office or factory that has met atleast one of the following criteria
Eco-Factory Select• Energy efficiency• Renewable energy use• High-efficiency lighting• Recycling of waste and otherresources• Efficient water recycling• VOC emissions reduction
Eco-Office Select• High-efficiency lighting• Renewable energy introduction• Energy savings• Improved office building
environmental performance

Factories and Offices

Examples of Eco-Factories & Offices SelectHitachi High-Technologies
Corporation, Ibaraki, Japan

Hitachi Building Equipment
Manufacturing (Tianjin)
Co., Ltd., Tianjin, China

Hitachi Building Equipment Manufacturing (Tianjin) Co., Ltd. manufactures
elevators and related components. Since its inception, this factory has been
improving energy efficiency, including installing skylights for natural lighting
and automated air conditioning control. Water used in the production process is collected and passed through a wastewater treatment system forreuse. All employees save energy by turning off office lights and PC monitors
during lunchtime.

The Naka Division of Hitachi High-Technologies develops, designs, andmanufactures semiconductor measuring and inspection equipment, electron
microscopes, and clinical analyzers, etc. This facility works to raise recycling
awareness among employees, ensure thorough waste sorting, collection,and reuse. Other environmentally conscious initiatives include upgrading tohigh-efficiency air conditioning systems, introducing LED lighting, and installing motion sensors in restrooms. The new building, completed in 2011,
features rooftop greenery, a solar power generation system, and energysaving equipment.

09

Hitachi Group Sustainability
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Sustainability Report Digest

ACTIVITIESFY 2013 Governance and Social Report
We are enhancing our corporate governance so that we can deliver social
infrastructure systems around the world and continue to grow in global markets. To
further integrate our management strategies with CSR, we are promoting innovation,
respect for human rights, and information disclosure.

Corporate Governance• We have seven outside directors on our 12-member*1 board of directors,
including three non-Japanese (one female), to provide a balanced mix of ideas
and global perspectives that reinforce the board’s supervision.
• In April 2014, we created the Healthcare Group to integrate our customer
response, to boost our ability to propose solutions geared to diversifying
market needs, and to enhance our global competitiveness.
• To ensure the reliability of consolidated ﬁnancial reporting, every company
uses assessment documents, company-level controls and business processcontrols based on the guidelines developed by our J-SOX Committee.*2

Our committee system establishes a frameworkfor quick business decisions and transparent
management by separating the responsibilities
for management oversight from the executionof business operations.

Majority ofoutside directors*1 Approved at the 145th Ordinary General Meeting of Shareholders on June 20, 2014.
*2 J-SOX: A system for the development of the internal controls required under Japan's Financial
Instruments and Exchange Act (FIEA) that ensure the reliability of corporate disclosure.

WEB Corporate Governance Guidelines of Hitachi, Ltd.
http://www.hitachi.com/IR-e/corporate/governance/guidelines.html

WEB

Hitachi Internal Control Assessment Framework
http://www.hitachi.com/csr/governance/gove/index.html#gove03* Hitachi Group Sustainability Report 2014 (PDF) pp. 60–62

Innovation Management• To achieve growth in global markets, we are focusing on developing worldclass technology supporting Hitachi’s core businesses and reinforcing regional
research that contributes to global business expansion.
• To reinforce our global research strengths, we further developed ourworldwide R&D network, setting up four new research laboratories in four
countries including in China and the US.
• Our R&D is conducted by researchers whose broad experience, backgrounds,
and ideas stimulate creativity and innovation.
• We work with around 80 research laboratories outside Japan and another
250 in Japan to develop innovative R&D beyond the reach of Hitachi alone.

Our research and open innovation help resolve
social issues. We will raise the total number of
researchers outside Japan from 290 in ﬁscal
2013 to 400 by ﬁscal 2015.

Researchers outside
Japan increased to
400 by FY 2015 (Hitachi, Ltd.)* Hitachi Group Sustainability Report 2014 (PDF) pp. 21–25

Social Contribution Activities• To help nurture young scientists, we hold the Hitachi Science Seminar, ahands-on science education program, and similar programs run by Group
companies. As well, we support the Hitachi Science Club in Hitachi City, Japan.
• To nurture personnel outside Japan, we operate the Hitachi Young Leaders
Initiative and the Singapore-Industry Scholarship.
• Hitachi Solutions, Ltd. is running an IT-based pro bono*1 project for recovery
assistance following the Great East Japan Earthquake.
• The social contribution expenditure of the Hitachi Group companies and ﬁve
foundations in Japan totaled approximately 3.1 billion yen.

Through our employees, we pass on technologies and knowhow to local communities andcontribute to nurturing the next generation.

*1 Pro bono: Voluntary work where people use their professional skills for the public good
*2 Hitachi Library Project: Operated by Hitachi Asia (Thailand) Co., Ltd., this project donates schoolbooks and other materials to schools. Donations are also made for libraries and renovations.

Approximately 3.1 billion yen
spent on social contribution activities.

Hitachi Library Project*2* Hitachi Group Sustainability Report 2014 (PDF) pp. 171–183

10

Hitachi Group Sustainability
Report 2014 Digest

FY 2013 Governance and Social Report

Respecting Human Rights
We see the responsibility to respect the humanrights of all stakeholders as key to operating asa global business. As of ﬁscal 2014, we will start
to create guidance on human rights due diligence*1 that will be shared across the Group.

• We released the Hitachi Group Human Rights Policy in May 2013.
• In July 2013, 29 executive officers, including the president, participated in aworkshop on human rights in global business.
• We conducted our ﬁrst common global human rights e-learning program,with around 160,000 employees participating, as of March 2014.
• We developed a pilot program for human rights due diligence, identifying
human rights risks in the value chain and mapping risks in particular regions.
*1 Human rights due diligence: Identifying and assessing human rights impacts, as well as
integrating ﬁndings and taking action to prevent or mitigate potential impact or to provide foror cooperate in remediation. The processes also cover tracking the effectiveness of our actions
and communicating externally.

WEB Hitachi Group Human Rights Policy
http://www.hitachi.com/csr/renew/pdf/human_rights_policy.pdf

Conducted a human rights
due diligence pilot program

Workshop for executive officers* Hitachi Group Sustainability Report 2014 (PDF) pp. 130–132

Supply Chain Management
As we work with our suppliers to take action
across the supply chain, we will continue to resolve issues together with our suppliers in linewith new procurement policies and guidelines.

• We asked 100 key suppliers to undertake CSR Monitoring (self-checks). We
also conducted CSR audits of 16 of these suppliers from China and the rest of
Asia, ﬁnding no major infringements.
• We released the Hitachi Group Conﬂict Minerals Procurement Policy andProcurement BCPs*1 and ensured that all concerned parties were informed.
• We revised our Green Procurement Guidelines, responding to tighterchemical substance regulations.
• Our green purchasing rate has reached 90 percent.
*1 BCP: Business Continuity Plan

Created the HitachiGroup Conﬂict Minerals
Procurement Policy

WEB Hitachi Group Supply Chain CSR Deployment Guidebook
http://www.hitachi.com/procurement/policy/__icsFiles/
aﬁeldﬁle/2010/08/30/SC_CSR_E_2.pdf* Hitachi Group Sustainability Report 2014 (PDF) pp. 133–137

Diversity Management
Hitachi, Ltd. aims to appoint female executives
by ﬁscal 2015 and to increase the number offemale managers to 1,000 by ﬁscal 2020.

• Our Diversity for Next 100 initiative develops diversity management as a key
management strategy.
• In addition to helping women develop their careers and providing support
for balancing work with nursing care, we are also enhancing Hitachi Group
partnerships and senior management commitment. We held events suchas Prior to Maternity Leave/Return-to-Work Support Seminars and diversity
workshops.
• We were selected to receive Nadeshiko Brand designation from the Ministryof Economy, Trade and Industry (METI) and the Tokyo Stock Exchange as anenterprise that encourages women to play active roles in the workplace.

Selected forNadeshiko Brand
Nadeshiko Brand logo

designation

Hitachi Group Women Leaders’ Meeting* Hitachi Group Sustainability Report 2014 (PDF) pp. 138–150

11Hitachi Group Sustainability
Report 2014 Digest

Sustainability Report Digest

Hitachi Group ProﬁleCompany Proﬁle (as of March 31, 2014)
Corporate Name Hitachi, Ltd.
Incorporated
February 1, 1920 (founded in 1910)
Head Office
1-6-6 Marunouchi, Chiyoda-ku,
Tokyo 100-8280, Japan
Representative Toshiaki Higashihara
Representative Executive Officer
President & COO

Capital458.79 billion yen
Number of employees (unconsolidated basis)
33,500
Number of employees (consolidated basis)
320,725
Number of consolidated subsidiaries
947(Japan: 283, outside of Japan: 664)
Number of equity-method affiliates
231(Japan: 66, outside of Japan: 165)

Consolidated Business Overview and Results for Fiscal 2013
Revenues

Capital Expenditure849.8 billion yen (up 14%)
R&D Expenditure351.4 billion yen (up 3%)
Percentage of Revenues amount toOversea Production
24%

9,616.2 billion yen(up 6%, year on year)
532.8 billion yen (up 26%)580.1 billion yen (up 62%)

Operating income
EBIT**EBIT: Deﬁned income before income tax less interest income changes

Revenues, Operating Income and EBIT
Revenues(billions of yen)
12,00010,000Operating income(billions of yen)
1,200
9,316

8,969

9,666

9,616

9,041

Revenues

8,000
6,000

445
444

4,000
2,000
0

573

422
358

412

580
533

78
2010

2009

2011

2012

Revenues and Sales Ratio by Region (billions of yen)
Others 526.7 (6%)
Number of companies: 71
Number of employees: 9,925

400
200
0

2013
(FY)

Revenues and Ratio by Segment (billions of yen)
Financial Services
338.5 (3%)

Information &Telecommunication Systems
1,954.9 (18%)

Others (Logistics andOther services)
1,233.6 (12%)

Asia 2,063.5 (21%)
Number of companies: 363
Number of employees: 88,821

Digital Media &Consumer Products
890.8 (8%)

Total Revenues
by Region
9,616.2 billion yen

Subtotal of Total
Revenues by segment
10,781.4 billion yen
Total Consolidated
Revenues
9,616.2 billion yen

Automotive Systems
892.1 (8%)

Europe 812.1 (8%)
Number of companies: 146
Number of employees: 10,317
North America 910.2 (10%)
Number of companies: 84
Number of employees: 15,455

800
600

Operatingincome
EBIT

202

1000

Japan 5,303.4 (55%)
Number of companies: 284*
Number of employees: 196,207

High Functional
Materials & Components
1,363.2 (13%)
Construction
Machinery767.3 (7%)* Hitachi, Ltd. and 283 consolidated subsidiaries in Japan, total 284 companies

12

Hitachi Group Sustainability
Report 2014 Digest

Power Systems
777.3 (7%)

Social Infrastructure &Industrial Systems
1,446.6 (14%)

Electronic Systems &Equipment
1,116.7 (10%)

Hitachi Group ProﬁleMajor Fields of Business and Products
Information & Telecommunication Systems
Systems Integration, Outsourcing Services, Software, Disk Array Subsystems, Servers,
Mainframes, Telecommunications Equipment, ATMs
Hitachi Information & Telecommunication Engineering, Ltd., Hitachi-Omron Terminal
Solutions, Corp., Hitachi Computer Products (America), Inc., Hitachi Computer Products(Europe) S.A.S., Hitachi Information & Control Solutions, Ltd., Hitachi Solutions, Ltd., Hitachi
Systems, Ltd., Hitachi Consulting Corporation, Hitachi Data Systems Corporation, Hitachi
Information & Telecommunication Systems Global Holding Corporation

Power Systems
Thermal, Nuclear and Renewable Energy
Power Generation Systems, Transmission &Distribution Systems
Hitachi-GE Nuclear Energy, Ltd., Hitachi Power
Solutions Co., Ltd., Horizon Nuclear Power
LimitedSocial Infrastructure &Industrial Systems
Industrial Machinery and Plants, Elevators,
Escalators, Railway Systems
Hitachi Industrial Equipment Systems Co.,
Ltd., Hitachi Elevator (China) Co., Ltd., Hitachi
Building Systems Co., Ltd., Hitachi Plant
Construction, Ltd.

Hitachi Uniﬁed
ComputePlatform*

Electronic Systems & Equipment
Semiconductor and LCDs, Manufacturing
Equipment, Test and Measurement Equipment,
Advanced Industrial Products, Medical
Electronics Equipment, Power Tools
Hitachi High-Technologies Corporation, Hitachi
Koki Co., Ltd., Hitachi Kokusai Electric Inc.,
Hitachi Medical Corporation

Photovoltaic Power
Generation System*
Oita Solar Power
Corporation, Oita solar
power (Mega solar
power plant)

Class395 high-speed train (UK)*Construction Machinery
Hydraulic Excavators, Wheel Loaders, Mining
Machinery
Hitachi Construction Machinery Co., Ltd.

Hitachi Construction Machinery’s
Double-arm Working Machine

Digital Media & Consumer Products
Air-Conditioning Equipment, Room Air
Conditioners, Refrigerators, Washing Machines,
Optical Disk Drives, Flat-Panel TVs
Hitachi Appliances, Inc., Hitachi-LG Data
Storage, Inc., Hitachi Consumer Products(Thailand), Ltd., Hitachi Consumer Marketing,Inc.

Hitachi Appliances’ Large
Capacity Refrigerator“Vacuum Compartment
FS” X seriesHigh Functional Materials &Components
Semiconductor and Display Related Materials,
Circuit Boards and Materials, Automotive Parts(Molded Plastics, etc.), Energy Storage Devices,
Specialty Steels, Magnetic Materials andComponents, High Grade Casting Components
and Materials, Wires and Cables
Hitachi Chemical Company, Ltd., Hitachi Metals,
Ltd.

Hitachi Medical’s MRI System

Automotive Systems
Engine Management Systems, ElectricPowertrain Systems, Drive Control
Systems, Car Information Systems
Clarion Co., Ltd., Hitachi Automotive
Systems, Ltd., Hitachi Automotive
Systems Americas, Inc.

Hitachi Automotive
Systems’ SemiActive Suspension
SystemHitachi Chemical’s
Industrial Li-ion Batteries

Others (Logistics and Other services)
Logistics, Property Management
Hitachi Life, Ltd., Hitachi Transport System, Ltd.,
Hitachi Urban Investment, Ltd., Hitachi America,
Ltd., Hitachi Asia Ltd., Hitachi (China), Ltd.,
Hitachi Europe Ltd., Hitachi India Pvt. Ltd.

Hitachi Transport System’s truck andMetropolitan East Distribution Center

Financial Services
Leasing, loan guarantees
Hitachi Capital Corporation

Hitachi Capital’s Hitachi
Corporate Card

: Main products and services: Positioning of principal affiliated companies (as of March 31, 2014) *: Products and services of Hitachi, Ltd.
(Notes.) 1. Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China), Ltd., Hitachi Europe Ltd. and Hitachi India Pvt. Ltd. are the Hitachi Group’s regional supervising company for
Americas, Asia, China, Europe and India, and they sell the Hitachi Group’s products.
2. Hitachi Information & Control Solutions, Ltd. changed its name to Hitachi Industry & Control Solutions, Ltd. in association with the reorganization of the informationand control solution business for industrial ﬁelds, the security system business and the printed-circuit board manufacturing business of the Group as of April 1, 2014.

Hitachi Group Sustainability Report 2014 Digest

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