Hitachi Group
Sustainability Report 2013

V A L U E

C R E A T I O N

F O RS U S T A I N A B L EAS O C I E T Y

002
Hitachi Group
Sustainability
Report 2013

CONTENTS
004
006
008

Sustainability Report Editorial Policy				010

VISION: Management Strategies and CSR

Hitachi Group Profile
TOP COMMITMENT Message from Management Hiroaki Nakanishi, President, Hitachi, Ltd.

Trends in Society and Hitachi Group Identity / 2015 Mid-Term Management Plan to Realize

Hitachi Group
Sustainability
Report 2013

the Hitachi Group Vision / Performance Overview of 2012 Mid-Term Management Plan

014

FEATURE: Contributing to Society through Business
Hitachi’s Solutions for Social Problems
Key Hitachi Business Segments
Ensuring Safe, Reliable, and Optimal Water Environments Worldwide
Innovative Cities and Communities

022

Activities by Country and Region			Europe / The Americas / Asia & India / China
		

027

Governance Report			message Toshiaki Kuzuoka, Senior Vice President and Executive Officer

028

Corporate Governance026

Strengthening Governance / Compensation /Internal Controls over Financial Reporting / Group Management

032

CSR Management
CSR Policy of the Hitachi Group / CSR Management Structure /CSR Self-Assessment Tool / CSR Activities Results and Plans

037

Risk Management
Reinforcing the Risk Management System / Business Continuity Plans / Providing
Information through Our Internal Website / Managing Risk Overseas /Responding to the Great East Japan Earthquake / Reputation Management

041

Compliance
Enhancing Comliance Flamework / Formulating and Ensuring Awareness of the HitachiGroup Codes of Conduct / Implementing Corporate Ethics and Compliance Month /Preventing Corrupt Practices Involving Public Officials / Compliance Reporting System /Preventing Violations of the Antimonopoly Law / Export Control / Information Security

047

Innovation Management

052

Intellectual Property

Research and Development Strategy / Research and Development Goals / R&D Plan and
Investment / Enhancing R&D outside Japan / Noteworthy R&D Achievements

IP Activities Supporting Global Operations / Activities and Results

056

Brand Management
Global Brand Strategy / Evaluating Our Global Brand Strategy /Activities and Results (Improving the Global Brand / Web Management /Internal Brand Management / Brand Management)

003
060
061

Environmental Report			message Shigeru Azuhata, Chief Environmental Strategy Officer

Hitachi Group
Sustainability
Report 2013

				

062

Environmental Activities Worldwide

064

Environmental Management Strategies and Initiatives
The Hitachi Environmental Vision and Long-Term Plan Environmental Vision 2025 /Environmental Action Plan

Hitachi Group
Sustainability
Report 2013071

Environmentally Conscious Products and Services
Increasing the Ratio of Eco-Products / Hitachi Products Helping to Reduce CO2 Emissions /Recycling Product Resources / Managing Chemical Substances Contained in Products /Participating in the Development of International Standards

086

Environmentally Conscious Production
Creating Eco-Factories and Office Select / Promoting Global Warming Countermeasures /Calculation of GHG Emissions throughout the Value Chain / Reducing Waste / Water
Conservation / Chemical Substance Management / Managing Environmental Risk /Environmental Load Data Generated through Business Operations (FY 2012)

105

Environmental Management Framework and Communication
Environmental Management Framework / Preserving Ecosystems / Environmental
Education / Environmental Accounting / Environmental Communication

120

Social Report

121

message Shinichiro Omori, Vice President and Executive Officer
Naoki Mitarai, Vice President and Executive Officer

122

Respect for Human Rights
Adoption of Human Rights Policies / Framework for Promoting Respect for Human Rights
and Activities / European Stakeholder Dialogue 2013: Human Rights Policy and Due
Diligence / Sharing the UN Guiding Principles on Business and Human Rights / Human
Rights Education in China / European Senior Manager Training on Business and Human
Rights / Contributing to International Discussions

127

Supply Chain Management
Promoting Global Procurement / Sharing Procurement Policies / Building Global
Partnerships / Hitachi Group CSR Procurement / Green Procurement / Response to theConflict Minerals Issue

133

Diversity Management
Hitachi Group Diversity Management / Diversity Promotion Project Structure / Diversity
Activities / Work-Life Management / Main Assessments and Awards / Employing People
with Disabilities

147

Public Policy Initiatives
External Relations Promotion Structure / Specific Initiatives

150

Quality Assurance Activities
Quality Assurance Activities / Quality and Reliability Education / Strengthening Quality
Assurance (QA) Systems in China and throughout Asia / Handling Product Accidents /Ensuring Hitachi Home Appliance Safety

153

Customer Satisfaction
CS Improvement Activities / Universal Design

159

Communication with Shareholders and Investors
Information Disclosure Policy / Proactive IR Approach / General Meeting of Shareholders /Hitachi as an SRI Investment / Fundamental Policy against Takeovers

163

Employee Health and Safety
Health and Safety Programs / Measures for Improving Health and Safety

167

Global Human Capital Development
Global Human Capital Management Strategy / Accelerating the Globalization of Japanese
Employees / Developing Local Personnel / Optimizing Employee and Organization
Performance / Career Development Support / Employee Welfare

Symbol Marks Used in This Booklet* Technical terms, proper nouns,
tables or diagrams, etc., requiringexplanation
WEB Indicates the title and URL of
the web page related to the article.

173

Social Contribution Activities
Philosophy and Policy / Education / The Environment / Social Welfare / Hitachi’s
Foundations / Support for Volunteers / Disaster Relief / Contributing to Local Communities

189
191
194

List of Key Indicators
Independent Assurance
Inquiries

Sustainability Report Editorial Policy

Basic Concept
The Hitachi Group Sustainability
Report 2013 presents basic policies,
promotion systems, measures, andkey performance indicators on each
initiative in keeping with related
reporting guidelines. This approach
maintains an honest and transparent
disclosure of information regarding
ﬁscal 2012 initiatives and Hitachi’s
stance in addressing social andenvironmental issues that are vitalto the sustainability of corporate
management and society.

Scope of Reporting[Period] The main period covered is ﬁscal 2012 (April 1, 2012 to March 31, 2013)[Companies] Hitachi, Ltd. and 963 consolidated subsidiaries (including modiﬁed entities to which the equity
method of consolidated reporting applies): total 964 companies[Scope of data]
Financial data: Hitachi, Ltd. and 963 consolidated subsidiaries (including modiﬁed entities to which the equity
method of consolidated reporting applies): total 964 companies and 215 affiliated companies that use theequity method
Social data: Scope of data indicated under each item
Environmental data: Hitachi, Ltd. and 963 consolidated subsidiaries (including modiﬁed entities to which
the equity method of consolidated reporting applies): total 964 companies. However, for environmental load
data generated through business operations, companies that cover 90 percent of the load (based on Hitachicalculations) 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 2012.
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 andIndustry, JapanGRI Sustainability Reporting Guidelines (G3.1), Global Reporting Initiative
ISO 26000: 2010, International Organization for Standardization
The Hitachi Group Sustainability Report is published annually.

Disclosure of Financial and
Non-Financial Information
Hitachi Ltd., following closely thedeliberations of the EU and theInternational Integrated Reporting
Council (IIRC) about non-ﬁnancial
disclosure, presents information tomatch the needs of stakeholders
reading this report. While ﬁnancial
information is in the Annual Report,
the Hitachi Group Sustainability
Report presents non-ﬁnancial
information and clariﬁes how
sustainability issues relate toﬁnancial activities. Up-to-date
information is available on the
Hitachi Group’s website.

Non-Financial Information Reports

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

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

Hitachi Group
Sustainability
Report 2013
WEB Global Community Relations andActivities (Social Contribution Activities)
http://www.hitachi.com/csr/sc/

Financial Information Reports

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

Annual Report 2013

Note: We also disclose ﬁnancial information about Hitachi, Ltd. in the
Corporate Governance Report, the Annual Securities Report, and theReport on the 144th Business Term.

Third-Party Assessments
To enhance the credibility of this report, we commissioned third-party environmental, governance, and social
performance assessments in ﬁscal 2012. Bureau Veritas Japan Co., Ltd. assessed environmental performance.
Ernst & Young Sustainability Co., Ltd., veriﬁed governance and social performance based on International
Standard on Assurance Engagement (ISAE) 3000.
External Evaluations
We were selected in September 2012 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 BusinessCouncil for Sustainable Development (WBCSD)
since 1995.

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

005

Hitachi Group
Sustainability
Report 2013

Report MediaThis report is a combination of the
Hitachi Group Corporate Sustainability
Report and the Hitachi Group
Environmental Sustainability Report,
which we published until ﬁscal 2010.
We published the Hitachi Group
Sustainability Report 2013, whichemphasizes comprehensiveness andsearchability of information withspecial emphasis on managementtransparency, as a PDF ﬁle (A4,
194 pages) and the Hitachi Group
Sustainability Report 2013 Digest, asummary of policies, areas of specialsocial interest, and reports on key
management issues, as a booklet(A4, 12 pages). Our website also
reports on detailed activity, as well as
news releases and other up-to-date
information.

PDF

Latest information
Reports on
detailed activities
Reports on material issues

Web
PDF

BookletHitachi Group
Sustainability Report
2013

Hitachi Group
Sustainability Report2013 Digest

Reports on Detailed Activities
Hitachi Group Sustainability Report 2013

Sustainability Report Editorial Policy
Hitachi Group Proﬁle
Top Commitment
Management Strategies and CSR
Trends in Society and Hitachi Group Identity / 2015 Mid-Term
Management Plan to Realize the Hitachi Group Vision / Material Issuesfor Hitachi / Performance Overview of 2012 Mid-Term Management
Plan
FEATURE
Contributing to Society through BusinessGovernance Report
Message from the Executive Officer for Management Audits / Corporate
Governance / CSR Management / Risk Management / Compliance /Information Security / Innovation Management / Intellectual Property /Brand Management
Environmental Report
Message from the Chief Environmental Strategy Officer/ Environmental
Activities Worldwide / Environmental Management Strategies andInitiatives / Environmentally Conscious Products and Services /Environmentally Conscious Production / Environmental Management
Framework and Communication
Social Report
Message from the Executive Officer for Procurement / Message fromthe Executive Officer for Human Capital Group / Respect for Human
Rights / Supply Chain Management / Diversity Management / Public
Policy Initiatives / Quality Assurance Activities / Customer Satisfaction/ Communication with Shareholders and Investors / Employee Healthand Safety / Global Human Capital Development / Social Contribution
Activities
List of Key Indicators / Independent Assurance

Hitachi, Ltd.
WebsiteBookletCSR (Corporate Social
Responsibility)
Environmental Activities
Global Community
Relations and Activities(Social Contribution
Activities)

Reports on Material Issues
Hitachi Group Sustainability Report 2013 Digest

Hitachi Group Proﬁle
Top Commitment
VISIONManagement Strategies and CSR
FEATURE
Contributing to Society through Business
ACTIVITIESFY 2012 Environmental Report / FY 2012 Governance and Social Report
Hitachi Group ProfileWeb

Latest Information
CSR (Corporate Social Responsibility)
WebsiteThe CSR website has a full PDF version with details on our activities andthe following content. The Environmental Activities website reports onenvironmental protection initiatives. The Global Community Relations andActivities website discloses corporate citizenship activities.
Contents Disclosed Solely on the Website
Hitachi’s CSR Principles: Vision and Policies
Highlights: Spotlighting FY 2005 through FY 2012
Supplementary Data for Environmental Report*
Comparative Table with GRI Guidelines / Comparative Table with ISO
26000 Core Subjects / Comparative Table with the UN Global Compact /Policy, Vision, and Guidelines* Expanded version of Hitachi Group Sustainability Report (PDF file)Hitachi Group Profile

Company Profile (as of March 31, 2013)
Corporate Name Hitachi, Ltd.
Incorporated
February 1, 1920 (founded in 1910)
Head Office
1-6-6 Marunouchi, Chiyoda-ku,
Tokyo 100-8280, Japan
Representative Hiroaki Nakanishi, Representative
Executive Officer and President

Capital458.79 billion yen
Number of employees (unconsolidated basis)
33,665
Number of employees (consolidated basis)326,240
Number of consolidated subsidiaries
963(Japan: 314, outside of Japan: 649)
Number of equity-method affiliates
215(Japan: 85, outside of Japan: 130)

Consolidated Business Overview and Results for Fiscal 2012
9,041 billion yen(down 6% year-over-year)
Operating income
422 billion yen (up 2%)
Capital investment
742.5 billion yen (up 14%)
R&D expenditures 341.3 billion yen (down 17%)
Output outside Japan as apercentage of consolidated net sales
21%

Revenues and Operating Income

Revenues

Revenues(billions of yen)
12,00010,000

Revenues
Operating income
10,0002,000
0Revenues by Geographic Area (billions of yen)
Others 533.9 (6%)
Number of companies: 67
Number of employees: 8,217

445
127
2008

412

422

202
2009

2010

2011

2012
(FY)

Digital Media &Consumer Products
818.5 (8%)
Automotive Systems
806.8 (8%)

Japan 5,355.1 (59%)
Number of companies: 315
Number of employees: 207,727

400

0Revenues by Industry Segment (billions of yen)

Information &Telecommunication Systems
1,786.5 (18%)

Financial Services
340.2 (3%)

Total Revenues byGeographic Area
9,041 billion yen

600

200

Others1,111.0 (11%)

Asia 1,711.1 (19%)
Number of companies: 345
Number of employees: 83,704

1,000
800

4,000

North America 804.0 (9%)
Number of companies: 83
Number of employees: 15,040

9,041

8,000
6,000

Europe 636.8 (7%)
Number of companies: 154
Number of employees: 11,552

9,666

9,316

8,969

Operating income(billions of yen)
1,200

Subtotal of Total
Revenues
10,188.6 billion yen
Total Consolidated
Revenues
9,041.0 billion yen

Power Systems
904.6 (9%)

Social Infrastructure &Industrial Systems
1,313.8 (13%)

High Functional
Materials & Components
1,336.4 (13%)
Construction
Machinery756.0 (7%)

Electronic Systems &Equipment
1,041.3 (10%)

007

Major Fields of Business and Products

Hitachi Group
Sustainability
Report 2013

Information & Telecommunication Systems
System integration, outsourcing services, software, disk array subsystems, servers,
mainframes, telecommunications equipment, ATMs
Hitachi Information & Communication 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
Data center (Okayama No. 3 Center)*Power Systems
Thermal, nuclear, hydroelectric, and renewableenergy power generation systems, power
distribution systems
Babcock-Hitachi K.K., Hitachi-GE Nuclear Energy,Ltd., Hitachi Engineering & Services Co., Ltd.,
Hitachi Power Europe GmbH, Hitachi Power
Systems America, Ltd., Horizon Nuclear PowerLtd.

Ultra supercritical pressure coal-fired
power plant*

Construction Machinery
Hydraulic excavators, wheel loaders, mining
machines
Hitachi Construction Machinery Co., Ltd.

Social Infrastructure &Industrial Systems
Industrial machinery and plants, elevators,
escalators, railway vehicles and systems
Hitachi Industrial Equipment Systems Co.,
Ltd., Hitachi Elevator (China) Co., Ltd., Hitachi
Building Systems Co., Ltd., Hitachi Plant
Technologies, Ltd.

Wastewater recycling plant (Dubai, UAE)*

High Functional Materials &Components
Wires and cables, copper products,
semiconductor and display-related materials,
circuit boards and materials, specialty steels,
magnetic materials and components, highgrade casting components and materials
Hitachi Cable, Ltd., Hitachi Chemical Co., Ltd.,
Hitachi Metals, Ltd.

Electronic Systems & Equipment
Semiconductor and LCD manufacturing
equipment, test and measurement equipment,
electronic medical equipment, power tools,
electronic parts processing equipment
Hitachi High-Technologies Corporation, Hitachi
Koki Co., Ltd., Hitachi Kokusai Electric Inc.,
Hitachi Medical Corporation, Hitachi Via
Mechanics, Ltd.

Hitachi Automatic Analyzer

Automotive Systems
Engine management systems, electric
powertrain systems, drive control systems, carinformation systems
Clarion Co., Ltd., Hitachi Automotive Systems,
Ltd., Hitachi Automotive Systems Americas, Inc.

Hitachi Automotive Systems’ electricallycontrolled brake

Hitachi Construction Machinery's
double-arm working machine
Hitachi Chemical’s transparent
conductive transfer film

Digital Media & Consumer Products
Air-conditioning equipment, room air
conditioners, refrigerators, washing machines,
optical disk drives, LCD projectors, flat-panel
TVs
Hitachi Appliances, Inc., Hitachi Consumer
Electronics Co., Ltd., Hitachi Media Electronics
Co., Ltd., Hitachi Consumer
Products (Thailand),Ltd., Hitachi Consumer
Marketing, Inc., Hitachi-LG
Data Storage, Inc.

Hitachi Appliances’ CV-SU series
cyclonic vacuum cleaner formarkets outside Japan

Financial Services
Leasing, loan guarantees
Hitachi Capital Corporation

Others
Logistics, information recording media,
batteries, property management, regional
headquarters
Hitachi Maxell, Ltd., 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 Capital’s Hitachi
Corporate Card
Hitachi Transport System’s Keihin
Distribution Center: Major Products & Services: Major Consolidated Subsidiaries (as of March 31, 2013) *: Products & services of Hitachi, Ltd.
(Notes.) 1. Hitachi Information & Communication Engineering, Ltd. merged with another Hitachi, Ltd. Consolidated subsidiary in information and telecommunication systems andwas renamed Hitachi Information & Telecommunication Engineering, Ltd. as of April 1, 2013.
2. Hitachi, Ltd. completed acquisition of all outstanding shares of Horizon Nuclear Power on November 23, 2012, then became a Hitachi, Ltd. consolidated subsidiary.
3. Chuo Shoji, Ltd. was renamed Hitachi Urban Investment, Ltd. as of April 1, 2012.
4. Hitachi Engineering & Services Co., Ltd. merged with three other Hitachi, Ltd. consolidated subsidiaries in power systems and was renamed Hitachi Power Solutions
Co., Ltd. as of April 1, 2013.
5. Hitachi Plant Technologies, Ltd. merged into Hitachi, Ltd. as of April 1, 2013.

Top Commitment Message from Management

Our Key Business Challenges Are
Social Contribution andReducing the Environmental Burden

The Hitachi Group has positioned the Social Innovation Business as ourcore business emphasis, and we work as a group to expand that businessglobally. There are several reasons why we call what we do Social Innovation
Business.

Resolving Social Issues
First, continuing to simply supply the equipment and systems needed for thesocial infrastructure would not be enough to overcome the trials faced bysociety. Carefully honing and perfecting the functionality and performanceof individual products and systems is of course an extremely important
responsibility for a manufacturer. However, the issues facing many countries
and regions around the world are becoming too complex to be resolved
with equipment and systems alone. Take energy issues, for example. In many
regions, economic development has brought power shortages. One solution
is to build large, high-efficiency thermal power stations, but at the sametime, because thermal power stations emit gases that cause environmental
problems, we also need to look closely at these problems and strive to009
Hitachi Group
Sustainability
Report 2013minimize the environmental burden so that we can be in harmony with theenvironment. If the environmental burden goes beyond tolerable limits, itwill be necessary to use renewable energy such as solar and wind power.
However, renewable energy relies on the weather, and the power that is
produced fluctuates enormously. Robust management must be used todeal with the impact on power transmission and distribution systems for astable, reliable supply of power. Many of these complex issues will not beeasily resolved by the Hitachi Group alone, but the basic approach of ourSocial Innovation Business is to deepen our understanding of the particularissues to the greatest extent possible and to seek solutions together withour customers and partners. Engaging in close dialogue with people aroundthe world, we will use Hitachi technologies to the full to help resolve social
issues.

Using Innovation to Build a Sustainable Society
The second challenge is innovation. To deal with the complex issues facing
society, we need to clarify these issues to the maximum extent possible—notan easy task. Many social issues by their nature have political, economic, andhistorical dimensions. We are developing certain technologies, including
big data and data analytics, to gather a wide range of social phenomena
from many perspectives into databases and to analyze that data. To bringabout social and business innovations, we need to overcome many hurdles
as we mobilize these technologies and apply methods for the experiential
and objective analysis of social behavior. We believe that by taking on thesechallenges as a group, we can earn the trust of many people worldwide
through our commerce, and that this will in turn grow our business. The
Hitachi Group is committed to contributing to society through Social
Innovation Business. In other words, we view our Social Innovation Businessas the business of creating a sustainable society.
This sustainability report presents the many activities that the Hitachi Group
carried out with a view to creating a sustainable society. As you will see, we
operate around the world in a huge range of capacities. This report also laysout Hitachi's management strategies and CSR, a diverse array of solutions
showing how Hitachi contributes to society through business, respects
human rights, promotes diversity, and helps to reduce the environmental
burden from production, as we become a corporate citizen through ouractivities around the world.
As we have done in the past, in the years ahead we will position our business
operations with a firm emphasis on the creation of a sustainable society.

Hiroaki Nakanishi
President, Hitachi, Ltd.

VISIONManagement Strategies and CSR
As a global enterprise, we share society’s values and pursue sustainable growthby integrating management strategies and CSR. Our challenge is to match our
CSR activities with our Mid-Term Management Plan goals to achieve the HitachiGroup Vision, creating both social and economic value.
For us, CSR is about making our Group
Vision a reality. Our purpose is to contribute
through innovation to both realizing a safe,
secure, comfortable society and helping totackle global challenges: poverty, inequality
in education, the spread of diseases, resourceand energy issues, population concentrationin cities, and other global environmental
issues.
The Mid-Term Management Plan is our action
plan for realizing the Group Vision. Our CSR
activities help to achieve the goals set out inthis plan. By implementing the plan, we are
creating robust, diverse governance, as well
as strong ethical behavior from and a senseof challenge for our employees. Additional
benefits include promoting business thathelps to resolve environmental problems andother issues facing society as a good corporate
citizen in global society. While implementing
the Mid-Term Management Plan, Group
employees comply with national laws and,
wherever they are in the world, they workwith a strong sense of ethics in line with the
Hitachi Group Codes of Conduct.

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 structure changes basedon 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• 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

In April 2013, as we began on a new Mid-Term
Management Plan, we created the HitachiGroup Vision to show what the Hitachi Groupintends to become. The Vision 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 medium- to long-term vision for

the Hitachi Group. Recognizing the changing
macro trends in society, the Vision embodies
our firm commitment to help resolve thechallenges facing the global community andto realize a sustainable society. Together withcreating our Vision, we have also merged the
Corporate Credo, Founding Spirit, and HitachiGroup Vision into the Hitachi Group Identity.

011

2015 Mid-Term Management Plan to Realize
the Hitachi Group Vision
Our action plan for realizing the HitachiGroup Vision is the 2015 Mid-Term
Management Plan.
Management Targets
To achieve our management targets, wewill grow and transform through our Social
Innovation Business.
Management Focus
In the 2015 Mid-Term Management
Plan, our key management policies focus
on innovation, a global emphasis, andtransformation.
Summary of Key Management Policies
I. Global Expansion of the Social
Innovation BusinessIn our Social Innovation Business, wework as One Hitachi with society and ourcustomers to identify their issues, creating
innovation through Group teamwork. We
provide global solutions combining
products, services, and IT (cloud) platforms.
II. Promoting Transformation
Bold structural reforms will fulfill the2015 Mid-Term Management Plan. Our
supply chain management will be rebuilt
to quickly respond to markets and boost
management efficiency, leverage businessintelligence to speed up our response
to environmental changes, improve
our balance sheets, and upgrade ouroperations globally.
We will better utilize our human capital—
our most critical resource—using a global
strategy. Our global grading system andhuman capital database help to optimize
personnel deployment worldwide. Ourhuman capital development promotes
diversity at all levels, including
management, to maximize organizational
and individual performance. Human capitalis the foundation of our growth strategy.
Other steps include creating a marketdriven organization, speedily transforming
our business portfolio, and reviewing ourcost structure.

WEB

Hitachi Group
Sustainability
Report 2013

FY 2015 Targets
Management Targets
FY 2015 Target*1
Revenues

10 trillion yen

EBIT*2 (operating income) ratio

Over 7% (over 7%)

Net income attributable to Hitachi, Ltd.
shareholders

Over 350 billion yen

Net income attributable to Hitachi, Ltd.
shareholders per share

Over 70 yen

Total Hitachi, Ltd. Shareholders’ equity
ratio (manufacturing, services & others)

Over 30%

Service Revenue Ratio, Overseas Revenue Ratio, Employees
FY 2015 Target
Service revenue ratio(including systems solutions)Over 40%

Employees in Japan

200,000

Employees outside Japan

150,000

Expected Cost Reduction Effects of Hitachi Smart Transformation Project
FY 2013 forecast

Total up to FY 2015

100 billion yen

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

2015 Mid-Term Management Plan
Management Focus
1. Innovation
Strengthen service businesses that maximize the utilizationof IT and bring about innovation

2. Global
Deliver innovation to customers and society globally

3. Transformation
Transform Hitachi: To deliver innovation by standardized
and speedy operation

Realizing the Hitachi Group Vision

Social Innovation Business
Identify issues faced by society and customers while working together onsolutions as One Hitachi
Innovate by providing solutions that combine products, services, and IT (cloudcomputing)

Solutions
Services

Cloud-based
service platform

Products

Support customers
from maintenancethrough to operation,
outsourcing andmanagement support

Create knowledge
by analyzing andassessing data collected
and accumulated using
cutting-edge IT

Use wide-ranging
systems expertise andtechnologies to provide
products responding toregional needs

Hitachi Announces “2015 Mid-Term Management Plan”

http://www.hitachi.com/New/cnews/130516.html

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 2013)
Increase R&D staff

FY 2013 Result approx. 280 people

FY 2015 Target 400 people

Strengthen Open Innovation
Service business sales ratio

FY 2012 Result 30%

FY 2015 Target Over 40%

Caring for the Environment
Eco-Product sales ratio

FY 2012 Result 84%

Global:Deliver innovation to customers
and society globally

FY 2015 Target 88%

Diversity Management
Diversity in directors (as of June 2013, out of 14 directors)• Outside directors: 8 people • Non-Japanese: 4 people • Females: 2 people(2.5 times more; compared with theFemale managers (Hitachi, Ltd.)FY 2020 Target 1,000 women number at the end of FY 2012)

Female senior executives

Target to be assigned by FY 2015

Business and human rights

May 2013: Global roll out of the Hitachi Group Human Rights Policy

Respect for Human Rights

Public Policy Initiatives
Stakeholder dialogue

FY 2012 Result: Held in two regions
Diversity Management

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

Expand regions and themes

Promotion of global human capital management strategy• Introduction of performance management• Talent development for global executives• Introduction of Global Leadership Development program
Sustainable Business
Promotion of Hitachi Smart Transformation Project
Target outcome (aggregated FY 2011 – FY 2015) 400 billion yen

Material Issues for Hitachi
Importance for stakeholders

Hitachi uses a materiality process based on
dialogue with stakeholders to identify material
issues. To integrate our management strategies
and CSR, we reflect in our CSR activities material
issues closely related to the key management
policies in our Mid-Term Management Plan.
The content of this report also reflects Hitachi’smaterial issues supporting the improvement of
the quality of our management.

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
We evaluate and verify issues identified through stakeholder dialogues with international organizations, and we identify sustainability
issues in public policy trends from the standpoints of importance for stakeholders and the influence on business. The importance forstakeholders includes human rights, international development, the environment, reporting, ethics, and regional and international
requirements. The influences on business are assessed from the perspectives of the global, fusion, and environmental focuses of our2012 Mid-Term Management Plan, as well as the perspectives of innovation, risk, reputation, and cost effectiveness. The digest of thisreport presents these important issues in the two assessment areas.

013

Performance Overview of 2012 Mid-Term Management Plan

Hitachi Group
Sustainability
Report 2013

We have revised our business portfolio to reflect the shift in focus to Social Innovation
Business. While we did not reach our overall revenue target, we did achieve most of
our profit targets. We also realized our D/E ratio and equity ratio targets, enabling us
to strengthen our foundation for further growth.
FY 2012 Performance
FY 2011 Results

FY 2012 Results

FY 2012 Target*1

Revenues

9,665.8 billion yen

9,041.0 billion yen

10 trillion yen

Operating income ratio

4.3%

4.7%

Over 5%

Net income attributable to Hitachi, Ltd.
shareholders

347.1 billion yen

175.3 billion yen

Consistently generate at least
200 billion yen

D/E ratio*2 (manufacturing, services & others)

0.86 times (0.56 times)

0.75 times (0.47 times)

0.8 times or below

Total Hitachi, Ltd. shareholders equity ratio(manufacturing, services & others)

18.8% (20.5%)

21.2% (23.2%)

20%

Exchange rate

79 yen/US dollar
109 yen/euro

83 yen/US dollar
107 yen/euro

80 yen/US dollar
110 yen/euro*1 As of June 9, 2011 (revised to reflect HDD business transfer), assumed exchange rate
*2 Including noncontrolling interests and liabilities associated with the consolidation of securitized entities.

2012 Mid-Term Management Plan: Key Management Policies and Related CSR Activities
CSR activities related to our key management policies and Hitachi‘s material issues played a crucial role inachieving 2012 Mid-Term Management Plan goals.
Material Issues for Hitachi

2012 Mid-Term Management Plan Key
Management Policies

CSR Initiatives and Results
Supply Chain Management

I. Strengthen Management Base
(1) Cost structure reforms• Execute the Hitachi Smart Transformation Project(2) Strengthen financial position• Increase profitability and reinforce financial position• Focus management resources

II. Global Growth Strategies(1) Expand investment in key regions• Globalize corporate functions and promote China
Business Strategy 2015
• Expand business in ASEAN countries as a new key
region and establish business in Myanmar(2) Optimize use of human resources andincrease efficiency• Pursue global human resource strategies• Launch Global Management Human Resources
Development and Allocation Program in Fiscal
2012(3) Strengthen global governance• Strengthen response to globalized management
and supervisory functions(4) Value creation and CSR• Pursue contributions to the environment andregional social contribution activities• Respect human rights and implement stakeholder
dialogues

Relevant Section

FY 2010Rate ofprocurement36%
outside Japan
Cost-cutting effect of Hitachi
Smart Transformation Project
Supplier audits in emerging countries

FY 2011

FY 201238%

38%

FY 2011

FY 201235 billion yen

75 billion yen

FY 2012Supply Chain
Management

12

Diversity Management
Non-Japaneseemployees in JapanFY 2010230 people

Ratio of female
FY 2010
managers (Hitachi, Ltd.)
3.3%

Employment ratio of FY 2010
people with disabilities(Hitachi, Ltd. in Japan)

FY 2011

FY 2012239 people

257 people

FY 2011

FY 2012

3.4%

3.5%

FY 2011

FY 2012

2.00%

2.05%

Global Human
CapitalDevelopment
Diversity
Management

2.02%

Caring for the Environment
Contributions
FY 2012 (estimate)
FY 2010
FY 2011
to CO2 emission
million15.51 million tonnes 19.04 million tonnes 22.74 tonnes
reduction
Rate of reduction in
FY 2011
FY 2010
FY 2012CO2 emissions per unit
21%
22%
production*1 (global) −Respect for Human Rights
Creation of the Hitachi Group Announcement of the Hitachi Group
Human Rights Policy (May 2013)
Human Rights Policy
2010
Occupational
2012
2011
accident rates*2
0.15
0.20
0.19

Environmentally
Conscious Products
and Services
Environmentally
Conscious
Production

Respect for
Human Rights
Measures for
Improving Healthand Safety

Products That Create a Sustainable Society
Eco-Productsales ratio

FY 2010

FY 2011

FY 2012

78%

80%

84%

Increasing the
Ratio of
Eco-Products

Public Policy Initiatives
Stakeholder
dialogues

FY 20103

Funding for Social
FY 2010Contribution Activities
1.6 billion yen

FY 2011

FY 20123

2

FY 2011

FY 2012

3.5 billion yen

3.3 billion yen

Public Policy
Initiatives
SocialContribution
Activities*1 Base year 2005
*2 Up to 2011, 90 major Hitachi Group companies in Japan including Hitachi, Ltd.; in 2012, 175 Hitachi Group companies in Japan, including Hitachi, Ltd.

Wind Power Ibaraki Co., Ltd.’s Wind Power Kamisu 1 Offshore Wind FarmFEATURE

Contributing to Society
through Business
Our R&D program focuses on products and services
that help to resolve social issues.
Creating value to fulfill our Corporate Credo—contributing
to society through the development of superior, originaltechnology and products—has underpinned our businessdevelopment for more than a century.
Environmental issues are becoming global: climate change
and ecosystem degradation as well as energy, water, resource
and food shortages, urban population growth, graying ofsocieties, and others. To solve these problems, as a global
corporate citizen, we create both economic and social value fora sustainable society.
Our new Hitachi Group Vision action plan, the 2015 Mid-Term
Management Plan, clarifies our contribution to overcoming
the challenges facing society and drives our Social Innovation
Business.

FEATURE

015

Contributing to Society
through Business

Hitachi Group
Sustainability
Report 2013

Hitachi’s Solutions for Social Problems
Combining our wide-ranging business activities with IT solutions helps
us resolve global environmental problems and social issues.

Environment andEnergy Issues
The aim of our environmental
management is to “achieve asustainable society.” For one key elementof this aim, preventing global warming,
we are reducing CO2 emissions throughour business operations.

Energy-Saving Products
and Systems
We are helping to reduce CO2 emissions
across society as a whole by providing
products and services with low energy
consumption.

Power Generation
Systems
We use wind and solar power andother renewable energies. Also, we
reduce CO2 emissions by improving theefficiency of power generation systems.

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

Advanced networks, storage, and cloudcomputing technologies connect infrastructures,products, and people. Our IT solutions meetsociety’s and our customers’ challenges.

Cities and Transportation
IssuesOur infrastructure solutions boost safety
and comfort in cities and remote islands
with limited infrastructures. Solutions
include safe, high-speed transportation
networks; highly stable, efficient power
equipment and transmission networks
for diverse power sources, including
renewable ensergy; and water systems for
safe, constant water.

Healthcare
Our R&D promotes medical
innovation in such areas
as ultrasound diagnostic
equipment, MRI scanners forhighly advanced medical care,and particle therapy equipment.

Biodiversity,
Water andResource Issues
Ensuring biodiversity forthe next generation means
preserving ecosystems today.
We help to protect ecosystems
through business operations
that clean the air, water, andsoil.

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

Smart Cities
Worldwide, we propose new formsof cities that are safer, more secure,and more convenient and 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
Our safe, convenient railway and traffic
information systems help reduce theenvironmental burden and congestion.

FEATURE

Contributing to Society
through BusinessWind Power Ibaraki Co., Ltd.’s Wind Power Kamisu 1
Offshore Wind Farm

Key Hitachi
Business
Segments
The Hitachi Group contributes to society
through a wide range of business operations
including the social infrastructure businesssegment.

Sales Ratio by Business Segment
FY 2012 (fiscal year ended March 2013)

Sales

9,041 billion yen

Information &Telecommunication
Systems

18%

Power Systems

9%Social Infrastructure& Industrial Systems

13%

Information &Telecommunication Systems

Power Systems

Our expertise is gained through a wide
range of areas and developed to provide
IT services tailored to diverse needs fromconsulting to systems building, operations,maintenance, and support.

Our highly efficient and reliable thermal,hydro and nuclear power generationequipment, as well as wind, solar, and otherrenewable energy products, help to build a
low-carbon society.

We have business
operations in approx.

Share of wind power
generation systemorders in Japan100

countries
and regions

39%

We provide total IT solutions—from consulting
to systems development and operations—to
support corporations that are upgradingsocial infrastructures and are globalizing theiroperations.

In fiscal 2012, we had the largest share in Japanfor wind power systems. By making these more
efficient and by developing offshore wind farms,
we are building a low-carbon society.

1,786.5 billion
yen
Operating income ratio
5.9%

904.6 billion
yen
Operating income ratio
3.3%

Social Infrastructure& Industrial Systems

Electronic Systems &Equipment

Our railway and traffic systems, elevatorsand escalators, and water systems support
daily life, and our industrial machineryand energy-saving solutions reduce
environmental burden.

Our semiconductor electronic component
processing equipment, broadcasting andcommunications systems, medical care andtesting systems, and electric tools support
the information age.

Sales

Sales

Electronic Systems& Equipment

10%Construction
Machinery

7%

High Functional
Materials &Components

13%

Automotive
Systems

8%

Digital Media &Consumer Products

8%

Financial Services

3%

Others11%

Freshwatersupplied

336,000
m3/dayMedical MRI
scanners supplied

6,300

This much water will be supplied to nearby
industrial parks by Asia’s largest desalination
system, to be built by Hitachi for a seawater
desalination project in Dahej, Gujarat, India.

As of April 2013, Hitachi Medical’s MRI scanners
maintained approx. 30 percent of the market
share in Japan. Developing these and othermedical equipment promotes better health foreveryone.

1,313.8 billion
yen
Operating income ratio
4.6%

1,041.3 billion
yen
Operating income ratio
2.9%

Sales

Sales

017
Hitachi Group
Sustainability
Report 2013

Construction Machinery

High Functional Materials &Components

Automotive Systems

Our technological expertise helps us todevelop solutions in civil engineering andconstruction, building demolition, mining,and construction machinery sales, service
and maintenance.

This business segment produces special
metals; magnetic materials; wires andcables; copper products; semiconductor,
display and high functional materials;
and synthetic resin products for IT, home
appliances, and cars.

We supply cutting-edge automotive
equipment and systems globally, including
systems for engine management, electric
powertrains, drive control, and car
information.

75%

Overseas
sales ratio

60%

World shareof ANISOLM

Ratio of automotive
electronics products

45％This is Hitachi Construction Machinery’s fiscal
2012 overseas sales ratio for excavators, wheel
loaders, mining machinery, and dump trucks usedon construction sites and mines around the world.

Hitachi Chemical’s ANISOLM, the world’s
most widely used high functional anisotropic
conductive film for LCDs, helps, through low power
consumption, to popularize flat panel displays.

Hitachi Automotive Systems develops newelectronic car parts. The fiscal 2011 ratio of those
products to the whole product line was equivalent
to fourth place among the top ten auto parts
companies in sales worldwide.

756 billion
yen
Operating income ratio
7.2%

1,336.4 billion
yen
Operating income ratio
4.4%

806.8 billion
yen
Operating income ratio
4.4%

Digital Media & Consumer
Products

Financial Services

OthersOur reduced-energy commercial anddomestic air-conditioning systems, home
appliances and all-electric products, as well
as digital home appliances, help reduce theenvironmental burden.

Worldwide, our optimal business solutions
cover lease, loan and rental services, card
services and securitization, payment andcollections, non-life insurance, trust, andoutsourcing services.

Hitachi is also active in logistics, including
systems logistics, freight, inventory
management, and packaging for shipping,as well as in other fields such as real estate.

2X

2X

66%

Sales

Number of LED
lighting models

Responding to the surge of interest in powersaving and long-lasting LED lighting, Hitachi
Appliances will expand the product line from 600
models in fiscal 2012 to 1,200 in fiscal 2013.

818.5 billion
yen
Operating income ratio -0.7%
Sales

Sales

Power generated
from renewableenergySales

Eco-carownership rate

Through financial services provided toenvironmental projects, Hitachi Capital boosted
power generated from renewable energy from160 MW in fiscal 2012 to 320 MW in fiscal 2015,
promoting wider renewable energy use.

Hitachi Transport System’s eco-car ownershiprate includes hybrid, natural gas, electric and LPG
vehicles, as well as nationally certified and lowemission gas and biofuel vehicles.

340.2 billion
yen
Operating income ratio
8.6%

1,111 billion
yen
Operating income ratio
3.6%

Sales

Sales

FEATURE

Contributing to Society
through Business

Ensuring Safe, Reliable, and Optimal
Water Environments Worldwide
Hitachi’s Intelligent Water System
State of Global Water Resources
Water recycling business in the
Emirate of Dubai (UAE)

China

Spain / North Africa

Seawater desalination
project in Dahej,
Gujarat, India

US / Caribbean
Solar-powered
desalination plant in
the Emirate of Abu
Dhabi (UAE)

MiddleEast

India

Water and sewage
systems in theMaldives

Australia
Examples of regions with water shortages
Little or no water scarcity
Physical water scarcity (use of water resources > 75%)

The areas facing physical or economic
water scarcity are located mainly near
the equator. Less than three percent
of water is fresh and usable. According
to World Health Organization, 1.1
billion people don’t have safe drinking
water and 2.6 billion don’t have basic
sanitation.

In the 21st century, water
shortages and pollution are
expected to become moreacute as populations grow andconcentrate in cities. There isa worldwide need for social
infrastructures that conserveand use limited water resources
and create sustainable living
environments.

Approaching physical water scarcity (use of water resources > 60%)
Economic water scarcity (use of water resources < 25%, low-income region)
Physical water scarcity: More than 75 percent of river flows are allocated toagriculture, industries or domestic use, with water resource development close to or
beyond the sustainability threshold.
Economic water scarcity: Less than 25 percent of water from rivers is drawn for use
by people, but that water is not being adequately distributed because of shortfalls inhuman resources, facilities, and financial resources.
Based on IWMI Annual Report 2006/2007 (International Water Management Institute)

Hitachi’s Intelligent
Water System
In Japan, we have supplied
equipment and systems for
550 domestic water treatment
plants and 2,800 sewage
treatment plants, in addition
to 900 monitoring and control
systems. As well, we participate
in water-related projects in 40
countries. Our intelligent water

system contributes to society bycreating an optimized water cycle
for as many people as possible.
We achieve this by coordinating
our infrastructure technologies—
water and sewage treatment,
industrial wastewater treatment,
desalination, and water recycling
technologies—with information
management and control systems
to optimize water use.

019
Hitachi Group
Sustainability
Report 2013

Hitachi Water
Environment Solutions

Hitachi’s Intelligent Water System Concept

In fiscal 2010, we set up the Water
Environment Solution Division
to increase deployment of ourintelligent water system. We areworking on a water recycling
project in Dubai to improve water
quality that has deteriorated
due to population growth and adesalination project in India toprovide a stable water supply forindustrial use from desalinatedseawater. Other projects include
water and sewage management
systems and deep sea water
systems for air conditioning to
reduce CO2 emissions in theMaldives, as well as solar-powered
desalination equipment in Abu
Dhabi to protect rare desert
animals.

Seawaterdesalination system

Drinking water
treatment

Lakes and dams

Sea

図版：本番作成中

Houses and offices
Sewage recycling

Factories

RiversIndustrial wastewater
treatment

Monitoring andcontrol system

Sewage treatment

We will work to expand ourbusiness in China, Southeast
Asia, and emerging nations. In
developed countries, we willfurther advance systems that
optimize intelligent water cycles.
Island of Malé in
the Republic of theMaldives

Hitachi’s Worldwide Water Environment Solutions
Project

Water recyclingin Dubai (UAE)

Solar-powered
desalination unitsin Abu Dhabi (UAE)

Main Developments

Hitachi Group Involvement

August 2008
Hi Star Water Solutions LLS established
as a joint-venture company
February 2009
Water recycling business launched

An urban development boom in Dubai has caused social problems suchas deteriorating water quality. Hitachi built a plant using membrane
technology to treat wastewater. At the plant, a business has beenlaunched that supplies inexpensive treated water to nearby factories forindustrial use.

Sept. 2009 Hitachi contracted
Oct. 2010 First unit supplied
Nov. 2012 Partial operation
March 2013 All 15 units supplied

We participated in a project to protect the endangered Arabian oryx andother desert-dwelling animals. Hitachi’s solar-powered desalination units
convert highly saline well water into fresh water for desert animals.

Seawater desalination
project in Dahej,
Gujarat, India

Dec. 2009
Japan-India Summit agreement
March 2012
Joint development contract
Jan. 2013
Water supply agreement

We are helping to build one of the largest seawater desalination plants in
Asia, part of an agreement between the governments of Japan and India
on smart community development. The plant is expected to provide astable supply of industrial water over 30 years (including construction) at
a rate of 336,000 m3 per day.

Water and sewage
businessin the MaldivesJan. 2010
Hitachi acquired 20% of shares in Malé
Water and Sewerage Company Pvt. Ltd.

We installed approximately 200 seawater desalination units, aninformation management system for pipe network in the island of Maléand a water-cooled air conditioning system using deep sea water in
airports and buildings, enabling a reduction of 12,450 tonnes of CO2
emissions per year (estimate).

FEATURE

Contributing to Society
through Business

Innovative Cities and Communities
Smart Cities and Smart Communities Worldwide
Breakdown of Energy-Related CO2 Emission Reductions
Comparing Reductions under the New Policies Scenario*1 and the 450 ppm Scenario*2
(Gt)
38
36
34
32
30
28
26
24
22
2015

2020

Energy conservation
activities and more
efficient power
generation
47%

Renewableenergy23%

450 ppm Scenario

20
2010

Wind and Photovoltaic
Generation and EV
Demonstration Project on
Maui, Hawaii

Breakdown of CO2
emission reductions

New Policies Scenario

15.0GtGlobal warming from greenhousegases is a serious global
problem. Lowering atmosphericconcentrations of greenhousegases to 450 ppm requires a major
reduction in CO2. Renewableenergies—hydro, wind andsolar—are vital for energy andenvironmental challenges, butthey can be unreliable andexpensive. We are helping to build
smart cities and communities
using integrated informationand control solutions, power
distribution, and storage.

2025

2030

2035
(Y)

Biofuel4%
Nuclear8%
Carbon captureand storage
17%*1 New Policies Scenario: A scenario that takes into account broad policy commitments and plansthat have been announced by countries.
*2 450 ppm Scenario: A scenario that restricts the global increase in temperature to 2°C by limiting
concentrations of greenhouse gases in the atmosphere to around 450 parts per million of CO2.

We are working on theJapan-US Island Grid Project(JUMPSmartMaui). The island of
Maui in Hawaii relies heavily on
fossil fuels, and aims to boost
the renewable energy ratio to
40 percent by 2030. We installed

Based on “energy-related CO2 emissions” in IEA World Energy Outlook 2012charging management systems
for electric vehicles (EVs)—more
widely used in the future—aswell as home gateways and otherequipment. This will create a smart

Japan-U.S. Island Grid
Project Environment

grid for a stable supply of power
even with increasing reliance on
renewable energy, which is affectedby weather conditions, through thisdemonstration project.

EV charging stationHomes
EV charging station
μDMS

Homes
Low-voltage
transformer

Substation

Power generation systems

μDMS

μDMS*3

Homes

Storagebatteries
Monitoring andcontrol system*3 μDMS: Micro Distribution Management System

The basic policy for the demonstration
project is to respond to the widespread
adoption of EVs, ensure a continual
power supply, and make maximum useof renewable energy. We promote thesmart grid environment utilizing EV
charging management system and an
ICT platform.

021
Hitachi Group
Sustainability
Report 2013

Smart Cities andMutual Agreement
Mutual agreement and dialogue
with local communities is vital for
realizing smart cities. For the Mauidemonstration project, we built
strong community relationships
through meetings with local NPOs
and leaders, being sensitive tothe regional situation and culture,keeping residents informed, andcreating user-friendly manuals.
Hitachi’s smart city concept
uses technology to reduce theenvironmental burden while
ensuring quality of life such as
safety and convenience, comfort,
and enjoyment. We will continue
to contribute to the creation ofsmart cities optimized for people
and the environment, mindful of
cultural and social considerations
for each country and region.

At an event to recruit volunteers for thedemonstration project in Hawaii, people could
try out our car chargers. The bottom right photoshows a kiosk monitor that lets consumers checkthe charging level at a glance.

Change a challenge to an opportunity

Jeanne Unemori
Skog
Maui Economic
Development Board, Inc.
President & CEO

Maui is fortunate to have been
selected as the site for the
groundbreaking JUMPSmartMaui
demonstration project. Our island-andstate-are challenged by the highest
rates for energy in the United States
and an unsustainable dependence
on fossil fuel. The cost of energy
impacts our businesses, public
institutions and the economic andsocial wellbeing of our residents.
Our challenge is also an opportunity.
JUMPSmartMaui represents a win-win:
Maui offers a willing, ideal test-bed for
Hitachi’s cutting edge strategies andtechnologies; NEDO (New Energy andIndustrial Technology Development
Organization) and Hitachi invest in
solutions that accelerate Maui’s searchfor broad-scale, clean energy solutions.
As importantly, Hitachi has embraced
our island community. Project
leaders have placed a high priority
on respecting the environmental andcultural values deeply held by ourresidents. They have tapped local
businesses to assist with planning andimplementation. They have readily
adopted island traditions. All of theseexperiences have laid the groundwork
for a productive relationship. We lookforward to the results.

Europe

Message from Representative
Activities by Country and Region022
Hitachi Group
Sustainability
Report 2013

For Hitachi in Europe, 2012 was a positive year. Despite difficult conditions acrossthe Eurozone, we continue to observe a strong demand for environmental
technology and public infrastructure.
Energy self-sufficiency and emission reduction are major challenges for Europe;and this is reflected in the contracts we have won. First, Hitachi Power Europe(HPE) will construct a high-efficiency coal fired power plant in Poland, which will
ensure a dependable supply of electricity in an expanding economy.
Second, Hitachi acquired Horizon Nuclear Power in the UK. This will help the UK
achieve its vision of a secure, low-carbon and affordable energy supply throughSir Stephen Gomersall

the construction of new nuclear power plants on two sites, as well as creating

Deputy Chairman of Hitachi
Europe, Ltd.

thousands of highly skilled jobs.
Third, Hitachi Europe has become a significant partner in smart cities projects
identifying energy-saving technology applications for the future.
In the rail sector, we have concluded a contract to supply and maintain highspeed Intercity Express trains in the UK and launched our European Rail ResearchCentre. Hitachi Rail Europe will build a factory in North East England creating 200
jobs during construction, completing in 2015. The facility will employ up to 730
people to produce rolling stock for two major routes.
Hitachi’s biometric Finger Vein technology is establishing a new standardof customer identity authentication. The innovative Polish banking sector is
becoming a forerunner in using biometric technology in European retail banking.
Hitachi’s philosophy is to work closely with local stakeholders to innovate andprovide sustainable technology solutions to meet social needs. We aim todeliver economic benefits to local areas through employment and procurement,
believing that local leadership teams, who understand Hitachi's heritage andvalues as well as local markets, deliver the best service.

Revenue by Geographic Area
(billion of yen)
Europe 636.8 billion yen (7%)
Number of employees: 11,552

Trend in Revenue

Revenues(billions of yen)
1,200
1,000

904.4

800

824.6

760.0

761.1

2010

2011

600

636.8

400
200
0

2008

2009

2012
(FY)

023

The Americas

Message from Representative
Activities by Country and Region

Hitachi Group
Sustainability
Report 2013

Sustainability is a part of every business. It has always been a core part of Hitachi
and is incorporated throughout everything we do. Let me address three specificsustainability areas.
Environmental — Our North America environmental managers attend annual
meetings to share updates and discuss regulation requirements. Similar meetings
are held in Mexico and Brazil. There are 80 sites in the Americas from theviewpoint of the environment and each site is categorized based on its degreeof environmental load to determine the amount of impact that it generates.
The Environmental Office has three priorities for corporate environmental
activity: business and communication, compliance, and management. The latest
environmental policies and regulations are shared, as are best practices, acrossthe Hitachi companies. An internal website is used to promote guidelines andcontains four types of handbooks that cover major US environmental laws andare now available in country appropriate languages.
Community — Our Community Action committees operate in 36 locations
throughout North America. These employee-led groups designate funding andvolunteerism activities. The Hitachi Foundation supports this program but also
drives two additional programs that support and expand business practices
that create tangible and enduring economic opportunities for underprivileged
Americans.
Employees — Being aware of our business environment includes being aware of
our employees. Diverse teams create better products for the marketplace, andby having all employees entered into our global human capital database; we
can better manage where to locate the best talent and when that talent needs
training or education. In addition, many employee resource groups are growing
and providing additional support to our employees.
In closing, let me state that business sustainability is also important andincorporating all sustainability issues into management decisions is vital for
success. We will continue to cultivate strong community relationships anddevelop our employees as they create innovative products and solutions.

Revenue by Geographic Area
(billion of yen)
North Americas 804 billion yen (9%)
Number of employees: 15,040

Trend in Revenue

Revenues(billions of yen)
1,200
1,000

899.5

800

729.6 781.1

869.0

804.0

600
400
200
0

2008

2009

2010

2011

2012
(FY)

Takashi HatchojiGroup Chairman for the Americas
Chairman of the Board of Hitachi
America, Ltd.

024

Asia & India

Message from Representative
Activities by Country and Region

Hitachi Group
Sustainability
Report 2013

Significant economic, political, social and environmental events have unfolded
in recent years pushing companies to look carefully at how they operate and do
business.
For example, ASEAN was seen before as just a manufacturing hub for many
multinational companies and the Indian sub-continent as just a big offshore
market. Today, we clearly see that situations have dramatically changed. These
areas now represent tremendous growth opportunities and are emerging as big
markets not only for Hitachi but for other global companies as well.
With the advent of progress, social infrastructure improvements have been highKiyoaki Iigaya

on the agenda of most of the region's leaders. As more social infrastructures are

Chief Executive for Asia, Hitachi, Ltd.
Chairman, Hitachi Asia, Ltd. &Hitachi India, Pvt. Ltd.

built, rapid urbanization normally follows. And with growth, each country in theregion today is faced with the issue of sustainability.
For over a hundred years, Hitachi has maintained its role as a responsible
corporate citizen. Being a leading global company in the Social Innovation
Business has given us an excellent platform to address the challenges of building
environmentally-sound social infrastructures.
To back up these commitments, we announced in 2011 the appointment ofan environment representative for ASEAN and India whose role, among otherthings, is to promote environmentally conscious systems that prevent pollution,
to lead sustainable business management, and to supervise the full execution ofenvironmental compliance in every factory and office.
Addressing the issues of education is also part of our CSR agenda. We have been
implementing three education-related programs, in the region that help towards
building the future generation: The Hindu-Hitachi Scholarship Program, The
Hitachi Young Leaders Initiative and The Hitachi Scholarship.
Moving forward, we are expanding our CSR activities to include dialogues withvarious stakeholders and introducing a human rights management system.
Stakeholder dialogues will help identify social issues, understand what is
expected of us and to reflect this in our management and strategy. At the sametime, the human rights management system will seek to evaluate current humanrights and find ways to improve it.
The initiatives that Hitachi Asia, Ltd. is advancing show our recommitment toactively engage ourselves as part of the ASEAN and Indian communities to build
a more sustainable society.

Revenue by Geographic Area
(billion of yen)
Asia & India 894.8 billion yen (10%)
Number of employees: 39,298

Trend in Revenue

Revenues(billions of yen)
1,200
1,000
800

832.7

884.2 927.5 894.8
707.4

600
400
200
0

2008

2009

2010

2011

2012
(FY)

ChinaMessage from Representative
Activities by Country and Region025
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Under the 12th Five-Year Plan announced in March 2011, China has set twogoals: to achieve economic growth driven mainly by urbanization and increased
domestic consumption, as well as to create an environmentally conscious
society with a low-carbon green economy. China’s new leadership has also
positioned the “new four modernizations”—industrialization, “informatization,”
urbanization, and agricultural modernization—as the engines for economic
development. China is expected to focus on information technologies anddeveloping social infrastructure.
Ryuichi Kitayama

In line with the Hitachi Group China Business Strategy 2015, which we
formulated in February 2012, we will pursue environment-focused businesses
driven by further localization of operations and realization of Group synergies.
Specific steps will include strengthening partnerships with local governments
and companies in the energy-saving and environment fields, and accelerating
localization by appointing outstanding local employees to key positions.
The Group will also foster greater internal synergies by drawing on our combined
strength to bolster the management platform and business bases in China
by rolling out the Hitachi Smart Transformation Project, a global project foroverhauling cost structures. Another step in increasing both synergies andHitachi's presence in China will be to hold combined Group exhibitions.
Through these initiatives, we will continue to drive forward in our business areas
to realize the goal for the entire Hitachi Group to become “the Most Trusted
Partner in China.”

Revenue by Geographic Area
(billion of yen)
China 816.3 billion yen (9%)
Number of employees: 42,053

Trend in Revenue

Revenues(billions of yen)
1,200

1,078.5

1,000

1,188.5
991.6

1,073.4
816.3

800
600
400
200
0

2008

2009

2010

2011

2012
(FY)

Vice President and Executive Officer
Chief Executive for China
Hitachi, Ltd.

Governance Report

144th General Meeting of Shareholders (Hitachi, Ltd.)

027

MESSAGE Governance Report

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Report 2013

Meeting Globalization with Enhanced Risk
Management and Governance
The Hitachi Group provides social infrastructure systems
to countries worldwide, helping to realize sustainable
societies as a new growth axis. Strengthening ourcompliance framework is vital for expanding ouroperations as a good corporate citizen in emerging
countries and other global markets. We must also beaware that any accidents that occur can have serious
repercussions for our business continuity.
Looking at global compliance risks, preventing bribery inparticular, has become an urgent issue amid tightening
regulations worldwide. In fiscal 2009, we formulated the
Hitachi Global Compliance Program (HGCP), our basis
for audits and educating staff. We decided to appointa chief compliance officer (CCO) to further improve ourframework for Group-wide compliance. In April 2013, I
became Hitachi Group CCO, assuming responsibility for
managing the compliance for the whole Group. Under
my supervision, we will establish CCOs in all in-houseand Group companies, as well as regional CCOs in our

Toshiaki Kuzuoka

regional headquarters. Guided by the HGCP, the CCOs will

Senior Vice President and Executive
Officer, in charge of Human Capital,
Government & External Relations andCorporate Auditing, General Manager ofLegal and Communications Group andCompliance Division, andHitachi Group Chief Compliance Officer

strengthen our compliance framework and strictly enforce
the Hitachi Group Codes of Conduct.
The Hitachi Group Codes of Conduct include compliancewith ISO 26000 and other international standards. The
Group as a whole globally shares high ethical values even
above national laws. In May 2013, we created the HitachiGroup Human Rights Policy to supplement the humanrights section of the Hitachi Group Codes of Conduct. We
are also reinforcing corporate governance in response
to globalization. As of fiscal 2012, we have appointed
a majority of our Board of Directors from outside theCompany, including non-Japanese directors. As part ofthe strategic strengthening of the functions of the Boardof Directors, we held a board meeting in December 2012
in India, a region where our operations are expected
to grow. This was Hitachi's first board meeting outside
Japan, and directors discussed strategies for India. In fiscal
2013, we increased the number of non-Japanese andfemale directors to reflect a more global perspective and adiversity of ideas in our management.

Chapter1 Governance Report

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Corporate Governance

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By enhancing corporate governance, the Hitachi Group is promoting
speedier, more efficient management and is meeting the
expectations of stakeholders as a business that merits the public's
trust.

Strengthening Governance
Hitachi operates under a committee system.*1 We have strictly separated businesssupervision and execution to establish a business structure for speedy, highly transparent
management. We have formulated and published Corporate Governance Guidelines
outlining the framework of corporate governance, such as the function and compositionof the Board of Directors, qualifications for outside directors, and the criteria for assessing
the independence of outside directors.
*1 Committee system: A corporate governance system where a board of directors makes basic policy decisions andoversees the execution of business by executive officers, while the executive officers, appointed by the board of
directors, execute the company's business affairs. Hitachi, Ltd. and its nine major listed subsidiaries haveadopted the committee system.

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

Governance Structure of Hitachi, Ltd.
In fiscal 2012, we appointed a majority of independent outside directors, non-Japanese
included, to our Board of Directors, reflecting a balanced mix of ideas and global
perspectives and reinforcing the Board's supervisory function.

Compensation
Compensation for every director and executive officer is set by the Compensation
Committee based on the Japanese companies act governing companies withcommittees.
Compensation for directors and executive officers consists of monthly salaries together
with year-end allowances for directors and performance-based bonuses for executive

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officers. While compensation for directors is generally fixed, performance-based bonuses
for executive officers are set at around 30 percent of annual compensation. Bonuses are
determined individually according to business performance and the outcome of work
carried out under the officers' management. Beginning with compensation for fiscal
2008, the system for directors and executive officers was revised to eliminate retirement
allowances. Now that retirement allowances have ended, the Compensation Committee
will determine and implement the payment of severance benefits for executives on theirretirement. In fiscal 2012, executives were compensated as follows:029
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Sustainability
Report 2013

FY 2012 Compensation
Category

Recipients (number)

Total amount (millions of yen)

Directors(outside directors)

15
(7)

336
(154)

Executive officers

27

1,689

Total

42

2,025

*
*
*

The number of directors indicated does not include one serving concurrently as an executive officer.
Compensation to directors includes the monthly salaries, from April 2012 to the time of retirement, of three
directors who retired as of the close of the 143rd Ordinary General Meeting of Shareholders on June 22, 2012.
We additionally provided 1 million yen in retirement allowances to one outside director who retired on June 21,
2013 and 165 million yen in retirement allowances to three executive officers who retired on March 31, 2013.

Internal Control over Financial Reporting
Hitachi, Ltd. and listed Group companies establish, maintain and evaluate internal control
over financial reporting, and then report the results on a consolidated basis.
The Group is committed to complying with all laws and regulations. Further, Hitachi
recognizes that it is an important social responsibility to establish and maintain thesystems that ensure appropriate financial reporting, and we will enhance thetransparency and credibility of our business operations.
Hitachi Internal Control Assessment Framework

As of March 31, 2013

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030

Group Management
The Hitachi Group instituted an in-house company system in fiscal 2009 to optimize
business operations. By maintaining the independence of in-house and Group
companies, we clarified responsibilities and authority, while respecting management
independence and original innovation. This has speeded up management and enhanced
competitiveness. Since fiscal 2010, we have rated each company and transferredauthority to ensure swift, independent management.

Hitachi Group
Sustainability
Report 2013

Six-Group Management Structure
In April 2012, we reorganized the entire Hitachi Group into five groups to achieve an
increased focus on growing fields. This move was designed to enable a rapid response to
the worldwide dynamic changes in business models and services centered on our Social
Infrastructure Business. In April 2013, the automotive equipment business, which was anelement of the Infrastructure Systems Group, was split off to form the new Automotive
Systems Group, reorganizing the Group management structure into six groups. Thischange will bring about quicker management decision making for automotive
components because in the future there will be accelerating changes in the needs ofregions and of customers.

*1 Big Data: A collection of the massive volumes of the unstructured data that conventional systems could notprocess, or the technology that handles this massive amount of data
*2 SI (systems integration): Integrated information system services that include planning through implementation
to operation responding to customer needs

Hitachi Smart Transformation Project
In April 2011, we launched the Hitachi Smart Transformation Project, part of a drive toreinforce overall Group corporate functions. Through this initiative, we are reforming theGroup-wide business structure, optimizing the allocation of resources, and sharing
common resources among business units. The Group Strategy Committee will handle
Group-wide strategies with an eye to optimize Hitachi Group management.

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Through the Smart Transformation Project, we have been overhauling our cost structure
in line with our Mid-Term Management Plan goals. In August 2012, we established the
Smart Transformation Project Initiatives Division to accelerate project promotion. The
new division is responsible for driving forward seven projects, with executive officers
serving as project leaders.

031
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Smart Transformation Project Initiatives Division Structure

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Chapter1 Governance Report

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CSR Management

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We strive to live up to our Corporate Credo of contributing to society
through the development of superior, original technology andproducts. We are working to realize the Hitachi Group Vision by
integrating CSR into management and operation strategies while
sharing our values with society.

CSR Policy of the Hitachi GroupWe created the Hitachi Group Vision based on the Corporate Credo and Hitachi
Founding Spirit, the starting points for Hitachi's CSR. The CSR Policy of the Hitachi Group,
designed to realize that vision, is shared Group-wide. Based on this policy, the CSR
Promotion Team, staffed by people from corporate divisions within Hitachi, Ltd. together
with regional headquarters outside Japan, has drafted a policy plan. This plan is steadily
being implemented by the entire Group.

CSR Policy of the Hitachi Group
1. Commitment to Corporate Social Responsibility (CSR)
The Hitachi Group, including all its executives and employees, recognizes CSR as a vital part ofcorporate activity and is therefore committed to a course of social responsibility in accordancewith this CSR policy for the sustainable development of society and business.
2. Contribution to Society through Our Business
The Hitachi Group will contribute to the building of a prosperous and vibrant society byproviding safe, high-quality products and services through business activities based on its
excellent research, technology, and product development.
3. Disclosure of Information and Stakeholder Engagement
The Hitachi Group will disclose information openly and transparently in order to maintain anddevelop a relationship of trust with its various stakeholders, and act responsibly towards themthrough various means of communication.
4. Corporate Ethics and Human Rights
The Hitachi Group will undertake its business based on the principles of fairness and sincerity,
act with the utmost respect for human rights and pursue a high sense of corporate ethics in the
global business market which encompasses diverse cultures, morals, ethics, and legal systems.
5. Environmental Conservation
The Hitachi Group will strive to minimize environmental effects and utilize resources towards
the development of a sustainable society that is in harmony with the environment.
6. Corporate Citizenship Activities
The Hitachi Group will promote social contribution activities as a good corporate citizen in orderto realize a better society.
7. Working Environment
The Hitachi Group will make every effort to create a pleasant and motivating working
environment for all its employees and to fully support those employees who desire selffulfillment and self-development through their work.
8. Responsible Partnership with Business Partners
The Hitachi Group will make every effort to promote fair and sound business practices among
our business partners by fostering a common awareness of social responsibility.
Adopted March 2005

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033

CSR Management Structure
To promote CSR, the CSR Promotion Team, staffed by people from the CSR Division and
CSR-related departments at Hitachi, Ltd., discusses and develops Group-wide CSR
measures. The team focuses on specific global initiatives with CSR promotion officers at
Group companies and regional headquarters outside Japan. Particularly important issues,
such as determining medium- and long-term policies, are decided by the Senior Executive
Committee. In-house company and Group company CSR promotion officers also meet
regularly to discuss issues that need attention and to follow a common direction.
To meet our responsibilities as a global enterprise, we take on sustainable activities forthe entire Group by using two tools: the materiality process and the jointly developed
CSR Self-Assessment Tool, which we use for improving CSR activities Group-wide and toclarify the issues that we face as a global entity. By talking with and listening to global
stakeholders, we proactively integrate global social issues within our organization tocreate sustainable social and management programs.

Hitachi Group
Sustainability
Report 2013

Structure of Hitachi Group CSR Promotion*1 Senior Executive Committee: Decides CSR management policies at the executive level*2 CSR Promotion Team: CSR-related departments prepare, implement, and follow up detailed plans for CSR
activities

CSR Self-Assessment Tool
In fiscal 2008, Hitachi, Ltd. and Group companies jointly developed the Hitachi Group CSR
Self-Assessment Tool, which benchmarks our companies against other leading global
companies. The goal is to tackle issues and clarify initiatives based on our policies forpursuing CSR and continually improving performance.
In fiscal 2011, we revised this tool to focus more on management collaboration andglobal perspectives, as well as to address risk and to measure impact based on such social
demand changes as the launch of ISO 26000 and the requirements of major SRI indexes.

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034

Results of Fiscal 2012 Self-Assessment
After reviewing the results of the fiscal 2012 self-assessment, we were able to clarify
items where building or improving a common global platform were required. In fiscal
2013, we will implement action plans based on the assessment results, and use this tool
to improve overall Group standards.

Hitachi Group
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Report 2013

Main Topics Covered in Each Policy of the CSR Self-Assessment Tool
Policy 1: Commitment to Corporate Social Responsibility (CSR)
CSR vision; CSR education; risk management
Policy 2: Contribution to Society through Our Business
Coordination with business strategies; sustainable designs; innovation; customer satisfaction
Policy 3: Disclosure of Information and Stakeholder Engagement
Information disclosure; dialogue with stakeholders
Policy 4: Corporate Ethics and Human Rights
Corporate governance structure; education on ethics and awareness of legal violations; respecting
human rights; infringement risks
Policy 5: Environmental Conservation
Carbon management strategies; resource recycling; ecosystem conservation
Policy 6: Corporate Citizenship Activities
Strategic social contribution; participation in local communities; support for employees' volunteer
activities
Policy 7: Working Environment
Respecting diversity; fulfilling work environments; creating opportunities for skills development;
work-life balance
Policy 8: Responsible Partnerships with Business Partners
Minimize procurement risks; communicate with suppliers

13. FY 2012 Self-Assessment Results (Hitachi, Ltd.)

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035

CSR Activities Results and Plans

CSR Policy of the
Hitachi Group1.
Commitment to
Corporate Social
Responsibility

2.
Contribution toSociety through Our
Business

3.
Disclosure of Information and Stakeholder Engagement

4.
Corporate Ethics andHuman Rights

Hitachi Group Activities in FY 2012

Hitachi Group
Sustainability
Report 2013

Achievement
Level

Results in FY 2012

· Apply revised version of the CSR
Self-Assessment Tool based on ISO
26000 to Group companies· Began applying to Group companies◆◆◆· Create next CSR strategy· Continue implementing the HitachiGroup QF (Quality First) Innovation
Movement launched in FY 2010 andassess the results· Continued implementing the Hitachi Group QF
Innovation Movement, improving processes forpriority business divisions, and OCHIBO HIROI*1

Ongoing· Continue implementing HitachiGroup QF Innovation Movement
and assess the results· Double the number of R&D
personnel at corporate research
centers outside Japan (approx. 150
in FY 2010)· Established three research centers including
Hitachi Brazil Ltd., R&D Division and boosted
R&D personnel to approx. 280 as of June 2013◆◆◆

· Boost R&D personnel to 400 by
FY 2015· Continue engaging in stakeholder
dialogues· Held a dialogue on business and human rights
in Belgium◆◆· Participate in international
dialogues and express our views on
sustainability· Hitachi representatives participated as panelists
or speakers at international conferences (UNGlobal Compact, CSR Europe and BSR,*2 etc. )◆◆◆· Create Hitachi Group humanrights policy in collaboration
with nongovernmental and otherorganizations and develop a due
diligence framework· Created the Hitachi Group Human Rights Policy(published in May 2013)· Held a human rights workshop in China◆◆◆· Conduct education on businessand human rights· Enhance education materials to
implement the Hitachi Group Codesof Conduct more widely· Implemented annual Corporate Ethics Month in
October· Created case studies in Japanese, English, andChinese for workplace discussion and conducteddiscussions using these◆◆◆· Continue working to implement
the Hitachi Group Codes ofConduct more widely· Continue compliance education andauditing of regional headquarters
outside Japan· Held a lecture in Vietnam on corruption
prevention and competition law· Continued auditing regional headquarters◆◆◆· Continue compliance education
and auditing of regional
headquarters outside Japan*1 OCHIBO HIROI (gleaning) is Hitachi’s program for adopting the customer’s perspective when reflecting on past
accidents and working to prevent recurrences.
*2 BSR is a non-profit business association headquartered in the United States that serves a network of more than
300 companies around the world and advises companies on their CSR management.

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036
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Report 2013

5.
Environmental
Conservation

6.
Corporate Citizenship Activities

7.
Working Environment

8.
Responsible Partnerships with Business
Partners· Reduce CO2 emissions from Hitachi
products (target for the year: 23
million tonnes)· Helped reduce CO2 emissions by 22.74 million
tonnes (target almost reached)◆◆◆· Conduct social contribution activities
based on medium-term themes andoverall plan

· Implemented social contribution activities basedon medium-term themes for education, theenvironment and social welfare◆◆◆· Continue to implement social
contribution activities covering theenvironment, energy, and otherareas· Implemented educational support programs on
the environment for children in China· Worked with an NGO on butterfly research near
Mt. Fuji to increase ecosystem preservation
awareness◆◆◆· Follow up biannually on progresswith the plans produced by eachin-house company for promoting
female executives· Conducted follow-up on progress of thepromotion plans of each in-house company◆◆◆· Establish balanced working styles
by continuing to implement WLB(Work-Life Balance)-Up! Month· Implemented WLB-Up! Month to help peoplebalance their work with their private lives◆◆◆· Strictly comply with legal
employment rate for people withdisabilities at all Hitachi Group
companies in Japan· Legal employment rate increased to 1.95%(1.86% in the previous year)◆◆◆· Strengthen monitoring of suppliers
globally (site surveys)· Monitored 98 suppliers in China and Asia
· Conducted site surveys in 12 locations◆◆◆· Continue monitoring suppliers
globally· Continue to distribute useful
information for suppliers'
environmental management· Exchanged information at the New MMM Club*3
plenary session◆◆◆· Continue to convey useful
information for suppliers’
environmental management*3 The New MMM Club is an organization run primarily by suppliers who have acquired environmental certification
through Hitachi's activities to support their environmental programs. Mottainai, which means regrettable waste
in Japanese, is now an international environmental term. The three Ms come from the first letter of the wordmottainai.

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060· Increase sales ratio of EcoProducts· Continue to implement social
contribution activities covering
education, the environment, andwelfare· Establish balanced working
styles by continuing to
implement WLB-Up! Month· Strictly comply with legal
employment rate for people
with disabilities at all HitachiGroup companies in Japan◆◆◆：Achieved◆◆：Partially achieved

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Chapter1 Governance Report

037

Risk Management

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Sustainability
Report 2013

Reducing the frequency and impact of risks globally by strengthening
policies and programs to meet the goals of the Mid-Term
Management Plan.

Reinforcing the Risk Management System
We manage the business and operational risks of every division with internal audits. The
entire Hitachi Group is reinforcing management systems to address increasingly global
and complex risks. Since fiscal 2009, we have consolidated information on all risks for all
in-house companies, Hitachi Group companies, research centers, and regional
headquarters outside Japan. In addition to traditional risks, including natural disasters orbusiness risks such as the market environment and raw material prices, these risks also
include environmental and reputational risks, human rights risks that cover employee
diversity and poor working conditions within the supply chain, as well as other risks that
could impact Hitachi's credibility and business sustainability.
We will reinforce our comprehensive risk management framework within which ourassessment standards are fully examined, where accumulated risk information is analyzed
and evaluated in greater detail, and where responses to the results of these analyses andevaluations are examined at the management level. In addition, we will improve risk
awareness among all employees through information sharing, education, and training.

Business Continuity Plans
Being deeply committed to the social infrastructure,
we are enhancing our business continuity plans(BCPs) to guard against risks that could cause aninterruption to business operations that impact
society. Specifically, we created the Hitachi Group
Guidelines for Developing Business Continuity Plans
in December 2006, and in fiscal 2010 translated
Hitachi Group Guidelines for Developing
Business Continuity Plans (department version)them into English and Chinese for distribution to all
Hitachi Group companies worldwide to reinforce
risk mitigation for large disasters. In fiscal 2011, we produced a department version of
the Hitachi Group Guidelines for Developing Business Continuity Plans, based on lessons
learned from the Great East Japan Earthquake, and translated these into English andChinese in fiscal 2012. Using these guidelines, Hitachi Group companies and businesssites review and prepare BCPs relevant to the nature of their operations, accelerating BCP
creation in key operations in and outside Japan.

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038

Novel Strain of Influenza Action Plan and BCPs
In fiscal 2008, as a precaution against a novel strain of
influenza that gave rise to fears of a pandemic,*1 weset up a special organization called the Risk
Management Headquarters, headed by our president.
In the event of a worldwide outbreak, the Risk
Management Headquarters would take the lead in
securing the safety of all Hitachi Group employees andPandemic simulation drill
their families. Every effort would be made to ensurethat operations essential for maintaining social functions, such as helplines, logistics,
information systems, medical services, and public security, would continue without
interruption. As part of these preparations, we formulated the Guidelines for Pandemic
Influenza Preparedness in 2009. We distributed these to all Hitachi Group companies infiscal 2010, after translating them into English and Chinese. In fiscal 2011, we further
enhanced preparedness by collaborating with three Hitachi Group service businesses to
conduct a joint drill based on the scenario of a novel influenza pandemic.

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Report 2013

*1 Pandemic: An infectious disease epidemic that spreads to a geographically wide area

Tabletop Exercise to Prepare for Large-Scale Disasters
Since fiscal 1998, Hitachi, Ltd. has held annual disaster
simulation drills covering 20 sites throughout Japan.
During these drills, teams of people make decisions
under disaster scenario conditions that have beendeveloped over three to six months and include a
range of crises. The objective is to verify and improvethe effectiveness of prevention plans for large
disasters. In fiscal 2012, we held a drill in the Kansai
Drill at Kansai Area Operation
region, which has already experienced the Great
Hanshin-Awaji Earthquake and where there is now concern about the potential for thesimultaneous occurrence of three large earthquakes known as the Tokai, Tonankai, andNankai earthquakes. Business site risk managers participating in the drills reported on
their drills and the results at a general assembly for around 200 officers responsible forhandling risk. We are constantly improving BCPs to address large disasters by sharing theresults of these tabletop drills. We also hold monthly drills that use a satellite
communications system.

Providing Information through Our Internal Website
The Hitachi Group internal website has provided a risk
response page for all Hitachi employees since 1997.
This internal website features information from wire
services and Japan's Ministry of Foreign Affairs as wellas problems that Hitachi Group employees havealready experienced. If emergencies arise, the site
Influenza page on the e-learning sitealerts employees and posts information based on top
management policies and the extent of damage. The risk response website adds or
updates around 80 news items every day. The average number of page views per month
has reached 500,000, illustrating that the site is playing an essential role in Hitachi's risk

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measures. This site also provides employees with e-learning about threats and measuresagainst H1N1 influenza.

039
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Managing Risk Overseas
The growing geographic scope of our operations is also increasing business travel todangerous areas. The Hitachi Group puts peoples' lives first, so since fiscal 1993 we haveoperated a 24-hour international travel call center system focused on overseas
emergency medical care. We also run overseas risk management courses for employees
about to work outside Japan and young employees entering overseas experience
programs. In fiscal 2012, around 1,600 employees took part in these courses.
To ensure employee safety in countries and regions with a particularly high travel risk, wesend in local survey missions that include external experts to identify and institute specificrisk management measures. Recognizing that the hostage incident in Algeria in January
2013 increased the risk of similar incidents occurring around the world, a President's
Message was issued to remind all employees to take extra care to ensure safety, and wehave bolstered risk management partnerships worldwide.

Responding to the Great East Japan Earthquake
When the massive earthquake, followed by a devastating tsunami, hit Japan's Tohoku
region and Pacific coast on March 11, 2011, we responded by immediately setting up theEmergency Headquarters for Response to Large-Scale Earthquakes to confirm the safetyof all employees and their families, while assessing the damage. Many Hitachi Groupfacilities in Fukushima and Ibaraki prefectures were heavily damaged. We expected that
restoration would take a long time, but key business sites completed their recovery
within a month and restarted most of their production. This swift turnaround is atestament to the support received from related entities outside Hitachi and theemergency preparedness of business sites within Hitachi. On March 23, we broadened
the role of the emergency headquarters to create the Hitachi Group Headquarters for
Post-Earthquake Reconstruction and Redevelopment, headed by Hiroaki Nakanishi,
President of Hitachi, Ltd. This group functions as a "control tower" for the Hitachi Group,
gathering information on damage and providing increased efficiency for support andrestoration work by consolidating of assistance requests, empowering Hitachi toundertake concerted efforts to restore areas hit by disasters.

Reputation Management
All Hitachi Group companies share the Hitachi brand globally. While this generates groupsynergies for innovation and trust in the brand, we recognize that accidents and rumors
can damage the brand around the world. We have set up communication divisions atregional headquarters outside Japan to handle reputational risk. These divisions ensure
the broad recognition of our activities by regularly communicating with local media andgovernment agencies, as well as members of nongovernmental organizations andopinion leaders in each market who are particularly interested in human rights andenvironmental issues. These divisions work hard to prevent public misconceptions about
our business management.

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We have also introduced a Web inquiry management system used across the Group for
managing the opinions and questions we receive every day from customers. These
inquiries are being recorded and kept as valuable sources of information for reputation
management.
Hitachi, Ltd., in-house companies, Group companies, and regional headquarters outside
Japan collaborate to mitigate risk to the brand and resolve problems arising from
accidents or rumors. Moreover, we work to proactively prevent the spread of any adverse
impact, as well as future occurrences, by investigating similar or related incidents in otherregions or businesses.

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Chapter1 Governance Report

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Compliance

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As we expand internationally, we are deepening complianceknowledge and awareness among Hitachi Group companies
worldwide, instilling and reinforcing even more stringent compliancepractices to ensure fair competition.

Enhancing Framework for Promoting Compliance
The Hitachi Group Codes of Conduct were formulated in 2010 and are implemented
among Hitachi Group companies. We have also developed in-house regulations andinstituted bribery prevention measures to maintain fair business practices. We use audits,
including internal control assessment procedures and a compliance reporting system, tocheck the results of our compliance system and to promptly identify and address
breaches, promoting robust and more sustainable management and business practices.
As of April 2013, our Senior Vice President and Executive Officer has been appointed
Chief Compliance Officer to further enhance our global compliance framework.
Hitachi Internal Control Assessment Framework
http://www.hitachi.com/csr/governance/gove/index.html#gove03

Formulating and Ensuring Awareness of the Hitachi Group Codesof Conduct
Hitachi, Ltd. formulated the Hitachi Group Codes of Conduct as
specific common conduct codes for the Hitachi Group. This was inline with the shift to a new Group management structure to markHitachi's centennial. Based on translations of this document into 19
languages (so far), consolidated subsidiaries worldwide thenformulated their own codes of conduct in line with the same content.
To ensure broader awareness of the codes, we produced the HitachiGroup Codes of Conduct Handbook in fiscal 2011 as a resource for the Hitachi Group Codes ofConduct Handbook
entire Hitachi Group. We also produced English and Chinese versionsof an existing Japanese-language e-learning tool that teaches
appropriate behavior and presents specific examples to publicize initiatives for HitachiGroup companies within and outside of Japan. We are extending training to businesssites of Hitachi Group companies worldwide and we are asking managers to submit awritten statement confirming that they have taken the course and that they pledge tocomply with the Hitachi Group Codes of Conduct.
Hitachi Group Codes of Conduct
http://www.hitachi.com/about/corporate/conduct/index.html

Implementing Corporate Ethics and Compliance Month
Corporate ethics and compliance are the bedrock of all our activities. Since fiscal 2009,
we have held Ethics and Compliance Month throughout the Hitachi Group each October.

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In fiscal 2012, we created a set of case studies for workplace discussion to boost
employee awareness of the content of the Hitachi Group Codes of Conduct Handbook.
The 44 case studies were mapped to the chapters in the handbook so that employees
could discuss the issues relevant to their own workplaces. We also translated the casestudies into English and Chinese for use in Hitachi global operations. 219,688 employees
in 23,038 groups and departments have taken part in discussions, and 11,490 employees
attended lectures given by internal and external speakers on the topic.

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Preventing Corrupt Practices Involving Public Officials
Hitachi Group is focusing on the infrastructure business in emerging countries.
Recognizing that global compliance will become ever more important, we formulatedGroup-wide rules and guidelines in October 2008. We are ensuring adherence throughaudits and education.
In October 2012, we held a lecture on bribery prevention and competition law inVietnam and Singapore that was attended by 10 compliance officers in Vietnam and 26
in Singapore. In March 2013, we invited a speaker to give a lecture to 207 officers onbuilding and operating a global compliance framework.

Compliance Reporting System
We instituted a Group-wide whistle-blowing system to prevent illegal and unethicalbehavior, to promptly address infractions, and to enhance our ability to self-regulate.
People can report directly to the Compliance Division at Hitachi or to an outside attorney.
This system can be used not only by Hitachi employees but also by former employees,
temporary staff, and business partners. Another system—Channel to the Board of
Directors—has been introduced to allow employees to report problems anonymously
directly to Hitachi's board of directors.

Preventing Violations of the Antimonopoly Law
The Hitachi Group operates on the principles of "conformance with the law and businessethics" and "fair and disciplined competition." However, it is with regret that Hitachi, Ltd.
was penalized for impairing the fairness of a public bid in fiscal 2002, and we received
administrative orders in September 2006, October 2008, and March 2009 for violating
Japan's Antimonopoly Law.
In November 2012, a subsidiary established during an incorporation-type company split
received administrative orders for violating the Antimonopoly Law. We deeply regret
these violations, and have worked hard to boost awareness of compliance issues inseveral ways, including publicizing messages from top executives, who also conductindividual interviews with sales staff.
In fiscal 2012, we held four education sessions for 76 sales managers using a group
discussion format to address familiar relevant cases. During the Corporate Ethics andCompliance Month, discussion sessions on the Antimonopoly Law were also held in eachdivision and department, with 7,570 employees attending. We intend to improve thecompliance awareness of all employees by stepping up auditing and education.

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043

Export Control
For basic export control, we use the Hitachi Standards of Corporate Conduct, whichstates that we "shall help maintain international peace and security through compliancewith trade laws and regulations." We adopted rules for controlling security exports basedon this policy in 1987, and we strive for the strictest possible export controls. This means
promoting legal compliance and screening for destination countries and regions, as wellas end use and end-user of all goods and technologies intended for export. In addition,
we promote Group-wide export controls by providing guidance to all Hitachi Group
companies on the rules and organizations for export control. Also, we support educationand compliance training to make certain that every Hitachi employee follows the same
export control policies. In fiscal 2012, we provided practical training on export control
through working-level meetings and workshops for Group companies in Europe, China,
and India. In fiscal 2012, we held a basic e-learning course on US re-export controls
within the Hitachi Group for around 66,000 employees in Japan and we supplied English
and Chinese versions of the course to Group companies worldwide. In fiscal 2012, theHitachi Group committed no material export control violations.

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044

Information Security
The Hitachi Group maintains information in a secure way with respect for all regulations.
We use our information security management system to safeguard business and personal
information of our customers, and Hitachi Group technical information as well as otherconfidential information. We sustain and improve security in several ways: extensive
information handling procedures, security education for employees, and information
security audits, among others.

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Framework for Information Security
The Information Security Committee, chaired by the Chief Information Security Officer,
determines our information security policies and procedures. The Information Security
Promotion Council and other bodies convey decisions internally and to Hitachi Group
companies. Information security officers at business sites and companies then inform
employees.
The Hitachi Group emphasizes two points that protect personal information andinformation security in our policies:（1）Precautionary measures and prompt security responses
We classify assets to be secured and take safeguarding measures based on vulnerability and risk
analyses. We also have an emergency manual for security breaches, based on the assumption thatthese are 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
the prevailing sense of ethics and security awareness through Group-wide e-learning. We are also
conducting audits to identify and address problems early on.

Basic Approach to Information Security GovernancePreventing Information Leaks
We formulated the Three Principles for Preventing Leakage of Confidential Information
to ensure the highest level of care for confidential information and to prevent leaks. Ourpolicies make certain that we minimize leaks by promptly contacting customers,

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reporting to government agencies, investigating causes, and acting to prevent
recurrences. Hitachi Group companies worldwide take the following steps to prevent
information leaks: using Hitachi Hibun encryption software and security PCs that do notstore data; employing Hitachi Katsubun electronic document access control andexpiration processing software; maintaining ID management and access control bybuilding an authentication infrastructure; and using e-mail and website filtering. In
response to the recent spate of targeted e-mail attacks and other cyberattacks, we areparticipating in an initiative to share information between the private sector and thegovernment. We are also enhancing our IT organization by adding more layers to ourleak prevention procedures with both entry and exit countermeasures.
To ensure a secure exchange of information with our suppliers, we review theirinformation security measures based on Hitachi's information security standards before
allowing them access to confidential information. We have provided tools toapproximately 8,800 suppliers (procurement partners) for security education and forchecking business information on computers. In addition, we require them to check andremove business information from personal computers to prevent leaks. Consequently,
we experienced no information leaks in fiscal 2012.

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Three Principles for Preventing Leakage of Confidential Information
Principle 1
As a general principle nobody can take Confidential Information out of the Company's premises.
Principle 2
Any person taking Confidential Information out of the Company's premises due to businessnecessity shall obtain prior approval from the Information Assets Manager.
Principle 3
Any person taking Confidential Information out of the Company's premises due to businessnecessity shall put in place relevant and appropriate measures against information leakage.

Global Information Security Management
Hitachi Group companies worldwide are reinforcing information security in line with
Global Information Security Administration Standards. We have set up PC security andother priority measures in coordination with colleagues in the United States, Europe,
Southeast Asia, and China to protect security by using secure shared services.

Protecting Personal Information
We established a personal information protection management system based on our
Personal Information Protection Policy. The roll-out of this system through e-learning
courses for all employees and through periodic audits ensures the Company-wide
protection and safe handling of personal information.
Personal Information Protection Policy
http://www.hitachi.com/privacy-e/index.html

Privacy Mark Certification
Hitachi, Ltd. received Privacy Mark*1 certification in March 2007 (renewed for the thirdtime in March 2013). As of March 2013, 69 Hitachi Group companies had received thePrivacy Mark. In July 2007, the Odaira Memorial Tokyo Hitachi Hospital became the first
corporate medical institution in Japan to become Privacy Mark certified. The Ibaraki

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Hospital Center (located in Japan) was also certified. These hospitals work hard to protect
and carefully handle the personal information of patients and others.
Hitachi also strives to safeguard personal information globally at Group companies
outside Japan based on the Personal Information Protection Policy and in keeping all
applicable laws and regulations, including social requirements.

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*1 Privacy Mark: A third party certification granted to businesses approved by an assessment institution as taking
appropriate security management and protection measures on personal information (granting institution: Japan
Information Processing Development Corporation). Effective since April 1998.

Information Security Audits and Inspections
The Hitachi Group promotes information security based on the PDCA (plan-do-check-act)
cycle of our information security management system. We conduct annual information
security and personal information protection audits at all divisions.
The president appoints officers to conduct independent audits. These officers are notallowed to audit their own units, underlining our commitment to fairness and objectivity
in auditing. We implemented audits at 298 domestic Hitachi Group companies, and weare in the process of confirming the results. For 517 Hitachi Group companies outside
Japan, we use the Global Security Self Check to ensure Group-wide auditing andinspections. We implement Confirmation of Personal Information Protection andInformation Security Management annually as a voluntary inspection of business unit
workplaces. We conduct monthly Confirmation of Personal Information Protection andInformation Security Management assessments at approximately 500 operations that
handle important personal information. This regular control mechanism ensures effective
safety management and implementation.

Education on Information Security
To consistently protect information, it is crucial for everyone to continually develop theirknowledge of information handling and to remain strongly aware of the issues. For thisreason, we hold annual e-learning courses on information security and personal
information protection for all directors, employees, and temporary employees. At Hitachi,Ltd., nearly 100 percent of the approximately 40,000 employees take these courses. We
provide specific additional training, especially for new employees and managers, andinformation system administrators. We have prepared a wide range of information
security programs based on target and role. We also aim to prevent human error, theprime cause of information security incidents. These programs combat cybercrime byaddressing issues such as risk prediction and social engineering.
Our educational programs, available to Hitachi Group companies in and outside Japan,
provide Group-wide education on information security and personal information
protection.

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047

Innovation Management

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Since our founding, the Hitachi Group has actively pursued R&D tofulfill the Corporate Credo of contributing to society through thedevelopment of superior, original technology and products. This
continuous innovation, with R&D as its core, is the driving force ofsustainable growth for the Hitachi Group.

Research and Development Strategy
The Hitachi Group invested 670 billion yen, approximately 60 percent of the total R&D
expenditure of 1,100 billion for FY 2010-2012, in Social Innovation Business areas toaccelerate R&D that promotes growth in the global market for this business area.
In April 2011, the R&D organization was reformed for the first time in 25 years. Locally led
research was expanded by increasing the number of researchers employed in the four
research hubs outside Japan, while consolidating the eight research laboratories in Japan
into three. In addition, the Technology Strategy Office was established within the
Research and Development Group to oversee Group-wide technology strategies and toformulate medium-to-long-term technological and development plans linked withbusiness strategies. Under this new structure, technology developments supporting
global Social Innovation Business will be accelerated, and measures put in place toincrease the efficiency of R&D.

Global Research and Development Structure
The organization of the R&D function within Hitachi, Ltd. includes the Technology
Strategy Office, the Central Research Laboratory, the Hitachi Research Laboratory, theYokohama Research Laboratory, the Design Division, and six research bases outside
Japan.
The Technology Strategy Office (TSO) prepares medium-to-long-term technology anddevelopment plans linking corporate research centers and business divisions in order toaccelerate expansion in areas of business priority. By proposing Hitachi-wide strategic
projects, the TSO formulates technology strategies to achieve Hitachi's management
policies.
Also, our overseas R&D bases will be further enhanced to build a stronger global R&D
network. In June 2013, the Hitachi Brazil Laboratory was established in Sao Paulo, Brazil,
creating a worldwide seven-hub formation: Japan, Europe, North America, China, India,
the rest of Asia, and South America.

Research and Development Goals
The R&D expenditure of the Hitachi Group is being maintained at around 4 percent of
total revenue. For R&D investment efficiency, the target is to deliver an ROI*1 (operating
income divided by R&D expenditure) of more than 1.
The number of papers accepted by the Institute of Electrical and Electronics Engineers(IEEE), the world's largest professional technology association, is used as a benchmark formeasuring Group technology standards and activities worldwide. In fiscal 2012, the IEEE

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accepted 40 research papers from the Hitachi Group, ranking it third in the electronics
industry worldwide and first in the electronics industry in Japan.
*1 ROI: Return on investment048
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Major Indicators

Trend in R&D Efficiency

Trend in R&D Expenditure

R&D Plan and Investment
At Hitachi, Ltd., 70 percent of R&D expenditure is for sponsored and advance sponsoredresearch from Hitachi in-house companies and Hitachi Group companies, and theremaining 30 percent is for basic and platform research from corporate funds. The goalof sponsored and advance sponsored research is to expand and advance priority
businesses, targeting practical application within three to five years. Basic and platform
research is centered on the medium-to-long-term Technology Plan, and aims to create
innovative technologies forming the basis for future core businesses. In fiscal 2013, 89
percent of basic and platform research will be invested in Social Innovation Businessresearch, and the remaining 11 percent in platform research.

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049

Enhancing R&D outside Japan
By enhancing the global R&D organization, Hitachi will promote R&D activities based onregional needs as well as incorporating a diverse array of experience, backgrounds andideas. This global approach will serve as a source of creativity and as a catalyst for
innovation with the aim of further expanding overseas business operations.
First, as a human resource initiative, the number of researchers outside Japan will be
increased from the current 280 to 400 by fiscal 2015. Further, Hitachi will actively seek toappoint qualified locally employed staff as leaders to accelerate regionally based
research.
Also, the Hitachi Brazil Laboratory was established in June 2013 to expand operations in
Brazil which is a focus region for the Hitachi Group. The Hitachi Brazil Laboratory will be
Hitachi's seventh regional base to integrate and promote regional R&D, along withJapan, the US, Europe, China, Singapore, and India.
Also, to promote R&D that leverages regional requirements, research centers andlaboratories within each regional research base are being enhanced. In October 2012,
the European Rail Research Centre was established in the United Kingdom, followed by
the Hitachi China Materials Technology Innovation Center in China and the Big Data
Research Laboratory in the United States in April 2013.

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Main Hitachi Group R&D Centers

Main Research Themes in Overseas Research Centers
Europe(Hitachi Europe Ltd.)

Advanced physics / Rail systems / Automotive systems / Power systems / Design

India(Hitachi India Pvt. Ltd.)

Software / Social infrastructure systems / Knowledge processing

Asia(Hitachi Asia Ltd.)
China(Hitachi China Research &Development Corporation)

Big data analytics / Cloud storage / Water treatment
Social infrastructure systems / Information & telecommunication systems / Medical & healthcare
systems / Chinese materials & manufacturing processes / Engine control & hydraulic systems / Design

US(Hitachi America, Ltd.)

Automotive equipment / Storage systems / Wireless communication systems / Big data analytics / Design

Brazil(Hitachi Brasil Ltda.)

IT systems for agriculture and mining / Social infrastructure systems

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050

Noteworthy R&D Achievements
ROPITS: Single-Passenger Mobility-Support Robot for Autonomous
Locomotion on Footpaths

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Hitachi is conducting R&D on human symbiotic
robots that co-exist with and provide services topeople, supporting the needs of a future society
with a high proportion of elderly people.
Announced in March 2013, ROPITS (Robot for
Personal Intelligent Transportation System) was
developed to support short-distancetransportation for the elderly or those with walking
difficulties. It is a single-passenger robot that
autonomously navigates along walkways. Since
March 2011, Hitachi has been participating in the
Mobility Robot Experiment Special District inTsukuba City, Ibaraki Prefecture, to makeautonomous travel technology more practical.
Urban vehicle ROPITS
Through pilot tests on real-world walkways, wehave improved the convenience of robots as a transport support service, as well as theirreliability in autonomous travel and the safety of robot-pedestrian interaction. A ROPITS
only requires the passenger to specify a pick-up and drop-off point on a smartphone ortablet, then the ROPITS delivers them to their destination.
Development of single-passenger mobility-support robot ROPITS for autonomous
locomotion on footpaths
http://www.hitachi.com/New/cnews/130312.html

Highly Efficient (11 kW) Permanent Magnet Synchronous Motor without
Rare Earth Metals
In fiscal 2012, Hitachi, Ltd. and Hitachi
Industrial Equipment Systems Co., Ltd.
developed a highly efficient 11 kW
permanent magnet synchronous motor that
does not use magnetic materials containing
rare earth metals such as neodymium anddysprosium. Instead, this motor uses an ironbased amorphous metal*1 in the core of theConventional motor (left) and 11kW highly efficientpermanent magnet synchronous motor (right)
motor.
In 2008, the two companies established the basic technology for a rare earth metal-free
motor. To further increase capacity and efficiency, technologies such as structural
optimization and core loss minimization were developed and applied to create a medium-capacity (11 kW) motor. Compared with conventional motors of the same class, the new
motor is smaller and has an energy efficiency of approximately 93 percent, conforming to
the IE4*2 standard, the highest level in the International Electrotechnical Commission(IEC) efficiency guidelines. The technology will be further developed toward a fiscal 2014
product launch.

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A part of this technology was developed under the Rare Metal Substitute Materials
Development Project of the New Energy and Industrial Technology Development
Organization (NEDO), Japan.

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*1 Amorphous metal: Solidified by rapid cooling, this metal has unique characteristics compared with normal
crystalline material.
*2 IE4: Currently the highest standard set out in IEC60034-31, the IEC guideline for motor energy efficiency.

Motor Performance

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Chapter1 Governance Report052

Intellectual Property

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Intellectual Property (IP) is a key element of Hitachi's businessstrategy. We are developing a global patent portfolio and promoting
IP activities focusing on Social Innovation Business. We are also
conducting anti-counterfeiting activities to protect the Hitachi brand,
and we are working on international standardization to expand ourbusiness to other markets.

IP Activities Supporting Global Operations
Our IP activities support global operations, including building a global patent portfolio toprevent other companies from using our technologies without authorization and todemonstrate the advantages of the technologies to customers. In some cases, we use ourpatent portfolio to forge cross-licensing agreements with other companies, creatingsmooth business operations without constraint on IPs for those companies.
Key Indicators

Patent Application Ratios outside Japan*1

The goal in building our global patent and IP portfolio was to increase our patent application ratio
outside Japan from 47 percent in fiscal 2009 to 55 percent by fiscal 2012. In fiscal 2012 this ratio
was 57 percent, achieving ahead of time the 2012 Mid-Term Management Plan goal of an overseas
revenue ratio of more than 50 percent.

*1 Hitachi, Ltd. and consolidated subsidiaries*2 FY 2012 target*3 The number of PCT (Patent Cooperation Treaty) applications is converted and counted based on the number ofcountries in which Hitachi is expected to obtain patents.

Next Steps
To efficiently build and maintain a global patent portfolio, we will continue to file PCT
applications. We will also conduct IP activities that support our business operations,
including anti-counterfeiting programs to protect the Hitachi brand, and we will
participate in international standardization to grow markets.

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053Intellectual Property: Activities and Results

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Respect for intellectual Property
We respect the intellectual property rights (IPRs) of others, as we expect them to respectours. We follow in-house rules*1 and conduct preliminary searches of others' patents
before undertaking R&D on new products and technologies in order to avoid IPR
infringements. For IPRs that belong to others, we obtain licenses from IPR holders before
we use their IP. If any company is found to have infringed our IPRs, we encourage themto acquire the necessary license, and will take legal action, if necessary.
*1 In-house rules: The Hitachi Group Codes of Conduct state "We will respect the intellectual property of otherparties. We will prevent violations of other parties' intellectual property rights in advance and, for the smooth
progress of business, we will investigate other parties' intellectual property rights beforehand when engaged inresearch, development, design, production and sales of new products or new technologies, and implement
appropriate measures when any doubts arise."

Hitachi Group Codes of Conduct
5.3 Management and Preservation of Company Assets
http://www.hitachi.com/about/corporate/conduct/index.html#ank2138315053

Anti-Counterfeiting Activities
Protecting the Hitachi brand is crucial to support our global operations, and the Hitachibrand is now registered as a trademark in more than 200 countries and regions. We
operate a rigorous regime against infringements such as making and selling counterfeit
goods carrying the Hitachi brand and illegally applying for or registering trademarks
similar to the Hitachi brand.
The standard anti-counterfeiting measures are to send warnings to manufacturers,
distributors, wholesalers and vendors who infringe our IPRs and/or to report theseoccurences to administrative agencies. Recognizing, however, that the supply of
counterfeit products exists only where there is demand, we are also educating consumers
about these products. For example, in fiscal 2011 we took part, together with otherJapanese companies, in the Third Educational and Advising Event for Primary School
Pupils in Beijing on Protection of IPRs hosted by the JETRO Beijing Office and the
Education Committee of the Copyright Society of China. At the event, the importance ofprotecting IP was explained to students at 10 elementary schools in Beijing.
We invest significant resources in IP programs for customs officials as the most effective
way of preventing infringements, focusing particularly on China and the Middle East. We
also hold seminars and workshops, in cooperation with local law enforcement agencies,
governments and authorities to seek their assistance with our anti-counterfeiting
initiatives.

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Third Educational and Advising Event for Primary School Pupils in Beijing on
Protection of IPRs
Date: April-June 2011
Location: 10 elementary schools in Beijing, China
Hosts: JETRO Beijing, Education Committee of the
Copyright Society of China
Participating companies: Sanrio Co., Ltd, Sony
Corporation, Panasonic Corporation, Bandai Co., Ltd.,Sanyo Electric Co., Ltd., Canon Inc., Mazda Motor
Corporation, and Hitachi, Ltd.

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Anti-Counterfeiting Seminar with Bahrain Customs Officials
Date: April 8-9, 2012
Venue: Khalifa bin Salman Port, Bahrain
Participants: 18 customs officials

International Standardization Activities
We support international standardization and commit our employees to serve in key
positions within international organizations. For example, Hiromichi Fujisawa is IEC(International Electrotechnical Commission) Vice-President. In fiscal 2012, Yukiyasu
Shirasaka, IEC convener*1 for power transformers, and Shoichiro Koseki, IEC convener for
power electronic systems and equipment, both received a METI Minister's Award at
METI's Industrial Standardization Awards for their contribution to technologies
developed in Japan being adopted as international standards.
We have established a Hitachi Group Standardization Committee to coordinate
international standardization for Group companies. The steering committee*2 for thisbody selects Hitachi Group priority themes and promotes standardization in the working
groups of the committee.
One priority theme is smart cities. Japan has been appointed secretariat for theInternational Standardization Organization (ISO) subcommittee on Smart Community
Infrastructures working on infrastructure metrics. Yoshiaki Ichikawa, Hitachi Ltd., chairs
the subcommittee. In addition, Hitachi and Toshiba Corporation used the top standard
system*3 to help establish an IEC technical committee on Electrical Energy Storage
Systems.
*1 Convener: Working group chair*2 Steering committee: Headed by the executive officer overseeing R&D and includes CTOs (chief technology
officers) of Hitachi in-house companies and the Hitachi Group. The committee is responsible for decision making
on cross-departmental and company-wide projects.
*3 Top standard system: Japanese Industrial Standards Committee system for making swift international
standardization proposals to the ISO/IEC.

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Hitachi Group
Sustainability
Report 2013

*1 CTO: Chief Technology Officer

Reward System for Employee Inventions
We motivate employees on the R&D frontlines with a reward system for new inventions.
To ensure that the reward system operates fairly and transparently, we set standards toevaluate inventions and disclose these standards to employees. We also have amechanism for receiving inquiries about the rewards as well as opinions on the reward
system.
We have set up a special division within the Intellectual Property Group to plan andoperate this system. 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. As part of the system we have developed aninvention information channel to promote communication between inventors and thebusiness divisions using their inventions. Inventors can ask the business divisions for
information about their patent implementation status and check the evaluation
standards used to calculate the rewards for their inventions. To ensure transparency andinventor satisfaction, we also set up an Arbitration Committee for Invention Rewards
with the same composition as the Invention Management Committee. Inventors canappeal directly to this arbitration committee if they disagree with the amount they havebeen rewarded.
From fiscal 2005, we have given President's Awards to the top 100 inventors. As of fiscal
2006, we have also awarded the top 50 young inventors (under 35 years old) based onreceiving patent application rewards within five years of them joining Hitachi.

Cultivating Human Capital
We drive IPR initiatives forward by cultivating employees who are highly skilled andglobally aware. As of April 1 2013, our Intellectual Property Group had 106 registeredpatent attorneys and six lawyers registered in the US. Every year, we send six employees
from our Intellectual Property Group to patent and law offices in the US and Europe forinternships.

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Chapter1 Governance Report056

Brand Management

Hitachi Group
Sustainability
Report 2013

Hitachi builds corporate value by promoting the 2012 Mid-termManagement Plan and by improving business performance. To
bolster and expand our Social Innovation Business worldwide, wemust improve our brand recognition and reputation in every market
and establish the Hitachi brand in the Social Innovation Businessarena. In fiscal 2013, we will expand our Social Innovation Businessglobally as One Hitachi in line with the 2015 Mid-Term Management
Plan, and pursue global brand management that contributes toachieving that plan. We will increase Hitachi's brand value globally sothat we become a company preferred by customers, investors, andoutstanding job applicants, which in turn will improve our brandvalue even more. We will realize this positive cycle across the HitachiGroup and communicate globally with stakeholders toward a fuller
understanding of Hitachi to increase the value of our brand.

Global Brand Strategy
For developing Social Innovation Business globally, weneed to communicate our Vision to stakeholders. To
do this, we will enhance the Hitachi brand value byimplementing a Group-wide brand strategy that
globally integrates public relations, investor relations, advertising, the Internet, and CSR
activities. In fiscal 2013, we created a new Vision. This Vision, together with the Mission
and Values passed on since Hitachi's founding, were articulated as the Hitachi Group
Identity. Our focus now, as One Hitachi, will be on promoting international
communications, expanding our Social Innovation Business globally, and enhancing
Hitachi's brand value. We will also present the Hitachi Group identity to all our
stakeholders, building understanding of our direction for the future.
Hitachi Group Identity
http://www.hitachi.com/about/corporate/identity/index.html

Evaluating Our Global Brand Strategy
Every year we conduct surveys to get an objective overview of the strengths of Hitachi's
brand in global markets, examining the degree of recognition and the reputation of the
Hitachi brand in key markets. We use these findings to review brand initiatives in linewith the 2012 Mid-Term Management Plan and assist with the development of regionaland business strategies, working to boost brand value.
In fiscal 2012, we conducted surveys in 11 countries.*1 The Mid-Term Management Plan
calls for global expansion of our Social Innovation Business as a key business area, butmarkets still have a strong perception of Hitachi as a Japanese appliance or consumer
products manufacturer. Moreover, while we are better known in some regions,recognition of the Hitachi brand is certainly not high compared with our competitors. We
need to further improve that brand recognition and build our image as a Social

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Innovation company. Also, for our brand communication planned and executed in fiscal
2013, we will measure the effectiveness of the steps taken so far.
*1 The 11 countries surveyed were China, India, Thailand, the Philippines, Myanmar, Malaysia, Germany, France,
Poland, Brazil, and South Africa.

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058

Brand Management: Activities and Results

Hitachi Group
Sustainability
Report 2013

Improving the Global Brand
For developing our Social Innovation Business globally, we execute brand advertising
campaigns and exhibitions in countries and regions around the world. In fiscal 2012, in
China and Brazil, we held the 2012 Dalian Hitachi Exhibition and the Hitachi+Brazil
Exhibition. We also conducted brand advertising campaigns in Turkey, Kazakhstan, andAustralia.
In fiscal 2013, we will execute a new brand advertising campaign based on a unified
message in 17 countries and regions to accelerate global expansion along with theannouncement of the 2015 Mid-Term Management Plan. In growth markets such as
India, Brazil, and the Middle East, where we are focusing on business expansion, we willhold Hitachi Group exhibitions and carry out other communication activities linked toregional business strategies, helping to enhance the Hitachi brand value and expand ourSocial Innovation Business globally.

Web Management
We have responded to increased Internet use worldwide by revamping our Hitachi
Global site as well as country and regional Web portal sites,*1 making them the key tools
for publishing important information. To convey a consistent Group brand message, we
also post content about key business areas and products in these countries and regions
as well as on Hitachi Group Social Innovation Business initiatives. In recent years, we havefocused especially on building websites in the emerging countries that we havepositioned as key markets. In fiscal 2012, we created a South American portal sitecovering Argentina and Chile, among other countries, and a Sub-Saharan portal site forcountries such as South Africa and Kenya. Currently our portal sites are in 28 languages
and cover 46 countries and regions.
Responding to the recent surge in people using social media, we have set up the Hitachi
Brand Channel on YouTube.*2 We have also created a policy for social media use in the
Hitachi Group that is the base for a campaign to use social media to strengthen relations
with stakeholders.
*1 Portal site: Website unifying diverse webpages*2 YouTube: YouTube and the YouTube logo are Google Inc. registered trademarks.

Hitachi Group website(Japanese)
http://www.hitachi.co.jp/

Hitachi Group Global website(English)http://www.hitachi.com/

Internal Brand Management
As our employees deal directly with stakeholders, they are important contact points forbuilding the brand. To safeguard the Hitachi brand, it is vital that we engage employees
to thoroughly understand and live our values, as well as the Hitachi Group Identity
underpinning these values. Therefore we are increasing internal Hitachi brandrecognition through global internal initiatives that encourage desirable employee
behavior. This includes giving out Inspiration of the Year Global Awards*1 to programs
and people that help improve our brand value. Grand prizes are awarded for outstanding
initiatives embodying our Vision in each of our six regions, including activities with strong
business growth potential, as well as activities that contribute to local communities
through business and that enhance the Hitachi brand value.

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In fiscal 2012, we launched Hitachi Brand News,*2 a Hitachi Group newsletter for
departments involved in brand communication, so that brand value enhancement by
these departments can be shared among Group employees worldwide. In fiscal 2013, we
created the Hitachi Vision Book and other documents to convey the new Hitachi Group
Identity to employees globally. In addition, we will arrange internal brand education
programs around the world.

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Report 2013

*1 Inspiration of the Year Global Awards
Applications: 288 from the six regions
Area: China, Europe and Africa, India, the Americas, Southeast Asia and Oceania, Japan, etc.
Overseas application ratio: 60.8 percent in fiscal 2012 (compared with 18.9 percent in fiscal 2010)*2 Hitachi Brand News: Released quarterly. Volume 4 came out in April 2013.

Hitachi Vision Book
http://social-innovation.hitachi.com/ebook/en/

Brand Management
The Hitachi brand is an important and clear "promise" to all stakeholders of our
fundamental contribution, and that includes our management philosophy, social mission,and specific corporate activities. To fulfill this promise, it is essential to continuallycommunicate the Hitachi brand, consistently based on the integral principles of ourbrand.
Managing of the Hitachi Brand Impression
We globally unified the presentation and use of our logo and trademark to maintain aconsistent high quality in our messaging and to accurately communicate the values ofthe Hitachi brand. To roll out our message as a single global entity, or One Hitachi, we
have created the Hitachi Group Identification Standards Manual, which outlines how to
use the Hitachi logo. We have also integrated visual impressions of the Hitachi brand, by
developing a design system for each communications medium.
Safeguarding the Hitachi Brand
We provide legal protection for the Hitachi brand by working hard to eliminate
counterfeit products and parts in such high-risk regions as China, the rest of Asia, theMiddle East, and Africa. In countries or regions where brand infringements are
particularly widespread, we collaborate with local companies to step up anticounterfeiting programs.

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Environmental ReportWind Power Ibaraki, Co., Ltd.’s Wind Power Kamisu 1 Offshore Wind Farm

061

MESSAGE Environmental Report

Hitachi Group
Sustainability
Report 2013

Tackling environmental concerns as a group to
resolve energy and environmental issues
The Environmental Report 2013 provides an overview of
Hitachi Group environmental initiatives, where we aremaking steady progress guided by the major policies laid
down in our Environmental Vision.
One particular focus in fiscal 2012 was reducing energy
use. In response to the call for energy conservation
following the Great East Japan Earthquake, in thesummer we introduced electricity visualization systems
into our main Japanese facilities and offices. Showing
employees how much power was being used acrossHitachi as a whole in real time raised their awareness of
efficient power use and enabled us to cut our peak power
consumption by 164 MW in fiscal 2010. We intend tofurther improve our energy efficiency Group-wide.
We are also communicating globally on environmental
issues and company initiatives. We are deeply involved in
the World Business Council for Sustainable Development(WBCSD), where our president, Hiroaki Nakanishi,

Shigeru Azuhata

served as co-chair for the ecosystems focus area. We

Executive Vice President andExecutive Officer Hitachi, Ltd.
Hitachi Group Chief Environmental Strategy Officer

also participate in the Electric Utilities group and thegreenhouse gas working group. In South Korea, we took
part in the 2012 World Conservation Congress hosted by
the International Union for Conservation of Nature, where
I gave a presentation on company initiatives, including
ecosystem conservation. The Hitachi Environmental Forum
was held in India, with government, business and NGO
representatives from both countries participating in a
discussion of India's environmental issues.
In fiscal 2013, with the Hitachi Group 2012 Mid-Term
Management Plan coming to an end and the 2015 MidTerm Management Plan beginning, we have revised ourEnvironmental Action Plan from the traditional five-year
format to three years to better integrate our management
and environmental initiatives. Long-term goals areachieved through the success of many short- and mediumterm programs, so we have set in place mechanisms tosteadily manage these milestones.
At the Hitachi Group, we are committed to working as
one to address global responses to environmental issues,helping to reduce the environmental burden through ourbusiness activities.

Chapter2 Environmental Report

062

Environmental Activities Worldwide

Hitachi Group
Sustainability
Report 2013

In the Hitachi Group, we contribute to environmental protection by acting
globally.

EuropeAmericas
Advanced distribution centerIn the Netherlands, a new distribution center
went into operation that is equipped with asolar power generation system with an output
of 1.6 megawatts, the largest project of its typein the Hitachi Group.
(Hitachi Data Systems)
Contributions to CO2 Emission Reduction

Startup of CCS demonstration
experiment project
Hitachi has jointly built with SaskPower in
Canada’s Saskatchewan Province a CO2 recovery
demonstration plant and started working on
a Carbon Dioxide Capture and Storage (CCS)
experiment project.
(Hitachi, Ltd.)
Contributions to CO2 Emission Reduction

Protecting honey bees
Responding to the decline in honey bee
numbers in France, believed due in part to theuse of pesticides, employees have started a
volunteer bee raising group, helping to increaseawareness of ecosystem preservation.
(Clarion Europe S.A.S.)
Environmental Communication

Eco-Engineering Forum
This annual environmental forum is held in
Washington, DC. With water as this year’s
theme, stakeholders from government agencies,
private enterprises, research institutes, andNGOs discussed water issues facing the UnitedStates.
(Hitachi, Ltd.)
Environmental Communication

Reducing annual water use
At a storage system manufacturing centerin France, the latest Hitachi chillers wereintroduced, cutting annual water use in half,
compared with the previous fiscal year.
(Hitachi Computer Products (Europe) S.A.S.)

Global CO2 emissions(by country and region/2010)
More than 5 billion tonnes

Water Conservation

1 to 5 billion tonnes

Improving energy efficiency

500 million to 1 billion tonnes

By promoting factory-wide efficient energy use,
a 45% reduction was achieved in the energy
consumption rate per unit production comparedwith the base year of fiscal 2005.
(Hitachi Computer Products (America), Inc.)

100 to 500 million tonnes
Less than 100 million tonnes
Source: CO2 Emissions from Fuel
Combustion Highlights (2012 Edition),
IEA

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105 Environmental Management
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Report 2013

China

Promoting water recycling
An additional wastewater treatment system
was introduced to cope with production line
increases. The treated wastewater is used forwatering the factory grounds and other needs,
helping to promote water recycling.
(Guangzhou Hitachi Unisia Automotive Parts,
Co., Ltd.)
Water Conservation

Starting up a denitrification
catalyst plant
Hitachi developed unique denitrification
catalysts used to reduce air pollution, andthe high-performance, long-life catalysts are
winning high praise in the world. Production of
the catalysts has began in China, where they aremuch needed.
(Babcock-Hitachi (China))

Tree planting
We have been planting trees in Shenzhen since
fiscal 2009, working with government officials
and other groups. In fiscal 2012, we planted
100 trees in the city.
(Hitachi Financial Equipment System(Shenzhen) Co., Ltd.
Environmental Communication

Development and Expansion of
Eco-Products

Global CO2 emissions(by country and region/2010)
More than 5 billion tonnes
1 to 5 billion tonnes
500 million to 1 billion tonnes
100 to 500 million tonnes

Japan

Less than 100 million tonnes
Source: CO2 Emissions from Fuel
Combustion Highlights (2012 Edition), IEA

Rest of Asia

Promoting waste recycling
Industrial and general waste materials arebeing recycled. After careful separation andsorting, a recycling route is established for eachcategory, resulting in a final disposal rate of lessthan 0.1%.
(Hitachi Automotive Systems, Ltd., Sawa Works)

Holding Hitachi Environment ForumAn environment forum was held in New Delhi,
India. Invitees included government officials,
customers, and business partners. In addition
to discussions on pressing environmental
issues, Hitachi Group products and services that
contribute to sustainable urban development
were introduced.
(Hitachi Pvt.Ltd.India)

Creating Eco-Factories & Offices SelectEnvironmental Communication

Launching an environmentallyconscious data center

Natural Barriers in Malaysia

Operating thermal power plants

Under the supervision of local government
officials, employees spent two days planting
60 coconut trees and 500 mangrove seedlings,
which act as a natural barrier against the sea.
(Hitachi Air Conditioning Products (Malaysia)
Sdn. Bhd.)

Singapore’s Senoko Energy started up the Stage
2 Repowering Project. This is the first suchproject to be carried out by the EPC consortium,of which Hitachi is a member, and involved
removing, reconstructing, and using existing
equipment.
(Hitachi, Ltd.)

Environmental Communication

Contributions to CO2 Emission Reduction

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105 Environmental Management
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Hitachi Okayama Center No. 3 was inaugurated
as a leading-edge environmentally conscious
data center. To lower the environmental burden,
this new center uses an optimal combination ofa highly efficient air-conditioning system andthe building’s structure, with a double outerlayer and insulating roof paint.
(Hitachi, Ltd.)
Development and Expansion of
Eco-Products

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064

Environmental Management Strategies
and Initiatives

Hitachi Group
Sustainability
Report 2013

With the environment as an important management focus, we areworking to reduce the environmental burden of our business
operations.
Guided by the Environmental Vision, aimed at achieving a sustainable
society, Hitachi Group environmental management is determined toachieve the goals of the long-term plan Environmental Vision 2025
and our Environmental Action Plan.

The Hitachi Environmental Vision and Long-Term Plan
Environmental Vision 2025
The Hitachi Environmental Vision
Our environmental vision describes the aim of our environmental management as"achieving a sustainable society." The world's population is expected to reach 9.6 billion
by 2050,*1 and worldwide GDP continues to grow. Along with the increase in economic
and social activities has come growing demand for energy, water, minerals, and otherresources, worsening pollution and environmental problems such as climate change.
To solve these environmental problems and to realize a sustainable society where
humankind can thrive, we must do everything possible to reduce the burden of humanactivities on the environment.
The Hitachi Environmental Vision

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http://www.hitachi.com/environment/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. As a milestone on the way to realizing thisEnvironmental Vision, we drew up the long-term plan Environmental Vision 2025,
looking ahead to fiscal 2025.

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*1 According to the United Nations report, World Population Prospects: The 2012 Revision

Long-Term Plan Environmental Vision 2025
The Intergovernmental Panel on Climate Change*1 (IPCC) concluded in its Fourth
Assessment Report that global warming is real and that human activities are involved inthis warming. The area of sea ice in the Arctic Ocean in 2012 was the smallest everrecorded due to this warming, shrinking by an amount double the size of the Japanesearchipelago since 2007, the year the ice was at its smallest size in the past.*2 The reportfurther stated that CO2 emissions will have to peak by 2015 and be reduced by 50 to 85
percent of their 2000 levels by the year 2050 to meet the minimum stabilized density
scenario (450 ppm) for greenhouse gases.
The International Energy Agency (IEA) has drawn up a CO2 emission reduction scenario
allocating the amount of reductions for the supply and demand of power to meet the450 ppm stabilization scenario. Hitachi conducts business widely in both of these sectors.
World Outlook for Energy-Related CO2 Emissions and Reduction Scenarios*

Based on energy-related CO2 emissions in IEA World Energy Outlook 2012

For this reason, the long-term plan Hitachi Group Environmental Vision 2025 targets theprevention of global warming, one of the issues that the world is facing today, and states
our goal of helping reduce annual CO2 emissions by 100 million tonnes by 2025 throughHitachi products and services.
This means that as we reduce CO2 emissions through greater efficiency and other means,
our contribution to curbing CO2 emissions through the use of our products and services
will be 100 million tonnes per year by 2025 compared with the products of the base year,
fiscal 2005. The target of 100 million tonnes was calculated based on growth strategies ineach business sector. Some 70 percent of the reductions are being targeted in the power
sector, 20 percent in the industrial sector, and 10 percent in the transportation,commercial, and residential sectors. To reach these goals, we are working to increase theratio of our products that are Hitachi Eco-Products, with a reduced burden on thechapter

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environment. We are expanding business opportunities further by working with partners
in global markets.
*1 IPCC：Intergovernmental Panel on Climate Change*2 According to observations by the Japan Aerospace Exploration Agency (JAXA)

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Contribution to CO2 emissions reduction through product use and development
and expansion of Hitachi Eco-Products
http://www.hitachi.com/environment/activities/ecoproducts/index.html

Record shrinking of Arctic Sea ice
http://www.satnavi.jaxa.jp/project/gcom_w1/news/2012/120920.html

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067

Environmental Action Plan

Hitachi Group
Sustainability
Report 2013

Overview of Environmental Action Plan
Hitachi has adopted environmental action plans every five years to define specific action
items and targets for achieving the Environmental Vision and to promote the long-termplan Environmental Vision 2025. The Third Environmental Action Plan was launched infiscal 2011 as a five-year plan. However, this was revised to a three-year plan in fiscal
2013 to respond quickly to changes in the external environment and to carry out the planin line with the Mid-Term Management Plan of the Hitachi Group for the fiscal years 2013
to 2015. This new Third Environmental Action Plan covers the years from 2013 to 2015.
Third Environmental Action Plan in Fiscal 2012: Achievements
http://www.hitachi.com/environment/activities/actionplan/fy2012.html

Third Environmental Action Plan for 2013 to 2015: Targets
http://www.hitachi.com/environment/activities/actionplan/fy2013.html

Hitachi Action Guidelines for Environmental Conservation
1. Global environmental conservation is a critical challenge shared by all humans. Hitachi iscommitted, therefore, to fulfilling its responsibilities by assisting in the realization of anenvironmentally harmonious and sustainable society as one of its management priorities.
2. Hitachi will make efforts to contribute to society by developing highly reliable technologies andproduction processes, while identifying needs considering concerns related to the prevention of
global warming, conservation of resources, and preservation of ecosystems.
3. Members of the board in charge of environmental conservation are responsible for facilitating
appropriate environmental conservation activities. Departments responsible for environmental
conservation should endeavor to promote and ensure environmental conservation activities,
including improving environment-related rules and regulations and setting goals for environmental
burden reduction. These departments should also confirm that their environmental conservation
activities are conducted in a proper manner and ensure that these activities are maintained andimproved.
4. Hitachi will promote globally applicable 'MONOZUKURI' with the aim of understanding andreducing environmental burdens at every stage, including product research and development,
design, production, distribution, sales, usage, and final disposal.
5. Hitachi will investigate and review the environmental impact caused in the course of its'MONOZUKURI' processes. Hitachi will also introduce excellent technologies and materials useful tosafeguard the environment, in other words, to reduce environmental burdens through energy andresource saving, recycling, chemical substance management, consideration for the ecosystem, andother measures.
6. Hitachi's environmental conservation efforts are not only to be focused on observing
international environmental regulations and those of national and local governments, but also on
conserving the environment by implementing voluntary environmental standards when necessary.
7. Regarding globally-applicable 'MONOZUKURI' activities, impact on the local environment andcommunity are to be considered. In addition, measures that meet local communities' requests
should be implemented.
8. Hitachi will educate its employees to take action in order to obey environment-related laws,
raise their global environmental awareness, and encourage their interest in environmental
conservation having wide-view about society activities.
9. Hitachi will evaluate potential environmental problems and prevent them from occurring. In theevent that any environmental problem occurs, Hitachi will take appropriate measures to minimize
the environmental burden.

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10. Hitachi will make efforts to disclose information on its environmental conservation activities to
its relevant stakeholders. Hitachi will also actively communicate with these stakeholders so as tostrengthen mutual understanding and forge cooperative relationships with them.

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069

Fiscal 2012 in the Third Environmental Action Plan: Achievements

Hitachi Group
Sustainability
Report 2013

In fiscal 2012, the second year of the plan, we fell short of our targets for the first item
but were able to achieve our targets for the remaining items. See pages corresponding
to each item for details of our initiatives.

Item

Action goals

Indicators

Fiscal 2012targets

Fiscal 2012
results

Achievement level

Becoming an environmental value creation company
Contribute to 100 million tonnes CO2 emissions
reduction through products and services

23 million tonnes
22.74 million[100 million t/
tonnes
FY 2025]◆◆

GPs in GREEN 21 Environmental Activity Evaluation
System448 GPs

489 GPs◆◆◆

Conduct assessment on ecosystem preservation;
propose strategies for ecosystem preservation (insome operations)

Trial assessmentof ecosystempreservation

Trial assessment◆◆◆

Percentage of Hitachi Eco-Product sales

81%

84%

◆◆◆

Number of models in Eco-Products Select program

70 models

129 models◆◆◆

Annual CO2 emissions reductions through products
and services

Eco-Mind & Global Environmental Management
Raise the level ofenvironmental activities(GPs: green points)
Establish environmental
management systems
Ecosystem (biodiversity)preservation

Next-Generation Products and Services

Promote Eco-Products

Expand Hitachi
Eco-Products lineup

Environmentally Conscious Factories and Offices
Build industry’s mostadvanced factories andofficesPrevent global warming

Reduce energy used intransportation

Use resources efficiently

Reduce VOC*1
atmospheric emissions

Promote Eco-Factory &Offices Select certification

Penetrate significance and role of Eco-Factories &Offices SelectEco-Factory Select certification

Expansion ofcertificationNew
certifications: 11
Continuation
certifications: 15
Total: 26◆◆◆

Reduce CO2 emissions

Rate of reduction in CO2 emissions(base: FY 1990, Japan)

17%

30%

◆◆◆

Rate of reduction in CO2 emissions per unit
production(standard goals for in-house and group companies,
base: FY 2005, global)

7%

22%

◆◆◆

Reduce energy forshipping per unit
production

Rate of reduction in energy for shipping per unit
production (base: FY 2006, Japan)

13%

19%

◆◆◆

High Functional
Materials Group

9%

9%

◆◆◆

Reduce waste generation
per unit production

Rate of reduction in
waste generation perunit production (base:
FY 2005)

Assembly IndustryGroup(other than High
Functional Materials)

16%

16%

◆◆◆

Use water effectively

Rate of reduction in water use per unit production(base: FY 2005, outside Japan)

18%

52%

◆◆◆

Decrease ratio of VOC
Ratio of VOC atmospheric emissions (emissions/
atmospheric emissions
used amounts)(emissions/used amounts)

6.3%

6.3%

◆◆◆

Expansion ofactivities

Expandedactivities◆◆◆

Reduce CO2 emissions perunit production

Worldwide Environmental Partnerships
Global citizenshipprogramSocial contributions
through environmental
activities

Carrying out environmental communication as theflagship activity of each in-house or group company◆◆◆ ： Achieved*1 VOC: Volatile Organic Compounds◆◆ ： Partially achieved

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070

Third Environmental Action Plan for 2013 to 2015: Targets

Hitachi Group
Sustainability
Report 2013

To give a more prominent role to environmental strategy within our overallmanagement strategy, the Third Environmental Action Plan was changed to a threeyear plan in line with the Mid-term Management Plan of the Hitachi Group for the
fiscal years 2013 to 2015, and the plan was revised. Responding to recent situation,
indicators for some items are revised and targets are set higher.

Item

Action goals

Fiscal 2013
targets

Indicators

Final fiscal year
(2015) targets

Becoming an environmental value creation company
Contribute to 100 million tonnes CO2 emissions
reduction through products and services

Annual CO2 emissions reductions through products
and services

24 million tonnes

35 million tonnes(100 million t/FY2025)

GPs in GREEN 21 Environmental Activity Evaluation
System

512 GPs

640 GPs

Assessment of ecosystem preservation

Assessmentof ecosystempreservation

Completion of ecosystempreservation assessment

Percentage of Hitachi Eco-Product sales

84%

88%

Number of models in Eco-Products Select program

140 models

180 models

Eco-Mind & Global Environmental Management
Raise the level ofenvironmental activities
Establish environmental (GPs: green points)
management systems
Ecosystem (biodiversity)preservation

Next-Generation Products and Services
Promote Eco-Products

Expand Hitachi
Eco-Products lineup

Environmentally Conscious Factories and Offices
Build industry's mostadvanced factories andoffices

Promote Eco-Factory &Offices Select certification

Eco-Factories & Offices Select certification

Expansion ofcertification

Average of one ormore certifications per
in-house and groupcompany

Prevent global warming

Reduce energy used per
unit

Reduction in energy used per unit
(Reduction in CO2 emissions per unit)(base: FY 2005, global)

11%
(12%)

15%
(16%)

Reduction in waste and reusable waste generation
per unit(base: FY 2005, global)

19%

23%

Reduce water used perunit

Rate of reduction in water used per unit
(base: FY 2005, outside Japan)

26%

30%

Reduce VOC*1
atmospheric emissions
per unit

Rate of reduction in VOC atmospheric emissions
per unit(base: FY 2006, global)

38%

40%

Expansion of activities

Achieve one or moreflagship activity per
in-house and groupcompany

Reduce waste andreusable waste
Use resources efficiently generation per unit

Manage chemical
substancesWorldwide Environmental Partnerships
Global citizenshipprogramSocial contributions
through environmental
activities

Carry out environmental communication as theflagship activity of each in-house or group company*1 VOC: Volatile Organic Compounds

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071

Environmentally Conscious Products
and Services

Hitachi Group
Sustainability
Report 2013

To reduce the environmental burden of products and services, wetake steps to help reduce CO2 emissions through products, conserve
resources, and manage chemical substances. We assess each of thesefactors at the design and development phase, and designate those
products that meet the standards as Eco-Products, and promote thedevelopment of environmentally conscious products and services.

Increasing the Ratio of Eco-Products
We develop environmentally conscious products called Eco-Products as part of our efforts
to make the burden on the environment of our products and services as small as possible.
Eco-Products that meet even more demanding requirements are designated as EcoProducts Select.
Eco-Products must meet specific environmentally conscious criteria for the design anddevelopment of products and services. These criteria are set in our Assessment for DfE(Design for Environment), which is used for the evaluation process. To make all our
products and services Eco-Products by fiscal 2025, we have set targets for raising the EcoProduct sales ratio, which is the ratio of Eco-Product sales to total product sales.
Hitachi's Framework for Environmentally Conscious Products

Development of Eco-Products
http://www.hitachi.com/environment/activities/ecoproducts/promote/index.html#promote02

Development of Eco-Products Selecthttp://www.hitachi.com/environment/activities/ecoproducts/promote/index.html#promote04

Activities and Results
In fiscal 2012 we created a Chinese language version of the Eco-Product registration(database) system in addition to the English and Japanese versions, to enable registering
the results directly from product designers outside Japan. These initiatives helped
increase the number of models designated as Eco-Products to 11,731, up 1,255 from theprevious fiscal year, and our Eco-Product sales ratio to 84 percent, topping our goal of 81
percent.

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072
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Key Indicators

Eco-Product Sales Ratio*1 Eco-Product sales are the sales of all products, excluding those elements that Hitachi cannot control or influencein terms of environmental impacts, such as patent income.

Eco-Product Increase

Development of Eco-Products
In 1999, we introduced Assessment for DfE (Design for Environment), which sets specificenvironmentally conscious criteria for designing and developing products and services tominimize their environmental burden. Products that meet DfE standards are designatedas Eco-Products.
In Assessment for DfE, the environmental load for each product life cycle stage–frommaterial procurement to production, distribution, use, and disposal–is assessed usingeight DfE criteria, including environmental protection measures and energy saving. The
results are recorded as 1 through 5. For a product to be designated an Eco-Product, it
must score at least level 2, the reference level before the latest major model change, in alleight assessment criteria and its average over all the criteria must be level 3 or more.

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073

How Assessment for DfE is Performed

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074

Fiscal 2012 Breakdown of Eco-Products by Sector and Examples

Sector

Key products

Information &Telecommunication Systems

SectorHitachi Group
Sustainability
Report 2013

Key productsHigh Functional Materials &Components

StoragePower Systems

Anisotropic conductive films
Automotive Systems

Thermal power systems
Social Infrastructure &Industrial Systems

Electronic brakes forautomobile
Digital Media and Consumer
Products

Elevators
Washer-dryers
Electronic Equipment &Systems

Financial Services, etc.

Semiconductor measurement
electron microscopes

Logistics systems

Construction Machinery

Hydraulic excavators

Development of Eco-Products SelectEco-Products that meet even more demanding requirements are designated as EcoProducts Select. These must (1) have either a global warming prevention factor or
resource factor of 10 or more, or (2) be leaders in their industry for their energy efficiency
standard achievement rate*1 or similar factors, or (3) be highly rated outside the company
or officially certified, or (4) have a carbon emission reduction at least 50 percent greaterthan fiscal 2005 products. Factor 10 or more indicates that the product has a global
warming prevention efficiency or resource efficiency at least ten times greater thanreference products that were sold in fiscal 2005, in principle.

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http://www.hitachi.com/environment/We are committed to increasing the number of Eco-Product Select models. In fiscal 2012,
129 models were designated Eco-Products Select, well above the target of 70 models.
*1 Energy efficiency standard achievement rate: Based on the Energy Conservation Law (Act on the Rational Use ofEnergy), this value indicates the rate of achievement for energy efficiency targets of certain home appliances.
The target values are defined using the most energy-efficient products available at the time.

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Global Warming Prevention Factor Calculation
The global warming prevention factor indicates the amount of improvement in efficiencyof global warming prevention compared with a reference product. The efficiency of
global warming prevention is based on the concept of environmental efficiency thatbalances the value of products contributing to the quality of life and the reduction of
their environmental load. We measure the improvement in product value by function
and life span, using the amount of greenhouse gases emitted over the product life cycle
to calculate the reduced environmental load.

Resource Factor Calculation
The resource factor indicates the amount of improvement in resource efficiency
compared with a reference product. Drawing on the same concept as global warming
prevention efficiency, we measure the improvement in product value by function andlifespan, using the amount of resources used over the product life cycle*1 to calculate thereduced environmental load.
*1 Amount of resources used over the product's life cycle: amount of new resources + wasted resources

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076

Examples of Eco-Products SelectHitachi Group
Sustainability
Report 2013

Refrigerator-freezers with Vastly Improved Energy Savings
Product:

R-C6700 and 13 other models in the Vacuum-Compartment series(Hitachi Appliances, Inc.)

Environmentally
Conscious
Features andCharacteristics

Energy-saving measures include Frost Recycle Cooling, which cools theinterior using air cooled by frost forming on the evaporator during operation;
refrigerant valve control that switches the flow path of high-temperaturerefrigerant to reduce the inflow of heat into the compartment; and a flexible
vacuum insulation panel design that keeps heat out. The series as a wholeboasts an energy efficiency standard achievement rate of 256 percent ormore (2010 standard).

Third-Party
Evaluations

Director-General Prize of the Agency of Natural Resources and Energy, Energy
Conservation Grand Prize 2012 for products and business models (homeproducts category)(11 models out of 14 models in the Vacuum-Compartment series: R-C6700, RCX6700, R-C6200, R-C5700, R-C5200, R-C4800, R-SF620CM, R-SF570CM, RSF520CM, R-SF480CM, R-SF440CM)

Refrigerator R-C6700

Wind Turbine Generating System with Reduced Environmental Burden
Product:
Environmentally
Conscious
Features andCharacteristics

Third-Party
Evaluations

HTW2.0-80 2 MW Downwind Wind Turbine Generating System(Power Systems Company, Hitachi, Ltd.)- Adopting downwind turbine technology with the rotor located on the
downwind side of the tower, it can generate 2 to 8 percent more power than
upwind models with the rotor located on the upwind side of the tower whenused in mountainous or hilly regions where updrafts are common, making itwell suited to the Japanese terrain. 2 MW is the largest capacity of any
previous model of this type.
- The improved capacity achieved by using the downwind design and spacesavings gained from putting the converter inside the tower, along with othermeasures, help to reduce the environmental burden throughout the life cycle,
from manufacturing to operation and disposal.

Wind Turbine Generating System

Chairperson's Award, Eco-Products Awards Steering Committee, 9th EcoProducts Awards (2012)

Addressing Our Carbon Footprint
CFP label on
The Carbon Footprint of Products (CFP) is the CO2 equivalent of
Hitachi Unified Storage150
the total amount of greenhouse gases (GHGs) emitted over theentire life cycle of a product or service–from procurement of
raw materials through to disposal and recycling. Making the
GHG emission amount visible in this way boosts people's
interest in buying products with low carbon emissions andencourages businesses to reduce the amount of carbon emitted
by their products over the whole life cycle. A number ofcountries around the world use the CFP approach.
We participate in the Carbon Footprint Communication
Program of the Japan Environmental Management Association
for Industry (JEMAI), launched in 2012, continuation of the CFP
Pilot Project run by the Japanese Ministry of Economy, Tradeand Industry (METI) and other ministries. In December 2012, wewere authorized to display the CFP label on our OCR*1 scanners, following earlier
approval for use on servers and storage equipment. For each of these products we areable to show the CO2 reduction rate per function (per page in the case of OCR scanners)
compared with conventional products. These products and their CFP labels were on
display at Eco-Products 2012 held from December 13 to 15, 2012.
*1 OCR：Optical Character Reader

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077
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Sustainability
Report 2013

PC Server HA8000/RS110 x L2

Hitachi Unified Storage 150

OCR Scanner HT-4161

Disclosure of Environmental Information
In 1999, Hitachi introduced an environmental information labeling system that uses
symbols and datasheets to provide environmental information on environmentallyconscious products. Hitachi's environmental mark indicates that Assessment for DfE has
shown the product to be an Eco-Product, informing stakeholders that the product's
environmental burden has been reduced. Our website also discloses environmental
information, such as datasheets that include power consumption for eachenvironmentally conscious product and case studies of products that helped to improve
environmental efficiency.

Hitachi's environmental markLists and datasheets of Eco-Products
http://www.hitachi.com/environment/ecoproducts/

Environmental Efficiency of Hitachi Products Based on Factor X (PDF, 5.06 MB)
http://www.hitachi.com/environment/library/pdf/factorx_en.pdf

Next Steps
To achieve our goal of boosting the Eco-Product sales ratio to 88 percent by fiscal 2015,
we will work on developing more Eco-Products that will help solve energy andenvironmental problems throughout the world, and we will strive to expand sales
through product advertising, achieving two aims: business expansion and environmental
protection.
Also, for Eco-Products Select, we have set a target of 180 models by fiscal 2015, as we doour best to reduce greenhouse gas emissions throughout the product life cycle.

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078

Hitachi Products Helping to Reduce CO2 Emissions
The long-term Hitachi Group Environmental Vision 2025 states our goal of helping to
reduce annual CO2 emissions by 100 million tonnes by 2025 through Hitachi products
and services.
This means that as we reduce CO2 emissions—by improving the environmental efficiency
of products and by other means—our contribution to lowering CO2 emissions throughthe use of our products and services by 2025 from the base year of fiscal 2005 will be 100
million tonnes annually.
To achieve our targets for contributing to reduced CO2 emissions, we have set as ourleading indicator to make all of our products Hitachi Eco-Products with a reduced
burden. We are working with partners in global markets to expand business
opportunities, while we develop environmentally conscious products and create new
businesses.

Hitachi Group
Sustainability
Report 2013

Activities and Results
Our contribution to CO2 reduction in fiscal 2012 was 22.74 million tonnes. A wide rangeof products and services contributed to the reduction in emissions, including highefficiency thermal power plants and inverters, energy-saving information systems, andparts and materials for use in energy-saving products. After the Great East Japan
Earthquake in 2011 our plans for installing electric power facilities were altered, and wefall short of the targeted amount of 23 million tonnes.
Key Indicators

Contributions to CO2 Emission Reduction (Base: FY 2005)*

The 2010 figures in the IEA's CO2 Emissions from Fuel Combustion Highlights (2012 Edition) are used for CO2
emission coefficients.

Details of methods for calculating the contribution of Hitachi products andservices to the reduction in CO2 emissions
http://www.hitachi.com/environment/activities/third/method.html

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Main Products Contributing to CO2 Emission Reductions in Fiscal 2012
High-efficiency Gas Turbine Generators at Kansai Electric Himeji No. 1 Power
Station (Power Systems Company, Hitachi, Ltd.)
Two gas turbine generators went into
commercial operation in August 2012 at
the Himeji No. 1 thermal power stationof the Kansai Electric Power Co., Inc.
Delivered to Kansai Electric for the firsttime, this simple cycle generation system
uses high-efficiency H-25 gas turbines.
The decision to install this equipment was made in January 2012 as a measure forboosting supply capacity in the summer of 2012 as the utility struggled to meet demand.
The plant was therefore built in a very short time, being completed in approximately fourmonths from the start of construction through to commercial operation. The new plant
will contribute to an annual reduction in CO2 emissions of 37,000 tonnes.*1

079
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Sustainability
Report 2013

*1 Compared with CO2 emissions per unit power of a conventional gas turbine (as of 2005)

Multi-Split Air-Conditioning System for Buildings (Hitachi Appliances, Inc.)The FLEXMULTI High Efficiency building airconditioning system integrates several indoor
units with one outdoor unit. The modular
outdoor units can be combined as needed. A
compressor performance at low speed is
improved by optimizing the slow-rotation
Multi-Split Air-Conditioning System for Buildings
efficiency of the concentrated winding DC
FLEXMULTI High Efficiency
brushless motor. This advanced technology
and an enhanced refrigeration cycle control sharply reduce annual power consumption.
For the 28.0 kW high-efficiency model (RAS-AP280DG1, with seasonal power
consumption of 4,579 kWh/year*1), the contribution to the annual reduction in CO2emissions is 0.9 tonnes per system.*2*1 The RAS-AP280DG1 is a fiscal 2012 model, which was replaced in fiscal 2013 by the RAS-AP280DG2.
Calculation Conditions
JRA4048: Data for 2006 (Tokyo, office building, cooling from April 16 to November 8, heating from December 14
to March 23, 8:00 a.m. to 8:00 p.m.) Seasonal power consumption was calculated under the standard conditions
set by the Japan Refrigeration and Air Conditioning Industry Association. Actual results may vary with the locale
and use condition.
*2 Compared with 2005 model RAS-NP280FS (Seasonal power consumption: 6,783 kwh/year) Hitachi calculation
based on JRA4048: 2006 (Tokyo, office building)

PC Server HA8000/RS220 (Information & Telecommunication Systems Company,
Hitachi, Ltd.)
Hitachi, Ltd. servers use the latest processors
and have large memory capacities. An arrayof power-saving techniques minimize thepower consumption of IT equipment
following the recent explosive growth indata volume. The BS500 Blade Server and
PC Server HA8000/RS220
HA8000/RS220 PC Server, for example,
reduce overall power by employing high-efficiency 80 PLUS® Platinum power supplies(certified conversion efficiency of 94% or higher*1) along with power capping function tocontrol processor performance so that it does not exceed set power consumption levels.
The BS500 and HA8000 rack servers guarantee operation up to 40°C by efficiently

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http://www.hitachi.com/environment/cooling internal components while conventional servers guarantee it only up to 35°C,
and reduce the need for air conditioning in a server room. Due to the increased
information processing capacity and power-saving design, HA8000/RS220 contributes toan annual reduction in CO2 emissions of 14.2 tonnes per server.*2

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*1 At a power supply load factor of 50%*2 Comparison of fiscal 2012 model HA8000/RS220 with fiscal 2005 model HA8000/130W

Next Steps
We will continue to develop and popularize products that help to reduce CO2 emissions,contributing to the prevention of global warming through technology.

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081

Recycling Product Resources
To promote resource recycling, the Hitachi Group is developing recycling technologies
and creating and operating systems for the reuse and recycling of end-of-life products.
We are working steadily on solving the difficult problems one at a time for completingthe cycle from product manufacturing to taking back end-of-life products, recycling
resources, and using recycled materials.

Hitachi Group
Sustainability
Report 2013

Rare Earth Magnet Separation and Recycling
In the past, it has been difficult to safely and cheaply extract rare earth magnets due totheir strong magnetic fields. So, reusing these valuable resources has not been successful.
We have developed a technology–applicable to hard disk drives and air conditioner
compressors–that partially automates disassembly, highly efficiently separating rare earthmagnets from these products after degaussing the magnets. The recovered rare earthmagnets are provided to magnet manufacturers, who use them to make new products.
Recycling of Rare Earth Magnet

Recycling and Reusing Information/Telecommunications Products
End-of-life IT products need to be handled carefully
due both to the need for information security and thesafe disposal of waste materials. Through our sales
division, we propose plans to our customers for taking
back end-of-life IT products for recycling and reuse.
The hard disk drives that are taken back are physicallydestroyed and their rare earth magnets are retrieved
so that we can recycle these resources. In fiscal 2012,
we extracted 2,620 kg of rare earth magnets fromapproximately 200,000 hard disk drives.

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082

Recycling Construction Machinery

Hitachi Group
Sustainability
Report 2013

Hitachi Construction Machinery Co., Ltd. led
the industry in recycling fabricatedcounterweights, traditionally considereddifficult to recycle, to realize a material cycle.
The company recovered and recycledaround 1,300 tonnes from fiscal 2006 to
fiscal 2012. Construction machinery
counterweights are used to balancemachines and are made by casting or are
fabricated from metal. Cast metal
counterweights have traditionally been
recycled because of their resource value.
Fabricated counterweights, however,contain filler material such as low-purity ironore and scrap metal*1 within the steel outershell, so they were disposed of as industrial
waste. Hitachi Construction Machinery
passes the end-of-life fabricatedcounterweights to a recycling specialist for
separation. A counterweight manufacturer
then uses the recycled materials to makecounterweights which Hitachi Construction
Machinery buys and uses.
*1 Scrap from steel plate cutting or stamping

Management of Containers and Packaging
http://www.hitachi.com/environment/activities/data/wrapping.html

Number and rate of recycled consumer electronics products
http://www.hitachi-ap.co.jp/company/environment/kankyo/recycle_kaden/

Number of PCs taken back and the resource recycling rate
http://www.hitachi.co.jp/Prod/comp/OSD/pc/flora/environment/recycle.htm

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083Managing Chemical Substances Contained in Products
To manage the chemical substances contained in products, we created Regulations forEnvironmental CSR-Compliant Monozukuri in fiscal 2005. We have also been using ourIntegrated Management System for Chemical Substances Contained in Products, createdin 2005, as a way to gather and send out information about chemical substances
contained in products.
We will continue to revise and improve our regulations and product information
gathering procedures to ensure compliance with REACH*1 and other regulations.
Briefings are held in Japan and other countries to ensure that regulations are understoodand actions are taken throughout the Hitachi Group and to educate the employees who
are responsible. Starting from April 2013, we modified the list of Voluntarily Controlled
Chemical (VCC) Substances; 17 prohibited substances (Level 1) and 20 controlled
substances (Level 2) are listed.

Hitachi Group
Sustainability
Report 2013

*1 REACH regulation: The European Union regulation on Registration, Evaluation, Authorisation and Restriction ofChemicals

Hitachi Group's Voluntarily Controlled Chemical (VCC) SubstancesClassification

Application

Substance (Group) Names

Level 1
Prohibited
Substances

Chemical substances that the Hitachi Group prohibits
from being included in procured products (chemical
substances banned or restricted for use in products,
including packing materials, by domestic or foreign
regulations and potentially used for procured products
for the Hitachi Group)

Cadmium and its compounds, hexavalent chromium
compounds, lead and its compounds, mercury and its
compounds, polybrominated biphenyls (PBBs), polybrominateddiphenyl ethers (PBDEs), tri-substituted organostannic
compounds, polychlorinated biphenyls (PCBs), polychlorinatedterphenyls (PCTs), polychlorinated naphthalenes (with 3 ormore chlorines), short-chain chlorinated paraffins (C10-C13),
asbestos, ozone layer depleting substances (Class I),
perfluorooctanesulfonic acid and its analogous compounds, 2(2H-1,2,3-benzotriazole-2-yl)-4,6-di-tert-butylphenol,
hexachlorobenzene, dimethylfumarate (DMF)

Level 2Controlled
Substances

Substances for which monitoring and control are
required by domestic or foreign regulations, or forwhich special consideration for recycling or appropriate
disposal is required. This level includes substancegroups whose use in supplied products may be
restricted for certain uses.

Antimony and its compounds, arsenic and its compounds,
beryllium and its compounds, nickel and its compounds,
selenium and its compounds, un-specific brominated flame
retardants, polyvinyl chloride (PVC) and its mixture and its
copolymer, phthalate esters, ozone layer depleting substances(Class II: HCFC), radioactive substances, di-substitutedorganostannic compounds, cobalt and its compounds, azodyes
and azocolourants which form specified amines, formaldehyde,benzene, fluorinebased greenhouse gasses, REACH restriction
substances, REACH authorization substances, REACH SVHC,JAMP declarable substances

Compliance with REACH Regulation
REACH notifications on particular substances in articles were completed by the June andDecember 2012 deadlines. Investigations and preparations are also continuing in thelead-up to the next round of notifications.

Working with the Supply Chain (Integrated Management System for
Chemical Substances Contained in Products)
Working closely with suppliers and customers, we gather and make available information
about chemical substances across the supply chain via the Integrated Management
System for Chemical Substances Contained in Products. As of March 31, 2013, chemical
substance information for more than a million parts and products was registered in thisintegrated management system.

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Integrated Management System for Chemical Substances Contained in Products

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Participating in the Development of International Standards
We work with the following international standards organizations on environmental
issues and environmentally conscious product technology: the International Organizationfor Standardization (ISO), the International Electrochemical Commission (IEC), Ecma
International, the Standardization Sector of International Telecommunications Union (ITU
-T), and the World Business Council for Sustainable Development (WBCSD). This helps us
to discover global business opportunities and ensure our products' competitiveness.

085
Hitachi Group
Sustainability
Report 2013

Activities and Results
In fiscal 2012, Hitachi, Ltd. chaired the plenary
meeting in Brazil of the IEC Technical Committee forEnvironmental Standardization for Electrical andElectronic Products and Systems (TC111), as well as theplenary meeting of the ISO technical committee
TC268/SC1 on smart community infrastructures. Japan
IEC/TC111 meeting chaired by Hitachi, Ltd.
took the lead in drafting IEC TR 62725, setting out theguidelines for life cycle assessment of greenhouse gas emissions (carbon footprint) of
products. This standard was issued with wide support from IEC member countries, andwas adopted by European governments as a reference document for future
policymaking.
The ISO is currently developing indicators for comprehensive assessment of energy,
water, transportation, info-communications, and waste recycling, aimed at disseminating
smart city technologies and expanding business opportunities.

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086 Environmentally Conscious Production
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086

Environmentally Conscious Production

Hitachi Group
Sustainability
Report 2013

We have set targets for reducing greenhouse gas emissions, waste,chemical substance emissions, and water use to reduce theenvironmental burden of our business activities. Factories and officesthat show a high level of environmental consciousness as well as
outstanding results in these areas receive Eco-Factory & Office Selectcertification as a way of promoting environmentally conscious
production and encouraging environmental action.

Creating Eco-Factories & Offices SelectHitachi began an Eco-Factories & Offices Select certification program in fiscal 2011.
Certification criteria were developed for our manufacturing (factory) and nonmanufacturing (office) divisions. To maintain and raise the level of environmental
awareness in Eco-Factories & Offices Select, certified plants and offices will be reevaluated every fiscal year to confirm that their performance continues to meet thecertification criteria. In 2012, 11 facilities obtained new certification and 15 facilities
obtained continuation certification.
Eco-Factories & Offices Select Certification Criteria

Examples of Eco-Factories & Offices SelectHitachi Automotive Systems, Ltd. Sawa Works
Hitachi Automotive Systems, Ltd.'s Sawa Works is thesite of research, development, design, andmanufacturing of electrical and electronic
components/systems and engine equipment for
automobiles.
Industrial waste from this location includes sludge, oil,waste acid and alkali, plastics, and wood shavings,
Panoramic View of the Sawa Works
while ordinary waste materials includes paper and raw
garbage. Recycling reduces the amount of these wastes. Every item—separated andsorted into approximately 80 categories—has a recycling route, resulting in a final
disposal rate of less than 0.1 percent.

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100 percent registration in electronic manifests by fiscal 2011 was also achieved, a target
set at its introduction in May 2010.

087
Hitachi Group
Sustainability
Report 2013

Hitachi Computer Products (America), Inc.
Hitachi Computer Products (America) introduced
processes to use energy more efficiently, achieving a
45-percent reduction in energy consumption per unit
production compared with fiscal 2005. A newly builtdelivery warehouse uses thermal barrier paint, naturallight, motion sensor lighting, and other measures to
Hitachi Computer Products (America)
reduce the impact on people and the environment.
Among several ways to make further improvements, the company is improving the
product test time during the manufacturing process and is studying the introduction ofrenewable energy.

Next Steps
Certification under the Eco-Factories & Offices Select program is being expanded tofurther reduce environmental burden by promoting global warming prevention andwaste reduction in Hitachi Group manufacturing plants and offices. Our goal is for every
in-house and Group company to have at least one plant or office certified by fiscal 2015.

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088

Promoting Global Warming Countermeasures
The Hitachi Group is promoting the reduction of energy-related CO2 emissions fromproduction, as well as CO2 emissions from transportation, to reduce greenhouse gases
and prevent global warming.

Hitachi Group
Sustainability
Report 2013

Actions and Achievements
CO2 emissions per unit production is an indicator of reduced CO2 emissions. We achieved
a reduction of 22 percent in fiscal 2012, surpassing the target of 7 percent. For further
reductions, we are continuing to install high-efficiency equipment and devices, from LED
lighting to inverter air conditioners, and are reducing energy consumption by improving
manufacturing processes. We are also raising environmental awareness by monitoring
electric power consumption and CO2 emissions at every in-house and Group company,and visually displaying target achievements on the company intranet.
Key Indicators

CO2 Emissions per Unit Production

CO2 Emissions (in Japan)

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089
Trend in CO2 Emissions

Hitachi Group
Sustainability
Report 2013

Breakdown by Region (kt CO2/year)
2008

*

2009

2010

2011

2012

Europe

4

6

9

7

4

Americas

416

361

473

281

301

China

510

554

626

276

303

Rest of Asia

489

476

586

357

382

Japan

2,893

2,482

2,630

2,200

2,142

Total

4,312

3,879

4,324

3,121

3,132

Emissions outside Japan were calculated based on the IEA's CO2 emission coefficient for electric power bycountry for the year 2008. For Japan, we used 0.36 kg CO2.

Creating Hitachi Group Electric Data Counting and Monitoring System
To efficiently control and manage
electricity use in the Group as a whole,
we built the Hitachi Group Electric Data
Counting and Monitoring System. Thissystem began operating in July 2012,
and it shows hourly statistics on power
use at 238 large-lot user sites in Japan(contracted capacity of 500 kW orabove). With this system, we are able toshare information on power use andcompare it with the previous year. By
managing electricity use per unit, we areable to achieve higher efficiency levels
while building employee awareness ofthe need to save electricity. This system
contributed to savings of 164,000 kW in
the summer of 2012 compared withfiscal 2010 peak use at each site.

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Web screen: Hitachi Group Electric Data Counting andMonitoring System

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090

Creating Hitachi Group Energy Data Management System

Hitachi Group
Sustainability
Report 2013

We have created Hitachi Group Energy DataManagement System for monitoring CO2 emissions
and energy consumption at all Hitachi Group sites inJapan. We show the results visually, including CO2
emission trends and target achievements. In July 2012,
we began displaying these statistics on the company
intranet, to both keep track of targets at every site andto raise environmental awareness.
Web screen: Hitachi Group Energy
Data Management System

Introducing Renewable Energy
We are promoting the use of solar, wind power and other forms ofrenewable energy. In fiscal 2012, 797 MWh of electricity weregenerated from renewable energy, mainly from solar power
generation at our Omika Works in Ibaraki Prefecture (940 kW) andthe Yokohama Office in Kanagawa Prefecture (500 kW). We also
contracted for Green Electricity Certifications of 1,000 MWh
through Japan Natural Energy Company Limited, using these tocover 965 MWh of power generated for offices and at exhibitions.

Green Power logo fromGreen Power Certification

Participation in the Low-Carbon Society Action Plan
The Hitachi Group (Hitachi Industrial Equipment Systems Co., Ltd., Hitachi Appliances,
Inc., Hitachi Medical Corporation, Hitachi Kokusai Electric Inc., and Hitachi, Ltd.) takes partin the electric and electronic industry's Action Plan toward a Low-Carbon Society, aiming
to achieve the common target for the industry of improving the energy consumption rate
per unit by an annual average of 1 percent between now and 2020.

Green Curtain Project
To conserve electricity, climbing vines were planted along building windows and walls
forming green curtains that lower the room temperature inside buildings. This
continuing project, begun in fiscal 2011, is being used at more than 200 Hitachi Groupsites and at the homes of some employees. In December 2012, we held the Hitachi Group
Green Curtain Contest, presenting awards in the group and individual categories for
activities during the year.

Toyokawa Works, Hitachi Terminal Mechatronics, Corp.

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Hikone Works, Shin-Kobe Electric Machinery Co., Ltd.

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091

Reducing Transportation Energy
Transportation energy consumption per unit was reduced by 19 percent in fiscal 2012(base year 2006), surpassing the target of 13 percent, through such measures as
container round use and improved load efficiencies. This result will be reflected in theindividual targets of every in-house and Group company so that additional action can betaken to further reduce power consumption.

Hitachi Group
Sustainability
Report 2013

Key Indicators

Rate of Transportation Energy Consumption per Unit Production in Japan

Trend in CO2 Emissions from Transportation in Japan

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092

Examples: Container Reuse
Reusing the same container for imports and exports (container round use) eliminates theshipping of empty containers. This is being promoted as a way to reduce energy
consumption during transportation as well as overall transportation energy. Hitachi
Appliances, Inc., in cooperation with Hitachi Transport System, Ltd., is implementing
container round use from the Tochigi Works, aggressively promoting this project, while
matching nearby business partners.

Hitachi Group
Sustainability
Report 2013

Next Steps
Our measures to reduce energy-related CO2 emissions include the scheduled introductionof LED lighting, inverter air conditioners and other high-efficiency equipment anddevices. We also use energy conservation diagnoses to determine the potential for
improvement, as we aim for a high level of energy conservation, including improvements
in production processes. Target acheivement is tracked visually, and individual reduction
measures are supported based on the extent of progress, as we work to raise the overalllevel of reduction by the Group.

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http://www.hitachi.com/environment/Calculation of GHG Emissions throughout the Value Chain
We have been working to calculate GHG (greenhouse gas) emissions throughout theentire value chain.

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Report 2013

Activities and Results
In fiscal 2012, we carried out trial calculations using a methodology based on Ministry of
the Environment guidelines. We found that the category with the most GHG emissions
was the use of sold products, accounting for 92 percent of the total. This was followed bypurchased products and services and then indirect energy-related emissions. We believe
it is important to focus first on those categories with the most GHG emissions so that we
can efficiently reduce the amount of emissions.
Categories of GHG Emissions in the Value Chain

SCOPE 1: Direct GHG emissions by the company
SCOPE 2: Indirect emissions from electricity, heat, and steam supplied to and used by the company
SCOPE 3: Indirect emissions other than SCOPE 1 and 2 (emissions by others related to the company's
activities)
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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094

GHG Emissions throughout the Value Chain in Hitachi
Category

Category Description

Notes

Calculation
Results(kt-CO2e)

Hitachi Group
Sustainability
Report 2013

SCOPE 1
Direct emissions

Direct emissions from in-house fuel use and industrial processes

862 (0.5%)

Indirect emissions from using electricity and heat purchased by thecompany

2,367 (1.3%)

SCOPE 2
Energy-related indirectemissions

Unit CO2 emission
per kwh:0.36

SCOPE 3 Upstream (other indirect emissions)
1 Purchased goods andservices

Emissions from activities on raw materials, parts, supplied products andsales from resource extraction to the manufacturing stage

10,570 (5.6%)

2 Capital goods

Emissions generated in the construction, manufacture and shipping of
the company's own capital goods (equipment, devices, buildings,
facilities, vehicles, etc.)-

Under consideration

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

Emissions from procuring the fuel (resource extraction, production andshipping) necessary for producing electricity and heat, etc., procured
from other suppliers-

Under consideration

4 Upstream transportationand distribution

Emissions due to distribution activities until materials involved in raw
materials, parts, supplied products and sales have been delivered to thecompany, and other distribution activities of products that the company
bears the expense

256 (0.1%)

5 Waste generated inoperations

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

99 (0.1%)

6 Business travel

Emissions generated from using fuel and electric power bytransportation of employees for business travel

91 (0.0%)

7 Employee commuting

Emissions generated from using fuel and electric power fortransportation of employees between their homes and their worksites-

Under consideration

8 Upstream leased assets

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

Included in SCOPE 1
and 2

SCOPE 3 Downstream (other indirect emissions)
9 Downstream
transportation anddistribution

Emissions from transportation, storage, loading and unloading, andretail of products-

Under consideration

10 Processing of soldproducts

Emissions by downstream companies during processing of intermediate
products-

Under consideration

11 Use of sold products

Emissions from use of products by end users (consumers and businesses)

174,434(92.4%)

Excluding power
generationequipment

12 End-of-life treatment ofsold products

Emissions from transportation, waste disposal and treatment of products
by end users (consumers and businesses)

142 (0.1%)

Excluding power
generationequipment

13 Downstream leased
assetsEmissions from operating assets owned by the reporting company aslessor and leased to other entities-

Under consideration

14 Franchises(SCOPE 1 and 2) emissions by franchises-

N/A

15 Investments

Emissions related to management of investments-

Under consideration

Total

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086 Environmentally Conscious Production
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095

Reducing Wastes
The Hitachi Group is reducing and recycling waste materials generated during
manufacturing, including valuable resources (reusable resources with residual value),setting Group-wide goals for waste reduction per unit production.

Hitachi Group
Sustainability
Report 2013

Activities and Results
In fiscal 2012, the High Functional Materials Group*1 reduced the amount of waste
generated per unit production by 9 percent compared with fiscal 2005, the base year,
while the Assembly Industry Group*2 reduced this by 16 percent by implementing various
measures such as reducing the amount of waste plastic and recycling resources. Bothgroups achieved their targets.
Under the Zero Emission*3 initiative, which minimizes landfill disposal as close to zero as
possible, 161 facilities have achieved their zero emission goal as of fiscal 2012.
*1 High Functional Materials Group: Business group dealing primarily with special metals, electrical wire andcables, wrought copper and copper alloy products, functional materials, and synthetic resin processed goods*2 Assembly Industry Group: Business group other than the High Functional Materials Group*3 Zero emission: Defined as a final disposal rate (landfill disposal/waste) of less than 0.5 percent in any given year

Zero emission sites
http://www.hitachi.com/environment/activities/data/zeroemission.html

Key Indicators

Amount of Waste Generated per Unit Production Rate
High Functional Materials GroupJapan
FY 2012 (frombase year)

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OutsideJapan

071 Environmentally Conscious
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19%

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096

Assembly Industry GroupJapan
FY 2012 (frombase year)

Outside
Japan

11%

49%

Overall

Hitachi Group
Sustainability
Report 201316%

Trend in Amount of Waste Generated

Breakdown by Region (kt/year)
2008

2009

2010

2011

2012

Europe

0

1

1

3

1

Americas

53

38

54

55

58

China

59

51

80

40

38

Rest of Asia

61

54

78

80

80

Japan

564

464

525

523

478

Total

737

608

738

701

655

Using IT for Managing Waste
In 2012, we improved a system that manages the status of general waste and valuable
waste generated at each facility. This has made it easier to analyze waste by type, andhelped us to effectively implement measures to raise the recycling rate, to recycle
valuable resources, and to improve the landfill rate.
We intend to boost the Hitachi Group e-manifest*1 registration ratio to at least 90
percent by fiscal 2015. As of fiscal 2012, 109 facilities had introduced e-manifest systems,
raising the registration rate to 56 percent.
*1 E-manifest: An evidence document that the waste generator must issue when waste disposal is commissioned toa disposal company

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097
Hitachi Group
Sustainability
Report 2013

Waste Management System

Examples: Waste Reduction by Introducing Returnable Transportation
Packaging
At Hitachi High-Technologies Corporation, the packaging used for shipping products
between Japan and manufacturing sites around the world was changed from cardboard
to returnable boxes made of plastic with aluminum frames. The company has reduced
the amount of cardboard that used to be thrown away as waste in Japan, lowering theenvironmental burden. The returnable box is designed strong and safe to be used for
double stack shipping in a freight container, This is helping to reduce the number ofcontainers as well as to improve transport efficiency.

Conventional Cardboard Box

Returnable Box

Next Steps
To achieve the targets in the Environmental Action Plan, we will promote waste
reduction from a global perspective by working on minimizing waste generation,
reducing waste in landfills, and raising resource recycling rates. Mindful of each country's
circumstances, we will continue to steadily reduce waste by implementing appropriate
measures as well as by sharing information in the Hitachi Group.

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098

Water Conservation
We are committed to effective water use by reducing water consumption in ouroperations, especially outside Japan where securing water resources is a pressing issue,
making water use per unit production the indicator.

Hitachi Group
Sustainability
Report 2013

Activities and Results
In fiscal 2012, we increased the rate of water reuse by implementing measures such as
introducing and improving advanced water treatment facilities, lowering water use perunit production outside Japan by 52 percent compared with fiscal 2005, the base year.
Key Indicators

Rate of Water Use per Unit Production outside Japan

Trend in Water Use outside Japan

Breakdown by Region (million m3/year)

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2008

2009

2010

2011

2012

Europe

0.02

0.01

0.02

0.03

0.03

Americas

3.89

3.71

4.05

2.35

3.15

China

4.80

4.94

5.16

2.92

2.85

Rest of Asia

4.90

4.24

7.17

3.61

3.85

Total

13.61

12.90

16.40

8.91

9.88

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099

Examples: Achieving "Zero Emissions" for Wastewater
Hitachi Elevator (Shanghai) Co., Ltd., a manufacturer of
elevators and escalators, collects and treats
wastewater from production processes for use in
toilets and for other domestic water needs and forwatering trees and plants within the facility's premises.
Moreover, by using reverse osmosis membranes andother advanced treatment technologies, water is
Recycled Water used for Greening ofreused in production. Due to this recycling system, thethe Facility's Premises
company has reduced to zero the amount ofwastewater coming out of the plant, achieving "zero emissions" for wastewater.
Following on recognition by city officials in fiscal 2010 as a Shanghai Water-Saving
Company (Business Site), in fiscal 2012 the water treatment facilities were expanded tomeet the increase in production and Hitachi Elevator (Shanghai) was honored by the city
as a model water-saving business site.

Hitachi Group
Sustainability
Report 2013

Examples: Water Recycling
At Guangzhou Hitachi Unisia Automotive Parts, Co.,
Ltd., a manufacturer of automotive parts, recycledwater is used for watering trees and plants within thefacility's premises, after chemical treatment, active
charcoal filtering, and other advanced treatments.
Through these recycling technologies, the company
saves up to 18,250 m3 of water per year. We will
promote the use of recycled water for manufacturing
and toilets, among others.

Landfill-type Wastewater Treatment Center

Next Steps
We will continue optimizing water use efficiency as well as steadily reducing our own
water consumption by preventing leaks and boosting the recycling rate.

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100

Chemical Substance Management
To deal with chemical risk and to comply with laws and regulations, we assess chemical
substances to be used in production processes, managing risk in three ways: prohibition,
reduction and control. In addition, we train chemical substance managers and regularly
communicate the risks to deepen local residents' understanding of how we manage
chemical substance risk.

Hitachi Group
Sustainability
Report 2013

CEGNET Chemical Substance Management System
Since 1998, we have operated a database for chemical substances management called
CEGNET to index the latest laws and regulations and our own voluntary regulations,ensuring the management of newly introduced chemical substances. Chemical
substances used in our operations are also registered with CEGNET. Collecting andaggregating data on the amount of chemical substances used, emitted, or transferred
helps to reduce our use of chemicals.
CEGNET Chemical Substance Management System

Activities and Results
To prevent air pollution, we cut emissions of 41 volatile organic compounds (VOCs) basedon a program from the Ministry of the Environment in Japan. In 2012, we raised painting
efficiency by changing paint and improving processes, and achieved our target bystrengthening the PDCA (Plan, Do, Check, Act) cycle based on the data collected in Japanevery three months and outside Japan every six months.
We comply with Japan's PRTR Law*1 through Group-wide monitoring of chemical
substances released into the atmosphere or into public waters, removed outside ourplants as waste, or discharged into sewage systems, reporting this to local Japanese
governments. Although some substances are exempt from reporting due to their small
quantities, our policy is to keep data on all PRTR substances (10 kilograms or more peryear), recognizing the need to control these substances as well.
*1 PRTR Law: Japan's Pollutant Release and Transfer Register Law

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101

Key Indicators

Hitachi Group
Sustainability
Report 2013

Ratio of VOC Atmospheric Emissions
Japan

OutsideJapan

Overall

7.5%

3.5%

6.3%

FY 2012(from baseyear)

Trend in Reducing VOC Atmospheric Emissions

Breakdown by Region (t/year)
2008*

chapter

2010

2011

2012

9
（13）

7
（10）

9
（12）

28
（29）

6
（8）

Americas

37
（44）

29
（41）

41
（48）

62
（70）

53
（64）

China

288
（607）

268
（502）

131
（310）

427
（9,522）273（10,769）

Rest of Asia

189
（356）

273
（452）

258
（539）

232
（8,101）346（8,479）

Japan

4,026
（65,935）

3,160（48,444）3,214（51,862）3,536（49,399）

3,449（46,139）

Total

4,549
（66,955）

3,737（49,449）

3,653（52,771）

4,285（67,121）4,127（65,459）

Top figure is the VOC atmospheric emission volume. Lower figure (in parentheses) is the volume of VOCs handled.
The scope of the data aggregation outside Japan prior to fiscal 2010 is different.

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102Managing PCB*1 Storage
Information on storing and handling equipment thatuses PCBs is gathered and continually managed as anenvironmental management item for the HitachiGroup. Waste materials with high PCB concentrations
are registered with treatment companies at an earlypoint, and subjected to a planned waste treatment
program. Waste materials with low PCB concentrations
are processed by treatment companies as they arereceived.

Hitachi Group
Sustainability
Report 2013

Loading PCB Waste for Disposal*1 PCB: Polychlorinated biphenyl

Next Steps
In addition to search for alternative substances for painting with high VOC atmosphericemissions, we will improve production processes. To achieve a reduction rate of 40% infiscal 2015, we will further promote activities.

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103Managing Environmental Risk
The Hitachi Group sets voluntary management criteria that are more stringent thanregulatory requirements, considering the environmental burden of all our businessactivities. At every business site, we regularly monitor water quality and noise, forexample, and work to minimize environmental risks.

Hitachi Group
Sustainability
Report 2013

Activities and Results
In fiscal 2012, we received eight complaints about noise or odors, all of which were
promptly resolved. We will continue close monitoring to prevent recurrences or new
occurrences of these problems.

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071 Environmentally Conscious
Products and Services
086 Environmentally Conscious Production
105 Environmental Management
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Data on Environmental Load Resulting from
Business Operations (FY 2012)

Hitachi Group
Sustainability
Report 2013

The data below show resource inputs and the environmental load for Hitachi Groupbusiness activities in fiscal 2012.

Total Output of Environmental Load
Total Input of Resources

Products shipped: 3,527 kt (in Japan), 937 kt (outside Japan)

Total Energy Input

In Japan 75%

Energy consumption(crude oil equivalent)
1.77 million kl

Outside Japan
31%

Greenhouse Gas Emissions

Outside Japan 25%

In Japan 69%

Greenhouse gases
3,230 GWP*2 kt

Electricity 81%

CO2 emissions 97%

Gas 13%
Fuel oil 6%
Electricity
Gas
Natural gas

Other 3%

In Japan

Outside Japan

4.3 billion kWh

1.4 billion kWh

CO2 emissions

90 million m3
44,000 t
90,000 kl

LPG, etc.
Fuel oil (heavy oil, kerosene, etc.)

In Japan

989 kt40 million m3

Other GHGs
SF6 (sulfur hexafluoride)

67 GWP*2kt

015,000 t

PFCs (perfluorocarbons)

17 GWPkt

06,000 kl

HFCs (hydrofluorocarbons)

14 GWPkt

1 GWPkt

Total Input of Materials
Materials
3,763 kt

Total Volume of Waste

In Japan 54%

Plastics 5%

Outside Japan 46%
Other materials
39%
Rubber 0%

In Japan

Outside Japan

Metals 56%

Outside Japan

2,142 kt

Outside Japan 27%

In Japan 73%

Waste generated
655 ktRecycle 83%
Waste reduction 4%

Landfill 13%

In Japan

Outside Japan

Metals1,355 kt

732 ktWaste reduction

19 kt

10 kt

Plastics

146 kt58 kt

Recycle429 kt114 kt

Reuse

65 kt

8 kt

Material recycle

336 kt106 kt

Thermal recovery

28 kt

1 kt

30 kt

53 kt

Rubber

7 kt

2 kt

Other materials

539 kt924 ktChemicals
PRTR substances*1 handled

162 kt23 kt

Landfill

Ozone-depleting substances
handled

30 t

512 t

Chemicals
PRTR substances discharged or transferredGreenhouse gas substances
handled

1,680 t1,111 tSOx (sulfur oxides)
NOx (nitrogen oxides)
Ozone-depleting substances emitted

Total Water Input
Water used
56.52 million m3

5 kt

4 kt

45 kNm3

12 kNm3

473 kNm3

25 kNm3

2 t (0 ODP*3t)

0 t (0 ODPt)

Total Volume of Wastewater

Outside Japan 17%
In Japan 83%
Industrial water 43% Groundwater 40%

Outside Japan 17%

In Japan 83%

Wastewater
54.84 million m3

Public water 66%
Sewerage 22%
Underground infiltration, etc. 12%

Tap water 17%
In Japan

Outside Japan

In Japan

Outside Japan

Tap water

5.79 million m3

3.72 million m3

Public water

32.12 million m3

4.18 million m3

Industrial water

20.19 million m3

4.33 million m3

Sewerage

7.45 million m3

4.69 million m3

Groundwater

20.66 million m3

1.84 million m3

Underground infiltration, etc.

5.88 million m3

0.52 million m3

BOD (biochemical oxygen demand)

297 t

236 t

COD (chemical oxygen demand)

182 t

721 t

Water quality
Water recycling
In Japan: 41.9 million m3
Outside Japan: 0.63 million m3*1 The 354 chemicals designated in Japan’s Act on Confirmation, etc. of Release Amount of Specific Chemical Substances in the Environment and Promotionof Improvements to the Management Thereof*2 GWP (Global Warming Potential): Coefficient derived by converting the global warming potential into CO2 equivalent tonnes*3 ODP (Ozone Depletion Potential): Coefficient derived by converting the global depletion potential into trichlorofluoromethane (CFC-11) equivalent tonnes

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105

Environmental Management
Framework and Communication

Hitachi Group
Sustainability
Report 2013

In the Hitachi Group, we have built a global network and are using
environmental management systems to foster sound environmental
practices and instill "Eco-Mind" in all our employees. We also work to
deepen stakeholders' understanding of our environmental activities
by disclosing information, and we encourage two-way
communication to improve those activities.

Environmental Management Framework
Our global environmental management system supports environmental decision making
and implementation at Hitachi, Ltd., 963 consolidated subsidiaries, and 215 equitymethod affiliates.
The Environmental Strategy Office is responsible for developing Group-wide
environmental policies. It drafts basic management policies and action plans that aredeliberated on and approved by the Senior Executive Committee, chaired by thepresident. The Environmental Strategy Officers Meeting, made up of representatives fromin-house companies and major Group companies, ensures that environmental strategies
are implemented throughout the Group. We also have an Environmental Committee andcommittees of working-level experts for each policy area who develop targets and thesteps to achieve them.
To strengthen our global management framework and to promote evironmental action
outside Japan, we deployed environment representatives in Europe, the Americas, China,
and Singapore. At regional environmental meetings, we reported on progress in
implementing the Third Environmental Action Plan and shared information on the latest
environmental regulations, while exchanging views on local environmental issues in eachregion. We have been creating environmental networks connecting Japan and eachregion to share trends in environmental regulations and related information. We takeadvantage of being a multi-industry company by mutually exchanging information witheach business and each region, leading to a more global approach. We will continue
using these worldwide regional networks to improve our global activities, reflecting the
local situation.

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Hitachi's Environmental Management System (EMS) (As of April 2013)

Hitachi Group
Sustainability
Report 2013

Building Environmental Management Systems
Criteria for Environmental Management
For efficient management of each
Level (major items)
business site's environmental load, weEmployees≥ 500
have set criteria for environmental
Electric power consumed ≥ 6,000 MWh/year
management. There are approximately
270 business sites that meet these criteria.
Waste generated≥ 500 tonnes/year
3
The R&D Group, five in-house companies,
Water used
≥ 600 m /dayand 15 Group companies, together with
Paper purchased≥ 50 tonnes/year
the Environmental Strategy Office, havedeveloped and implemented the HitachiGroup Environmental Promotion
Organization EMS (environmental
management system) to promote theconsistent implementation ofenvironmental policies.
At the same time, every business site meeting the criteria for environmental
management continues to maintain ISO 14001 certification. Business sites that did notmeet the criteria have also obtained ISO certification.

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Status of ISO 14001 Certifications (as of April 2013)
No. of Certified Sites*1

Japan

Outside Japan

Total

175

106

281

Hitachi Group
Sustainability
Report 2013

*1 Including companies with more than one certified business site

List of ISO 14001-certified sites
http://hitachi.com/environment/activities/data/iso14001.html

Monitoring Environmental Performance Data
For effective environmental management, we collect environmental performance dataon business operations using the Environmental Load Evaluation System. This systemcollects environmental load data from some 270 Hitachi business sites worldwide on suchitems as energy use, CO2 emissions, and waste generated, together with information on
outside complaints, honors received, and other items. By analyzing this information, we
identify environmental management issues, share instructive examples within the Group,
and improve environmental practices. Specifically, environmental performance data in
the key areas of energy, waste materials, water, and VOCs is collected and analyzed
monthly or quarterly so that the performance levels can be further raised.

Environmental Activity Evaluation System
We use our own evaluation system, GREEN 21, to improve the level and quality of ourenvironmental activities. It divides environmental activities into eight categories andevaluates achievements and progress toward Action Plan targets by rating 53 items on ascale from 1 to 5, then showing the results on radar charts. For any category, a perfectscore is 100 green points (GPs). The results of GREEN 21 evaluations are incorporated into
the business performance evaluations of all Hitachi in-house companies and some Group
companies. We surpassed our fiscal 2012 target of 448 GPs with a score of 489 GPs. As
we further raise the level of environmental activities, we are aiming at a target of 640 GPs
for fiscal 2015.

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Key Indicators

Hitachi Group
Sustainability
Report 2013

Green Point (GP) Average: Results and Targets

Categories and Evaluation Items
1. Environmental management, environmental
accounting, compliance with laws and5. Assessment of products and services
6. Reducing CO2 emissions, improving energy

regulations

efficiency, energy savings in transportation

2. Progress toward goal of reducing CO2

7. Resource recycling, chemical substancesmanagement

emissions by 100 million tonnes;
environment business strategies

8. Information disclosure, communication
activities, global citizenship activities,

3. Gathering and communicatingpreserving ecosystems

environmental information across the
supply chain
4. Environmental education, training
environmental experts

Hitachi Group Environmental Award Program
To encourage environmental activities and disseminate best practices throughout theGroup, we established the GREEN 21 Award program, honoring environmentallyconscious products, technologies, and activities. Awards are based on multiple criteria,
including the results of GREEN 21 overall environmental evaluations, reduction ofenvironmental load, innovation, and ongoing benefit. In fiscal 2012, 11 awards were
given out.

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Fiscal 2012 GREEN 21 Awards
Category

Recipient (business site/individual)

Hitachi Group
Sustainability
Report 2013

Achievement

Environmental Management & Communication
Grand Prize

Hitachi (China), Ltd.

Conducting Mengmo's Eco Classroom throughout the Group topromote environmental programs in China

Excellence Prize

Hitachi Construction Machinery Co., Ltd.
Environment Policy Division

Creating the construction industry's only recycling program forconstruction machinery counterweights

Eco-Business and Eco-ProductsGrand Prize

Hitachi Appliances, Inc.

Developing the vacuum-chilled Sleep Preservation SL series ofrefrigerators

Select Excellence
Prize

Information & Telecommunication Systems
Company, Hitachi, Ltd.
IT Platform Division Group,
IT Platform R & D Management Division

Hitachi Unified Storage 100 Series

Honorable
MentionPower Systems Company, Hitachi, Ltd.
Hitachi Works

Promoting the sale of large-scale solar power systems

Eco-Factory and Eco-OfficeGrand Prizenone

Select Excellence
Prize

Power Systems Company, Hitachi, Ltd.
Hitachi Works,
Kokubu Engineering and Production Division

Making the new main office building into an Eco Office with energysaving LED lighting, natural ventilation, and full adoption of heatexchangers

Hitachi Elevator (Shanghai) Co., Ltd.

Maintaining "zero emissions" for wastewater by adding treatment
facilities to handle wastewater from increased production

Central Research Laboratory, Hitachi, Ltd.

Generating half of the electricity used in the dining room by installinga 54.72 kW solar power system

Hitachi Consumer Products (Thailand), Ltd.

Taking various measures in areas such as energy efficiency, including
the conversion to high-efficiency equipment (annual reduction in CO2emissions of 282.9 tonnes)

Hitachi Kokusai Electric Inc., Toyama Works
Kokusai Electric Techno Service Co., Ltd.

Reducing CO2 emissions by carrying out a modal shift in producttransportation

Hitachi IE Systems Co., Ltd.

Reducing final disposal amounts by switching to a waste management
system, and by achieving 100 percent computerization

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Preserving Ecosystems
We have made the preservation of ecosystems a pillar of our environmental vision andincorporated this into our Action Guidelines for Environmental Conservation. In fiscal
2012 we focused on encouraging employees to understand the relationship between
corporate activities and ecosystems as well as world trends in this area, and to reflect thisunderstanding in our business operations. For these reasons, we revised the HitachiGroup Guide to Preservation of Ecosystems that was originally issued in March 2011, andconducted a trial of the Business Assessment on the Preservation of Ecosystems program.
We were also active outside the company, serving as co-chair of the Ecosystems Focus
Area of the World Business Council for Sustainable Development (WBCSD). We willcontinue working to raise awareness and knowledge in the company and to carry out
medium- to long-term programs involving the entire Group. In addition, by taking action
outside the company we are laying the groundwork for other ecosystem preservation
initiatives.

Hitachi Group
Sustainability
Report 2013

Corporate Relationship with Ecosystems
Corporations depend on "ecosystem services," or the benefits received from ecosystems,
including raw materials such as fibers and wood, and the ability of the ecosystem tomaintain the quality and quantity of air, water, and soil. To continue receiving thesebenefits and to restore ecosystems, we believe that we can contribute to ecosystempreservation through both business and social activities. Specifically, for contributions
through business, we are promoting designs and production that reduce the impact on
ecosystems during the product life cycle (raw material procurement, production,transportation, use, recovery, recycling, and appropriate disposal), as well as increasing
the number of products and services for direct preservation of ecosystems through waterand air purification. Seeing chemical substance management as part of ecosystempreservation, we continue to ensure that it is carried out correctly. For contributions tosociety, we encourage tree planting and ecological surveys of rare plants and animals by
employees in volunteer programs, along with other programs that preserve ecosystems.
Corporations and Ecosystems

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Tackling Medium- to Long-Term Goals
In the Hitachi Group Guide to Preservation of Ecosystems issued in March 2011, we
presented all employees with our thinking on the relationship between corporate
activities and ecosystems, while introducing trends and examples of initiatives being
taken around the world. To further enhance understanding, in May 2012 we issued
Business Assessment on the Preservation of Ecosystems and began self-evaluating theimpact of our business operations on the ecosystem. We will regularly review thisassessment program and make improvements throughout the Group.
In December we held internal training sessions within the Hitachi Group and had experts
from government agencies and NGOs describe policy trends and thinking. Discussions
were stimulated by Business Ecosystems Training (BET), new course materials for teaching
employees about the relationship between corporate activities and ecosystempreservation developed by the WBCSD. We plan to offer similar training while reviewing
the content.

Hitachi Group
Sustainability
Report 2013

Laying the Groundwork for Ecosystem Preservation by Society
Outside the company, as a WBCSD member we assisted with the World Conservation
Congress held in Jeju, South Korea, in September 2012. This event is held once every four
years by the International Union for Conservation of Nature (IUCN), the world's largest
global conservation organization. At this event we introduced the Corporate Ecosystem
Valuation (CEV)*1 methodology developed by the WBCSD and the BET program, alongwith Hitachi initiatives for ecosystem preservation. We also take part in the Council on
Competitiveness-Nippon (COCN), a private group bringing together business leaders andexperts from all areas to give advice on policies for making Japanese industries morecompetitive. We created English-language versions of the final report of the COCN
Business and Biodiversity Study Group, and a checklist for assessing the impact ofcorporate activities on biodiversity (issued March 2012), introducing these to the WBCSD
and its members. WBCSD published a report introducing tools for ecosystem preservationand presented the COCN report and the checklist as an example from Japan.
*1 CEV: A method for making better business decisions by evaluating both ecosystem degradation and the benefits
provided by ecosystems

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VOICES

Hitachi Group
Sustainability
Report 2013

Using IT for Ecosystem Preservation: IT Eco Experimental Village
The IT Eco Experimental Village was established in Hadano,
Kanagawa Prefecture, in April 2011 as a venue for using
information technology (IT) for ecosystem and biodiversity
preservation, and for conducting trials and studies todetermine the usefulness of IT for ecosystem preservation.
The site is a satoyama (natural woodland near a populated
2area) of around 7,000 m . In cooperation with local
residents, officials, and schools, fallow farmland, bamboo
groves, and forests are being restored, turning them intorural habitat. IT systems are being used to gather
information on flora and fauna.
Thanks to the cooperation of so many people, the village is
now in its third year. Through this village, we have been

Mitsukiyo Tani,
Assistant Department
Manager,
Environment Policy Division,
Strategy Planning &Development Office,Information &Telecommunication
Systems Company, Hitachi,
Ltd.
Mayor, IT Eco Experimental
Villagedemonstrating that local environmental regeneration andcorporate environmental activity can work well together,in tandem with the local community and with thecontribution of our products. While the scope is still
limited, we are thinking about further improving thisvillage. We would particularly like to enhance the range
and areas of activities to increase interest in satoyama
conservation. We are also thinking about strengthening
collaborative creation with local officials and universities,
for example, by using IT to gather regional data and tocollaborate with local data centers, further contributing toecosystem preservation.

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Environmental Education
Hitachi Group Training is offered to all Group employees with a view to raising awarenessand aiding understanding of environmental issues.

Hitachi Group
Sustainability
Report 2013

Activities and Results
In fiscal 2012 we carried out education for employees whose operations involve air andwater quality or waste management, to provide basic knowledge as well as recent legal
amendments and guided operational procedures. In addition to Hitachi Group training,
individual companies and units provide education tailored to their own business area. For
general education, we offer an Internet-based e-learning course in three languages:
Japanese, English, and Chinese. To date 151,341 employees worldwide (97% of thetarget employees) have taken this course.
Environmental Education and Training System

Next Steps
From fiscal 2013, we will continue with education to enhance the knowledge and skills ofstaff in charge of factory management as well as to prevent environmental accidents.

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Environmental Accounting
We have adopted, and are making public, environmental accounting procedures that
conform to the Environmental Accounting Guidelines issued by the Ministry of theEnvironment in 2005. The results help us to raise the efficiency of environmental
investments and activities by more effectively allocating management resources to ourongoing efforts that benefit the environment. The increase in R&D expenditures related
to the environment in recent years has resulted in higher environmental protection costs.
At the same time, environmental investments were down year on year. This is mainly
because large expenditures were accelerated in fiscal 2011 to deal with changes inelectric power supply and demand.

Hitachi Group
Sustainability
Report 2013

Achievements
Trend in Environmental Investments, Environmental Protection Costs, and Economic
Effects

FY 2012 Investment Ratio by Countermeasure

Environmental Investments
Item

Total investment

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Costs (billions of yen)
FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

10.17

7.95

7.60

9.61

5.28

Investment in energy-saving equipment andequipment that directly reduces environmentalload

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Environmental Protection Costs
Item

Expenses

Description

Costs (billions of yen)
FY
2008

FY
2009

FY
2010

FY
2011

FY 2012Business area

Costs of maintaining equipment with low
environmental load, depreciation, etc.

33.31

28.20

27.98

27.78

31.84

Upstream/downstream

Green procurement expenses, recovery andrecycling of products and packaging,recycling expenses

1.97

1.70

1.60

1.43

1.38

Administration

Labor costs for environmental management,
implementation and maintenance ofenvironmental management system

11.20

8.92

8.61

8.25

7.67

Research anddevelopment

R&D for the reduction of environmental
burden caused by products and production
processes, product design expenses

50.25

52.81

57.56

79.81

84.71

Social activities

Planting, beautification, and otherenvironmental improvement expenses

0.35

0.25

0.31

0.45

0.41

Environmental
remediation

Environmental mitigation costs,
contributions, and charges

0.99

0.68

0.37

1.94

1.90

98.06

92.56

96.44

119.66127.91

Total*

Hitachi Group
Sustainability
Report 2013

Equipment depreciation costs are calculated using the straight-line method over five years.

Environmental Protection Effects
Economic Effects*
Item*

Costs (billions of yen)

Major FY 2012 Activities

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012Net income
effects

10.90

8.30

9.62

13.72

17.85

Recovering value from waste by sorting andrecycling

Reducedexpenses effects

18.24

15.00

18.45

15.27

12.07

Reducing resource costs through resource andenergy conservation; reducing waste disposal
costs through waste reduction

Total

29.14

23.30

28.07

28.98

29.92

Economic effects include the following items:- Net income effects: benefits for which there is real income, including income from the sale of resalable material
and income from environmental technology patents- Reduced expenses effects: reduction in electricity and waste treatment expenses arising from environmentalload reduction activities

Physical Effects
Item

Reduction inenergy usedduringproduction
Reduction inamount of waste
for final disposal*

Amount Reduced

Major FY 2012 Activities

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012158 million
kWh

191 millionkWh

129 million
kWh

93 million
kWh

107 million
kWh6,752 t5,955 t3,623 t4,754 t3,788 tSwitching to LED lighting, installing more
efficient air-conditioning equipment, optimizing
equipment operation rates, etc.
Encouraging recycling, reducing volume or
recycling of liquid waste, etc.

Benefits from equipment investment are calculated using the straight-line method over five years, as with costs.

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Efficiency of Environmental Load Reduction*1
Item

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Efficiency of reduction in energy consumption(million kWh/100 million yen)

3.3

4.2

2.6

2.0

1.7

Efficiency of reduction in amount of waste for landfill(t/100 million yen)

194

229

121

183

146

Hitachi Group
Sustainability
Report 2013

*1 The amount of environmental load reduction divided by the cost of the reduction.

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Environmental Communication
We publish reports every year on our environmental protection initiatives, their results,
and our plans. The Hitachi Group Environmental Report, issued each year starting in fiscal
1998, was combined in fiscal 2011 with the Hitachi Group Corporate Social Responsibility
Report as the Hitachi Group Sustainability Report, in response to the global need for asustainability report. We also cooperate with SRI*1 ratings and other environmental
surveys.

Hitachi Group
Sustainability
Report 2013

*1 SRI: Socially Responsible Investment. An approach to investing where shares are selected partly on the basis of
criteria related to CSR.

Website Communication
The Environmental Activities section on the Hitachi website provides highlights of theenvironmental programs that we take for Hitachi Group products and services, alongwith environmental activities. This site was overhauled in December 2012, making it
more readable and informative.
Environmental Activities
http://www.hitachi.com/environment/index.html

CSR/Environmental reports published by Hitachi Group companies
http://www.hitachi.com/environment/activities/data/rpt_open.html

External Environmental Awards
Hitachi's products and services received environment-related awards in fiscal 2012: 2 MW
Downwind Wind Power Generation System received an award at the 9th Eco-ProductsAwards; Super Amorphous XSH series, Hitachi's super energy-saving transformer, andFLEXMULTI High Efficiency, the multi-split air-conditioning system for buildings, received
the Energy Conservation Grand Prize 2012.
External environmental awards
http://www.hitachi.com/environment/activities/data/commendation.html

Dissemination of Information through Exhibitions and Forums
Valuing the opportunity for direct dialogue withstakeholders, we participate in environmentrelated exhibitions. In Japan, we ran
environmental booths at the Hitachi Innovation
Forum 2012 in July and at the Eco-Products
Exhibition in December 2012, as we have every
year since the first exhibition. Outside Japan, we
Hitachi booth at Eco-Products Exhibition in 2012
took part in the Eco-Products International Fair in
Singapore in March 2013 and the Greentech & Eco Products International Exhibition(IGEM) in Malaysia in October 2012. We also host forums to discuss environmental issues
with stakeholders. The Hitachi Environment Forum was held in December in New Delhi aspart of the 60th anniversary celebrations of diplomatic relations between India andJapan. We discussed the environment-related issues faced by India, such as increasing
urban populations, lack of social infrastructure, and environmental degradation. At the
Eco-Engineering Forum held in Washington, DC, we discussed the theme of water
resources. At WBCD, we played a leading role at sessions on ecosystem preservation andelectric power projects.

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List of environmental exhibitions

Hitachi Group
Sustainability
Report 2013

http://www.hitachi.com/environment/showcase/employee/event/index.html

Preserving Ecosystems
http://www.hitachi.com/environment/activities/stakeholder_collabo/ecosys.html

Participating in the Development of International Standards
http://www.hitachi.com/environment/activities/ecoproducts/global.html

Worldwide Environmental Partnerships
We promote environmental communication, deepening the exchange on environmental
themes with local stakeholders, and we conduct social contribution activities with them.
In fiscal 2012, we carried out environmental education and tree planting as well as
cleanup activities in regions around the world.
For education, and to help raise the eco-awareness of children who will lead the next
generation, we provided learning opportunities through hands-on training, experiments
and explanations of Hitachi Group activities. To conserve the environment as a global
citizen, we promote environmental beautification and natural conservation incooperation with employees, their families, and local residents. These local
environmental protection activities are promoted by consulting with local authorities orworking with NGOs and NPOs that specialize in local environmental situations andactivities.
Raising Environmental AwarenessWe are helping to raise environmental
awareness through activities such as putting
up nest boxes for the Eastern Bluebird andinstalling a bench made of recycled plastic
engraved with environmental messages.
Hitachi Computer Products (America), Inc.
Natural Barriers
Under the supervision of local government
officials, employees spent two days planting
60 coconut trees and 500 mangrove
seedlings, which act as a natural barrier
against the sea. (Hitachi Air Conditioning
Products (Malaysia) Sdn. Bhd.)

Observation and Conservation of Bats in Forests
In collaboration with a local administrative
agency, company employees helped withcounting and observing flight patterns ofbats, animals important for forest
development in the Subic Bay area. We arehelping with the conservation of bats as wellas to raise environmental awareness (Hitachi

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Terminals Mechatronics Philippines
Corporation)

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Tree Planting
For the third consecutive year, about 1,000
members took part in planting 1,500 trees,
under the slogan, "Plant trees and protect
the earth." (Taiwan Hitachi Co., Ltd.)

Corporate Forest Maintenance
Together with the local community,
company employees cut back grass,trimmed trees, and built pathways in forests,
as well as planted trees, to help maintain
forests. (Hitachi Kokusai Electric Inc., Toyama
Works)

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Social Report

Hitachi Human Rights Workshop (July 2012)

121

MESSAGE Social Report

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Stepping Up Global Procurement andReinforcing CSR in the Supply Chain
The Hitachi Group is accelerating global procurement to lock in astable supply of materials and to boost cost competitiveness for
global business expansion. At the end of fiscal 2012, we have 25
overseas procurement offices, primarily in emerging countries. As
well, regional chief procurement officers have been appointed
for North America, Europe, China, and the rest of Asia to bolster
our procurement management. We have held briefings in China
and Eastern Europe to explain our procurement guidelines, whilebuilding partnerships and cultivating new suppliers. To improvetraining for local staff, we are adding CSR procurement education
to our procurement skills training.
We have established the Hitachi Group Procurement CSR
Committee to deal with increasing potential risk, and as a way
to share procurement policy and programs Group-wide. The
committee selects suppliers, mainly outside of Japan, for CSR
monitoring. In fiscal 2012, as part of our drive to further reinforce
supply chain risk management for global procurement, we

Shinichiro Omori
Vice President and Executive Officer,
General Manager of Corporate
Procurement Division, Hitachi, Ltd.

performed supplier audits outside Japan, based upon the resultsof this monitoring.

Promoting Diversity as Our Core
Strategy to Improve Human Capital
Capacity
We created the Global Human Capital Management Strategy infiscal 2011 to optimize individual and organizational performance.
Our first steps: building the Global Human Capital Database,a global grading system, and other foundational elements.
Diversity management is at the heart of that strategy, and we areconcentrating on securing and training a wide range of talented
staff globally.
Specifically, our aim is to optimize organizational and staff
performance through IT-based performance management. We areusing tools, such as our Global Leadership Development program,to accelerate the development of mechanisms for selecting andtraining managers Group-wide, regardless of gender or nationality.

Naoki Mitarai

A key focus is boosting support for women in the workplace

Vice President and Executive Officer,
General Manager of Human CapitalGroup and Corporate Administration
Division, Hitachi, Ltd.

numerical goals for appointing female executives and managers in

as a touchstone for promoting diversity, including announcing
Japan.
We are using several initiatives from a social perspective, including
creating and announcing the Hitachi Group Human Rights Policy,
based on the United Nations Guiding Principles on Business andHuman Rights. We will strive to ensure that all Hitachi Group
employees have a safe workplace and find fulfilment as we place
the right people in the right positions.

Chapter3 Social Report122

Respect for Human Rights

Hitachi Group
Sustainability
Report 2013

Cherishing humanity has been fundamental to management at
Hitachi since our foundation. As a global company, we respect humanrights of all our stakeholders based on international standards while
appreciating the diverse cultures of each country and region we
operate in.

Adoption of Human Rights Policy
In May 2013, we adopted the Hitachi Group Human Rights Policy to supplement the
Hitachi Group Codes of Conduct. In this policy, we clarify our understanding of humanrights to be, at a minimum, those outlined in the International Bill of Human Rights andthe International Labour Organization's Declaration on Fundamental Principles andRights at Work. This policy outlines Hitachi's approach to meeting our responsibility torespect human rights including developing and implementing human rights due
diligence*1 in line with the UN Guiding Principles on Business and Human Rights,
providing appropriate training, adhering to national laws and regulations in all theregions and countries where we operate, and respecting international human rights
when faced with conflicts between internationally recognized human rights standards
and national laws. In fiscal 2013, we will start developing human rights due diligenceprocesses. Hitachi strives to respect the human rights of all people, not only those of ouremployees.
*1 Human rights due diligence: An on-going process to identify and assess potential and actual human rights
impacts, integrate findings and take appropriate action to prevent or mitigate potential impacts or to provide foror cooperate in remediation of actual impacts. The processes will also entail tracking the effectiveness of actions
to address impacts and communicating externally.

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

Framework for Promoting Respect for Human Rights andActivities
Hitachi, Ltd. established the Corporate Human Rights Promotion Committee to gauge theimpact of business activities on stakeholders' human rights and deliberate onmechanisms and policies to prevent human rights violations. An executive officer chairs
this body, whose members include representatives from sales, procurement, humanresources, the CSR Division, and other corporate units. Information from deliberations isshared with all employees through company and business site committees, led bycompany and division executives.
We improve Group-wide human rights awareness based on guidelines discussed anddecided by the Corporate Human Rights Promotion Committee. We develop humanrights leaders in the various units, while business units use their own regular grouptraining, seminars, and videos to educate their staff. We have appointed a CSR team inEurope—in our opinion the most advanced region addressing human rights—to lead thedevelopment of educational materials and to consider due diligence based on the viewsof our six operating bases: the Americas, Europe, Japan, China, India, and elsewhere in
Asia. This framework brings a global perspective to the human rights initiatives of the2chapter

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Group as a whole, with regional CSR leaders spearheading the development of humanrights awareness at a global level.

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Hitachi, Ltd. Framework for Promoting Respect for Human Rights

European Stakeholder Dialogue 2013: Human Rights Policy andDue Diligence
In February 2013, Hitachi's European CSR team convened business and human rights
experts to gather feedback and input on the development of our global human rights
policy and due diligence approach. Participants included representatives from theEuropean Commission, the ILO, NGOs, specialist lawyers, and external companies.
The first session featured a presentation on the development of the global policy and theelements included in it, followed by a discussion on the policy text. Many constructive
suggestions and comments were provided by the stakeholders; the major contributions
included that we should ensure that the policy highlights our contribution to therealization of human rights as well as to the prevention of human rights violations. Ourpolicy text was updated in light of this feedback.
During the second part of the day some of Hitachi's European business leaders outlined
their companies' approaches to human rights impact assessment. The leaders from ourrail and power business spoke about human rights issues, particularly among local
communities, when building new facilities. Another business leader from Hitachi's Finger
Vein Business articulated the work his team does to ensure privacy of information forcustomers in the banking system. The external experts highlighted the need to engage
stakeholders early on when assessing human rights impacts and also the importance of
involving rights holders in the process. All outputs from the day are extremely valuable
and will contribute to Hitachi's creation of effective human rights impact assessment
processes.

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Sharing the UN Guiding Principles on Business and Human Rights
In July 2012, 55 managers from Hitachi, Ltd.
headquarters, business divisions, key Group
companies, and regional headquarters gathered in
Nasu Town, Tochigi Prefecture, for a workshop on the
Guiding Principles on Business and Human Rights
adopted by the United Nations. We invited
representatives from the NPO Shift*1 to lead thesession, with participants discussing business andHitachi human rights workshop in Japan
human rights beyond divisions and borders, boosting
their understanding of cultural and legal differences, and learning about Hitachi's
responsibilities. In line with the UN Guiding Principles, we have also developed a common
global human rights e-learning course to foster Group-wide recognition of respect forhuman rights as a corporate responsibility. This course will be rolled out to all Group
companies in fiscal 2013.

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*1 Shift: An NPO made up of members of the team that shaped and wrote the UN Guiding Principles on Businessand Human Rights under the guidance of Prof. John Ruggie, former Special Representative of the UN SecretaryGeneral for Business and Human Rights.

Human Rights Education in China
A human rights workshop on the UN Guiding
Principles on Business and Human Rights was held in
China, a market that represents massive sales volumesfor Hitachi and is home to many Group companies.
In August 2012, we invited Dr. Liang Xiaohui from thePeking University Law School to lead the workshop for
Hitachi Group CSR officers in China. Around 50 officers
Human rights workshop in Shanghai
participated from 30 Group companies, addressing the
topic of companies and human rights in a global environment. They specifically learned
about what human rights are, the impact companies have on human rights, the UN
Guiding Principles and what Hitachi can do. Comments from participants included, "I
realized that human rights was an issue closely related to daily business operation," and"Hearing about incidents at other companies, I was inspired to make sure that thoseincidents would not happen here at Hitachi." In February 2013, a similar CSR workshop
was held for Hitachi Group CSR officers in Hong Kong. The speaker was Dr. Surya Deva
from the City University of Hong Kong, and the workshop was attended by 14 officers
from 13 Group companies.

European Senior Manager Training on Business and Human
RightsBuilding on previous training sessions that introduced the topic of business and humanrights and that have started to gain the understanding of senior managers in Europe, theCSR team provided further training in the region in January 2013. The two sessions heldin the UK and Belgium were facilitated by an issue expert from the business and humanrights organization, Shift.

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The training began with an overview of the UN Guiding Principles on Business andHuman Rights, the corporate responsibility to respect human rights and a case study onhuman rights due diligence (HRDD). Attendees then participated in an exercise that tookthem through an HRDD methodology. They started by identifying potential and actual
human rights impacts related to their business, before assessing the risks of the impacts.
By prioritizing the risks, the senior managers were able to consider how to address themthrough prevention, mitigation or remediation. Many valuable lessons were learned
about impacts that may not previously have been considered, as well as the need foradequate knowledge on human rights risks and why it is important to conduct HRDD.
Going forward, further training sessions will be held to support the implementation of
Hitachi's global human rights policy.

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Contributing to International Discussions
As a member of the United Nations Global Compact (UNGC)*1 Human Rights and Labour
Working Group, we help to create case studies on human rights initiatives in frontrunning companies, develop business and human rights tools, promote the UNGC's
human rights principles, and improve the understanding and implementation of the UN
Guiding Principles on Business and Human Rights. In Europe, we participate in a working
group on human rights run by CSR Europe, a business network promoting CSR across theregion, which is supporting the implementation of key human rights in business with
examples of best practices and practical tools. In December 2012, we were the only
Japanese company to participate as a panelist in the UN Forum on Business and Human
Rights in Geneva, presenting the background on human rights issues in Japan andintroducing Hitachi's initiatives in this area. We will continue our role in international
discussions on human rights, deepening our understanding of global human rights
trends and contributing to activities that promote respect for human rights—beyond
Hitachi and our industry sectors.
*1 UN Global Compact: An international accord that Kofi Annan, the former Secretary-General of the United
Nations, proposed and which was adopted in 2000. This compact's 10 principles on human rights, labor, theenvironment, and anti-corruption encourage the building of a sustainable society. The United Nations asks
corporations, nongovernment organizations, citizens groups, and other entities to base their actions on theseprinciples. Hitachi became a signatory in 2009.

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126

VOICES

Implementing Hitachi's New Policy Commitment on Human Rights

Hitachi Group
Sustainability
Report 2013This year, Hitachi launched a company-wide human rights
policy, in line with the UN Guiding Principles on Businessand Human Rights, which has been developed with expert
stakeholder input. Hitachi has also conducted a number ofinternal human rights training sessions to help build
understanding and support for the new policy, including
with senior managers in Europe, leaders from Global CSR,
Human Resources and other functions and business units
in Japan, and also with its CSR team in China.
Adopting a policy commitment is an essential first step in
implementing Hitachi's responsibility to respect humanrights. The next steps for Hitachi will be to embed theRachel DavisManaging Director,
Shift and former Legal
Advisor to Professor John
Ruggie, UN Special
Representativeon Business and Human
Rightspolicy throughout the company—including throughfurther internal awareness-raising and capacity-building—and to develop the human rights due diligence andremediation processes needed to implement it effectively.
This is a significant undertaking by Hitachi and following
through on the new commitment will take time,
particularly given the global reach and sectoral diversity of
Hitachi's business. It will be important that Hitachi seeks tomanage raised stakeholder expectations throughmeaningful engagement and communication about its
plans and progress against specific goals. As a participant
in Shift's Business Learning Program, Shift looks forward tocontinuing to support Hitachi as it works to meet its
human rights commitments.

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Chapter3 Social Report127

Supply Chain Management

Hitachi Group
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One priority in the 2012 Mid-Term Management Plan is to expand our
global procurement ratio, particularly by increasing purchasing inemerging countries. This will reinforce our competitiveness in global
markets and our operational foundation. In procurement, we respecthuman rights, including basic work rights, of everyone in our supply
chain. We collaborate with suppliers in promoting CSR by sharing
guidelines and communicating proactively.

Promoting Global Procurement
Using the 2012 Mid-Term Management Plan, we intended to raise the Hitachi Group's
global procurement ratio from 36 percent (fiscal 2010) to 50 percent by fiscal 2012. We
therefore formulated the Hitachi Group Mid-Term Procurement Strategic Plan. The key
aims were to establish global partnerships to create Group procurement strategies, tostabilize the supply of materials, and to reinforce CSR and sustainability within the supply
chain. In fiscal 2012, however, the impact of factors such as changes in the parameters ofour business portfolio kept the global procurement ratio at 38 percent. In fiscal 2011, we
appointed procurement officers for the first time to oversee local procurement in China,
the rest of Asia, Europe, and the Americas. These officers are responsible for expanding
the pool of suppliers in emerging markets, as well as for reinforcing our responsiveness to
CSR risks, a growing concern as the supply chain expands globally.
Key Indicators

Global Procurement Ratio

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128

Sharing Procurement Policies
Our procurement activities are based on the Hitachi Guidelines for Procurement
Activities, while sharing global supply chain issues within the Group. All companies in the
Hitachi Group follow these guidelines.
These guidelines were created in line with the United Nations Global Compact, andinclude the elimination of discrimination in employment and occupation as well as all
forms of child and forced labor.

Hitachi Group
Sustainability
Report 2013

Guidelines for Procurement Activities
These guidelines define business transaction standards which shall be applied to all HITACHI
executives and employees in connection with their activities purchasing necessary materials,
products, services, and information from 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 suppliers with a view to the long term results.
(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 whichmight cause a 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.
(1) HITACHI responds to all suppliers' offers sincerely, and is always willing to offer the informationnecessary for suppliers to compete on an even playing field.
(2) HITACHI shall periodically check and review suppliers' performance and will consider offering
more advantageous business opportunities when comparison with other resources allows.
4. Through a designated selection process, suppliers shall be evaluated by product quality,
reliability, delivery, price, suppliers' business stability, technical development ability, fair andtransparent information release, compliance with societies' rules, regulation compliance, respectfor human rights, elimination of discrimination in respect of employment and occupation,
elimination of all forms of forced and compulsory labor, environmental preservation activities,
social contributions, good working environment, and recognition of social responsibilities withbusiness partners.
(1) HITACHI shall not request quotations from suppliers with whom there is no intention to enter
into a future business relationship.
(2) In accordance with specified internal procedures, the role and responsibility for specifications,terms and conditions, product acceptance and inspection belongs to each Requester, Procurement
Department and Inspection Department.
(3) Procurement Departments shall be a representative of HITACHI when contracting with
suppliers.
5. HITACHI members are prohibited from receiving any personal gifts or offers from suppliers.
Revised in 20092

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129

Building Global Partnerships
Our basic principles on procurement call for forging partnerships, mutual understanding,and reliable relationships with all suppliers with an eye on the long term. For thesereasons, as well as the principle of free competition, we disclose procurement items to all
suppliers, inside and outside of Japan, to cultivate and expand our pool of suppliers.
For this goal, we held supplier meetings aimed at developing new supplier partners in
Dalian in July 2012, Istanbul in December, and in Kaohsiung and Bangkok in March 2013.
We will continue to develop relationships with suppliers in new areas in response to
globalization, focusing on the emerging countries that we have positioned as major
markets.

Hitachi Group
Sustainability
Report 2013

Hitachi Group CSR Procurement
CSR risks are a growing concern as globalization accelerates. Recognizing that supply
chain procurement risk could cause management problems, we are reinforcing our risk
identification and management systems to avoid and mitigate risk as much as possible.

CSR Procurement Promotion Framework
To strengthen our CSR supply chain management, we established a CSR Green
Procurement Center within the Hitachi headquarters in fiscal 2011. We have alsoestablished the Hitachi Group CSR Green Procurement Committee, which includes
committee members from our in-house companies and Group companies. This completesa framework that will enable our CSR procurement and green procurement philosophy
and initiatives to be shared throughout the Group.

Formulating a CSR Code of Conduct and Standards and Informing Suppliers
In fiscal 2009, we revised the Hitachi Group Supply Chain CSR Deployment Guidebook,which conforms to the Supply Chain CSR Deployment Guidebook of the Japan Electronics
and Information Technology Industries Association (JEITA). Our guidebook serves as a
CSR code of conduct and standards that we expect our suppliers to comply with. We
have distributed this guidebook to around 22,000 suppliers of our in-house companies
and Group companies (around 12,000 sites of in-house companies' suppliers, and around
10,000 sites of Group companies' suppliers) to inform them of their CSR responsibilities.
Hitachi Group Supply Chain CSR Deployment Guidebook (PDF, 612 Kb)
http://www.hitachi.com/procurement/policy/__icsFiles/afieldfile/2010/08/30/SC_CSR_E_2.pdf

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130

Implementing Self-Checks by Key Suppliers
To check the extent that the codes ofconduct and standards indicated tosuppliers are being met, since fiscal 2009 wehave asked key suppliers to undertake selfchecks using the check sheet attached to the
JEITA Supply Chain CSR Deployment
Guidebook, and have collected the results.
Since fiscal 2011, we expanded the scope of
suppliers to include companies in emerging
markets (China and the rest of Asia).

Data on Self-Check Results
FY

Suppliers inJapan

Suppliers outside
Japan

Total

FY
2007

100

0

100

FY
2009

132

0

132

FY
2011

0

102

102

FY
2012

57

41

98

Total

289

143

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Auditing with the Support of External Auditing Organizations
Since July 2012, we have been auditing suppliers from emerging markets (China and therest of Asia) from among the suppliers providing self-check results. In fiscal 2012, we
conducted CSR audits of 12 suppliers: 10 in China, one in Korea, and one in Indonesia. For
these audits, we engage JACO and DNV.*1 Local auditors familiar with local laws andregulations check suppliers' performance on labor and human rights, health and safety,
the environment, and ethics. No major infringements have emerged from these audits,
but there are areas needing improvement, and we are working with suppliers to that
end. We will systematically continue audits of suppliers, mainly in China and elsewhere in
Asia.
*1 JACO and DNV: JACO (Japan Audit and Certification Organization) is a certification institution that provides arange of auditing services. For overseas audits, JACO develops and carries out joint audits with DNV (Det Norske
Veritas), a third-party certification institution that provides certification and other services. DNV, with 140 yearsof experience, is known as a risk management leader.

Auditing manufacturing and environment-related sites of a supplier in an emerging country

Green Procurement
We use green procurement,*1 sharing our commitment to environmentally conscious
monozukuri craftsmanship with everyone in our supply chain.
*1 Green procurement: Procuring parts and materials manufactured with less environmental impact, so that
suppliers help to protect the environment.

Revised Green Procurement Guidelines (Responding to Chemical Substance
Regulations)
In fiscal 1998, we led the industry in developing Green Procurement Guidelines to define
our basic position on procuring parts and products that do not have a negative impact on
the global environment, as well as our requirements of suppliers, so that we can work
together to promote green procurement.

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The guidelines set out supplier requirements for environmental conservation, including
building an environmental management system and acquiring certifications. There arealso 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.
In fiscal 2012, we reviewed our categories for controlled chemical substances with aparticular focus on restricted substances, authorized substances, and SVHCs (substancesof very high concern) as stipulated in Europe's Registration, Evaluation, Authorisation andRestriction of Chemicals (REACH) regulations managing chemical substances within the
EU. Specific changes include: (1) moving some chemicals to the prohibited substances list,(2) further breaking down the controlled substances list, and (3) adopting the industry
association list. The guidelines were revised to match the changes and distributed tosuppliers.
There is a global trend for strengthening regulations on chemical substances. We havebuilt the A Gree'Net, an Internet-based green procurement system, to collect information
about chemical substances contained in products and other environment-related datafrom suppliers as soon as it becomes available. The goal is to manage chemicals carefully.
Under this system, we encourage suppliers to use the MSDSPlus*1/AIS*2 reporting
templates published by JAMP (Joint Article Management Promotion Consortium). We
also encourage them to use information transmission systems and to minimize theamount of labor involved.

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*1 MSDSPlus: A format for reporting chemical substances contained in products created by upstream companies(chemical manufacturers) for mid-stream companies (molded product manufacturers, etc.).
*2 AIS: A format for reporting chemical substances contained in products created by mid-stream companies(molded product manufacturers, etc.) for downstream companies (assembly manufacturers, etc.).

Hitachi Group Green Procurement Guidelines (PDF, 549 Kb)
http://www.hitachi.com/environment/library/pdf/green.pdf

Helping Build Environment Management Systems
We call suppliers who acquire environmental
certifications and who develop environmental
management systems (EMSs) Green Suppliers. In fiscal
2009, we launched the New MMM Club*1 with theseGreen Suppliers, providing them with information on
advanced environmental technologies andenvironmental regulations to support their EMS
development.
Presentation at the New MMM Club
General Meeting
In fiscal 2012, 97 suppliers attended a general meetingof the New MMM Club. At the meeting, we explained our environment philosophy,
environmental footprint trends, and waste management. We also invited a speaker fromthe Japan Environmental Management Association for Industry (JEMAI), who gave apresentation entitled "Trends in regulations on chemical substances contained in
products and the need to pass information along the supply chain." Suppliers gave
presentations on their own environmental programs.
*1 The New MMM Club: An organization run primarily by suppliers who have acquired environmental certification
through Hitachi's activities to support their own environmental programs. Mottainai, which means regrettablewaste in Japanese, is now an international environmental term. The three Ms come from the first letter ofmottainai.

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132

Promoting Green Purchasing
We are improving our green purchasing rate–the ratio of environmentally conscious
products purchased to total office supplies–by using a Group-wide online purchasingsystem: the e-sourcing Mall. This system has a range of environmentally conscious
products, and promotes purchasing by clearly labelling these products. For fiscal 2012,
our green purchasing rate reached 92 per cent, two per cent up on the previous fiscal
year.

Hitachi Group
Sustainability
Report 2013

Response to the Conflict Minerals Issue
In August 2012, the U.S. Securities and Exchange Commission (SEC) adopted and issued afinal rule obliging companies with securities registered in the United States that use any
conflict minerals in their products to report this to the SEC pursuant to Article 1502 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law
in July 2010. Conflict minerals include columbite-tantalite, cassiterite, gold, andwolframite, the four minerals determined to be financing conflicts that are produced in
the Democratic Republic of Congo (the "DRC") and adjoining countries (together the"DRC countries"). The goal of this law is to cut off revenues from armed groups that use
violence and violate human rights in the conflict-ridden DRC countries.
Because Hitachi, Ltd. has not been listed in the United States since March 2012, we haveno legal obligation to report. However, we strive to ensure that we do not, directly or
indirectly, abet the human rights violations identified in the DRC countries. To continue
our responsible procurement practices, we are working with Group companies, suppliers,
and the industry association JEITA to strengthen supply chain transparency and to ensurethat the minerals we procure do not finance or benefit armed groups committing humanrights violations.

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Chapter3 Social Report133

Diversity Management

Hitachi Group
Sustainability
Report 2013

The diversity of people can be seen externally through aspects suchas gender and age, which are easy to distinguish from appearance.
People also differ by internal aspects, such as character and values,
which are not immediately visible. External factors such as genderand age are important in understanding each other. It is equallyimportant to respect the internal aspects of diversity.

Hitachi Group Diversity Management
Our diversity management views external and internal differences as making up theindividuality of a person. We intend to get the most out of every employee by respecting
them as individuals.
Through diversity management, we aim to boost our competitiveness in global markets
and nurture employees who can respond to the growing diversity of our stakeholders
and customers and their expectations of our organization. We are committed to building
a diverse organization that is inclusive of all aspects of diversity. We want to build
professional environments where employees can demonstrate and develop theircapabilities, collaborate with each other, and talk to bring creativity and innovation totheir work.
The range of our business domains, technologies, geographic coverage, and types ofcustomers are among the broadest in the world, making employee diversity a genuine
competitive advantage for us. We are proud of our diversity, and will use it to the full,getting the best from our talented employees to strengthen our organizational capacity,
create synergies, boost company productivity, and expand our operations.

Diversity for NEXT100
We have developed the "Diversity for Next 100" initiative to promote diversity
management as a key management strategy to best use our wide range of personnel.
Drawing on the strong commitment from our senior management, we are enhancing our
personnel capacity Group-wide. We are also pursuing greater diversity at the
management level. In fiscal 2012, we appointed three non-Japanese directors (including
two from outside Hitachi) to our Board of Directors, as well as one female Japanese
director from outside Hitachi. Then in fiscal 2013, we appointed one female nonJapanese as an outside director.
One of our initiatives to support female employees in the workplace was to establish inhouse day care centers in fiscal 1990, ahead of other companies, to help women balance
work and child care. We have also developed and extended systems for child care leave
and working from home. In fiscal 2000, we launched the Gender-Free & Family-Friendly
Plan (FF Plan), while increasing the number of women hired for management positions.
Support programs have been reinforced, including developing and enhancing programs
supporting balance between work and home. Recently, we have been raising awarenessamong all employees through diversity education and Work-Life Balance-up! Month.
These initiatives aim to create a more inclusive corporate culture. Thanks to these efforts,
the ratio of female employees has grown steadily to reach 16.0 percent in fiscal 2012, 3.5

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percent in the case of female managers. Our focus going forward will be to have more
women in leadership positions, participating in management and decision making.

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Roadmap for Promoting Diversity Management

Goals for Hitachi, Ltd.
To develop female employees and support their promotion in the workplace, we have set
two new goals: appointing female executives and increasing the number of female
managers in Japan to 1,000 by fiscal 2020 (2.5 times more than at the end of fiscal 2012).
This is an expression of our commitment within and beyond Hitachi to provide even more
support to women in the workplace and to enhance diversity management. In addition
to bolstering existing programs, we will make visible the progress of programs and issues
faced in each business division and set numerical goals for each business division in orderto strengthen our management commitment. We will also provide education for womenat the general manager level and above to boost their engagement and performance,
creating an environment where they can use their skills in leadership and business
management.
The Group will be a frontrunner in diversity management promotion, implementing
workforce planning that places the right people in the right roles regardless of gender,
nationality, career, or age.

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135

Key Indicators

Hitachi Group
Sustainability
Report 2013

Ratio of Male and Female Employees (Hitachi.Ltd.)

Trend in the Number and Ratio of Female Managers (Hitachi.Ltd.)

Diversity Promotion Project Structure
The Diversity Promotion Center, established in fiscal 2009, was placed under the directsupervision of the Human Capital Group in January 2013 to strengthen its activities. The
Advisory Committee and the Diversity Promotion Group Council, in which all 24 Group
companies participate, hold in regular information exchanges to thoroughly energize ourdiversity management policy and share best practices to promote diversity across the
Hitachi Group. To promote diversity, we hold regular meetings to exchange opinionswith labor unions.

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136
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Diversity Promotion Group Council
The Diversity Promotion Group Council was launched to promote diversity among inhouse companies, business sites and Group companies. We have now divided this council
into two: the Advisory Committee primarily made up of general managers and officers incharge of labor administration in Group companies, and the Diversity Development
Group Council, bringing together heads of departments in charge of diversity
development to clarify their roles and review operations. The Advisory Committee istasked with direction setting and creating action guidelines, while the council will
exchange information and views on specific activities. We will deepen our efforts from
simply respecting diversity and creating a strong management commitment toexpanding diversity as a management strategy aimed at establishing competitive
advantages and accelerating diversity management initiatives Group-wide.
Diversity Promotion Group Council Proceedings Prior to the Ninth Meeting
http://www.hitachi.com/csr/society/diversity/project/index.html

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137

Diversity Activities (1)Hitachi Group
Sustainability
Report 2013

Women's Summit Tokyo 2012
Date: January 18, 2012 (Friday)
Headquarters Conference Room, Asahi Breweries, Ltd.
Participants: 56 (6 companies)
This regular cross-industry networking event is cosponsored by six Japanese and foreign-affiliatedcompanies from various industries to support theadvancement of women in the workplace and diversity
management. Themes at the fifth event in 2012
included presenting role models for working women,
leadership, and networking outside the company. The
keynote speech by Takako Konishi, Executive Vice
Women's Summit Tokyo 2012
President of Pola, Inc., was followed by workshops andgroup discussions with lively exchanges of views and information.
Participating companies: Asahi Breweries, Ltd., Aozora Bank, Ltd., NTT DATA Corporation,
Hewlett-Packard Japan, Ltd., Sumitomo 3M Limited, the NPO GEWEL, and Hitachi, Ltd..

Diversity Training for Managers
Fostering recognition in the entire workplace helps to promote and instil diversity. Given
the central role of managers, building diversity awareness among them is particularly
important. Our diversity training for managers features group discussions on specificcompany- or worksite-related issues that encourage the adoption of a new mindset.
This program asks managers to review their management experiences and rethink theirapproach to maximizing the potential of people and organizations. We expect concretechanges to emerge from all participants. Around 570 managers have participated in the
program from the second half of fiscal 2010 through fiscal 2012.

Diversity Workshops
It is important that the workplace as a whole puts diversity and work-life management
into practice, and that our diversity workshop approach is effective. Hitachi's uniquediversity workshops use the World Café approach, bringing together employees,
including senior executives and young employees, to freely exchange opinions on
diversity and work-life management based on their own experiences. More than 1,000
Hitachi Group employees have already participated in these workshops, prompting many
positive comments. One person, for example, felt that the workshop had been invaluable
for sharing issues and opinions with senior staff and other employees. In fiscal 2013, we
created a handbook so that Group and in-house companies can hold their own
workshops, publicizing the approach across the Group.

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Prior to Maternity Leave/Return-to-Work Support Seminars
We introduced seminars to address challenges
particular to women, such as putting careers on holdfor childbirth, child care, and concerns about balancing
work with child care. Women attend seminars with
their managers so that both can share attitudes andapproaches when returning to work. This will ensure awoman's smooth return to work as well as
understanding and support from her managers andReturn-to-work support seminarfrom colleagues. Since more employees aim to balance
work and child care, we plan to hold seminars twice a year.

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Union-Hosted Work-Life Balance Partnership Forum
Labor unions are also proactively addressing work-life balance, for example by holding
study meetings to boost awareness among their members. In April 2013, the Federationof Hitachi Group Workers Unions held a Partnership Forum for union members fromGroup companies.
At the forum, company policies and programs on promoting diversity were highlighted,
and an outside speaker gave a lecture on career development. This was followed bygroup discussions on workplace issues and their solutions for achieving a work-lifebalance. The forum gave participants the chance to think about their own work-lifebalance, furthering their understanding of the importance of taking concrete action for
better ways of working.

LectureGroup discussion

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139

Work-Life Management
Our diversity management initiatives are designed to enable all employees to reach theirfull potential, as well as to enhance our organizational capability and create synergies
that will boost productivity and grow our business. This requires building a work
environment that embraces human resource diversity and work style flexibility.

Hitachi Group
Sustainability
Report 2013

Hitachi Group's Work-Life Balance Is Work-Life Management
The Hitachi Group looks beyond simply achieving work-life balance. We aim to create an
employee-friendly work environment, from the perspective of work-life management,
where employees can create the best combination of work and life for themselves, andenhance both, toward maximizing their capabilities.

Work-Life Balance-up! MonthIn fiscal 2010, we began holding the Work-Life Balance-up! (WLB-up!) Month every
November to inform employees of our approach how to managing the balance between
work and life. The main activities during the third WLB-up! Month in November 2012:
Promoting understanding of the systems supporting work-lifebalance
Improving work-life management and creating a corporate culturethat encourages people to use these programs
Boosting individual employee's awareness of work-life management

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140

Developing Work-Life Balance Support Systems
Since fiscal 1990, we have been introducing and improving an array of programs for
employees to balance work with child care or nursing care, aiming to create a more
employee-friendly work environment.

Hitachi Group
Sustainability
Report 2013Child Care and Nursing Care Support System (Example of Hitachi, Ltd.)Key Indicators

Using Work-Life Management Support Systems (Hitachi, Ltd.)
System

FY 2009

FY 2010

FY 2011

FY 2012Child care leave

414

486

542

533

540

Shorter working hours for child care

449

473

531

614

625

Nursing care leave

14

8

10

12

17

Shorter working hours for nursing care

6

7

8

8

10

Paternity leave

117

133

156

209

230

Family nursing leave

161

173

204

195

194

Work from home

93

43

187

289

320

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FY 2008

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Setting Up In-House Child Care Centers
Genki ClubIn April 2013, the Genki Club daycare center celebrated its 10th anniversary. This inhouse facility was set up to help Hitachi Group employees living and working around the
Totsuka area in Yokohama City to balance work and child care. The center opened with
14 children; today this has grown to 60, with the center becoming one of the few large in-house daycare facilities in Japan. The Hitachi Workers Union Soft Branch operates thecenter, along with Hitachi Ltd., Hitachi Group companies, the labor unions of relatedcompanies, and many other groups who work together to provide support.

Excursion (potato digging)

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142

Main Assessments and Awards
Hitachi, Ltd. has received the following assessments and awards from the media andother external organizations to recognize our diversity and other initiatives that create amore employee-friendly workplace.

Hitachi Group
Sustainability
Report 2013

Hitachi, Ltd. Recognized in FY 2012 Diversity Management Selection 100
On March 22, 2013, Japan's Ministry of Economy,
Trade and Industry (METI) held a ceremony tocelebrate Diversity Management Selection 100.
Hitachi, Ltd. was one of 43 companies receiving
awards in Japan.
The Diversity Management Selection 100 systemchooses and recognizes companies that achieve
METI Parliamentary Vice Minister andhigh results in areas such as improving innovation
representatives from award-winning companies
and productivity by using the talents of diverse
employees, including women, different nationalities, older employees, and people withdisabilities.
The Hitachi Group is accelerating work on diversity management. Not only is our diversity
message communicated directly by the president and company executives, but dedicatedorganizations are also being set up within each company and division to meet specificgoals. We also have regionally oriented programs such as the European Diversity Project,which we launched in fiscal 2009.

Kurumin Certification
In February 2011, we acquired Kurumin certification in Japan under the
Act on Advancement of Measures to Support Raising Next-Generation
Children, which came into force in April 2005. Certification is granted
to companies that create action plans for child care support in line withthis legislation and that meet performance requirements. We develop
and implement action plans supporting child care so that ouremployees can work with the peace of mind that comes from a good work-life balance.
Act on Advancement of Measures to Support Raising Next-Generation Children
Japan's Ministry of Health, Labour and Welfare
http://www.mhlw.go.jp/seisakunitsuite/bunya/kodomo/shokuba_kosodate/jigyou_ryouritsu/ryouritu.html

Other Assessments and Awards
Nihon Keizai Shimbun, 2012 Ranking of Companies with the Best Working Conditions: 2nd place
Nikkei Business Publications, Inc., 2013 Ranking of the Best 100 Companies that Encourage Working
Women: 33rd place
Work-Life Balance Category: 4th place
Active Use of Women's Ability Category: 5th place
Fortune Magazine of the United States named Hitachi Data Systems Corporation one of the "100 Best
Companies to Work For" in 2012.

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143

Diversity Activities (2)Support for Women's Leadership Networks (WLNs) in North America

Hitachi Group
Sustainability
Report 2013

Hitachi, Ltd. and all of our Group companies believe that diversity of our business lines,
technologies, and people enables social innovation. By embracing diversity anddifferences, Hitachi can drive social innovation by developing individual talents andcohesive teams that provide the best solutions for our global customers.
One of the ways that Hitachi promotes diversity and inclusion is by supporting Women's
Leadership Networks (WLNs) in North America. As with any employee resource group(ERGs) or affinity groups, these are open to men and women who have a shared interest.
The WLNs focus on topics such as professional development, time management, people
skills, and networking opportunities. The WLN leaders at each company hold quarterly
teleconferences to share resources, make book recommendations, and discuss how theirgroups are growing. All employees are encouraged to create other ERGs to support theirinterests.
In addition, many of our locations host international appreciation days. Some of these
events tie into our annual North America Food Drive and others host learning days atother times of the year. One of our locations celebrated diversity by performing andhosting a Japanese tea ceremony where the employees learned about Japan's cultural
traditions and history.
Respecting differences increases employee satisfaction, which in turn motivates
employees to work at their highest level both personally and professionally. This in turntranslates into greater innovation, company sustainability, and growth. We strive tocreate an environment where the unique strengths and abilities of a wide array of people
are brought together to produce new value and develop innovative solutions.

Promoting Diversity in Europe
Hitachi in Europe continues to address diversity and inclusion, driven by the reality ofdemographic change, an aging population and an intensifying "war" for talent in theregion. Having a diverse workforce and an inclusive workplace culture is particularly
important for increasing innovation and therefore business performance.
A recent annual survey of Hitachi Group companies in Europe indicated that overall the
proportion of female employees in Europe has remained the same as in 2012,
approximately 29 percent. There has been a small increase in the number of female
senior managers. However, more needs to be done to ensure that female managers areequipped to take on senior level roles. This issue is being addressed, for example in 2012
four times more women graduated from Hitachi's European Leadership Programme thanin 2011.
Hitachi Europe has seen a rise in the proportion of female managers from 21 percent in2012 to 30 percent in 2013. Our policy is to hire and promote the best candidates foreach position, and in 2012 twice as many women as men were promoted to
management positions. In recruitment processes, standard job description terminology
was reviewed to make it more gender neutral and recruitment agencies were briefed on
implementing a more diversity friendly approach to attracting people to work for Hitachi.
Three female managers were recruited to work for Hitachi Europe in 2012, a threefold
increase from 2011.
A series of management level meetings was kicked off in December 2012 coinciding witha visit by Ms Yukari Tominaga, Executive Officer, Hitachi Solutions. Ms Tominaga shared
her desire to improve gender diversity within Hitachi with a number of female managers

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and acknowledged that Europe faces similar challenges to Japan, particularly for womenleaving work to have children and the need to develop women for senior roles. Follow-up
meetings took place in 2013 to outline the specific challenges facing women's
development and ways to address these on a regional level.

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145

Employing People with Disabilities
The policy of the Hitachi Group is to respect individual differences and to seek ways toharness every employee's individuality and capabilities. People with disabilities are using
their skills in a wide range of workplaces from design, development and manufacturing
through to human resources, accounting, and other workplaces.
As of June 2012, the employment ratio of people with disabilities was 2.02 percent at
Hitachi, Ltd. and 1.95 percent for the entire Group, topping Japan's legally mandated
ratio of 1.8 percent. With the legally mandated ratio rising to 2.0 percent (as of April2013), we will maintain our Group-wide drive to hire more people with disabilities.
We also outsource tasks to a sheltered workshop in Ibaraki Prefecture, helping to create
jobs for around 80 people.

Hitachi Group
Sustainability
Report 2013

Key Indicators

Trend in Employment of People with Disabilities and Employment Ratio (Hitachi,Ltd.)* Data is compiled in June every fiscal year.

Hitachi Group Special Subsidiaries
Five special subsidiaries within the Hitachi Group employ 211 physically, intellectually,
mentally, and developmentally challenged people. They work at the parent company andaffiliated companies performing a large variety of roles suited to their abilities.
Hitachi Group Special Subsidiaries (as of June 1, 2012)
Special subsidiary

Parent company

No. of people withdisabilities

Main tasks

Hitachi You and I Co., Ltd.

Hitachi, Ltd.

93

Cleaning, mail, shredding, cafeteria
work, clerical work assistanceHallow, Ltd.

Hitachi Metals, Ltd.

40

Machining, checking, aluminum
wheel grinding, mailHitachi High-Tech Support
Corporation

Hitachi High-Technologies
Corporation

25

Mail, business card creation, travel
expense calculation, bookbinding

Building Care Staff, K.K

Hitachi Building Systems Co., Ltd.

48

Digitization of documents, office work
assistance, cleaning, shredding

UJKC Social Enterprise, K.K.

Hitachi Automotive Systems Steering,Ltd.

5

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Fostering Understanding of People with Mental Disabilities andEmployment
Hitachi, Ltd. proactively participated in a model project of the
Ministry of Health, Labour and Welfare called Promoting the
Employment of People with Mental Disabilities. We hold study
meetings to share the employment and retention expertisedeveloped through the project Group-wide, as well we createdthe Handbook on Employment of People with Mental Disabilities
for distribution to all Group companies in Japan. Our initiatives
to boost employment have raised the number of mentallychallenged employees in the Hitachi Group to 195 (as ofDecember 2012).

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Handbook on Employment ofPeople with Mental Disabilities

Trend in Employment of People with Mental Disabilities (Hitachi Group)* Data is compiled in June every fiscal year.

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Public Policy Initiatives

Hitachi Group
Sustainability
Report 2013

Partnerships with governments and policymakers around the world
are vital for growing our Social Innovation Business to create asustainable society. We are enhancing external relations so that we
can respond to social expectations as a company supplying social
infrastructure and then feeding back social and policy trends tomanagement.

External Relations Promotion Structure
Background to and Vision for Government & External Relations
Partnerships with government institutions in and outside Japan are becoming
increasingly critical for the global expansion of our Social Innovation Business. Deepening
our relationships with the government institutions that are the main agents for social
infrastructure will enable us to more precisely identify local business needs andcontribute to the creation of optimal societies. Working with the Japanese government
to best use the systems that the government has in place to support the export ofinfrastructure business will also be a powerful business driver.

External Relations Structure and Mission
The Government & External Relations Division was established within our headquarters infiscal 2009 to guide and accelerate the external relations of the entire Hitachi Group,
responding to the management policy of strengthening our Social Innovation Business,
as well as the growing support offered by the Japanese government for infrastructure
system exports. Through this division, including executive managers, we talk with
policymakers so that government institutions can get a better understanding of ourbusiness. We then offer policy recommendations with a view to stimulating industry as awhole.
In addition to appointing external relations personnel in in-house companies and Group
companies, we have offices in Washington, DC, and Brussels to monitor policy trends andto manage external relations initiatives in the US and Europe. To promote external
relations Group-wide, we hold regular meetings to share cases and issues, with an eye toboosting the efficiency of our activities.

Specific Initiatives
Participating in International Conferences
Hitachi gives presentations at international conferences held by Japanese and othergovernment institutions to contribute to policymaking from an industry standpoint. In
fiscal 2012, the Mekong-Japan Industry and Government Dialogue, a Ministry of
Economy, Trade and Industry (METI) initiative aimed at boosting Japan's presence in thefive Mekong countries, was attended by representatives from Hitachi Group local
subsidiaries. They offered their views on infrastructure projects in the Mekong region.
Hitachi executives also attended the Japan-France Energy Forum held in the Chamber ofCommerce and Industry of Paris, highlighting the importance of an effective energy mix.

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148

Participating in Policy Deliberations
We exchange views on the Japanese government's support for infrastructure system
exports. In fiscal 2012, executives attended the Subcommittee on Infrastructure andAdvanced Systems Strategy under METI's Industrial Structure Council and the Ministry ofLand, Infrastructure, Transport and Tourism's Advisory Council on Promotion ofInternational Infrastructure Deployment, proposing specific types of support.

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Participating in Business and Industry Associations
Operating through business and industry associations is another critical aspect of ourexternal relations. For example, the European Union Parliament is currently revising the
proposal on the General Data Protection Regulation for the protection of personal data.
We are working as a member of the Japan Electronics and Information Technology
Industries Association (JEITA) to put our views to the European Union Parliament, as wellas to develop, in consultation with METI, a Japanese industry response.
Hitachi is also a member of Keidanren (Japan Business Federation), serving as vice chair aswell as participating on several committees. As the planning and coordination chair forthe subcommittee on Europe, we urged the Japanese and European governments toenter negotiations on a Japan-EU Economic Partnership Agreement. With that decision
reached in March 2013, we will continue to support the progress of negotiations.

Using Government Support
METI provides a program supporting global human resource development and thecreation of international networks, part of their support for infrastructure system exports.
In fiscal 2012, 14 Hitachi Group employees took part in this program, which sends, forseveral months, working-level employees from private companies to government
institutions and local companies in emerging countries. Participating in this kind of
program will enable us to more accurately identify the needs of emerging countries.
Hitachi has also been contracted by the New Energy and Industrial Technology
Development Organization (NEDO) to participate in the Japan-US Island Grid Project on
the island of Maui in Hawaii in a bid to convert 40 percent of the island's power
generation to renewable energies by 2030. This demonstration project, running until theend of fiscal 2014, is a collaboration with partners including the State of Hawaii, theHawaiian Electric Company, Inc., the University of Hawaii, and the Pacific Northwest
National Laboratory.

External Relations in the US
The Hitachi Group Corporate Office in Washington, DC, examines the impact on businessof US government legislation. To promote mutual understanding and improve business
opportunities, we communicate to key stakeholders how Hitachi's business cancontribute to the growth of US society.
For example, we launched the Hitachi Government Relations Network (HGRN) in fiscal
2011. With more than 20 members—primarily from Group companies—the HGRN serves
as a venue for exchanging information on key laws and regulations that impact
management and business, and for sharing the business impact of public policy. The
HGRN also communicates with key policymakers in federal and state governments andwith other government representatives.
We provide information to policymakers and government representatives on Hitachi's
specialist technologies in the Social Innovation Business to convey directly and indirectly
how Hitachi technologies can contribute to US society. For example, communication with2

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researchers at influential institutions, such as the Brookings Institution, the American
Association for the Advancement of Science, the Center for Strategic and International
Studies, and the Council on Foreign Relations, deepens their understanding of Hitachi'sbusiness and technological capacity, helping them to reflect our specialist technologies in
the policymaking of their institutions.

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External Relations in Europe
The Hitachi Corporate Office, Europe, located in Brussels, gathers, analyzes, anddisseminates information on policy trends in Europe, makes recommendations on
European Union policies, and serves as a link to European institutions. Participating inEuropean policy debates from the perspective of a global company will enable us to not
only understand the future business environment, but to seize the opportunity to havesome influence on shaping it. We believe that these activities will contribute tomaintaining an appropriate quality of management as a global company. Especially inrecent years, there have been discussions involving stakeholders in the fields of businessand human rights that have the potential to impact the business environment as well as
policy trends in Europe. From this point of view, in fiscal 2012, we contributed to thediscussion on business and human rights led by the European Commission. When theEuropean Commission was creating sector guidance for putting the United Nations
Guiding Principles on Business and Human Rights into practice, we formulated views on
sector guidance through the CSR Committee of the Japan Business Council in Europe(JBCE), which Hitachi chairs, and submitted them to European institutions. We also
hosted the JBCE Japan-Europe Business and Human Rights Roundtable focusing on
internal communication from a practical perspective and published the summary of theroundtable for wide distribution.

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Chapter3 Social Report

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Quality Assurance Activities

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To reinforce our management structure, we continuously improve thequality of products and services globally for diverse customers
through our tradition of monozukuri craftsmanship.

Quality Assurance Activities
To preserve our tradition of monozukuri
craftsmanship from the customer's
perspective and to advance productreliability, our quality assurance activities
cover all processes from product planningand development through to design,
manufacturing, delivery, and after-sales
service. Quality assurance programs arecarried out Group-wide, with special priority
on organizations and management,
technology, and human resources. Fromfiscal year 2010, the three-year HitachiGroup Quality First (QF) Innovation
Movement ensured product safety,
compliance with laws and regulations,human resource development, and quality
enhancement. We have also been
concentrating on quality improvements
outside Japan, especially in China and therest of Asia, since fiscal 2007.

Activities Supporting Quality Assurance
Organization &Management

Management of defective
product accidents
QF emphasis management
systemOCHIBO HIROI (gleaning)
Management of hazardous
chemicals

Technologies

Quality reliability committee
Product safety
Technical law compliance
Work process improvements

Human Capital

Cultivation of OCHIBO HIROI
spiritImprovement of engineers'
ethical awarenessEducation on quality andreliability
Quality awareness improvement
movement

Key Quality Assurance Programs
OCHIBO HIROI
Meaning gleaning in English, OCHIBO HIROI identifies the fundamental causes of productaccidents and ways to prevent them from reoccurring. The quality assurance executive
officer works with divisions to identify fundamental causes and preventive measures.
They examine not only technical causes but also the procedural, organizational, andpsychological factors that led to the accident.
Intensive Product Safety Programs
To deliver safe products and services, we combine expertise and technologies from suchdiverse areas as planning, research, design, manufacturing, quality assurance, andmaintenance. Life, health, and property are the top priorities in product development.
Therefore, we verify design safety and conduct risk assessments from a wide perspective
in collaboration with manufacturing plants and research laboratories.
Complying with Technical Laws
To supply our customers with products they can use with confidence, we comply with all
product safety and technical laws, including those covering environmental consciousness
and safety labels. We distribute information within Hitachi Group companies on product2

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regulations with amendment trends and enforcement dates. We have also createdcompliance guidelines to share within the whole Group that include clarifying productspecific laws (product-specific laws map), continual improvement processes—based on
our compliance management system, designed to satisfy the 2008 ISO 9001 standards—
and providing education on compliance, in an effort to raise overall complianceawareness.

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Quality and Reliability Education
Our training courses for all technical and skill levels at divisions working in design andquality assurance cover reliability (fundamentals and applications) and product safety. In
fiscal 2011, we reinforced our monozukuri practices by beginning an e-learning program
for the more than 120,000 Hitachi engineers around the world, reaffirming themonozukuri spirit based on our engineering ethics. In fiscal 2012, we developed a second
e-learning program that draws on the results of analyses of past product accidents to
identify weaknesses that our engineers should be aware of and should overcome,building monozukuri craftsmanship into their daily activities.
Quality assurance training centers at manufacturing sites and locations in Hitachi City,
Ibaraki Prefecture, help to increase production, inspection, and maintenance skills
through their own specialized technical courses.

Strengthening Quality Assurance (QA) Systems in China andthroughout Asia
As production volume has been increasing in China
and other Asian nations, we are reinforcing systems
and training to improve quality production fromthese locations. For example, we host annual
conferences for QA managers in China and Thailand
to improve quality awareness and to share
information and best practices.
We provide quality reliability courses in Beijing,First Advanced Reliability Course in Bangkok
Shanghai, and Guangzhou in China and Bangkok,
Thailand, to develop employees' QA skills and to improve their quality awareness andinspection techniques. In addition to the Basic Reliability Course*1 and Intermediate
Reliability Course,*2 we launched an Advanced Reliability Course in China in fiscal 2011
and in Thailand in fiscal 2012. In this course, managers hold group discussions on past
accidents to identify the fundamental causes, including process-related, organizational,
and psychological factors. The goals are to boost problem identification and problemsolving skills as well as to develop accident prevention procedures. We will continue toexpand the number of regions where we conduct these courses.
*1 Basic Reliability Course: Deepens understanding of such basic issues as Hitachi's monozukuri craftsmanship,
quality management, and labor safety.
*2 Intermediate Reliability Course: Improves understanding of more practical issues in, for example, Hitachimonozukuri craftsmanship, ISO 9001 certification, defect elimination, design for reliability, and purchasing andvendor management.

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152

Handling Product Accidents
If a product malfunctions, the division responsible acts swiftly to resolve the problem
from the customers' perspective, coordinating with other Hitachi business units asneeded. For an especially serious accident, we quickly submit a status report to top
management and then take fast remedial action Group-wide. At the same time, we
promptly comply with legal requirements to report to government agencies, and wepublish the incident information through our website and other channels.
When we decide that a product recall is necessary, we notify the public through our
website or in newspaper notices, then repair or replace these products.

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Response Flow in the Event of Product Malfunction

Ensuring Hitachi Home Appliance Safety
We are eliminating consumer appliance accidents in line with Hitachi's Customer
Satisfaction (CS) Management Guidelines, which take the avoidance of accidents as theirbaseline. For example, since fiscal 1987 we have been testing worst-case scenarios, suchas deliberately setting a fire inside a product to confirm that the fire will not spreadoutside it. Since fiscal 2006, we have also been conducting product safety risk
assessments at the development stage, creating "accidents" that might be caused bymisuse.
Of the serious product accidents occurring in Japan, there were as many as 2,862 fires inelectrical products between May 14, 2007 and March 31, 2012.*1 By product, room air
conditioner accidents were the most common. Only one of those room air conditioners
was from Hitachi, and this was a simple case of smoke coming from an internal
component that had deteriorated over time; there was no external fire. We will continue
to make all our consumer appliances even safer using our own voluntary action plan for
product safety so that customers can use our products with confidence.
*1 Ministry of Economy, Trade and Industry website

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Customer Satisfaction

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Using the Customer Satisfaction (CS) Management Guidelines, one ofthe pillars of our business management, we continue to improve CS
with the goal of "creating innovation through collaboration withcustomers."

Customer Satisfaction Management Guidelines
Listen to our customers determine the value of products and services
Review information from our customers is another source of improvement
Offer prices and quality that are competitive
Respond rapidly to keep our promises to our customers
Adopt systems that prevent accidents and minimize their impact
Formulated in 1994

CS Improvement Activities
Reflecting Customers' Voices
We use CS surveys tailored to every business operation. We also analyse customer
opinions submitted to the Hitachi Customer Answer Center and reflect their feedback in
our product development and business operations.

Sharing Information within the Hitachi GroupWe regularly hold Hitachi Group Service Business Liaison Council meetings, chaired by thepresident of Hitachi, Ltd. Other members are presidents and department officers from
Hitachi in-house and Group companies. The participants at these gatherings share
information to enrich after-sales service for our products and systems, including repairs
and maintenance, and we use that information to improve service quality and to offer
appropriate service costs. At the time of the Great East Japan Earthquake, cooperation
among many departments enabled the smooth delivery of emergency vehicles andsupplies to the affected operation sites.

Website Customer Support
Our website provides comprehensive customer support. It enables us to process customer
inquiries, opinions, requests, and complaints--in collaboration with the customer support
offices of Hitachi Group companies--to improve our business operations as well as
products and services. We also conduct training courses to provide better handling ofthese inquiries.
As one of our initiatives, we have been holding the Web Inquiry ResponsivenessImprovement Course since fiscal 2009. In fiscal 2012, 165 Hitachi Group employees took
this course (bringing the total to 442 participants since the course began), which features
case studies based on responses to inquiries. Going forward, we will work together withGroup companies to respond more quickly and effectively to customer inquiries, using
the website as an important contact tool.

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154Electric Home Appliances
The Electric Home Appliances Customer Satisfaction Division has enabled the expansionof Hitachi business from electronic and electric equipment to the environment businessby drawing up a vision for environment value creation, actively promoting various service
areas.
The Hitachi Contact Center for Customer Support in Japan and their website handle
repair requests, customer inquiries, and complaints about LCD TVs, washing machines,
and other appliances. The center receives about 3.7 million phone calls, faxes and e-mails
a year within Japan. We have undertaken the following initiatives to better respond toinquiries and to reflect customer feedback in our monozukuri craftsmanship:

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Third-party assessments of customer support center employees
Training for personnel in the design and quality assurance departments to listen to the actual voices of
the customers
Improving rates of customer contact by promoting outsourcing of a part of the Contact Center function
Creating a database of customer feedback, including consultations, inquiries and complaints
Enhancing our website FAQs

We also conduct semiannual customer service evaluation surveys at 90 service centers inJapan. Based on the answers, we improve services by promoting employee education,
especially through CS training courses and CS improvement awareness months.
With the expansion of Hitachi's markets outside Japan, sales offices have been opened inseven countries in Asia and the Middle and Near East. We are also working on unifying
management of the operations outside Japan.
Rates/Number of Cases of Customer Contact (without Repair Requests)

Results of Evaluation Survey for Customer Repair Services

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155

Flow Chart of Customer Service

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Management of Elevators and Escalators and Building Facilities
Hitachi provides safe, comfortable, and convenient elevators andescalators as well as maintenance services matching our customers'
diverse needs. We also offer high value-added services for total
facilities management, including security and energy saving.
For building facilities management, in response to customers' needs toimprove the efficiency of their management operation, we provide
systems that support customers' businesses. For example, we have
HBS Mindbook
developed BIVALE, an integrated building facility management systemthat unifies the management of energy, security and building facilities at multiple
buildings through the Internet.
Our maintenance services subsidiary, Hitachi Building Systems Co., Ltd., has 350 service
sites throughout Japan to swiftly respond to customers' requests. Our latest remotemonitoring and diagnostic systems observe and analyze elevators, escalators, andbuilding facilities around the clock for preventive maintenance. Hitachi Building Systems
has also created the HBS Mindbook to encourage all employees to consider thecustomer's perspective.
For risk management, after learning from the lessons of the 1995 Great Hanshin
Earthquake, we created a wide-area disaster response manual in fiscal 1996. Since fiscal
2006, we have also been carrying out annual wide-area disaster response training andupdating the manual. This training was applied to the Great East Japan Earthquake inMarch 2011 and enabled us to quickly establish a disaster response headquarters in
Hitachi, Ltd. and to send people to assist in the disaster areas.

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156

Universal Design

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Hitachi's Universal Design Philosophy
We promote Universal Design (UD) by improving the quality and ease of use, accessibility,
and life cycles of our products. Quality of use means focusing on the traits that makepeople feel that the product is easy and enjoyable to use. Accessibility refers to the rangeof people who can use a product or service. Life cycle covers all the stages of the value
chain from product purchase through to disposal.

Our Universal Design Activities
In keeping with the UD philosophy, we conduct basic research on behavior and cognitive
characteristics of various users to formulate UD guidelines and reflect these in productdevelopment, incorporating the voices of users and experts at every stage. The
information obtained during product development is entered into a database shared byour businesses. We also distribute some of this information externally to promote open
source standardization and education.
Digital and Home Appliances
We define people as customers as soon as a product interests them, so we make a pointof considering Universal Design in everything from pre-sales to disposal. Key attributes
are usability, features, harmony with the environment, safety, and maintenance. Our
intention is to provide products that suit the physical ability or lifestyle of every customer
and are appreciated for a long time.
Our UD focus extends beyond products to include product manuals. For example, we areworking with the NPO Kanagawa Information, Employment and Welfare Network for the
Visually Impaired (View-Net Kanagawa) to make our manuals available as audio text files.
The entire manual, including photographs, diagrams and tables, is converted into a text
file that can be played aloud using text-to-speech software (a screen reader for thevisually impaired). These reconstructed text files are available online and allow thevisually impaired to use our products safely and easily. The text files are created based on
feedback from visually impaired people who have operated and verified product use
while listening to the instructions on the text files. In February 2013, this initiative wasselected for the 5th Kanagawa Barrier-Free Urban Development Awards, hosted by
Kanagawa Prefecture. Hitachi Appliances, Inc. and View-Net Kanagawa jointly received
the award from the Kanagawa Prefectural Governor.
We have also launched a range of measures to improve the accessibility of increasingly
complex consumer electronics appliances for the elderly and disabled. DVDs providing
clear explanations on product use are included with products, while some products have
Braille labelling on their buttons.

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157

Public Equipment and Systems
Public equipment and systems are used by alarge number of people, including children,
either individually or together, in public
spaces such as public buildings, stations,railways, and hospitals. Because of the
public nature of the spaces where they areused, product design must address not only
ease of use but also security, privacy, andsafety.
For example, our automated teller machines(ATMs) include considerations and ideas
based on a human-centric approach aimed
at producing a machine that a range of
people can operate in the same way withease and without any particular concern.
The arched guide frame leads hands
naturally toward the card, bankbook, andcash slots. The open space below the user
panel has been substantially deepened to
improve wheelchair access. The screeninterface, designed to be easier to use
regardless of differences in color vision, hasreceived color Universal Design
certification*1 from the NPO Color Universal
Design Organization.

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AKe-S next-generation ATM*1 Certification was obtained using Hitachi, Ltd.'s recommended screen design specifications.

An arched guide frame leads hands naturally toward theslots

A deeper space below provides better wheelchair access

The screen accommodates various types of color vision2

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Web and Information Systems
Web and information systems are essential forgathering information and communicating. For people
with disabilities who have difficulty accessing
information, it is particularly important that systems areaccessible, usable, and secure. We are promoting UDthat ensures accessibility in our Web and information
Screenshot of the Assistance for Color
Generation toolsystems by using the international Web Content*1
Accessibility Guidelines (WCAG) 2.0. Examples of this include screens and layouts thatare easy to read, compatibility with screen readers that read content out loud, and afeature that allows people to alter font size and color.
The Assistance for Color Generation by CSS3 (CSS3 Generator) tool uses CSS3,*2 enabling
the rendition of gradation, shadows, glow effects, font bordering, rounded corners andother effects that allow more people to create web pages efficiently without factoring incolors and using images. This tool makes it easy to choose colors that can bedifferentiated regardless of color vision. We have made this tool available for free from
July 19, 2012 so that it can be used by screen designers and systems developers.

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*1 Web Content Accessibility Guidelines (WCAG) 2.0: Guidelines created by the World Wide Web Consortium (W3C)
that form the basis of the JIS standard on information communications and Web content. The International
Organization for Standardization (ISO) adopted these guidelines as an ISO/IEC40500:2012 standard on October
12, 2012.
*2 CSS3 (CSS Level 3): An additional specification for the W3C's Cascading Style Sheets (CSS), a language fordescribing the rendering of HTML and XML documents.

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Communication with Shareholders andInvestors

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To ensure that shareholders and investors can make soundinvestment decisions, we enhance communication with them byproviding the information they require in a fair, transparent andappropriate way.

Information Disclosure Policy
We communicate with shareholders and investors based on our disclosure policy. We
disclose not only information required by laws or regulations, but also information that
promotes deeper stakeholder understanding of our management policies and businessactivities.

Disclosure Policy
1. Basic Policy
Hitachi's Mission is to contribute to society through the development of superior, originaltechnology and products. With this in mind, Hitachi seeks to maintain and develop trust
relationships with its stakeholders, including shareholders and other investors, customers, business
partners, employees and regional communities. It will fulfill its responsibility to stakeholders by
disclosing information in a fair and highly transparent manner, and by conducting various
communication activities.
2. Information Disclosure Standards
Hitachi discloses information as appropriate in a fair and highly transparent manner, in compliancewith the law and/or regulations of the stock exchanges on which the Company is listed.
Hitachi discloses not only information required by law and/or regulation, but also management
and financial information it regards as useful in deepening stakeholder understanding of Hitachi
management policy and business activities. Hitachi also discloses non-financial information
regarding the social and environmental impact of its activities. Hitachi's stance on disclosure
recognizes that society regards the above information as important.
3. Disclosure Methods
Hitachi uses appropriate means to disclose the information required by law and/or regulations of
the stock exchanges on which the Company is listed. The Company also posts this information on
its website immediately after it is disclosed.
Hitachi also discloses information not required by law and/or regulations by distributing news
releases, holding press conferences and presentations, posting information on its website, andconducting other disclosure activities in an appropriate, precise and timely manner.
4. Quiet Period
Hitachi stipulates a quiet period of a certain length prior to earnings announcements to prevent
information leaks and to maintain disclosure fairness. During this period, Hitachi refrains fromanswering inquiries about business performance and related matters.
5. Forward-Looking Statements
In its disclosures, Hitachi may make statements that constitute forward-looking statements thatreflect management's views with respect to certain future events and financial performance at thetime of disclosure and include any statement that does not directly relate to any historical or
current fact. Such statements are based on information available at the time of disclosure and are

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subject to various risks and uncertainties. Certain forward-looking statements are based uponassumptions of future events which may not prove to be accurate. Hitachi discloses the factors that
could cause actual results to differ materially from those projected or implied in forward-looking

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Proactive IR Approach
Our range of investor relations (IR) activities include business strategy meetings for
institutional investors and analysts, tours of plants and R&D facilities, participation in
brokerage-sponsored investor meetings, and one-on-one meetings with investors andanalysts.
In fiscal 2012, we held quarterly financial results
briefings and corporate strategy meetings on the
progress of the 2012 Mid-Term Management Plan.
Following on from fiscal 2011, we hosted a Hitachi IR
Day 2012, where in-house company presidents andCEOs explained their business strategies under the2012 Mid-Term Management Plan. Feedback from
Corporate strategy meeting on the progressinstitutional investors and analysts was positive. Theirof the 2015 Mid-Term Management Plancomments included, "Hearing explanations from theheads of the various businesses enabled us to better understand these, which I founduseful for analysis" and "It was a significant event for dialogue between the capital
market and management." We intend to hold this event annually.
We held a corporate strategy meeting on the power transmission and distribution
business to deepen understanding of our power systems operations. Furthermore, we
conducted around 650 one-on-one meetings with institutional investors and analysts
worldwide. Senior managers visit institutional investors in North America, Europe, andAsia twice a year to explain management policies and business directions, and in fiscal
2012, in-house company presidents and CEOs went to see investors outside Japan. We
are doing our best to share IR feedback in-house and reflect this in management andoperations.
We are committed to timely disclosure and we post briefing materials and businessperformance and stock price trend charts on our IR website. We constantly seek toexpand that content and make it more user friendly.
Investor Relations
http://www.hitachi.com/IR-e/

Disclosure Tools
Financial results
Annual and quarterly reports in accord with the Financial Instruments and Exchange Law ofJapan
Annual reports
Hitachi Group Corporate Sustainability Report

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161

General Meeting of Shareholders
At the Ordinary General Meeting of Shareholders, we provide audio-visual reports
designed to give shareholders a thorough understanding of our situation. After thegeneral meeting of shareholders, Hitachi discloses management policy explanations fromour president for shareholders and investors via our website. We post notices of general
meetings of shareholders earlier than legally required to give stakeholders additionaltime to consider our proposals.

Hitachi Group
Sustainability
Report 2013

Trends in Shareholder Composition

Hitachi as an SRI*1 Investment
The Hitachi Group welcomes external assessments as a socially responsible andsustainability investment.
For four years in a row (since fiscal 2009), DJSI World,*2 a leading global sustainability
investment index, has listed Hitachi, Ltd. as a component stock. Five Group companies,
including Hitachi Chemical Co., Ltd., Hitachi Capital Corp., and Hitachi Koki Co., Ltd., wereselected for the FTSE4Good Index Series.*3 Four Group companies including Hitachi
Construction Machinery Co., Ltd. and Hitachi High-Technologies Corp. were chosen for
the Morningstar SRI Index, with the Group performing well overall in these external
assessments.
*1 SRI: Socially responsible investment, where investment funds evaluate companies and select stocks from a CSR
perspective.
*2 DJSI: A family of SRI indexes developed by Dow Jones & Company (USA) and RobecoSAM (Switzerland) that
includes global and regional indexes within a certain composition. DJSI World, for example, selects on a global
basis, while the DJSI Asia Pacific Index covers Japan, Asia, and Australia.
*3 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, climatechange mitigation, human rights and workers' rights, supply chain labor standards, bribery and corruption
prevention, and corporate governance.

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162

Results of SRI Assessments in Fiscal 2012
Institution
RobecoSAM

Index

Companies selected

DJSI World

Hitachi, Ltd.

DJSI Asia Pacific Index

Hitachi Chemical Co., Ltd.

FTSE GroupFTSE4Good Index Series

Hitachi Chemical Co., Ltd. / Hitachi Capital Corp. / Hitachi
Construction Machinery Co., Ltd. / Hitachi High-Technologies
Corp. / Hitachi Koki Co., Ltd.

Morningstar

SRI Index

Hitachi, Ltd. / Hitachi Chemical Co., Ltd. / Hitachi Construction
Machinery Co., Ltd. / Hitachi High-Technologies Corp.

Hitachi Group
Sustainability
Report 2013

Fundamental Policy against Takeovers
The Group invests a great deal of business resources in fundamental research and in thedevelopment of market-leading products and businesses that will bear fruit in the future.
Realizing the benefits from these management policies requires that they be continued
for a period of time. For this reason, the Company keeps its shareholders and investors
well informed of not just the business results for each period but also of the Company's
business policies for creating value in the future.
The Company does not deny the significance of the vitalization of business activities andperformance that can be brought about through a change in management control, but
recognizes the necessity of determining the impact on company value and the interestsof all shareholders of the buying activities and buyout proposals of parties attempting toacquire a large share of stock of the Company or a Group company by duly examining
the business description, future business plans, past investment activities, and othernecessary aspects of such a party.
There is no party that is currently attempting to acquire a large share of the Company's
stock nor is there a specific threat, neither does the Company intend to implement
specified anti-takeover measures in advance of the appearance of such a party, but theCompany does understand that it is one of the natural duties expected by shareholders
and investors to continuously monitor the state of trading of the Company's stock andthen to immediately take what the Company deems to be the best course of action whena party attempts to purchase a large share of the Company's stock. In particular, together
with outside experts, the Company will evaluate the buyout proposal of the party andhold negotiations with the buyer, and if the Company deems that the buyout will not
maintain the Company's value and is not in the best interest of the shareholders, then the
Company will quickly determine the necessity, content, etc., of specific countermeasuresand prepare to implement them. The same response will also be taken in the event that a
party attempts to acquire a large percentage of the shares of a Group company.

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Chapter3 Social Report

163

Employee Health and Safety

Hitachi Group
Sustainability
Report 2013

The Hitachi Group's health and safety policy ensures that the healthand safety of employees are key priorities. Employees work together
to create safe and secure work environments aiming to be accident
free.

Hitachi Group Health and Safety Policy
Principle"Health and Safety Comes First."
Policies
1. To continually be involved in health and safety activities in order to prevent work-related injuries
and sicknesses through designating the health and safety of employees as management's toppriority.
2. To comply with the local laws and regulations in each company regarding health and safety.
3. To develop a safe and comfortable work environment by encouraging employees to maintaintheir own health and through taking a proactive stance on health and safety activities in theworkplace.
4. To require from partner companies an understanding of Hitachi's principle, and promote healthand safety awareness of all business partners of the Hitachi Group.
5. To contribute to the creation of a safe and pleasant society by emphasizing activities that makehealth and safety a top priority in all of Hitachi's business activities.
Adopted January 2011

Health and Safety Programs
Based on top management policies, each Group company and business unit maintains ahealth and safety program matching its specific work health and safety management
system. People in each workplace collaborate on programs that improve health andsafety management standards. We reinforce basic activities, such as workplace safety
checks and job-based education, based on the nature of the business site. We also work
to reduce the risk of accidents by thoroughly assessing risk.

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164

Key Indicators

Hitachi Group
Sustainability
Report 2013

Trends in Occupational Accident Rates*1 Up until 2011, figures for 90 major Hitachi Group companies in Japan, including Hitachi, Ltd.; as of 2102, 175
Hitachi Group companies in Japan, including Hitachi, Ltd.

Measures for Improving Health and Safety
Despite our health and safety programs, we have unfortunately had occupational
accidents that affected employees of Hitachi, Ltd., Hitachi Group companies, and theiraffiliates. The entire Group takes seriously the fact that accidents can happen, and wehave implemented measures that further improve health and safety management
standards.

Health and Safety Presentation and Conference
Once a year, we hold the Hitachi Group Health and
Safety Research Presentation Meeting for Hitachi
health and safety officers. The 56th gathering, inNovember 2012, attracted around 200 participants.
They shared their newfound knowledge from casestudies and heard special lectures from outside experts
on ideas that could benefit health and safety activities
at every business site. Around 100 industrial healthcare
56th Hitachi Group Health and Safety
Research Presentation Meeting
workers within the Hitachi Group, such as industrial
physicians and nurses, participated in the 12th HitachiGroup Industrial Health Conference in January 2013. After presentations on specialized
research, the participants discussed qualitative improvements in industrial healthprograms at business sites and talked about training for industrial healthcare workers.

Hitachi Group Key Safety Management Designation System
In fiscal 2011, we introduced a system to help improve safety at Hitachi Group companies
and business sites that have experienced serious occupational accidents in improving

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safety. These companies and business sites take on both management-driven andbottom-up initiatives to improve safety under the leadership of top executives. As well as
extensively investigating the cause of serious accidents, these workplaces have now
reorganized their companywide safety management systems and have formulated more
safety-oriented programs.

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Hitachi Group Health and Safety Portal System
We constructed the Hitachi Group Health and Safety Portal System to ensure that every
Hitachi Group company can track the progress of Hitachi health and safety management
programs. The system also promotes the sharing of information about accidents within
Hitachi, including causes and responses, from a register on all occupational accidents, thegoal being to prevent similar incidences.

Life Microscope: A Support Tool for Returning to Work after a Mental
Illness
Life Microscope is the fruit of collaboration between the Hitachi Group's internal researchlaboratories and industrial doctors. This wristband lifestyle monitor uses a threedimensional acceleration sensor and power supply to record a wearer's real-time
movements and temperature. This device records detailed activity levels, sleeping times
and other data. Used within a fully secure, cloud-based environment, this tool helps
improve the daily routines of employees returning to work after mental illnesses, and has
proven effective in preventing relapses.

Wristband lifestyle monitor

Managing daily routines to improve lifestyles

Developing the Coping with Stress Program for Younger Employees
In fiscal 2008, we developed the Coping with Stress Program to counsel employees onways to reduce stress so that they can work happily and productively, in turn benefitting
the entire organization. We encourage young and middle-aged Hitachi Group employees
to take these programs. The 16 trainers from our labor section and industrial healthpersonnel deliver these programs primarily to employees aged 40 years and under. Eachsession is around four hours long, covering three steps: stress theory, self-analysis, andpractical relaxation. Participants check their own stress levels and identify the best way tocope with stress for them personally. From fiscal 2008 through to March 31, 2013,
around 18,700 employees have participated in the program. We will continue to run thisprogram and encourage employees to further improve their stress management.

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Recognition for an Outstanding Occupational Safety Record
Based in Totsuka Ward, Yokohama, theTelecommunications and Network Systems Division of
Hitachi, Ltd. extended their industry record of work
time accident-free hours to 148,310,805 as of March
31, 2013, remaining number one in Japan. The HitachiGroup Health and Safety Award Program, awards
Hitachi Group companies that either extend accidentfree records or win external prizes for health andHitachi Group Health and Safety Award
ceremonysafety. In fiscal 2012, we recognized three Group
companies for continuing to improve their record after
achieving a Class 5 zero accident rate from the Japanese Ministry of Health, Labour andWelfare.

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Chapter3 Social Report

167

Global Human Capital Development

Hitachi Group
Sustainability
Report 2013

Hitachi is globalizing operations, especially in the Social Innovation
Business. To keep pace with the growing proportion of sales
generated outside Japan and our strategy for the global marketplace,
we are strengthening local management and developing new,globally focused human resource management systems.

Global Human Capital Management Strategy
Hitachi, Ltd. created the Global Human Capital Management Strategy to support theGroup's worldwide growth. We established the Global Human Capital Division on July 1,
2011 to drive that strategy. The new division establishes a common framework forhuman capital management, while optimally matching human capital management
programs with the specific requirements of regions, businesses and market needs incollaboration with the other business divisions. In this global framework, we treat Japanin the same way as our as our other major operating regions. We aim to further develop
the global human capital management framework, systems, and knowhow and then to
implement them globally.
At Hitachi, we project sales ratios between inside and outside Japan for each business in
our Mid-Term Management Plan. For greater accuracy, we have developed a templatethat determines the number of employees that will be needed in each region at aparticular time to ensure that we have the people we will need. The template also
calculates the gaps between available and required personnel. We will continue to planand deploy human resource programs to meet the needs of the businesses.

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Global Human Capital Management Strategy Overview

Employment of global personnel(from fiscal 2013*1)- 100 percent employment of global
personnel, in principle- People from outside Japan
representing
10 percent of all employees
Providing young employees withoverseas experience(from fiscal 2011)- Sending 1,000 employees outsideJapan
every year
Fully revised management training(from fiscal 2011)- Global and leadership focuses

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Group-wide borderless sharing ofmanagers
Personnel cultivation, employment andconditions shared globally across theGroup- Global talent management(development
programs for local managers)- Total rewards*2- Global Human Capital Database- Global Grading System- Performance management- Global recruiting- Employer surveys
Personnel management optimized
according to regional and businesscharacteristics- Business partnering- Collaboration as business line partners- Group collaboration in priority regions

Developing programs for local
personnel- Discover Hitachi program- Global training system for newly
promoted managers*1 New graduates joining in April 2013
*2 Comprehensive remuneration that combines non-financial factors such as opportunities for learning and growthwith salaries and other financial compensation

Accelerating the Globalization of Japanese Employees
To find market opportunities outside Japan, we intensified programs for the
globalization of employees in fiscal 2011 and 2012, and are accelerating programs
centered on (1) recruiting people in Japan who can promote global operations, (2)providing more young Japanese employees with experience outside Japan, and (3)comprehensively revising management development for Japanese employees.

Recruiting for Global Operations
To secure the right people for business globalization, we are opening up employment
opportunities and strengthening management diversity. We categorize all employees
graduating from universities and technical colleges in principle as global businesspersonnel who drive our global operations. Our priority for employing global businesspersonnel is to attract people who are eager to build their foreign language skills andwho want the challenge of working in different cultures, social settings, and work
environments.

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We are committed to employing the right talent, regardless of nationality. In fiscal 2013,
we recruited around 50 non-Japanese from universities in Japan and worldwide, andaround 20 Japanese graduates from universities outside Japan.

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Key Indicators

Trend in the Number of Non-Japanese Employees (Hitachi, Ltd.)

Providing More Young Employees with Overseas Experience
We maintain broad programs to systematically cultivate and secure people who can
succeed in global business. To create a pool of people who can understand and adapt tolocal cultures and lifestyles, we have offered a program for younger employees to live
outside Japan. We dispatched more than 1,000 young employees in both fiscal 2011 and2012, allowing them to take part in more than 80 programs, including apprenticeships,
local field studies, and language studies. We plan to dispatch approximately 1,000 again
in fiscal 2013.

Comprehensive Revision of Management Development Program
We help employees to develop their skills by offering on-the-job training andsupplementary training programs. The Hitachi Group's training facilities include the
Hitachi Institute of Technology and the Hitachi Institute of Management Development,
which run many of the training programs. These programs cover management
development, training for engineers, production workers, globalization training, sales
education, and other job-based training. In fiscal 2011, we completely revised
management training, shifting the focus from skills and knowhow to successful global
leadership. While specific content varies according to the course, the focus is now onpractical training. So, in addition to lectures on cases within Hitachi and management
simulation exercises, participants also give growth strategy presentations for their
particular areas to senior executives. In 2012, about 2,200 employees participated inthese programs.

Developing Local Personnel
With our operations taking on an increasingly global focus, it is essential that all
managers working on the global frontlines understand our history, founding spirit,

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company operations, common values, corporate philosophy, and basic management
approach. Since fiscal 2006, we have provided the Global Fundamental Course for new
managers in the Hitachi Group to have a sound understanding of our core values. These
core values are harmony, sincerity and the pioneering spirit that underpins Hitachi. The
course also covers the Corporate Credo and guidelines for conduct. In 2012, 174
managers participated in this course. We will continue to offer this course while
extending its geographical reach and personnel covered as well as improving training
methods.
In November 2012, we held the Global Advanced Program for Leadership (GAP-L) in
Singapore to develop personnel who can lead and control our operations in the everexpanding Asian market toward our goal of becoming a major global player. The aim isfor participants to develop superior leadership abilities and skills that will contribute to
the global growth of the Hitachi Group, as well as to understand the special
characteristics of emerging markets. This program offers lectures, group discussions, andcase studies of the Hitachi Group's global operations, which are all conducted over fivedays. In fiscal 2012, there were 21 participants, including six Japanese.

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Optimizing Employee and Organization Performance
Our Group-wide personnel management initiatives optimize both personnel andorganizational performance toward achieving Hitachi's goal of becoming a major global
player.
For example, we constructed the Global Human Capital Database to cover all HitachiGroup employees, excluding factory workers outside Japan. This database enables us to
fully understand our Group human capital in and outside Japan, and to assess data suchas the allocation of human resources. We also built a global grading system that applies
to all managers in the Hitachi Group worldwide, using it as a common platform for job
evaluations throughout the entire Group.
In fiscal 2013, we introduced a global performance management platform to link thegoals of both business operations and individual competency, toward sustained
improvement and growth. To support the advancement of employees outside Japan as
our global operations expand, we are forming global contracts with recruitment agentsand introducing common global hiring systems to secure talented people, boost
efficiency, and reduce costs in our hiring practices.
From September 2013, we will conduct annual employee surveys targeting office
employees from around the Group. These surveys will enable us to identify the strengths
and weaknesses of the whole Group as well as individual organizations. We will also
provide feedback on the results to divisions in order to improve staff engagement and to
improve organizational performance.
We are working with in-house and Group companies to build a personnel management
system to be used by all regions, focusing on Hitachi's 11 key regions.

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171

Career Development Support
We believe that empowering every employee to work with vigor and enthusiasm isbeneficial for the Hitachi Group. We support employees in developing their own careers
and abilities as part of our drive to foster independent, self-motivated employees. We
focus particularly on enabling satisfying careers within Hitachi.

Hitachi Group
Sustainability
Report 2013

Career Development in the Workplace
Because we regard the workplace as the center of career development, our careerdevelopment support emphasizes growth in daily work. Our approach builds employees'
engagement and motivation via two key mechanisms: an "MBO (management by
objectives)" developed between employees and their supervisors—where both parties
discuss and agree on short-term work goals—and career consultations to gain mutual
understanding of medium-to long-term career plans, training and skills development.
Applying the PDCA (plan-do-check-act) cycle to goal management improves employees'
individual abilities and gradually raises the level of their objectives, as well as their results.
This in turn links individual growth to organizational growth.

Career Development Workshops
Together with workplace career development, we provide direct support for individualcareer development through education and workshops that encourage self-awareness of
employees' careers. These programs are geared to every employee's career development
and life stage, from young employees to more senior. The Career Development
Workshop (CDW) initiative is a key program that targets middle-aged employees who
have some work experience and who play a central role in the workplace. Participants
use self-analysis to deepen their understanding and affirm their career direction, goals,
and paths so that they can direct their own career development and skills development.
Trend in the Number of Participants in Career Development Workshops (Hitachi Group)

Next Steps
We will develop our human capital through career development geared to the global
expansion of our business operations, creating mechanisms that enable a diverse rangeof people to work with enthusiasm.

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172

Employee Welfare
Hitachi has instituted a range of programs designed to support richer, more stable lives
for employees and their families.

Hitachi Group
Sustainability
Report 2013

Supporting Employee Self-Help and Independence
Hitachi, Ltd. has designed programs that support employees' self-reliance andindependence.
These include housing support, such as dormitories, company housing, and a housing
allowance system, as well as an asset-building savings program, an employee stock
ownership program, group insurance, and consolation payments. In 2000, a new"cafeteria plan" system was introduced so employees can select the benefits they will
receive. Choosing from a list of options, such as skills development, childcare, nursing
care, health promotion and donations, allows employees to tailor a plan to theirindividual lifestyles and needs. Employees can select the support that they need--when
they need it--according to their "cafeteria points."

Employee Life Planning Support through Corporate Pensions
With Japan's declining birth rate, the aging of society, and the growing diversity of postretirement lifestyles, corporate pensions are being positioned to play an increasingly
important role.
In response to the diversification of post-retirement lifestyles, changes in theemployment system, and revisions to legal systems, the Hitachi Group has fundamentally
revamped retirement allowances and pensions. Defined contribution and defined benefit
plans have been introduced within the systemic infrastructure--across the Group--toprovide life planning support for employees.
For defined contribution plans, we encourage the active participation of employees intheir postretirement planning through, for example, education on asset management
and investments. For defined benefit plans, we have boosted the number of benefit
options in response to employees' diverse needs.

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Social Contribution Activities

Hitachi Group
Sustainability
Report 2013

Hitachi's wide-ranging social contribution programs are tailored to
local needs, but help to resolve the challenges facing a global society.
Particularly in emerging countries, we are tackling poverty, hunger,
disparities in education and medical care, and environmental issues.

Social Contribution Activities Philosophy and Policy
We approach social contributions based on our Social Contribution Activities Philosophy
and Policy, keeping in mind our Vision. To better integrate Group activities at both theglobal and local levels, we have selected education, the environment, and social welfare
as medium-term priorities for fiscal 2012 onward, and are pursuing a range of programsin and outside of Japan.
We believe that our social contribution activities and the support we provide forvolunteer work by Group employees help us to build trust with communities as a good
corporate citizen. They also inspire the expression of individuality, greater social
awareness, and more flexible thinking in those employees who volunteer. These in turn
become a source of strength driving our Social Innovation Business, enabling us tocontribute to the development of both sustainable society and business.
In fiscal 2012, the social contribution expenditure of the Hitachi Group companies andour five foundations in Japan totaled approximately 3.3 billion yen.

Philosophy
The Hitachi Group strives to demonstrate good corporate citizenship in response to social needs
and expectations, while helping to enrich the quality of life and realize a better society.
PolicyThe Hitachi Group promotes various corporate citizenship activities to build a vibrant society basedon fostering leadership that will implement reforms for the next era. This is achieved by making
optimal use of our knowledge and information technology in three specific areas: education, theenvironment, and social welfare.
Adopted February 2002

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Key Indicators

Hitachi Group
Sustainability
Report 2013

Breakdown of Funding for Social Contribution Activities* Data on Hitachi Group companies and five foundations in Japan

Mid-Term Priorities for Social Contribution Activities
1. Education: Community development activities that support the development of thenext generation
2. The Environment: Promote global environmental sustainability based on the Hitachi
Environmental Vision
3. Social Welfare: Empower economically and socially vulnerable people
Approach to Social Contribution Activities

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175

Education
Monozukuri, or designing, manufacturing and repairing products, the heart of ourbusiness as a manufacturer, is founded on sound human resources. We instill a keensense of social awareness in every employee through their communication with society
and we focus on nurturing ambitions to meet new challenges and to improve technicalstrengths to achieve dreams. Our wide range of activities ensure that the technical andother expertise that our people have accumulated, including science education for young
people, is useful for developing the next generation.

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Hitachi Science Seminars
One way we support education is through the Hitachi
Science Seminar program, launched in fiscal 2011 toencourage children's interest in science andmonozukuri. In this hands-on program, Hitachi Group
companies engage children in science experiments andconstruction projects in an enjoyable way tocommunicate the skills and knowhow developed
through the Group's manufacturing business. In fiscal
Making magnets with Hitachi employees
2012, Hitachi Metals, Ltd., Hitachi Maxell, Ltd., Hitachi
High-Technologies Corporation, and Hitachi, Ltd. held the Hitachi Science Seminar series
at the Science Museum in Tokyo. About 70 elementary and junior high school children
had the opportunity to create paperclip motors using magnets and dry cell batteries, andto observe the micro world through electron microscopes, use flocculation magnetic
separation to purify water, and use computers for voice synthesis. At the Creating
Tohoku's Future: A Day with Hitachi in Kesennuma event, which the Hitachi Group
companies in Tohoku hosted in disaster-affected areas in September, parents andchildren enjoyed creating paperclip motors. We will continue holding these fun andeducational hands-on seminars harnessing the knowledge areas and characteristics ofvarious Group companies.

Universal Design (UD) Classroom Program
We organize volunteer visits by employees from the
Hitachi Group to elementary schools to give hands-on
workshops on Universal Design (UD), the concept ofdesigning products and services that are easy to use foreveryone. This program shows children the importanceof UD from a product developer's perspective.
Launched in Japan in 2005, the program has now been
Designing a remote control based on
extended to the United States and the United
the principles of UD
Kingdom, with more than 10,000 children around theworld participating to date.
In the UK, we developed educational tools with the help of Cambridge-Hitachi(Cambridge Hitachisoft Educational Slutions Plc.) and other experts so that more children
could participate in the program. These tools are available for free on the laboratory's
website so that even at schools that our volunteers can't visit, teachers can use computers
or interactive whiteboards to run similar programs.

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Using StarBoard Interactive Whiteboards and Tablet PCs to Support
Education
Hitachi Solutions, Ltd. has been teaching classroom
programs in elementary schools since fiscal 2011. In
fiscal 2012, the company created a social studies
seminar program on the theme of information
technologies (IT) for the future, encouraging children
to think about the connections between IT and daily
life. Incorporating the social sciences, IT education, andcareer education, the program is designed to stimulateGroup work using tablet PCs
children's interest in the IT that underpins the social
infrastructure, and it helps them to acquire information and communication technology
literacy for the years ahead. Every seminar has a preparatory lesson given by a teacher
and a special seminar given by a Hitachi Solutions' employee.
Interactive classes use a Hitachi Solutions interactive whiteboard called StarBoard
together with tablet computers. The teacher poses questions on the whiteboard which
the students answer using iPad tablets; their answers are then displayed on thewhiteboard.
Seminars held in elementary schools in Tokyo's Suginami and Koto wards in February
2013 received positive feedback from students. One child found that the iPad enabled
them to take an active part in the class, while another learned that IT could be used as atool for helping everyone achieve their dreams. We were able to hold classes wherestudents took the initiative for their own learning. The level of proficiency in accessing
information with a tablet in these classes reached 88 percent. Hitachi Solutions willcontinue this program, further tailoring it to meet social demand and expectations, whiledeveloping new content.

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Supporting Science Education through Tabletop Electron Microscopes
Hitachi High-Technologies Corporation has been
providing children with the opportunity to experience
the world at the micro and nano levels by supporting
science education using electron microscopes. Its
tabletop microscope is compact, meaning it can betaken out to schools, museums, and other places, andused in a broad range of activities that include
traveling exhibitions using scientific devices andscience-related exhibits loaded on to a trailer. As well,
Hitachi High-Technologies loans out tabletop
Inspire STEM Education website
for STEM educators
microscopes and cooperates on demonstrations for
STEM*1 education events in the US that are aimed atdeveloping human resources in the science and technology fields.
Particularly in the US, Hitachi High-Technologies is bolstering support for teachers and is
helping to develop future scientists and engineers. Hitachi High-Technologies makes
available, via a special website, content including tabletop microscope-based lesson plansand other teaching tools for all educational levels from kindergarten through touniversity.
*1 STEM: Science, technology, engineering, and mathematics

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177

Hitachi-CFR Fellowship Program
Hitachi, Ltd. has been running the Hitachi-CFR
Fellowship Program since fiscal 1997 in partnershipwith the Council on Foreign Relations (CFR), an
influential American think tank. Every year, theprogram provides from three to five leaders of the next
generation in the US with the opportunity to pursue
their research in Japan on their own topics. So far, 50
15th Anniversary reception
fellows have come to Japan. In fiscal 2012, to mark the
15th anniversary of the program, a commemorative reception was held at the Japaneseambassador's residence in Washington, DC, with the cooperation of then-Ambassador ofJapan to the United States, Ichiro Fujisaki. At the reception, Ambassador Fujisaki and Ms.
Carla Hills, Co-Chairman of CFR and former US Trade Representative, acknowledged theprogram's success in deepening the friendship between Japan and the US.

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EU Hitachi Science & Technology ForumThe EU Hitachi Science & Technology Forum is held in
Europe every two years and the purpose of the forum
is to provide a platform for key figures fromgovernment, business, and academia to debate andmake proposals on how technology can help to resolve
societal issues in the daily life of European citizens.
The 13th forum, with the theme of "Transport andSpeakers at the 13th forum
Mobility towards 2050," was held in London in May
2012 and attended by more than 150 people. There were also presentations byrepresentatives from several organizations, including Mr. Marcel Rommerts, Director
General of Mobility & Transport, European Commission; Dr. Lewis Fulton, Head of Energy
Technology Policy Division, International Energy Agency (IEA); and Dr. Ilja Radusch, Headof Automotive Services & Communication Technologies Department, Fraunhofer FOKUS.
A summary of the forum's findings was distributed to the European Commission, theEuropean Parliament, and other bodies.

The Hindu-Hitachi Scholarship Program
Since fiscal 1960, Hitachi, Ltd. has been running The
Hindu-Hitachi Scholarship Program together with the
influential Indian English-language newspaper The
Hindu to nurture young Indian engineers. Every year,
engineers from the Indian government and private
sector are invited to Japan for technical training atfactories of the Hitachi Group companies. To date, 134
At 2012 Engineers' final presentations
engineers have completed the training.
One of the three 2012 engineers studied process centrifugal compressor design at thethen-named Hitachi Plant Technologies, Ltd., while two others studied electrical systems
in power plants at the Hitachi Works, Ibaraki Prefecture. In December 2012, when
Hitachi's first board meeting outside Japan was held in New Delhi, scholarship alumni
were invited to the Environment Forum, held together with the Embassy of Japan inIndia. We also held a reunion for alumni, and they exchanged views on promoting
further cooperation between Japan and India.

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The engineers who completed the program in fiscal 2012 commented that they learned a
lot not only from the technical training but also from Japan's people and culture. The
training helped them define their career goals of becoming outstanding engineers, andthey also learned important life lessons at Hitachi about passion, dedication, and a senseof responsibility. Program alumni also said that they found the experience extremely
valuable for their career paths.

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179

The Environment
The Hitachi Group's environmental management mitigates increasingly serious global
environmental threats and helps to achieve a more sustainable society. In our social
contribution activities too, Group employees and members of their families are involvedin environmental conservation projects, working together with the community based on
our two main Environmental Vision priorities: preventing global warming and preserving
ecosystems.

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Kasumigaura Basin Environment Conservation and Community Stimulation
In fiscal 2012, to commemorate the company's 50th
anniversary, Hitachi Chemical Co., Ltd. worked with the
Asaza Fund and Shibanuma-syouyu Co., Ltd. to launch
the Connecting with Nature through Soy Sauce
Project. The aim of this project is to protect the naturalenvironment of the Kasumigaura Basin and to
stimulate the local economy.
Abandoned fields were cultivated, a biotope was built
Company volunteers planting soy beans
as a habitat for the frogs and dragonflies that eat
harmful insects, and organic soybeans were grown. The harvested soybeans, together
with other Ibaraki Prefecture soybeans and wheat and natural salt from Okinawa, were"reborn" as soy sauce using Shibanuma's 300-year-old traditional techniques. Some 382
Hitachi Chemical Group employees participated as volunteers over one year from April
2012 at all stages, from digging fields to soy sauce preparation. The company willcontinue with grassroots environmental conservation, including working with local
elementary school children to create soy sauce packaging labels and names.

Hakone Forest Regeneration Project
To address the goal of preserving the environment,
identified in the Environmental Vision 2025, theInformation & Telecommunication Systems Company,
with many factories and offices in Kanagawa
Prefecture, has encouraged employees every year since
fiscal 2010 to experience the blessings of nature and tolearn the importance of environmental conservation.
This has been done under the guidance of forestry
Experiencing the benefits of forests
instructors at the Prefectural 21st Century Forest(Minami-Ashigara, Kanagawa Prefecture). In October 2012, 140 people, including
employees and their families from Hitachi, Ltd. and nine Group companies, joined thevice president & executive officer in thinning out trees and clearing underbrush, as well as
walking on nature trails guided by instructors, and using wood from the thinned trees tomake handicrafts. In this way, adults and children learned the value of trees and thebenefits of forests. During short lectures after lunch, they learned about the ecology ofbroad-leafed and conifer forests, the significance of forest conservation, and theimportance of forest ecosystems.

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Participating in the 2012 Corporate Competition! MOTTAINAI Mt. Fuji Clean-up Competition
The Mottanai movement was set into motion by Dr.
Wangari Maathai, a female activist from Kenyaawarded the Nobel Peace Prize for "her contribution tosustainable development, democracy and peace,"
when she advocated that the Japanese word mottainai
should be used internationally for environmental
conservation. The aim is to build a sustainable andcyclical society with lifestyles that don't place a
Picking up trashsignificant burden on the global environment. As partof this campaign, the Corporate Competition! MOTTAINAI Mt. Fuji Clean-up Competitionis held every year, bringing together employees from companies that support the
campaign to "sweat and compete" over the amount of trash they can pick up. Eightmembers of the ALAXALA Networks Corporation—from the president down—formed ateam for the competition held on October 20, 2012 on the Tagonoura coast near Fuji
City, Shizuoka Prefecture. They and the other teams collected enough trash in under twohours to fill a 1.5-tonne truck two and a half times over. The matching towels that theteam members wore around their foreheads and the way the whole team worked
together to clean the beach from end to end made such an impression that they were
given an award.

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Mengmo Eco Education Classroom
Hitachi Group companies in China hold the Mengmo
Eco Education Classroom program around the country
to raise awareness among Chinese children about
environmental conservation. Company volunteers play
the role of the dream-eating baku, or tapirs, also calledmengmo in Chinese, and use picture books to present
environmental issues to the children in an
Class in Beijing
understandable way.
The program kicked off in June 2012 at the Beijing Foreign Language School, affiliatedwith Beijing Foreign Studies University, with volunteers from Hitachi (China) Ltd. holding
a class, including giving quizzes about environmental issues, for 80 third grade students.
In fiscal 2012, employees from Hitachi (China) Ltd., Hitachi Construction Machinery(Shanghai) Co., Ltd., Hitachi Construction Machinery (China) Co., Ltd., Hitachi Group
Companies in Hong Kong, and Hitachi High-Technologies (Shanghai) Co., Ltd. and otherGroup companies held classes in 11 schools in Beijing, Shanghai, Guangzhou, Dalian, andHong Kong, with 844 children participating. We will continue to offer this program in
China to foster interest in the environment among the children who will be the next
generation and encourage them to protect the environment.

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181

Preserving Mangrove Forests
To raise awareness of environmental conservation
among employees, Clarion Asia (Thailand) Co., Ltd.
helps in the tree planting that is preserving local
mangrove forests, which have been declining every
year. On August 18, 2012, as part of a staff trip, around
50 employees planted about 400 mangrove seedlingson the Bangjakreng coast of Samutsongkram Province
Volunteers planting mangrove seedlings
southwest of Bangkok. Tree planting encourages
communication among employees and helps them share awareness of environmental
conservation.

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Environmental Volunteer Programs
Activities held by the CSR Division at Hitachi, Ltd. aredesigned to boost Group employees' and theirfamilies' awareness of the natural environment andways to preserve ecosystems, as well as to create
opportunities to think about what they can do to help
and to begin taking concrete action. For these
activities, we often partner with NGOs and NPOs whoare expert on environmental initiatives. For example, inStudying Reverdin's Blue butterfly
larvae and adults
the Activities to Conserve an Endangered Butterfly
Living near Mt. Fuji, since fiscal 2006 we have beenworking, under the guidance of researchers, with the NGO Earthwatch Institute (Japan)
to help investigate the larval and adult stages of the endangered Reverdin's Bluebutterfly. Since fiscal 2007, we have also been holding Hitachi Group Volunteer
Experience Tours for the Horqin Desert Greening Project in China. In cooperation with the
NPO G-Net, these tours give employees the opportunity to promote desert greening in
the Horqin Desert in the Inner Mongolia Autonomous Region of China. We will continue
with these and similar programs so that as many Hitachi Group employees as possible canexperience the importance of environmental conservation.

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182

Social Welfare
We support social welfare projects so that everyone can enjoy the benefits oftechnological progress, placing special emphasis on promoting the education of theyoung, the independence of people with disabilities, and helping the elderly.

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Supporting Food Banks
Hitachi Europe Ltd. celebrated its 30th anniversary inJanuary 2012, prompting employees to organize
commemorative fundraising and volunteer activities
over the year that contribute to European society. They
held internal sports competitions and Christmas charity
events. As well, they sold calendars featuring
photographs taken by employees, raising 20,000 euro
(about 2.9 million yen) for the European Federation of
Christmas charity event raising money forfood banks
Food Banks (FEBA), a charity that fights hunger,
poverty, and food waste. FEBA is the umbrella organization for the food banks in 21
European countries that collect non-standard products from food processing plants anddistributes them for free to welfare and other groups.
Hitachi Group companies in North America hold an annual food drive every July,
spearheaded by local employee groups called Community Action Committees. In fiscal
year 2012, 26 Group companies participated in 55 locations. Employees helped to collectsome 16 tons of food and around US$135,000 (about 13.5 million yen), which was thendonated to food banks, providing assistance to people in need.

Applying Finger Vein Authentication to Health and Demographic Studies in
Developing Countries
There is an urgent need to improve the accuracy ofdata analysis related to infectious diseases and publichygiene in some developing countries and areas such
as Africa and Asia, where no civil registration or basic
demographic information is available. To solve thisproblem, Hitachi's finger vein authentication
technology has been applied to studies undertaken by
the Institute of Tropical Medicine of Nagasaki
Registering finger vein pattern
University and the Research Institute for Humanity andNature (RIHN) of the National Institutes for the Humanities, Japan, Inter-University
Research Institute Corporation. Without basic civil registration, identifying every local
resident was a major problem but Hitachi's finger vein authentication system has made ita lot easier and more accurate. The residents only need to place their fingertip on thedevice and then the system accurately identifies them and their samples, boosting theefficiency of these studies.
Nagasaki University surveyed the health of 500 infants in the Kwale District ofsoutheastern Kenya in March 2012. In July 2012, RIHN worked with the Lao PDR's
Ministry of Health on a survey of forest environments and malarial infection for 4,000
villagers aged six and above around the town of Sepon in Savannakhet Province. In
December 2012, RIHN also conducted stool examinations for 500 junior and senior highschool students in Song Khone in the same province. Hitachi also sent staff to join the2chapter

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study teams, operating the finger vein authentication system and helping with dataregistration.
We will continue to help boost comprehensive healthcare and to help improve hygiene
in developing nations.

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VOICES

Unusual Experience Fosters Responsibility in the Next Generation
I spent six weeks from March 2013 at an NPO in India aspart of my company's international corporate volunteering
program (Ryushoku Program). Under this program,
employees work with local people as well as NPOs andcompanies in emerging countries to resolve social issues.
My NPO operated its own schools, provided teachingmaterials to other schools, and gave assistance to teachers.
Because of the big disparity in children's academic levels,
they are divided into several groups to provide an
education geared to their individual needs. This requires

Osamu Torigoe,
IT Platform Division Group,
Information &Telecommunication Systems
Company,
Hitachi, Ltd.

assessing every child and developing an individual
education strategy. Using my experience as an IT engineer,
I worked on the development of tools for managing andanalyzing data on computers that had until then been
managed on paper. I spoke with teachers, data input staff,
and those analyzing the data, and showed them visually
the current status and results. I worked particularly hard to
improve input efficiency, and I consider the positive
feedback that I received as my greatest achievement.
Working with local people to solve problems made me
realize how difficult it is to raise children's education levels,
but I was also able to experience firsthand the children's
desire to learn, and that really motivated me to develop
robust, high-quality tools. I was delighted to see thegrowing number of students attending the origami classes
that I held to introduce students to Japanese culture, andthat the teachers decided to continue the class as part of
the formal curriculum.
Interacting with the children made me strongly aware of
my responsibility to the next generation. Before this, I
hadn't been conscious of the necessity of creating asustainable society, but through my experience in India, I
feel as though I've come to understand this, at least in
part. Operating outside the framework of my professional
experience has left me with a real desire to become anengineer who can take an unusual or "beyond-the-square"approach.

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184

Hitachi's Foundations
Hitachi's six foundations worldwide operate
in a wide range of areas, including
supporting family education, promoting
science and technology research, inviting
Southeast Asian university faculty members
to Japan, helping with environmental
conservation, supporting the developmentof young people, and promoting good
corporate citizenship in the United States.

The Odaira Memorial Hitachi Education

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Foundation
The Hitachi Environment Foundation
The Kurata Memorial Hitachi Science andTechnology Foundation
The Hitachi Scholarship Foundation
The Hitachi Mirai Foundation
The Hitachi Foundation (US)

Environmental Science Cafés
Resolving environmental issues requires widening the circle of action so that everyone—
public administrations, companies, schools, and citizens—understands the issues andworks to improve the environment. As part of our work to raise environmental
awareness, the Hitachi Environment Foundation has been holding Science Café events
since 2011. Participants deepen their understanding of environmental issues over a cupof coffee with experts and researchers who look at environmental issues from a scientificperspective.
The six lectures held in Tokyo in fiscal 2012 each covered a different theme. For example,
Professor Hiroyuki Enomoto from the National Institute of Polar Research spoke on global
warming, while Hiroyoshi Higuchi, Professor Emeritus of The University of Tokyo, gave apresentation on bird migration and protecting the global environment. About 260
people attended the lectures and contributed to a lively exchange of views. The Hitachi
Environment foundation makes transcripts of all the lectures available on its website sothat as many people as possible can gain the same recognition of and insight into
environmental issues as Science Café participants. The five lectures on climate change
given by Professor Ryuji Tada from The University of Tokyo between February andOctober 2011 have been published as a book that is now available for sale.

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Support for Volunteers
The Hitachi Group supports employees who volunteer by providing useful information,
time off, and financial assistance. We inform employees about volunteer opportunities
via seminars and our intranet. For time off, in addition to an annual paid leave, we offer
paid volunteering leave that employees can use for team building work or personal
development. Our volunteer support program, The Growing Tree, provides funding for
employees in Japan to participate in or financially support specific activities run byJapanese non-profit organizations.

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Hitachi Volunteer Seminars
These informative seminars, held as part of our support
for volunteering, provide opportunities for our
employees to experience volunteering and to regularly
participate in volunteer activities. Developed andcarried out in cooperation with the Tokyo Voluntary
Action Center, the seminars are designed for easy
participation and cover a wide range of volunteer
activities. Over 40 seminars have been held since they
Employees doing volunteer group work
were launched in fiscal 2002. In fiscal 2012, around 85
Hitachi Group employees took part in disaster prevention experiences and workshops togain knowledge about disaster recovery and to improve their disaster prevention skills.
They also participated in voluntary transcription work and provided learning support for
non-Japanese children.

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Disaster Relief

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Great East Japan Earthquake Relief
Our Buy and Help Society! bazaars enable welfareorganizations and a wide range of NPOs to sell theirgoods and present their activities to employees,
allowing employees to easily contribute to society. In
fiscal 2012, the program theme was support fordisaster-affected areas. From December 2012 toFebruary 2013, we invited the Tono City Disaster Relief
Product sales by groups working
in affected areas
Network, the Association for Aid and Relief, Japan, andother groups working in affected areas to participate
in these bazaars. The bazaars were held in venues belonging to Hitachi Medical
Corporation, Hitachi Kokusai Electric Inc., and Hitachi Systems, Ltd. The sweets andhandicrafts bought by Group employees raised around 1.16 million yen for operating
funds for these groups.
Hitachi, Ltd. participates in a project operated by the NPO XYZ (Cross Wise) to supply
picture books to children around the world. In March 2013, we donated picture books to
427 public elementary schools in Miyagi Prefecture.
Hitachi Solutions, Ltd. is running a pro bono*1 project and will carry out pro bono
activities to benefit disaster affected areas.
*1 Pro bono, or pro bono publico, (literally "for the public good" in Latin) is voluntary work where people use theirprofessional skills and/or knowledge.

Disaster Relief
Hitachi Group companies in the United States donated US$ 167,000 (around 16.7 million
yen) to the American Red Cross and other groups to help victims of Hurricane Sandy,
which struck the east coast of the United States in October 2012, and to aid inreconstruction. The companies also applied a matching system*1 for employee donations,
responding to employees' desire to contribute to the quick recovery of the areas affected.
To aid the victims of Typhoon Bopha, which struck the Philippines in December 2012,
Hitachi, Ltd., Hitachi Asia Ltd. and Hitachi Group companies in the Philippines donatedaround one million pesos (approximately 2.3 million yen) to the Philippine Red Cross.
*1 Matching system: System where the company donates an amount equal to donations made by employees.

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Contributing to Local Communities

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Hitachi Hospitals Support the Community
In 1938, Hitachi, Ltd. founded the Hitachi Hospital as a company hospital in Hitachi City,
Ibaraki Prefecture, with the fundamental philosophy of contributing to factory hygieneand public health. We subsequently established six company hospitals, located in theregions where our production plants and businesses operate. Even now, five of our
hospitals provide medical care to both local residents and Hitachi Group employees.
These hospitals work with local healthcare institutions to improve local medical care.
They also cooperate in the Hitachi Group's health care businesses by sharing expertise on
medical treatments. Only about 20 percent of patients are Hitachi Group employees,
firmly establishing these hospitals as hospitals open to the local community.
The Five Hitachi Company Hospitals
Name

Location

Year Established

Hitachi Hospital

Hitachi City, Ibaraki Prefecture

1938

Taga Hospital

Hitachi City, Ibaraki Prefecture

1942

Hitachinaka Hospital

Hitachinaka City, Ibaraki Prefecture

1945

Odaira Memorial Tokyo Hitachi Hospital

Bunkyo Ward, Tokyo

1960

Hitachi Yokohama Hospital

Yokohama City, Kanagawa Prefecture

1952

Hitachi Hospital
Hitachi Hospital launched an emergency medical
center—the first facility of this type in the area—inOctober 2012 in northern Ibaraki Prefecture to
improve emergency medical care. The center accepts
critically ill and emergency patients requiring
multidisciplinary treatment 24 hours a day, all year
round, enabling the hospital to contribute to the local
Hitachi Hospitalcommunity by providing advanced, comprehensive
medical care. Designated as an Ibaraki Prefecture regional cancer center, a disaster basehospital, and as a medical institution for infectious diseases, the hospital also serves as aregional center for the coordination of cancer diagnoses and treatment and disasterrelated medical care for northern Ibaraki.
Hitachinaka Hospital
Hitachinaka Hospital is part of Ibaraki Prefecture's
Hitachiota-Hitachinaka second medical area, covering
a population of around 400,000. As the only general
hospital for the Hitachinaka City and Tokaimura area,
this hospital works with the regional branch of theJapan Medical Association and with medical
institutions in the adjacent Mito medical area, as well
Hitachinaka Hospitalas with the Hitachi Hospital, contributing to local
residents' medical care and health management. It operates as a disaster base hospital,
quickly responding to large-scale disasters, as a medical institution designated fortreating infectious diseases, and as a "hospital that cares for its community." In addition,
the hospital contributes to the Hitachi Group's healthcare businesses, providing feedback

2

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Governance
ReportEnvironmental
Report

026

060

121
122
127
133
147

chapter

1chapter

3 Social Report

Message
Respect for Human Rights
Supply Chain Management
Diversity Management
Public Policy Initiatives

150
159
163
167
173

Quality Assurance Activities 153 Customer Satisfaction
Communication with Shareholders and Investors
Employee Health and Safety
Global Human Capital Development
Social Contribution Activities

http://www.hitachi.com/csr/

on product design and by introducing MRI (magnetic resonance imaging) scanners andother devices.

188
Hitachi Group
Sustainability
Report 2013

Community Activities at Hitachi Group Factories and Offices
In line with the medium-term themes of our social
contribution activities, people from Hitachi Group
offices and factories help protect the environment bycleaning up nearby rivers and wetlands and byplanting trees. They nurture the next generation by
conducting science programs and by taking students
on field trips. Other community activities include using
Pond on the grounds of the Central
rooms and facilities of business/manufacturing sites to
Research Laboratory
host events for local residents, as well as participatingin local festivals and environmental protection programs and events.
For example, the grounds of the Hitachi, Ltd. Central Research Laboratory in Kokubunji
City in Tokyo contain a riverhead and a lush natural environment rarely found in urban
areas, and we work to protect them. On the laboratory's biannual open days, many
visitors from the neighborhood and beyond enjoy this pocket of nature, contributing to a
positive relationship between the laboratory and the community.

2

chapter

Governance
ReportEnvironmental
Report

026

060

121
122
127
133
147

chapter

1chapter

3 Social Report

Message
Respect for Human Rights
Supply Chain Management
Diversity Management
Public Policy Initiatives

150
159
163
167
173

Quality Assurance Activities 153 Customer Satisfaction
Communication with Shareholders and Investors
Employee Health and Safety
Global Human Capital Development
Social Contribution Activities

http://www.hitachi.com/csr/

189

List of Key Indicators

Hitachi Group
Sustainability
Report 2013

Key indicators reported in Hitachi Group Sustainability Report 2013 are listed below.
Comparative tables with GRI Guidelines and ISO 26000 Core Subjects, as well as our
Policy, Vision, and Guidelines, are available on our website.
WEB

Comparative Table with GRI Guidelines
http://www.hitachi.com/csr/download/gri/WEB

Comparative Table with ISO 26000 Core Subjects
http://www.hitachi.com/csr/download/iso/WEB

Comparative Table with the UN Global Compact
http://www.hitachi.com/csr/download/gc/

WEB

Policy, Vision, and Guidelines
http://www.hitachi.com/csr/download/policy

Governance
FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Innovation Management
R&D Efficiency (ROI) (%)

0.31

0.54

1.10

1.00

1.24

R&D Expenditures to Revenues (%)

4.2

4.2

4.2

4.3

3.8

47

47

51

55

57

Intellectual Property
Patent Application Ratios outside Japan (%)

Scope of data
Hitachi, Ltd. and consolidated subsidiaries (including modified entities to which the equity method of consolidated
reporting applies)
Number of companies:
FY 2008: 944; FY 2009: 901; FY 2010: 914; FY 2011: 940; FY 2012: 964

Environment
FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Environmentally Conscious Products and Services
No. of Eco-Product Models (models)Contributions to CO2 Emission Reduction (millions of tonnes)

6,954

8,387

9,456

10,476

11,731

―

―

15.5

19.0

22.7

4,312

3,879

4,324

3,121

3,132

155

128

125

138

124

Environmentally Conscious Production
CO2 Emissions (ktCO2)
CO2 Emissions from Transportation in Japan (ktCO2)
Waste Generation (kt)

737

608

738

701

655

Water Use (outside Japan) (millions of m3)

13.3

12.9

16.4

8.9

9.9

VOC atmospheric Emissions (t)

4,549

3,737

3,653

4,285

4,127

Scope of data
For environmental load data generated from products
Hitachi, Ltd. and consolidated subsidiaries (including modified entities to which the equity method of consolidated
reporting applies)
Number of companies:
FY 2008: 944; FY 2009: 901; FY 2010: 914; FY 2011: 940; FY 2012: 964
For environmental load data generated through business operations
Companies that cover 90 percent of the load (based on Hitachi calculations)
Data for each fiscal year indicates performance within the given scope for the fiscal year.

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Hitachi Group
Sustainability
Report 2013

Social
FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Corporate Citizenship Activities
1.439

1.347

1.605

―

―

―

―

―

3.471

3.284

―

―

36

38

38

86 : 1485 : 1584 : 1684 : 1684 : 16

Ratio of Female Managers (Hitachi, Ltd.) (%)

2.9

3.0

3.3

3.4

3.5

Number of Employees Taking Childcare Leave (Hitachi, Ltd.)

459

510

542

533

540

Number of Employees Taking Nursing Care Leave(Hitachi, Ltd.)

18

11

10

12

17

Number of Employees Working Shorter Hours for Childcare(Hitachi, Ltd.)

449

473

531

614

625

6

7

8

8

10

2.06

2.01

2.05

2.00

2.02

200

218

230

239

257

0.12

0.06

0.07

0.10

0.14

0.20

0.21

0.20

0.15

0.19

Funding for Corporate Citizenship Activities *1 (billions of yen)
2

Funding for Corporate Citizenship Activities * (billions of yen)Supply Chain Management
Global Procurement Ratio (%)

Diversity Management
Ratio of Male and Female Employees (Hitachi, Ltd.) (%)

Number of Employees Working Shorter Hours for Nursing Care
(Hitachi, Ltd.)
Employment Ratio of People with Disabilities (%)

Global Human Capital Development
Number of Non-Japanese Employees (Hitachi, Ltd.)
3

Employee Health and Safety*

Occupational Accident Rate (Hitachi, Ltd.)
4

Occupational Accident Rate (Hitachi Group* )Scope of data
*1 Hitachi, Ltd. and five foundations in Japan*2 The Hitachi Group and five foundations in Japan*3 Statistics from January to December 2012
*4 90 major Hitachi Group companies in Japan including Hitachi, Ltd. through to 2011; 175 major Hitachi Group companies in Japan
including Hitachi, Ltd. for 2012

191

Independent Assurance
To enhance the reliability of the data disclosed in the Hitachi Group Sustainability
Report 2013, we are receiving third-party audits and reviews.

Governance Report / Social Report
Regarding the Governance Report (pp. 026–059) and the Social Report (pp. 120–
188) focusing mainly on fiscal 2012, we are receiving a review by Ernst & Young
Sustainability Institute Co., Ltd.

Third-Party Certification Reporton Governance Report and Social
Report will be available later.

Hitachi Group
Sustainability
Report 2013

Environmental Report
Regarding the fiscal 2012 results in the Environmental Report (pp. 060–119), we havereceived a review by Bureau Veritas Japan Co., Ltd.*1
For energy use, a more detailed verification was conducted to confirm the data.
Environmental load data, Eco-Product registration data, and the contribution to CO2emission reduction through the use of Hitachi products and services were also subject
to review.
The standards, guidelines, and calculation methods used in collecting data are posted
on our website.
WEB

Calculation methods for environmental load data:
http://www.hitachi.com/environment/activities/third/method.html*1 A certification agency providing inspection, auditing, and certification services in areas such as marine and building compliance; health, safety, and the environment; systems; and consumer products.

Third-Party Verification Report on Environmental Report

192
Hitachi Group
Sustainability
Report 2013

193
Hitachi Group
Sustainability
Report 2013

Greenhouse Gas Emissions Verification Statement

194
Hitachi Group
Sustainability
Report 2013

Inquiries:

Hitachi, Ltd.
CSR and Environmental Strategy Division
1-6-6 Marunouchi, Chiyoda-ku, Tokyo, 100-8280 Japan
Tel: +81-3-3258-1111 Fax: +81-3-4564-1454
http://www.hitachi.com/csr/