ESG Report 2023 - Fiscal 2022 Results Environmental, Social and corporate GovernanceContents

Introduction

03

Social24

1 ESG Report Editorial Policy and About Hitachi Astemo

03

1 Innovation Management

25

Management04

2 Human Capit al

32

1 CEO’s Message

05

2 Mission

07

07
08
09

3 Human Rights

43

09

4 Value Chain Management45

5 Community

48

Editorial Policy
About Hitachi Astemo

MissionValue
3 Sustainability Management
Sustainability Management based on Sustainable Development
Goals

4 Engagement and Participating in Initiatives
Stakeholder Engagement
International Standardization Activities

03
03

10

10
11

Research & Development
Intellectual Property

Global Human Capital Management
Human Resource Development
Diversity, Equity & Inclusion (DEI)
Occupational Health and Safety
Freedom of Association and Collective Bargaining
Respect for Human Rights throughout the Value Chain
Quality
Customer Satisfaction

Social Contribution Activities

25
30
32
35
37
38
42
43
45
47
48

Environmental

12

1 Environmental Vision and Long-term Goals

13

Governance49

13

1 Corpor ate Governance50

2 Compliance53

15

3 Risk Management

56

16
17
18

4 Information Management

57

Environmental Policy and Action Plan

Environmental Action Results for FY2022 and Environmental Action
Targets for FY2023 and Beyond
14

2 Environmental Governance15

3 Realizing a Decarbonized Soc iety16

Environmental Governance Promotion

Realizing a Decarbonized Society
CO2 Emission Reductions at Business Sites (Factories and Offices)
Introducing Renewable Energy
Disclosure of Financial Information Related to Climate Change(Disclosure under TCFD)

20

5 Achieving a Harmonized Society with Nature

22

6 Environmental Data

23

Preserving Ecosystems

Environmental Data (Results for 141 sites included in the FY2022 tally)

Business Practices in Accordance with International Norms

50
53

Addressing Risks and Opportunities, Business Continuity Initiatives 56
Information Security

57

19

4 Realization a Resource Efficient Society

Building a Society That Uses Resources Efficiently
Building a Water Efficient Society

Corporate Governance

20
21
22
23

2

Contents

Introduction

Management

Environmental

SocialGovernanceIntroduction

ESG Report Editorial Policy and About Hitachi Astemo
Editorial Policy
The Hitachi Astemo ESG Report 2023 presents our stance toward environmental (E), social (S), and governance (G) issues and details the activities we undertook in
relation to these in fiscal 2022.
Scope of this report
Period:The main period covered is fiscal 2022 (April 1, 2022, to March 31, 2023)
Some information on activities in April 2023 and after is also included.

Companies:

Hitachi Astemo Corporation and consolidated subsidiaries.

Reporting cycle:

Published yearly as an annual report.

About Hitachi Astemo
Company Profile (as of November 30, 2023)

Consolidated Financial Highlights for Fiscal 2022
Based on International Financial Reporting Standards (IFRS)Corporate name

Hitachi Astemo, Ltd.

Revenue

1,920.0 billion yen

FoundedJanuary 2021

3.6％

Head office2520 Takaba, Hitachinaka-shi, Ibaraki-ken, Japan

Adjusted
operating income
ratio

73.4 billion yen

Headquarters

Shin-Otemachi Building, 2-1, Otemachi 2-chome,
Chiyoda-ku, Tokyo, Japan

Adjusted EBITA＊1

Representative

President & CEO Kohei Takeuchi

Capital121.9 billion yen

No. of employees

Approx. 90,000(Consolidated)

Note: Hitachi’s consolidated financial statement is prepared based on the International Financial
Reporting Standards (IFRS).
*1 Adjusted EBITA: Presented as adjusted operating income plus acquisition-related amortization and equity inearnings (losses) of affiliates.

3

Contents

Introduction

Management

Management

Environmental

SocialGovernance

1 CEO‘s Message
２ Mission
３ Sustainability Management
４ Engagement and Participating in Initiatives

4

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 1 CEO’s Message

CEO’s Message

We strive to create advanced and sustainable mobility,
based on ESG management and the collective efforts
of all our employees

My name is Kohei Takeuchi, and I was appointed President and CEO of Hitachi Astemo in July 2023. Our
company name "Astemo" is a combination the first letters of the words "Advanced Sustainable
Technologies for Mobility," which embodies our mission to contribute to a sustainable society andimproved quality of life by providing world-leading advanced mobility solutions that satisfy ourcustomers.
Our mission focuses on three areas. In the environment, or green area, we contribute to carbon
neutrality through highly efficient powertrains, including electric drive systems and innovative
production methods. In the safety area, we contribute to reducing traffic accidents through advanced
chassis and autonomous driving/advanced driver assistance systems.
In the digitalization area, our SDV (Software Defined Vehicle) technologies advance the evolution ofvehicles by updating software through our vehicle architecture and IoV (Internet of Vehicles) platform.
Our success in promoting Advanced Sustainable Technologies for Mobility drives us closer to our goalof becoming a Tier 0.5 supplier.

5

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 1 CEO’s Message

CEO’s Message

In addition, by incorporating the environment, society, and corporate governance in its

employee by developing their skills—including upskilling—to respond to market

management, Hitachi Astemo strives to raise its corporate value by practicing ESG

changes and diversifying customer needs.

management to create sustainable growth.

In October 2023, we transitioned to a company with an audit committee system toRegarding environmental preservation, we contribute to the realization of a society thatfurther strengthen corporate governance and raise our corporate value. Under theis decarbonized, advanced, recycling-oriented, and can coexist in harmony with nature,strengthened compliance promotion system, we are making efforts to enhancethrough the provision of products, systems, and solutions. We also aim to reduce theour self-corrective functions and prevent inappropriate conduct.

environmental impact from our own business activities. These efforts aim to achieve

Hitachi Astemo will continue to meet the expectations of our stakeholders, including

carbon neutrality in our factories and offices by FY2030.

our customers, by working together under ESG management. Our advanced andIn addition, as a company with approximately 90,000 employees globally, we aresustainable technologies will contribute to the rapid and exciting changes taking placecreating workplaces where employees can thrive by promoting global diversity, equity

in mobility today.

and inclusion. This will optimize our ability to rapidly respond to social demands anddiverse customer needs. In addition to promoting the delegation of authority aiming tostrengthen customer service globally, we are also committed to developing leaders whowill drive medium- to long-term reforms. We will also improve the performance of each

Representative Director,
President & CEO

6

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 2 Mission

MissionOur company nameOur mission

In January 2021, Hitachi Automotive Systems, Keihin, Showa and Nissin Kogyo

Our mission is unite the thoughts of all our employees, aggregating our wisdom

supplier "Hitachi Astemo."mega-supplier that can keep securing its global leadership position. To realize

Hitachi Astemo provides new mobility solutions that combine the strengths ofembark on a new future.

completed a business merger and began their journey as the global mega-and strength to overcome the once-in-a-century wave of change and become athis goal, all of our global employees will become as one, and together we will

each company in the fields of electric powertrains for vehicles, advanced chassis,
autonomous driving and advanced driver-assistance systems, and motorcycle

systems. By addressing issues facing society such as traffic accidents andMissiongreener solutions and improved efficiency, we will contribute to realizing a safe,

We will contribute to a sustainable society and improved quality

congestion, and the environmental impact of exhaust emissions throughcomfortable, and sustainable society that is friendly to the planet and people.

To clearly express the company's commitment to "providing a safe, comfortable,of life by providing world-leading advanced mobility solutions
that satisfy our customers

and sustainable mobility lifestyle through technologies that contribute to anadvanced and sustainable society," the first letters of the words "Advanced
Sustainable Technologies for Mobility" were combined to form the name

"Astemo."

Advanced Sustainable Technologies for Mobility

7

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 2 Mission

Value
Toward a better world
Hitachi Astemo is committed to improving peoples’ quality of life (QoL) and creating a sustainable society by providing social, environmental, and economic value to realize a betterworld.

Our triple bottom line

The value we deliver to our stakeholders

Hitachi Astemo will continue to develop world-leading

technologies focused on achieving our triple bottom
line.

Social contribution
Improve safety, comfort and QoL throughAD*1/ADAS *2 and advanced chassis.

Be a partner that transforms
the future of mobility together
with our customers

Contribute to a safe andsustainable society●Efficient, sustainable technology●Products with reduced CO2
emissions●Improved safety comfort andquality of life for everyone

Society

Customers●Co-creation with customers throughcontinuously evolving solutions●Benefits of increased scale●Global leadership●Expansion of global bases

Environmental contribution
Contribute to improving our environment withhighly efficient electrified products andtechnologies that reduce emissions.

Economic contribution
Expand revenue to realize sustainable growth.

Provide opportunities tocreate next-generation
technologies●Opportunities for career growth●Diverse and global work
environment●Working together to create thetechnologies that are redefining
the future

Continue to increase value
and improve ROIC*3 forstakeholders
Employees

Stakeholders●Social value●Environmental value●Economic value*1 AD: Autonomous Driving*2 ADAS: Advanced Driving Assistant System*3 ROIC: Return On Invested Capital8

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 3 Sustainability Management

Sustainability Management based on Sustainable Development Goals
We contribute to the realization of a sustainable society by providing next-generation mobility solutions to solve global social and environmental
challenges outlined in the Sustainable Development Goals (SDGs). As a global technology company, we are committed to creating social,environmental, and economic value while contributing to the realization of a sustainable society and environment.

Contributing to SDGs through business strategies (targets and solutions)
Our contribution
to SDGs

SolutionsTarget3.6

By 2020, halve the number of global deaths and injuries from road traffic accidents

3.9

ADAS

AD

By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil
pollution and contamination

Improve ICE

Electrification

7.3

By 2030, double the global rate of improvement in energy efficiency

Improve ICE

Electrification

7.a

By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including
renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment inenergy infrastructure and clean energy technology

Improve ICE

Electrification

9.1

Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure,
to support economic development and human well-being, with a focus on affordable and equitable access for all

Connected

9.4

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use
efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with allcountries taking action in accordance with their respective capabilities

Electrification

By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road

11.2 safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations,AD

Connected

Improve ICE

Electrification

women, children, persons with disabilities and older persons

By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air

11.6 quality and municipal and other waste management

13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

Electrification

9

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 4 Engagement and Participating in Initiatives

Stakeholder Engagement
Hitachi Astemo endeavors to solve social issues in various countries and regions together with a diverse range of stakeholders, including customers,
suppliers, central and local governments, academic and research organizations, and others. Moreover, we are promoting initiatives that emphasize
direct dialogue between employees and management with the aim of enhancing the value of our human capital.

Stakeholder engagement and participating in initiatives
Stakeholder

Major challenges

Main contact point

Communication method (results in FY2022)

Customers

Create better products and services, handle complaints, and disclose
appropriate product and service information.

QA/Sales●Customer Satisfaction (CS) activities●Sales activities●Website

Suppliers

Smooth information sharing to create fair business relationships andbetter partnerships.

Procurement●Procurement activities

Employees

Promote appropriate compensation and occupational health and safety,
and improve employee engagement.

Internal
Communications /Human Capital●Dedicated employee website (Astemo
Times) / Intranet / company newsletter●Training●Town hall meetings between management
and employees●Employee surveys

Central/local
governments & industry
bodiesCompliance with Japanese and foreign laws and regulations, strengthenindustrial infrastructure, and attract companies.

PR/Human Capital●Liaison with international agencies,
national government bodies, and local
governments●Manage participation with industry bodies

Academic/researchorganizations

Promote technological innovation and participate in projects thatcollaborate between industry, government, and academia.

R&D●Open innovation (joint research)

Local community

Fulfill responsibilities as a corporate citizen and participate in the local
community.

Business divisions /Human Capital●Contribute to local community throughbusiness●Participate in volunteer activities

10

Contents

Introduction

Management

Environmental

SocialGovernanceManagement 4 Engagement and Participating in Initiatives

International Standardization Activities
Approach to international standardization
Hitachi Astemo is working to solve social issues from a
global perspective through the creation of new social
norms, together with a diverse range of stakeholders,

including governments and municipalities throughout theworld, academic and research institutions, companies,
and users.

Hitachi Astemo's international standardization activities

implement our policy of "global initiatives that contributeto the realization of a sustainable society, being based on
explicitly stated standards, formulated on the basis of fairdiscussions involving members representing specialized
fields, with international consensus, and an accurate
grasp of social issues facing the world".

Accordingly, we consider international standardization
activities to be of importance, along with research anddevelopment and intellectual property-related activities.

To contribute to resolving social issues on a global scale,
Hitachi Astemo actively engages in activities withinternational standardization organizations, including

ISO*1 activities, and in particular, cybersecurity, functionalsafety, software updates, and automated driving, which

are handled by ISO/TC22 (automotive-related) and TC204

Structure for promoting international standardization activities
As part of our commitment to international standardization activities, Hitachi Astemo personnel participate as members ofstandards meetings of mirror groups (Society of Automotive Engineers of Japan) in international standardization
organizations, such as ISO, and have been appointed to key positions, such as secretaries.

The Hitachi Astemo International Regulations and Standardization Committee was established to formulate policies forinternational standardization within Hitachi Astemo, centrally manage and share a variety of standardization information,and promote its deployment to products. The working groups under the committee promote the standardization ofactivities through detailed discussions of each regulation and standardization information.

*1 ISO: International Organization for Standardization. An international organization composed of member countries and regions.
*2 JASPAR: Japan Automotive Software Platform and Architecture. Engineers from car manufacturers, electrical components,
semiconductor/electronic components, and software/tools, trading companies, career organizations, universities, and research institutes
participate in the project.

Hitachi Astemo's International Regulatory and Standardization Committee structure

Owner

CTO*

Business division
Committee and unit
members
representatives(Director level)
Steering committee

Promotion Theme ❶Working Group
Promotion Theme ❷Working Group＊CTO： Chief Technology Officer(ITS-related) as well as Japanese standardization study
groups, such as the Society of Automotive Engineers ofJapan (JSAE) and JASPAR. *2 Regarding the promotion ofinternational standardization, we are working to adopt
Hitachi Astemo's leading/proprietary technologies and to
capture the market through the formation of rules.

11

Contents

Introduction

Environmental

Management

Environmental

SocialGovernance

1 Environmental Vision and Long-term Goals
２ Environmental Governance
３ Realizing a Decarbonized Society
４ Realization a Resource Efficient Society
5 Achieving a Harmonized Society with Nature
6 Environmental Data

12

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 1 Environmental Vision and Long-term Goals

Environmental Policy and Action Plan
Environmental philosophy & policy
As part of our corporate social responsibility, Hitachi

Astemo is working to reduce the environmental impactof our business activities and, through our products

and services, promoting environmental management tohelp reduce society’s impact on the environment. In

addition, to promote environmental management

across the Hitachi Astemo Group, we have establisheda set of guidelines on environment-related matters inEnvironmental Policy"We help build a sustainable society in harmony with nature by taking action to protect the
global environment."

Environmental vision
Guided by our mission statement "We will contribute to a sustainable society and improved quality of life by providing worldleading advanced mobility solutions that satisfy our customers," we strive to protect the global environment with an awarenessof how our business operations, products, and services are deeply related to it.
 Environmental action guidelines
1. Complying with environmental laws and regulations while
preventing pollution

3. Promoting global manufacturing throughout the product life-cycle

We will promote global manufacturing aimed at minimizing environmental

the form of an "Environmental Policy," and ensure that

We will:

1. comply with laws and regulations related to the environment and develop

procurement, production, distribution, sales, use, and disposal.

complies with it.

2. implement measures designed to meet the needs of local communities

1. develop and design environmentally friendly products;

everyone, from top management to employees,

voluntary standards needed to ensure compliance;and minimize the impact our global manufacturing operations may haveon their environment whenever possible;

3. fulfill our agreed environmental requirements with customers and otherthird parties;

4. assess the possibility of environmental problems, work to prevent

pollution, and take appropriate measures to minimize the impact of any
environmental problem that should arise.

2. Enhancing environmental management functions and making
continual improvements

We will:

1. take action aimed at achieving our environmental impact reduction

targets utilizing an ISO 14001-compliant environmental management

system, environmental regulations, and the capacity to implement
environmental initiatives;

2. take action aimed at continually improving environmental performance;
3. help enhance our management system with the above actions.

impact at every stage of the product life-cycle from R&D and design to

We will:

2. work to conserve energy to stop global warming;

3. strictly control chemical substances and reduce emissions;

4. promote the conservation and recycling of resources to help build aclosed-loop society

4. Protecting the ecosystem

We will promote action for protecting the ecosystem based on both our businessactivity and social contribution activity relevant to the protection of nature rooted
in our local community, aiming to achieve a society coexisting with nature.
5. Education, training and raising awarenessWe promote awareness among all Hitachi Astemo employees as well as

those who work us. We provide employees with education and training onprotecting the environment while ensuring compliance with environmental
laws and regulations.

6. Information disclosure

We will share information about our environmental initiatives withstakeholders and maintain communication with them to further mutual
understanding and build stronger relationships.

13

Contents

Introduction

Environmental

Management

SocialGovernance

Environmental 1 Environmental Vision and Long-term Goals

Environmental Action Results for FY2022 and Environmental Action Targets for FY2023 and Beyond
Item

Category

Environmental management
Compliance

Develop environmental
talentGoal

FY2022(Target)FY2022(Results)

FY2023(Target)FY2024(Target)Regulation compliance

Zero legal violations

0 incidents

1 incidents*1

0 incidents

0 incidents

Reduce complaints

Promote zero complaints

0 incidents

0 incidents

0 incidents

0 incidents

Promote education of environmental talent

Develop environmental experts, increase legally qualified personnel, etc.

Develop/increase

Develop/increase

Develop/increase

Develop/increase

Cut total CO2

Percentage of total CO2 cuts (compared to FY2010)

10.6%

17.8%

30.1%

50.0%

Improve transport consumption rate (Japan)

Percentage improvement of transport energy consumption rate (Japan)

2.5%

31.8%

1.3%

1.0%

Contribution to cut CO2

Revenue from electrification busine

Promote ecological design

Ratio (Number of products assessed in the current year/Number of
products subject to assessment in the current year)

Decarbonized societyLong-term target
Business sites (factories and offices)
FY2030: Achieve carbon neutrality*2
Via the value chain
FY2050: Achieve carbon neutrality
FY2030: Reduce CO2 emissions by
50% (compared to FY2010)

Factories and offices

Products and services

We aim to increase revenue from the electrification business to over 400 billion yen in FY2025 and morethan double that amount in FY2030 by promoting the uptake of highly efficient and high-performanceelectrification products, such as motors, inverters, and electric axles (e-Axle) for EVs.
ー

ー

ー

100%

Landfill waste rate

7.1%

5.2%

4.1%

3.5%

Improvement rate of waste and valuables generation per basic unit
(vs FY2010)

17.4%

27.4%

33.5%

34.1%

Improvement rate of water use per basic unit
(vs FY2010)

21.1%

30.0%

26.6%

37.1%

Identification and effective utilization rate of plastic waste

73.3%

81.2%

75.5%

79.0%

20.0%

19.2%

20.2%

Resource efficient societyLong-term target
Efficient use of water/resources
FY2050: Improve by 50％(compared to FY2010)

Factories and offices

Improve resource use efficiency

Circulation-oriented
product and businessdevelopment

Transition to a circular economy

Analyze risks and opportunities, promote roadmap creation

Water risks

Respond to water risks

Promotion of response to water risks depending on results of water stress investigation

Chemical substance

Reduction of chemical substance emissions

Improvement rate of atmospheric chemical substance emission per
basic unit (vs FY2010)

A Society Harmonized with Nature

Long-term target
Minimize impact on natural capital

Ecosystem conservation

Calculation of impact on natural capital

Contribution to ecosystem conservation

3.1%

Consideration of calculation of negative impact (implementation of LCA*3)
Consideration of calculation of positive impact (forest preservation activities)
Promotion of ecosystem preservation activities*1 At our overseas business sites, there were cases of waste and wastewater violations, which were reported to the relevant administrative agencies and countermeasures have been completed.

*2 Includes carbon offsets (emissions trading).
*3 LCA: Life Cycle Assessment

14

Contents

Introduction

Environmental

Management

SocialGovernance

Environmental 2 Environmental Governance

Environmental Governance Promotion
Environmental management promotion

Environmental education for employees

Hitachi Astemo business sites and subsidiaries in Japanraise the level of management.

ISOsociety according to our mission and Environmental

to invigorate environmental activities, Hitachi Astemo

environmentally friendly products and systems that

Astemo employees, from junior staff to executives.

and overseas have obtained the international standard
14001

certification,

and

are

promoting

We will contribute to the realization of a sustainable

environmental activities based on an Hitachi Astemo

PolicyJapan, we conduct mutual audits through cooperation

please our customers, and systematically reduce thegroup-wide environmental management system. Withinbycontinuallyprovidingadvanced,

between our business sites. Audits at our overseas sites

environmental impact of all the processes involved insites, focusing on priority management sites, in order toimplementing effective environmental management.

are carried out by internal auditors from our domestic

Environmental
Representative

Secretariat (Environmental
Protection Dept.)

Planning & design
Environmentally friendly design

Business sites
Group companies

Americasheadquarters

North American, Mexic an,South American Group
companies

China headquarters

Chinese Group
companies

Asia headquarters

Asian Group
companies

Europeheadquarters

European Group
companies

Input
Product development &environmental
Eco products
Input
compliance assessment
Less energy toLess materials
transport
Eco-materials
Emissions
Environmentally
Emissionsfriendlymaterials
Zero emissions

Green procurement guidelines
Chemical substance guidelinesthat improving employee

conducts awareness-raising activities for all Hitachi
The goal is to encourage employees to think about
what they can commit to and do, at work and at home,by learning about climate change issues, how the Paris
Agreement works,

and Hitachi

neutrality goals and initiatives.

Astemo's carbon

and specialized training for environmental practitioners

and internal environmental auditors.

EmissionsClean, clear
wastewater

beliefeducation as introductory training for new employees,

Logistics & sales

Clean exhaust gas
Less energy

Japan headquarters

theWe also provide environmental and eco-minded

Procurement & production

President & CEO
Environmental Strategy
Officermaking those products. To this end, Hitachi Astemo is

Based onawareness and promoting understanding is necessary

3Rs* ＞＞Disposal

Legal compliance

FY2022 initiatives

Customeruse

In April 2022, Hitachi Astemo conducted"environmental and eco-minded" education as
introductory training for new employees.

Additionally, we conducted internal auditor training
and education on environmental laws andregulations in November 2022, and a briefing on 3R
promotion for waste reduction in February 2023.

Contributing to a sustainable society* 3Rs: Reduce, reuse, and recycle

15

Contents

Introduction

Environmental

Management

SocialGovernance

Environmental 3 Realizing a Decarbonized Society

Realizing a Decarbonized Society
Hitachi Astemo Group initiatives

Hitachi Astemo’s targets

Obtained SBT certification

Hitachi Astemo incorporates sustainability into the

In response to th e SBT initiative (SBTi), an organization

primary mission is to contribute to the realization of aorganization and strives to make improvements

greenhouse gas emission reduction targets that areprovision of products that are helping to reduce ourtrust

conservation, and advance the use of renewable en ergy.

environmentally friendly and sustainable society andAs a leading provider of mobility solutions to theautomobile and motorcycle industries, we believe oursustainable, decarbonized society. We will increase th eenvironmental

impact,furtherpromoteTargets by 2030
 Carbon neutrality at production sites
 Reduced CO2 emissions through advanced
technologies

energymanagement and business practices of the entire

that certifies "Science Based Targets," which arethrough its PDCA* cycle. By building relationships ofscientifically consistent with the targets set by the Paris

communication,

greenhouse gas emission reduction targets by 2030 in

with

our

stakeholders

we

aim

to

throughachieveeffective

bothgrow as a global company.

* PDCA: Plan, Do, Check, ActionanAgreement,

HitachiAstemosubmitted

its

own

August 2023 in line with the targets, and obtained SBT
certification* in November of the same year.

* With the SBT certification, targets have been set for an 80% reductionin Scope 1 and Scope 2 emissions and a 25% reduction in Scope 3
emissions by 2030, based on actual greenhouse gas emission values
in 2021.

Energy conservation efforts
Continuation of current activities
Use of renewable energy, such as installationof solar power generation equipment
Use of green power
Innovative new technologies

16

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 3 Realizing a Decarbonized Society

CO2 Emission Reductions at Business Sites (Factories and Offices)
Actions and achievements
Hitachi Astemo aims to achieve carbon neutrality at our business sites (factories and offices) by 2030 in order to realize a decarbonized society. We are implementing a number of

initiatives to reduce CO2 emissions at all our business sites.
Examples of initiatives at business sites

Miyagi No. 2 Plant

Saitama Plant

High-efficiency electric motors and inverter control for air conditioners

Compressor upgrade

motors of air conditioners (two units) and by using inverter-controlled operation

power supply transformers

Reduction of electric power consumption by improving the efficiency of electric

Air conditioners for air conditioningat Miyagi No. 2 Plant
CO2 emissions reduction

Inverter control panel

51.6 t-CO2/year

Reduction of electric power consumption by upgrading old compressors andCompressor at Saitama Plant
CO2 emissions reduction

Power supply transformer
47.0 t-CO2/year

17

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 3 Realizing a Decarbonized Society

Introducing Renewable Energy
Initiatives to utilize renewable energy
As a step to reduce carbon emissions to achieve carbon

neutrality, Hitachi Astemo is moving forward with theuse of renewable en ergy. We are striving to reduce CO2
emissions by purchasing electricity generated fromnatural energy sources, such as hydroelectric and wind

Promoting the utilization of renewable energy (utilization of in-house solar power generation system)
We are continually trying to expand the use of renewable energy globally. In FY2022, solar panels were installed at

Hitachi Astemo Hanshin (Sanda No. 3 Plant) and Hitachi Astemo Seiko in Japan. Overseas, solar panels were also

installed at plants in China and Indonesia. As a result of these efforts, the overall CO2 emissions reduction of Hitachi
Astemo was approximately 15,200 t-CO2/year.

power (also known as green power), by installing solar

power generation systems within the company, andusing the electricity generated by these systems within

the company.

Examples of initiatives at business sites

Hitachi Astemo Hanshin(Sanda No. 3 Plant)

CO2 emissions reduction

Hitachi Astemo Brake Systems India(Jalgaon Plant)

Hitachi Astemo Seiko

126 t-CO2/year

CO2 emissions reduction

16 t-CO2/year

CO2 emissions reduction

4,000 t-CO2/year18

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 3 Realizing a Decarbonized Society

Disclosure of Financial Information Related to Climate Change (Disclosure under TCFD)
Strategy
Through its business activities and by providing products and services,
Hitachi Astemo is promoting the reduction of the environmental impact on

Our business environment, major risks and opportunities under the 1.5°C and 4°C scenarios, and our
response to themsociety as a whole, in order to contribute to realizing a decarbonizedsociety, which is expected of a global company under the RCP 2.6*¹ and
RCP 8.5*² scenarios of the Fifth Assessment Report Intergovernmental

Panel on Climate Change (IPCC). Moreover, to help limit the global
temperature rise to 1.5°C as recommended in the IPCC Global Warming ofBusiness environment andmain risks and opportunities
under the 1.5°C scenario▶Business environment: Electric vehicles will rapidly become widespread due to stricter laws and regulations,such as fuel efficiency and environmental performance regulations, as well as rising prices of fossil fuels. The
market for alternative technologies to non-fossil fuels such as hydrogen and biofuel vehicles will also expand.
There will be an increase in the number of countries/regions with almost zero internal combustion engine vehicles
based on sales.
▶Risk: There will be delays in business transitions in response to the rapid progress toward the shift away frominternal combustion engine vehicles.

1.5°C report, we will contribute to the realization of a carbon-free society▶Opportunity: The market for electric vehicles (including motorcycles), hydrogen, and biofuel vehicles to replaceinternal combustion engine vehicles will expand.

Astemo's business sites (factories and offices) and reducing CO 2 emissions▶Business environment: Fuel efficiency laws and regulations will remain lax globally, and internal combustion
engine vehicles will remain a major mode of transport. The modal shift will be slow, as conventional automobiles
and motorcycles will remain predominant. Typhoons, floods, and other natural disasters caused by climate change
will rise sharply.

on a global scale with the goal of achieving carbon neutrality at Hitachi
by promoting the spread of high-efficiency, high-performance electrified
products.

*1 RCP2.6 scenario: A Represen tative Con centration Pathway (RCP) scenario un der which, atthe en d of the 21st cent ury, t he increase in global temperatu res from preindustrial le vels
is kept below 2°C.
*2 RCP8.5 scenario: An RCP scenario that assumes t hat emiss ions will continue to rise
resultin g in an approximately 4°C rise in global temperat ures com pared to prein dustrial
levels.

Addressing risks and oppo rtunities bas ed on climate change-related

Business environment andmajor risks and opportunities
under the 4°C scenario▶Opportunities: Demand will grow for technologies to enhance the efficiency of internal combustion engines.

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

 Economic growth, urbanization, population growth, and infrastructure development like road construction will
expand the global market for automobiles and motorcycles as a flexible and personal means of transport.
 Global pandemics may temporarily dampen passenger vehicle sales due to restrictions on people’s movements,
but commercial vehicle sales will tend to rise as the need for the delivery of goods increases.
 Businesses that offer greater safety, security, and comfort, such as those developing autonomous driving andadvanced safety devices, will become increasingly important.
 Technological innovations in the connected industries will create new mobility service markets.

Response to future businessrisks (business opportunities)

Response to business risks under the 1.5°C scenario
Promote R&D of electrification technology and other alternative technologies to enhance the response to newmarkets such as electric vehicles.
Response to business risks under the 4°C scenario
 Promote R&D and product development in existing technologies, including internal combustion engines, to not
only improve energy efficiency but also non-environmental issues like safety, security, and comfort.
 Given the increasing frequency of natural disasters, take risk aversion into account when deciding the locationand equipment layout of a new plant. Keep an eye on the supply chain in strengthening our ability to respondto business disruption risks in accordance with our BCP*s.

Financial information (sales
volume of each target sector)

Partial impact on revenue at 1,920 billion yen in FY2022

scenarios

We considered the environment under the 1.5°C and 4°C scenarios forour businesses, and how we would respond.

•1.5°C scenario: As projected by the IPCC’s RCP 2.6 climate model, the IEA
450 scenario, and for other scenarios, we are anticipating a world where

stringent measures and regulations will be implemented to help realize adecarbonized society. Therefore, we investigated risks and opportunities
on the premise of carbon neutrality by fiscal 2050.

•4°C scenario: Considered under the assumption of there being increased
climate-induced natural disasters as a result of lax regulations as
projected by the IPCC's RCP8.5 scenario and other scenarios.

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

*BCP：Business Continuity Planning
Note: The above scenario analyses are not f uture project ions but attempts t o review our resilie nce t o climate chan ge. How the fut ure
unfolds may be quite different from any of these scenarios.

19

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 4 Realization a Resource Efficient Society

Building a Society That Uses Resources Efficiently
Resource recycling
Examples of initiatives at business sites

For a resource efficient society
Together with our customers build a society thatuses water and other resources efficiently
Efficiency in use ofwater/resources
FY2050Miyagi No. 4 Plant
Detailed sorting and recycling of waste (scrap metal,
foundation scrap, etc.) generated in the production

50％ improvement(compared to FY2010)

Raw materials used in Hitachi Astemo’s manufacturingof inverters

processes are repeatedly recycled again as raw materials
for the same product while maintaining their original

Waste reduction amountconsumption of new natural resources, reduce emissionsof environmentally hazardous substances, and reduce

Hitachi Astemo Uki

properties.

We

are

actively

working

to28.0 t/year

Foundation scrap

Sorting station

reducewaste.

Effective use of resources

Regarding the reuse of parts, some alternators andstarters recovered by automobile dealers are dismantled,inspected, cleaned, recycled, reassembled, and inspected

Dedicated tanks are installed at each workplace toseparate recyclable waste oil (waste oil fromcarburizing equipment, rust preventive oil, etc.)from the waste oil generated at the plant.
Waste reduction amount28.0 t/year

Dedicated tank for recycled waste oilat the production plant (Sawa Works) before being

shipped again as rebuilt products. As for raw materials,
scrap metal that had been discarded at our factories are

Hitachi Astemo Mexico (multiple sites)

Recycled materials collected at a factory in the Miyagi area

Sorting stations were installed to promote recyclingof non-hazardous waste, and sorted into aluminum,

reused as recycled materials (Miyagi region).

plastic, paper, organic waste, and inorganic waste.
Waste reduction amount

0.3 t/year

Sorting station

20

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 4 Realization a Resource Efficient Society

Building a Water Efficient Society
Building a water efficient society
Reduced and effective use of water resources

By measuring the volumes of water used and discharged at our plants and offices, we manage th e results of our environmental impact, including water usage, and progress toward our
reduction targets. We also manage risk in the event of flooding or other incidents that could affect our business.

Examples of initiatives at business sites

Miyagi No. 3 Plant

Hitachi Astemo Seiko

Hitachi Astemo FIE (Doddaballapura Plant)

Review of supply frequency of aluminum anti-

Optimization of deionized water supply in the

Reduction of water supply to cooling towers of

Reduced water consumption by reviewing the supply

A liquid level gauge was installed in the deionizedcorrosion treated water

frequency from the water storage tanks to the rinsing
and hot water rinsing tanks

cleaning processwater tank in the cleaning process to optimize thesupply volume and save water

Water storage tank
Water resource usage reduction

500 ㎥/year

Reduction of water consumption by reusing

wastewater from the concentration process of the
MEEs to the cooling tower

Water deionizer system
Water resource usage reduction

multiple effect evaporators (MEE*)

700 ㎥/year

Multiple effect evaporator
Water resource usage reduction

1,500 ㎥/year*MEE: Multiple Effect Evaporator

21

Contents

Introduction

Management

Environmental

SocialGovernance

Environmental 5 Achieving a Harmonized Society with Nature

Preserving Ecosystems
Preserving Ecosystems
Committed to preserving ecosystems and biodiversity,

A society harmonized with natureenvironmentally

Minimize impact on natural capital

HitachiAstemois

implementing

friendly

initiatives,aasvarietycommunity and social contribution activities.

well

of

as

Examples of initiatives at business sites

Gunma No. 1 & No. 2 Plants

Kyushu Plant

Hitachi Astemo Mexico (multiple sites)

Tone River cleanup mission
Cleanup activities along the banks of the Tone River

Autumn walking competition and Environment
Day

Plastic cap collection activities
Supporting children in need of cancer treatment

during lunch breakbottle caps

No. of participants

150 (once/year May)

Neighborhood walking and trash collection activities

No. of participants

82 (once/year Oct.)through the recycling of discarded plastics such as

Amount collected

425.3 kg22

Contents

Introduction

Environmental

Management

SocialGovernance

Environmental 6 Environmental Data

Environmental Data (Results for 141 sites included in the FY2022 tally)
Ratio of plastic waste generatedJapan
CO2 emissions
Waste
disposed
Water resource
usage
Plastic waste
volume meter

Waste
disposed
Water resource
usage
Plastic waste
volume meter

CO2 emissions

Americas275.8 1,000 t-CO2

59.4 1,00 0t
3,650.5 1,000 m

3

2.3 1,000 t

Asia
CO2 emissions

Environmental impact ratio by region

CO2 emissions
Waste
disposed
Water resource
usage
Plastic waste
volume meter

Europe 1%

184.8 1,000 t-CO2

46.1 1,000 t
1,021.5 1,000 m

3

2

48.6 1,000 t
2,705.0 1,000 m

3

1.7 1,000 t

CO2 emissions
Waste
disposed
Water resource
usage
Plastic waste
volume meter

CO2 emissions
1,031,000
t-CO2

1.6 1,000 t
Asia
37%

China
382.1 1,000 t-CO

China
17%

Waste
disposed
Water resource
usage
Plastic waste
volume meter

Americas18%

Europe
10%
China
10%

Asia
25%

2

19.9 1,000 t
117.2 1,000 m

Americas24%219.1 1,000 t
1,053.6 1,000 m

3

0.6 1,000 t

Water resource usage
Europe 1%

Plastic waste volume meter
Europe 5%

China
12%

13.1 1,000 t-CO

Waste
disposed
193,000 t

Japan
31%

175.2 1,000 t-CO

EuropeCO2 emissions

Japan
27%

Waste disposed

Asia
32%

Water
resource usage
8,548,000 ㎥

China
10%
Japan
43%

Asia
26%

Plastic waste
volume meter
6,400 t

Japan
35%

3

0.3 1,000 t

Americas12%

Americas24%

23

Contents

SocialIntroduction

Management

Environmental

SocialGovernance

1 Innovation Management
２ Human Capital
３ Human Rights
４ Value Chain Management
5 Community

24

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 1 Innovation Management

Research & Development
Hitachi Astemo’s R&D policies and initiatives
Against the backdrop of the momentum to address

global climate change and achieve the SDGs, there is asearch for a vision of mobility that will play a role in asustainable society; and to solve this challenge,technologicalinnovations in

the areaofSocial value

Environmental value

Improving safety, comfort and QoL with the
AD/ADAS and advanced chassis

CASE

Cloud
Digitalization

Contributing to a better global environment
with highly efficient electrified products andtechnologies that reduce emissions(Connected, Autonomous, Service & Shared, Electric)
are being promoted. Hitachi Astemo is also working on

solutions to realize a saf e, secure, comfortable,

environmentally friendly, and sustainable mobility

Safetysociety, and is promoting technological innovation inConnected car technology
In-vehicle devices, softwareGreenthe area of CASE. We will continue to provide socialand environmental value through these mobility

solutions.

As for social value, we are working to improve safety,
comfort, and QoL through AD/ADAS, advanced chassis,

andconnectedcartechnologies,

and

as

for

with

highlyefficientelectrified

products

andenvironmental value, we are working to solve problems

technologies that reduce emissions.
Throughthese initiatives,

we will

AD/ADAS

Advanced external
recognition,
integrated electronic control• Scalable and competitive
components• Sensor fusion technology

Integrated vehicle behavior
control

improving people's quality of life and our customers’
that contributes to a sustainable society.”

Global mobility solutions
provider that contributes toa sustainable society

Advanced chassis

contribute tocorporate value as a “global mobility solution provider

xEV

Decrease in traffic
accidents

Integrated chassis control withbrakes, steering and suspension

Advanced electric
powertrain/system unit
Differentiated technologies• Motors: High torque density• Inverters: Unique coolingstructure• Software: Efficiency optimization
Characteristics of “e-Axle”• High efficiency• Compact• Cost competitive

Environmental conservation
through the reduction of
CO₂ emissions

25

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 1 Innovation Management

Research & Development
Hitachi Astemo's R&D system and value provided
The Technology Development Functional Division is

responsible for creating new products and technologies,
developing products and systems across businessdivisions, and developing fundamental technologies(analysis, material technologies, etc.) that are sharedthroughout the entire company.

In addition to collaborating with the company's global

technical centers (in the Americas, Europe, China, etc.),
the Technology Development Functional Division aims
to collaborate with the Center for Digital Services,

We are promoting the evolution of stereo cameras, 360-

electrification, we are accelerating the development ofsensing technologies for recognizing the driving

technologies for inverters in vehicles, and high-degree 3D sensing, fusion functions using multiple
sensors, and AI implementation technology as external

environment.
As for technology

to anticipate ahead,

we aredeveloping technology that reads high-precision maps
with an MPU (Map Position Unit) to estimate thevehicle's location, technology to predict risks ahead, andtechnology to obtain map updates and road conditions

high-efficiency and high-power technologies for motors,
which are key components, high-power density
efficiency and compact e-Axle technologies that apply
these technologies, and are applying them to various
products. We are also accelerating our electric andelectrification efforts for motorcycles.

From

2022,

we have been

participating inthe"Development of Highly Efficient Electrification Systems"

Center for Technology Innovation, and overseas
laboratories of Hitachi's R&D group in the developmentfrom the cloud through secure communication via OTA
and central ECU. We are also working on developing

under the Green Innovation (GI) Fund, and areaccelerating the development of motor and inverterand quickly create advanced technologies that meetglobal needs.

algorithms that minimize rolling motion, vehicle control
technologies that enable high-precision tracking of the

reduced weight, resource conservation, etc.
We will also develop technologies for energy eco-

Social value: AD/ADAS and advanced chassis
technology to improve safety, comfort, and QoL

chassis-based products. Furthermore, we are working on
developing mobility solutions—including the evolution

bidirectional on-board chargers (OBC).

of advanced technologies. This way we will efficiently

Hitachi Astemo has been developing products foradvanced chassis technologies, such as track planningtarget track, and related by-wire technologies forofsinglecomponents

andAD/ADAS and related vehicle control, providing
products such as stereo cameras, ADAS Electronic

Electronic Control Units (AD ECU) and OTA (Over the Air).
The evolution and expansion of automated driving

QoL.

accurately recognize" areas visible from the vehicle,"technology to anticipate" areas invisible from theenvironment through highly efficient electrified
product technology

control" from the information obtained.

technologies to achieve carbon neutrality. In powertrain

Units

(ADAS

ECU),

Autonomous

Drivingtechnology requires three technologies: "technology tovehicle, and "technology to accurately judge andsystems such as electric power energy management andcross-domain(AD/chassis/powertrain) system development, SDVs
(Software Defined Vehicles), and connected services—

Control

technologies that achieve high efficiency, compactness,

which will contribute to improved safety, comfort, andEnvironmental value: Contributing to a better global

We

are

developing

environmentallyfriendly26

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 1 Innovation Management

Research & Development
Examples of development in FY2022
Development of thin-type inverter technology for EVs
that is more compact and energy efficientPowersemiconductor
Printed circuit
board

integrating and accumulating power semiconductors on a

printed circuit board with embedded inverter circuitcomponents, we were able to develop a basic technology

DevelopmentofSteer-by-Wireprototype

that

combines advanced steering and a fail-safe functionthat makes it possible to avoid the problem of heatgeneration. With this technology, we have succeeded in
reducing the energy loss generated when power

Power source

Steering side actuatorsemiconductors switch on and off by 30 percent compared
to conventional systems and thereby minimizing heatgeneration, as well as reducing the size of inverters by

Conventional inverter(volume: 3L)

Developed thin inverter(volume: 1.5L)

approximately 50 percent compared to conventional

Communication
Wheel turning side actuator

We have developed basic technology for a thin-typesystems.
In addition, conventional inverters use many copper plate

We have developed a steer-by-wire prototype, which
operates tires not through a mechanical mechanism but

miniaturization as a power converter (henceforth, "inverter")for electric vehicles (henceforth, "EVs"). This technology

power semiconductors, which must be connected bywelding or other means. This required many parts andoperation. Simultaneously achieving a smooth andcomfortable steering feel*1 with minimal burden on thesemiconductors*1 that control power supply with printed

circuit boards. Compared to conventional products, theproduction efficiency. With the mounting technology, power
semiconductors and circuit components are mounted on acontinues operation and enhances safety in the event of amalfunction thanks to its redundantdesign.

semiconductors are switched by 30 percent and isapproximately 50 percent*2 smaller. The new design

eliminating the need for busbars. This has greatly simplified
the production process, reducing the number ofHitachi Astemo is promoting efforts toward the practicalapplication of a steer-by-wire system that links the*1 Semiconductors that can pass or stop a larger amount of power than ordinary
semiconductors. Si (silicon) has been mainly used as a material, but the practicalapplication of SiC (silicon carbide), which is high-performance and energysaving, has been progressing. The structure of the newly developed product isbased on Si power semiconductors, but it can also be applied to SiC.
*2 Compared to our conventional product (100kW class).
*3 A conductor to carry a large current.

electrical signals to improve safety and comfort, andincreases layout flexibility.

inverter that achieves both energy conservation andsimplifies

power

wiringbyintegrating

power

thin-type inverter reduces energy loss when power

eliminates the need for welding of power semiconductors

and power wiring, and the number of components andassembly processes required are also reduced. As a result,

throughout the lifecycle of the inverter, including the

production process, CO2 emissions are reduced.

With the conventional structure, it was necessary toassemble power semiconductors and inverter circuitcomponents separately and connect them with wiring. By

components called busbars*3 to supply large currents toassembly processes, making it difficult to improvecompact, lightweight, thin printed wiring board, successfully

components and assemblysteps.

Hitachi and Hitachi Astemo Developed Thin-type
Inverter Technology for EVs That is More Compact andEnergy Efficientthrough electrical control during a vehicle's steering wheel

steering operation, it features a fail-safe function that

Looking ahead to advancements in autonomous driving,actuators*2 of the steering and turning systems with

*1 The reaction of the vehicle's movement to the operation that is felt by the driverthrough the steering wheel. Steering feel.
*2 A device that converts the power from motive power or the driver's operation
into some kind of action.

Hitachi Astemo develops Steer-by-Wire prototype
with advanced steering and failsafe function

27

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 1 Innovation Management

Research & Development
Examples of development in FY2022
Development of protot ype 360-degree stereo vision

with multi-camera 3D sensing
Side-front

Side-rearFront(wide) × 2

Field of
view

Front
(narrow)

Stereo area
Rear
Side-front①Side stereo-vision

Side-rear

resolution all-surrounding sensing system based on

for driving—all of which are necessary to identify foraroundand environmental resistance in camera sensing, such

multi-camera 3D sensing.
The newly developed 360-degree stereo vision usestencamerasthatcanprovidethree-

dimensional stereoscopic vision by combining nonparallel cameras with different viewing angles, insteadof as a module integrating two nearly parallel cameras

with the same viewing angle—the conventional form ofstereo vision. By integrating multi-camera 3D sensing

into a single in-vehicle camera system, the all-

Side-rear

Rear-camSide-cam

The AI has learn ed malfunction patterns caused bythese factors and can identify malfunction factors that
occur in each camera, thereby preventing malfunctions.
Going forward and with the aim to expand the scope of

automated driving systems for use on general roads,
Hitachi Astemo will continue to strengthen its 360-

By generating highly accurate distance information instereo and all around the vehicle, the system can detectadvantages with high accuracy and resolution, as wellas improved reliability and environmental resistance.

the adjacent lane, or a two-wheeled vehicle incongested traffic slipping through a line of cars from

Hitachi Astemo Develops Prototype 360-Degree
Stereo Vision with Multi-Camera 3D Sensing

such elements as the distance of a vehicle traveling in

Side-front

as features to resist water droplets and dirt adhering to
the lens surface, or shielding the entire lens in the snow.

vision, with a cost advantage, high accuracy andsurrounding sensing system realizes 360-degree stereo
resolution.

②Rear stereo-vision

while driving on ordinary roads.
Furthermore, Hitachi Astemo has improved reliability

behind. It can estimate the relative speed and direction

degree stereo vision systems that combine costof movement, and apply this information for vehicle
control to avoid collisions and entanglements at

Multi-camera 3D sensing

Hitachi Astemo has developed a prototype 360-degreestereo vision system for autonomous vehicles travelingon regular streets, which is a highly accurate and high-intersections. In addition to basic object recognition of

objects such as cars, motorcycles, pedestrians, andtraffic lanes, the recognition function also includes turnsignals, red lights, and brake lights to predict the

behavior of other vehicles; as well as traffic signals,
road signs, road edges, and free space areas available

28

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 1 Innovation Management

Research & Development
Examples of development in FY2022
Development of Anti-Jerk Control to improve ride

resulting in shaking that impairs ride comfort. To solve

operation, which can suppress tire slippage, but this willleverages the features of electrified vehicles.

which will worsen electricity consumption.

comfort of electrified vehicles and protot ype of

this issue, Hitachi Astemo developed a prototype that

consumption and stability of electrified vehicles

Unlike the torque of an internal combustion engine,

motor

torquecontroltoAccelerator
releaseimprovepower

Torque applied to reduce
jerking

Motor torque0 Nm

Without
control

Vehiclevelocity

Achieves a gradual andsmooth stop without
skillful driverwhich is powered by fuel combustion, the torque of anelectric motor is highly responsive to the driver's
operation

and

can

be

increased

quicklywhen

accelerating or decelerating. Electric vehicles are also

equipped with a regenerative braking mechanism,

Change of motor torque and vehicle velocity with anti-jerk during
accelerator release

In response to this issue, Hitachi Astemo has developed
a motor torque control technology that does not stop

the regenerative brake itself, but controls the torque ofthe drive motor according to the driving conditions of

the vehicle. The technology enables the vehicle tocontinue

regenerating

electricity

evenduringwhich converts the torque into electric energy when the

deceleration when the accelerator pedal is not applied,motor's rotation with torque and generates electricity

condition. This enables both regeneration of electricity

accelerator pedal is released. It quickly reduces the

0 Km/hreduce the amount of regenerated electric energy,

while using torque for the braking force.

Hitachi Astemo has developed an anti-jerk control

while controlling tire slip and stabilizing the driving
and a sense of security due to improved driving
stability during deceleration.

system that takes advantage of the motor's torque

The two newly developed technologies will contributecontrol that improves ride comfort by reducing thebraking. The system suppresses jerking motions bydriving performance with environmental performance,

stops, and a motor torque control [motor ABS (anti-

optimize the motor's braking power when

Hitachi Astemo has developed a prototype of anti-jerkback-and-forth jerking* that occurs when the vehiclelockbrakingsystem)]that

improves

electricity

consumption, driving stability and a sense of security

characteristics and the braking power of regenerative

appropriately controlling the amount of torque totheaccelerator pedal is released. With this control, evenordinary drivers can easily achieve smooth stops withby maintaining appropriate wheel slippage during

little jolting, achieving the same results as those of aDuring deceleration when operating and bringing a

In addition, when driving on icy and slippery roads, theregenerative braking on slippery surfaces.

vehicle to a stop, braking force must be controlled by

reducing or increasing the braking appropriately

according to the speed, or else jerking will occur,skilled driver.

regenerative braking alone could cause the tires to slip,

which in turn reduces steering and driving stability. One
way to avoid this issue is to stop the regenerative braketo OEMs’ electric vehicle development combining highand thereby contribute to the popularization ofelectrified vehicles.

* Rate of change of acceleration. When a vehicle is brought to a stop, a vigorous
acceleration with vibration and shaking tends to occur, which is called jerk

Development of Anti-Jerk Control to Improve Ride
Comfort of Electrified Vehicles and Prototype of
motor torque control to improve power consumption
and stability of electrified vehicles

29

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 1 Innovation Management

Intellectual Property
Hitachi Astemo’s intellectual property
policyThe Intellectual Property Department has established

two codes of conduct: “Protect our IP and respect othercompanies’ IP” and “enhance our brand value.” Alignedwith our mission, the Intellectual Property Division has

established the following three missions, each of which
is based on the policies of the Technology Development
Functional Division.

1. Ensure freedom of business and design
2. Create new value that contributes to society withintellectual property

3. Utilize intellectual propertyfor business/development
In FY2022, we began discussions within the department

Promotion system for IP activities
At Hitachi Astemo, the Intellectual Property Division supports the intellectual property activities of all business units, and in

FY2022, the division comprised the Planning Division, which is in charge of IP strategy and trademark and anti-counterfeiting

activities as well as management systems and budget management; the No. 1 Patent Section, which is mainly responsible forpatent prosecution in the powertrain and safety business; and the No. 2 Patent Section, which is mainly responsible for patent
prosecution in the chassis business; plus specially appointed staff. Specially-appointed positions include an MC specially-

appointed position in charge of patent prosecution in the motorcycle (MC) business, a TDD specially-appointed position in

charge of patent prosecution in the Technology Development Functional Division (TDD), a contract specially-appointed positionin charge of company-wide development contracts and license negotiations, and a global specially-appointed position in chargeof IP in cooperation with the IP divisions of overseas subsidiaries, in addition to strategic specially-appointed positions in chargeof IP strategy and IP information dissemination throughout Hitachi Astemo. These positions are in eight locations in Sawa, Atsugi,

Gunma, Tochigi, Miyagi, Haga, Saitama and Tomi, where the main design and development departments are located to support

the design and developmentdepartmentsin the respective business units.

on developing a mechanism to index the quality ofpatents. This enables comparisons to be made among

As a framework for promoting intellectual property activities in each business unit, a Patent Committee member and a Patentwider use of intellectual property rights that cancontribute to the global environment as part of ourthe Intellectual Property Strategy Meeting is held with the participation of business unit heads, where the Intellectual Property

business units and on an annual basis, as well as theenvironmental intellectual property activities.

We are benchmarking patent portfolios against othermega-suppliers. Using external patent value evaluation

tools, etc., we are working on intellectual property
activities with a focus on improving quality whileregularly understanding the positions of each company.

In addition, we publish "Intellectual Property White
Papers," which summarize the status of Hitachi Astemo’s
patent portfolio as a whole and by business unit, for use

in the consideration of intellectual property strategies foreach business unit.

Committee chairman are selected from the design department, and Patent Committee meetings are held regularly for eachbusiness unit, during which targets for intellectual property activities are set and progress is checked. Furthermore, once a year
Division and the Patent Committee of each business unit share IP strategies for their respective business units to invigorate IP
activities.

Technology Development Functional Division

Intellectual Property Strategy Meeting

Intellectual Property Division
Planning Division
No. 1 Patent Section
No. 2 Patent Section
Specially appointed

Patent Committee

Head ofBusiness
Unit

Patent Committee
Chairman
Deputy PatentCommittee Chairman
Secretariat
Intellectual Property
Division

Development Patent Committee
Department A
MemberDevelopment Patent Committee
Department B
MemberDevelopment Patent Committee
Department C
Member30

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 1 Innovation Management

Intellectual Property
Brand protection
The protection of each brand owned by Hitachi Astemo isAward achievements
Hitachi Astemo is continuously promoting application activities for the National Invention Award and the Regional

critical to promoting social innovation businesses andexpanding global business. Therefore, we are taking firm

Invention Award sponsored by the Japan Institute of Invention and Innovation.
We were awarded the Prime Minister Award at the 2022 National Invention Award for the "invention of an insulation

products pretending to be the Hitachi Astemo brand andagainst unauthorized trademarkapplication registration.

Chairman Award at the 2022 Kanto Area Invention Award for the "invention of a voltage detection circuit for inverter
devices." We will continue to contribute to society by actively acquiring intellectual property rights for superior

measures against the manufacture and sale of counterfeit

In recent years, manufacturing methods and sales routes forcounterfeit products have become more sophisticated anddiversified, and we are strengthening our response,

structure for 800V on-board inverters that enables rapid recharging," and the Tochigi Prefecture Invention Association

technology.

Examples of awards received in FY2022

including efforts to clarify the networks of counterfeiters.

The Prime Minister Award at the “National Invention Award”

measures against counterfeit products on e-commerce sites.

Invention of insulating resin structure for 800V on-board inverter that enables rapid charging(patent no. 6200871)

We are also cooperating with website operators to take
The Hitachi Astemo brand consists not only of new businessbrands, but also of a wide range of product brands,
primarily automotive and motorcycle products. Each of ourbrands is a testament to the technical capabilities and trust

we have cultivated over many years, and because they arehighly valued by our customers, we will continue topromote intellectual property activities that contribute to
the improvementof the value of each brand.
Business brand

The Tochigi Prefecture Invention Association Chairman Award at the “Kanto Area Invention Award”
Voltage detection circuit for inverter equipment (patent no. 6515425)
The Invention Encouragement Award at the “Kanto Area Invention Award”
Disc brakes for hydraulic vehicles (patent no. 4318618)
Low-loss double-sided cooled power module with branch terminals (patent no. 5879233)
High-pressure fuel supply pump (patent no. 6470267)

Product brands

Invention of an on-vehicle inverter with FM band radiation noise suppression (patent no. 6858926)

31

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 2 Human Capital

Global Human Capital Management
Approach to global human capitalmanagement

Global human capital management strategy

Through mergers and acquisitions, and inclusive hiring

Based on the "2024 Mid-Term Management Plan," Hitachi Astemo's vision is "to become an 'Employer of Choice' in theworkforce making it more essential than ever toorganization where they can thrive. To achieve this goal, we are promoting various measures under the four pillars ofpolicies, Hitachi Astemo has been attracting a diverse
promotethecreationofaninclusive,

diverseorganization in which talented people can thrive. In

order to propose innovative solutions to society andglobal marketplace by attracting human capital who are committed to contributing to society,” and to be an"People," "Mindset," "Organization," and "Foundation“.

Key measurescustomers for a better mobility society, to achieve

Four pillars of humancapital strategy

supplier, it is important for each and every employee toPeople(Talent)

global leadership positions, and to grow into a mega-view social issues as his or her own personal matter

Main initiatives
1 Acquire, retain, and develop global leaders and digital talent to maximize their potential
2 Assign the right people in the right places at the right time

and to be a driving force in the midst of change.

3 Improve employee well-being and engagement

capital who can embody these qualities.

4 To achieve sustainable growth, embody our mission and foster a global Hitachi Astemo culture

HR Strategy

Hitachi Astemo is committed to developing human
Mindset(Culture)

5 Promote continuous and proactive development, including a growth mindset and improving skills
6 Promote and reward innovation and change
7 Strengthen diversity, equity and inclusion (DEI)

Organization

8 Break down organizational silos and collaborate to improve value provided to customers
9 Transform HR to provide higher quality services and solutions by utilizing digital technology

Foundation

Ensure safety and healthStrengthen and ensure thorough implementation of our mission, compliance, and global risk
management32

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Global Human Capital Management
Ensuring fair evaluations andcompensation

Initiatives to put the right person in the right place
Hitachi Astemo is building a global common humanGlobal Gradedeploy, and develop globally thinking human capital.

it is necessary to carry out human capital management

capital management infrastructure in order to secure,Integrated

management

platform

for

human

resource

Through this platform, the Hitachi Astemo Group

Hitachi Astemo believes that in order for diverse

In order for diverse human capital to advance business,

human capital of any nationality to play an active role,

based on role and job standards. One way to achieve

and treat them fairly, and we have established a

it is necessary to establish a global system to evaluate

this is the “Global Grade.” We have introduced a seven-management

organizations based on job evaluations in accordance

to the Hitachi Astemo Group that is based on thelevel

gradingsystemforallpositionsinallsystem

based

on

the

GlobalCompensation Philosophy, a core philosophy common

leverages its human capital database for information

with standards common to the Hitachi Astemo Group.

a cloud system.

Visualization of human capital and shift to job-

In determining compensation, we comply with the laws

introduction of the system to all employees in 2022. As

Hitachi Astemo is promoting the recruitment of global

appropriate and competitive compensation system inprocesses such as global human capital search,

strategy that secures top class talent and capabilities.

such as employee skills and career aspirations throughWe began implementation in 2019, and completed thea result, it is now possible to centrally manage various

information

management,collection,

performance

applicationformanagement,

team

training

plans, and career development. Going forward, we aim

to improve the utilization rate of manager self-service(MSS) and employee self-service (ESS). In addition, we
will utilize people analytics through data integration

and utilize human capital data that is effective forcompany management.

based human resource managementhuman capital in order to strengthen a human capital
To realize this goal, Hitachi Astemo introduced a global

principles of "ensuring market competitiveness," "payfor performance," and "maintaining transparency.

in each country and region, and we have developed anlight of the labor market of each business in eachcountry and region. Additionally, we evaluate theperformance of all employees each year before

Talent Review in FY2020 to consider placement anddetermining the amount of compensation. Evaluation

aspirations, and launched the system in FY2021.

source of personal growth.

training based on each employee's aptitude and career
Discussions with labor unions that aim to advance theresults are f ed back to each employee and used as ashift to job-based human capital management in Japanare ongoing.

33

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Global Human Capital Management
Fostering the Hitachi Astemo culture

Strengthening employee engagement

Hitachi Astemo believes that improving employee

Hitachi Astemo has established the employee engagement score as one of the KPIs for human capital management inand therefore requires all managers to take th e

fiscal year, the FY2022 scores showed an increase in the percentage of positive responses in both the overall average

engagement is an investment in business operations,following initiatives:

Helping employees balance work and personal life.
Add value to business and cost efficiency by improving
rewards and rewards and providing benefits based onunderstanding employee needs.
Managers play an important role in promoting diversity,
equity and inclusion, respect for employees, fostering
relationships among employees, equal opportunity to speak
up, listening kindly, and breaking down barriers whennecessary.
Provide employees with a sense of accomplishment, build
trust in leadership, and increase engagement throughcoaching and other manager support, 1-on-1 meetings,
performance management, etc.
Empowerment: Delegating authority to get work done
Positive work environment: Flexible work environment,
respect, rewards, fairness, inclusion.

order to promote employee engagement for creating a sustainable and strong organization. Compared to the previous

and the focus areas (management of supervisors, employee engagement, as well as diversity, equity and inclusion). To
further improve employee engagement scores, we're focusing on the following three areas:
1. Clarification of instructions

2. Improvement of employee engagement

3. Growth mindset for company development and sustainable growth
Cycle of engagement surveys
Conduct
surveysCorresponding items

Execute ⇔Confirm

Analysis ofsurvey results

Create anaction plan

Share results

FY2022
4th Quarter
Jan.

1

Feb.

Mar.

FY2023

1st Quarter 2nd Quarter 3rd Quarter
Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Action plan formulation
by top management

2 Implementation of action
plans

Monitoring and follow-up

Decide on
issues3 (Check progress with each top
management)

Learning and capacity building: Assigning new projects todevelop individual training roadmaps that foster
independence.

4 Pulse survey implementation

Team support to practice Hitachi Astemo’s health and safety
principle of “safety and health protection take precedence
over everything else.” Team members clearly understand theimportance of the operating model (OPM) and confirm that
OPM is actually taking place.

6 Analysis of survey results

5 Conduct survey in FY2023

34

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Human Resource Development
Approach to human resource
development

Development of management leadership

Hitachi Astemo emphasizes the development of human

Hitachi Astemo is working to develop medium- to long-term management leaders who will lead change andworkplace, we are developing training programs

To develop candidates for CEO, CxO, business unit heads, and other senior management positions in the next andcapital, and in addition to on-the-job training in the
globally to improve individual abilities, skills, andtransformation.

subsequent terms, we select several hundred candidates from Hitachi Astemo human capital around the world andexpertise. Going forward, we will continue to support

conduct OJT (on-the-job training) and Off-JT (off-the-job training and coaching) that incorporate tough assignments .*developing human capital that contribute to solving

education by granting tough assignments and providing opportunities for direct discussions with outside directors.

the growth of each and every employee with the aim ofsocial issues.

In addition, for the talent pool of management leadership candidates, we select outstanding young people for intensive*Tough assignment: Assigning highly difficult tasks.

Name of training

Training content

Global Advanced Program for
Leadership Development

Training held twice a year for local leaders who are expected to play an active role inoverseas subsidiaries, with the aim of developing high-level leadership, mindset, andskills to achieve global growth

Hitachi Astemo Selected Global
Leadership Program

Selective training over a five-month period for the early development of future
Hitachi Astemo management leadership candidates.

Global Leadership Acceleration
Program for Managers
Ready to Lead

Leadership training for general managers and new managers with the samecontent globally.

35

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Human Resource Development
Fostering a coaching and feedback
cultureUtilization of the learning platform

The Hitachi Astemo Group is implementing initiatives

At the Hitachi Astemo Group, each employee can use

the aim of managers leading teams more effectively

progress and consult with his or her manager aboutrolled out the coaching and feedback introduction e-

career advancement, and to take the necessary training

subordinates, and conducted training on coaching andpandemic, some of the technical training programs thatby approximately 400 people. We will continue towere implemented through e-learning to promote th e

for managers to foster and establish a coaching andlearning. More than 20,000 employees globally are

to take root in a culture of coaching and f eedback withthe learning platform to check his or her past learning

Conducting skills assessments forengineers in JapanWe are implementing a skills assessment program inJapan to periodically evaluate the skills of ourengineers. This is a system where managers canand achieving organizational goals. In FY2022, wethe training n ecessary to achieve goals and futureobjectively

learning

when necessary. In addition, due to th e COVID-19

education plans for each person, and share and review

programgloballyformanagers

withgrasp the skill

levels that individual

engineers have self-diagnosed, formulate effective

them with the person during feedback interviews, etc.

feedback by in-house instructors, which was attended

were previously conducted through group training

The strengths and weaknesses of the organization (theprovide training for in-house instructors and training

expansion of educational opportunities through e-

be identified and linked to a sustainable human capital

feedback culture.

learning

This diagnosis, which started in th e software field, has

Development of digital human capital
The Hitachi Astemo Group began its own DX humancapital development efforts in FY2021 to promote its

business plan, and is developing an e-learning programthat includes DX basics to improve th e DX mindset ofprograms.

throughthecompany-widecommonThe Hitachi Astemo Group will continue to utilize thelearning platformtopromote global

education

development and promote autonomous human capitaldevelopment starting from the workplace.

company as a whole, each department, etc.) can also

development plan for the organization.

been expanded and implemented in the hardware field(machinery, electrical and electronic, electric motors) in
FY2018

and

to

the

manufacturing(production

technology) and quality assurance fields in FY2022.

Career development support

employees and educational materials to promote th e

As part of the promotion of career development, we

employees globally have participated in the program.

with the aim of fostering a sense of autonomous career

projects by training ambassadors who will promote DX

each and every employee. These interviews allow eachuse of business tools. So far, more than 17, 000

Hitachi Astemo will continue to further promote DX

as part of its measures to develop th e DX humancapital needed by the global group.

regularly hold career interviews for indirect employees

development and sustainable career development forindividual to think about his or her own mid- to long-term career goals, share th em with the manager, andproceed with mutual understanding and agreement on
how to work toward those goals.

36

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Diversity, Equity & Inclusion (DEI)
DEI initiatives
Hitachi Astemo is actively improving the environment

Status of DEI achievement in 2022
Since th e establishment of Hitachi A stemo, w e hav e

and making efforts to not only enhance diversity, but

begun to share our DEI vision and expan d globally,making use of their differences and demonstrating

measures:also to increase the vitality of the organization by

their strengths.

DEI Vision
Hitachi Astemo creates and leverages an
inclusive work environment,
one that embraces diversity and encourages
employees to respect and inspire each other.
Expanding DEI projects globally We will break out of the shell of our daily decisionmaking and working style to understandunconscious biases and habits we may have had.

 We will value communication and collaborate withcolleagues around the world.

 We will create an open environment where self-

worth is respected, change is encouraged, and an
open environment of mutual recognition andacceptance is maintained.

and inDEI-related awards

FY 2022, w e hav e taken th e followin g

Reorganization of the DEI promotion structure (global,
regional)
Sharing of DEI strategies and policies (including equity)
LGBTQ+ awareness (awareness and acceptancecolleagues) through Pride Month (June 2022)

DEI Awards from Hitachi India(India)

Women Achievers Awards“Women Empowerment” (India)

ofContinued promotion of a healthy meeting culture andencouragement of creativity in weekly activities throughmeeting-free Friday afternoons (an initiative to not set
meetings every Friday afternoon)
Introduction of e-learning training on unconscious bias for
700 managers globally as a pilot group to promote DEI,
cross-cultural leadership, etc. in the workplace

Excellence Award “Outstanding
Employer for People with
Disabilities” (Thailand)

Hosting of webinars related to gender equality andinclusion (inclusive leadership, understanding genderconditioning, etc.)
Deployment of the "Our Diversity, Our Strength" campaign
on "Zero Discrimination Day" (March 2023)

37

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human CapitalOccupational Health and Safety
Basic principles of occupational healthand safety

Establishment of a health and safety
management system
We are establishing a global

healthcompanies around the world, whose basic philosophy

accidents,

employeesafety." The entire Group works together to create asafety" and "occupational health and health," and by

The Hitachi Astemo Group shares the "Hitachi Astemo

and safety

Group Health and Safety Policy" with all groupmanagement system, working towards “zero” businessis that "we will never compromise on health andmanagement. In addition, we aim to ensure "occupational

andstrengthening

healthsafe, secure, and healthy workplace free from accidents.

building an organization that supports employees'

accidents can be prevented" and "we are responsible

healthcare

In addition, based on the belief that "all work-related

autonomous safety activities, we are improving the
supportsystemfor

employees—bothfor our own health," we are striving to build a culture

physicallyand mentally—to promote health management.

share this mindset, act to ensure their own health andmonth, attended by the safety and health managers of

where all employees of the Hitachi Astemo GroupThe "General Safety Manager's Meeting" is held every

safety, and foster mutual awareness.

each department and each company, where members
share a clear commitment to "place the highest priority on

protecting the safety and health of employees," formulate
plans and targets for company-wide safety and healthactivities, review the status of continuous improvement,

check the progress of safety and health activities,

education, and training in each department, and set andfollow up on group-wide unified KPIs. In the course of

these activities, important issues, especially those related

to health and safety, were reported monthly to theauditors in FY2022.

In Japan, the Central Safety and Health Committee, inwhich the labor union participates, meets twice a year to

discuss and share information on health and safety

activities, including analysis of occupational accidents
causes, countermeasures, and status of employees on sickleave.

Hitachi Astemo health and safety policy
We will never compromise on health and safety.
[Basic policy]

Based on the enduring philosophy that "safety andhealth take precedence over everything else," theHitachi Astemo Group is united in its global efforts tocreate a safe, comfortable, and h ealthy workplace

where all employees can work with confidence andvigor, with the belief that "safety is uncompromising."[Basic initiatives]

1. Compliance with applicable laws, regulations, and selfimposed management standards.

2. Prevention of "occupational accidents," "fire accidents,"

and "traffic accidents" by raising awareness of healthand safety (building rule-abiding human capital andworkplaces) and taking proactive measures against
various risks.

3. Maintain and improve health and safety activities
through occupational health and safety management
systems.

4. Maintenance and promotion of "mental and physical"

health through organized health management andmeticulous attention to detail.

5. Minimize damage by developing both normal andcontingency response methods for various risks.

38

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 2 Human CapitalOccupational Health and Safety
Contributing to the SDGs throughhealth and safety

Establishment of a health and safety management system

Hitachi Astemo's corporate activities realize a vibrantApproach from health and safety to improve

economic growth), we are promoting the active

workplace satisfaction, or happiness and wellbeing.

society and enrich people's lives. In particular, tocontribute to achieving SDG 8 (decent work andparticipation of diverse human capital and the creationof healthy and safe workplaces within the company.

workplace satisfaction, i.e., happiness, and wellbeing
Health and safety share a common foundation, which is

Hitachi Astemo globally manages the health and safety
conditions of each workplace by using TRIFR, or thenumber of near-miss reports, and the turnover rate as

Hitachi Astemo’s goal of a sustainable safety system
To protect the safety of our employees, we aim to build aglobal KPIs related to health and safety. It is currently
developing a Wellbeing KPI consisting of elements

investing in safety. In the unlikely event of an accident, we
not only ascertain the actual number of lost time injuries,

and linking it to measures to improve wellbeing.

management system than spans from risk identification to

but also the accident ratios (TRIFR*1 and LTIFR*2) per total

number of actual working hours to ascertain the true
situation, which is not dependent on the site size.
We aim for sustainable management by adapting toRelationship between wellbeing
and health and safety
awareness/behavior

Safety andhealth awareness
Health andsafety actions

Engagement
Wellbeing

Five elements of Wellbeing KPIWorkplace inspection

Disaster-stricken sites

Other locations

Thorough analysisof the root cause

Conduct risk assessments for
similar workplaces and equipment

Horizontal deployment of best practices*1 TRIFR (Total Recordable Injury
Frequency Rate)

Number of casualties over and above
lost time injuries x 200,000
Total actual working hours*2 LTIFR (Lost Time Injury Frequency Rate)
Number of casualties resulting in losttime injury or more x 200,000
Total actual working hours

TRIFR

Absence rate

Turnover rate

Investments

Production equipment,risk assessment systems

1-on-1 conversations(digital signs identified
based on absenteeism
rates, etc.)

Workplace
maintenance

Reduced risk daring

Interactive training(Adhere to the rules foreveryone as your own
business)

5S activities, heatstroke
countermeasures

Promote near-missproposals

Encourage leaders to take the initiativeand encourage members to participate
autonomously

 LTIFR (global)

processes for greater efficiency, accurate accident counts,
Manager & Health and Safety Committee/Safety Meetings

Ensuring psychologicalsafetyincluding these, with the aim of monitoring workplaces

global standards for health and safety through the sharingof risk information among these sites, standardization ofand safety investments.

Examples of measures to improve wellbeing
related to health and safety

FY2022

0.06

0.05

％

％

Percentage of accidents
resulting in injury or death overlost time injuries per total
number of actual working
hours
Compared to theprevious fiscal year

17%

improvement** FY2022 in-house KPI: 0.05%

 Number of near-miss reports (global)
Number of nearmiss reports

Engagement survey

Converting Wellbeing KPIs from five elements

Wellbeing KPI

FY2021

FY2021

143,480
cases

FY2022

206,322
cases

Number of near-miss reports(global)2.3

cases/year/person**Number of reports in FY2022
In-house KPIs:
1 case per year/person

39

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 2 Human CapitalOccupational Health and Safety
Initiatives to improve employee health
Measures to foster a health and safety mindset

Based on the enduring philosophy that "safety andWe established workplace inspections and horizontal

health take precedence over everything else," Hitachi

to thoroughly implement basic infection control underhealth" and is united globally in its commitment to

deployment of countermeasures in all forms, continued

COVID-19, improved communication methods fortelecommuting, conducted risk assessment and global

general inspections of facilities and the environment,
and promoted an ongoing response to high-risk work.

In addition, we established Health and Safety Week inthe beginning of the fiscal year to promote health andsafety, held presentations for horizontal deployment of

measures and hosted theme-based team discussions
across all sites, with awards given for outstanding
efforts at a global safety forum held in December.
Global health and safety forum agenda(Held in December 2022)
 Introduction
 Report from the region

・Summary; China, Asia, Europe, Japan・Health measures; Japan・Keynote speech; Americas (North America、Mexico）

 Q&A live session
 CEO comment / Award Ceremony
 Closing

Astemo believes in "never compromising on safety and"creating a safe, comfortable, and healthy workplace"where all employees can work with confidence andvigor. The Health and Safety Committee, the Healthand Safety Department, and the Occupational Health
Department at each site in Japan take the lead in
implementing employee health promotion measures, incooperation with health insurance associations withwhich the company is a member of and various internal
departments.

FY2022 initiatives
1. Occupational health services were provided inhealthcare rooms where occupational health staff
such as occupational physicians, public healthnurses, and nurses are stationed.

2. Implemented various health-assurance measures
to prevent severe ailments following the resultsof regular health checkups, etc.
3. Prevented mental and physical illness throughmedical interviews and interviews with workers
who work long hours.

4. Provided health counseling and guidance by
occupational health staff to allay employee
concerns about their health and encourage
exercise habits.

5. Implemented a statutory stress check system, andactively promoted mental health problem
prevention and revitalization.
6. Provided opportunities for improving the qualityof occupational health activities and humancapital development for occupational health staff
through regularly holding meetings, researchsessions, and workshops by both occupational
health staff and health and safety personnel.

40

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 2 Human CapitalOccupational Health and Safety
Initiatives to promote the health of
employees and their families

Mental health support
Hitachi Astemo has established mental health support
measures for employees, workplace managers, industrial
health staff, and human capital departments, and is
working to disseminate basic knowledge about mental
health and stress management, while strengthening theemployees’ ability to deal with stress in each position.
We are developing a proactive prevention approach toaddress the increasing mental burden of diversifying
work styles and inhibiting behavior due to the COVID-19
pandemic.
In addition, based on the results of stress check group
analysis and the opinions of industrial physicians, we arefurther promoting proactive measures for thoserequiring caution (promotion of interviews for those whohave undergone stress checks and high stress, alertingthem to the importance of taking attendance
information into consideration, opening a consultation
service for managers, conducting resilience education,and interviewing younger employees individually, etc.).
Furthermore, we are promoting symptom (predictive)
management and one-on-one communication globallyas measures to enhance support for employees withmental health problems.

Superior

Ensures
psychologicalsafetyEffective
questions

Communication frequency:
Once/day, week, month

Sharing
empathy/supportMember
Psychologicalsafety is ensured

Talk with peaceof mindFace-to-face(directly confirming facial expressions)

We will continue to develop measures to improve
wellbeing on a global basis to ensure that employees are
satisfied with their health and safety, both physically andmentally.
Mental health support measures
 Regular one-on-one interviews
 Expansion of remote consultation service forindustrial physicians Introduction of the EAP* consultation desk Posting of "self-care in telecommuting" and"workplace development in telecommuting" on theintranet
 Stress check group analysis health issue
identification*EAP: Employee Assistance Program

Promotion of medical checkups
Hitachi Astemo has established a system to subsidize thecost of medical checkups by health insurance societies inJapan, especially for employees aged 35 or older. It is
working to promote early detection and early treatmentof lifestyle-related diseases and cancer by encouraging
employees to undergo examinations, which also serve as
statutory medical checkups, and to undergo
examinations for certain parts of the body according toage. In addition, as a response to metabolic syndrome
we are actively promoting measures to prevent serious
illnesses to prevent the onset of diabetes, stroke, andmyocardial infarction, on top of the specific healthguidance mandated for health insurance societies.

Hitachi Astemo uses a personal health portal site
operated by health insurance associations with which it
is a member of, to encourage healthy behavior among
employees and their families.
The site provides information such as incentive points
and health checkup results to raise health awareness,and offers a variety of support services to monitor one's
own health status and engage in healthy behaviors.

Promotion of collaborative health*The Hitachi Astemo Group implements its own healthpromotion measures tailored to the characteristics ofeach company, and is also working to maintain andpromote the health of its employees by making
maximum use of the services provided by healthinsurance associations with which it is a member of,while working to enable all our companies tocontinuously obtain certification as a corporation withexcellent health management from the Ministry of
Economy, Trade and Industry.

*Collaborative health:Effective and efficient implementation of prevention and health promotion
for enrollees (employees and their families) through active cooperation
between insurers, such as health insurance societies and employers, with aclear division of roles and a favorable work environment.

41

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 2 Human Capital

Freedom of Association and Collective Bargaining
Respect for basic employee rights

Dialogue between labor andmanagement

Notification of business transfers andsecondments

Hitachi Astemo complies with respect for the basic

Labor-management relations at Hitachi Astemo and

The collective labor agreement that Hitachi Astemo has

In Japan, where the formation of labor unions is

discussions are held smoothly.

stipulates that when transferring or seconding anagreement between the CEO, who represents th eManagement

recognizes that the union has the three labor rights

communication between labor and management,rights of employees.

permitted, Hitachi Astemo has a collective bargaining
company, and representatives of th e labor union, which(right to organize, collective bargaining, and collective

action).

The Hitachi Astemo labor union membership rate* isapproximately 99.1% (as of March 31, 2023).

*All employees except union members/management staff (management
staff are not eligible for union membership).

group companies in Japan are stable, and various
HitachiAstemohas

CouncilestablishedandDivisiontheCentralManagement

Council, which meet regularly to ensure mutualsmooth management, business development, andimprovement of working conditions for union members.
Overseas group companies also engage in active

dialogue based on laws and regulations in eachcountry and region to deepen understanding between
labor and management.

concluded with the Hitachi Astemo labor union
employee for business reasons, th e union must be
notified immediately after the decision is made, afterdueconsideration

of

the

employee's

own

circumstances. In particular, it is stipulated that basic

matters will be discussed with the union for mass
relocation and transfers, etc.

Labor-management cooperation to
improve health and safety standards
The collective labor agreement signed by Hitachi

Astemo and the Hitachi Astemo labor union establishes

health and safety measures, the establishment of ahealth and safety committee, education, training, andmedicalexaminations.

Labor

and

management

cooperate to improve workplace health and safety

standards.

The Health and Safety Committee formulates annual
plans for health and safety activities to create a saf eand healthy work environment, confirming its progress;

examines measures to prevent occupational accidents

and their recurrence; and shares the status of healthcheckups.

42

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 3 Human Rights

Respect for Human Rights throughout the Value Chain
Human rights due diligence (HRDD)
initiatives

Respect for human rights of all people
Hitachi Astemo believes respecting human rights is ourhuman rights due diligence (HRDD)*3 based on the

our business activities. We strive in our corporate

Human

responsibility as a global company and is essential toDevelopment of HRDD promotion system

United Nations Guiding Principles on Business andHitachi Astemo has established a system for promoting

employees, compliance with the laws and regulations

measures for the Hitachi Astemo companies andideology, creed, religion, social status, family origin,

Astemo Group operates, and th e pursuit of methods to

responding to inquiries.

any conduct that offends individual dignity. We also

there is a conflict between internationally recognizedactivities to not to discriminate on the basis of gender,

sexual orientation, age, nationality, race, ethnicity,
disease, disability, or any other factor, or to engage invalue engagement with relevant stakeholders toproperly understand and respond to human rights

impacts.

andappropriate

training

forof the countries and regions in which the Hitachi
respect international human rights principles whenhuman rights and the laws of the countries and regionsin which the Hitachi Astemo Group operates.

Regarding children's rights, we strive to eliminate childlabor and forced labor in our own operations and in

our supply chain, and stipulate that we give due

Human rights policy
Hitachi Astemo established the "Human Rights Policy"

as one of the highest standards of internal regulations.

This policy expresses respect for human rights as statedin the ILO Declaration on Fundamental Principles andRightsRights*4

atWork

Organization (ILO*

1),

of

the

International

Labourwhich sets forth fundamental

rights at work, including the International Bill of Human
Rights*2, the effective recognition of freedom of

association and the right to collective bargaining, theprohibition of all forms of forced labor, the effective
abolition of child labor, and the elimination of

discrimination in employment and occupation. In
addition, it clearly stipulates the implementation of

consideration to human rights, including the rights of

HRDD internally, is examining HRDD promotion
suppliers,

conducting

educational

activities,

andIn addition, in order to implement HRDD rooted ineach business of Hitachi Astemo, we have appointed aperson responsible for implementing HRDD at eachmajor group company and are developing a system forstrengthening human rights risk management thattakes into account the business characteristics andrespective value chains of each company.

children.

*1 ILO: International Labour Organization*2 International Bill of Human Rights
Collective name for the Un iversal Declaration of Human Rights andInternational Covenants on Human Rights adopted by the United

Nations General Assembly.
*3 Human rights due diligence (HRDD)

Identifying and assessing negative business-related human rights
impacts, implementing prevention and mitigation measures, andcontinuously verifyin g an d disclosin g the effectiveness of suchmeasures.
*4 “Guiding Principles on Business and Human Rights”

The principles are contained in the "Report of the Special
Representative of the Secretary-General on the Issue of Human Rights

and Transnational Corporations and other Business Enterprises"
published by John Ruggies in March 2011 (A/HRC/17/31).

43

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 3 Human Rights

Respect for Human Rights throughout the Value Chain
Raising awareness and education of humanrights of executives and employees

Outreach to procurement partners
Hitachi Astemo makes it clear that it does not tolerate

Hitachi Astemo conducts educational activities to raisechild labor nor forced labor in its own operations or inawareness of human rights through the use of videos,

Policy. As the globalization of business increases, th ecourse each year. Through recruitment activities forimportance of preventing forced labor and humanopportunity for each employee to think seriously about

learning course on human rights for employees.

of human rights by presenting awards for outstanding

its supply chain, in accordance with the Human Rights
likelihood of the risk of forced labor, as well as th etrafficking as a company is also explained in an e-

To share these basic stances with our procurement

partners, we have distributed the "Supply Chain CSR
Procurement Guidelines" to ensure that they are wellunderstood throughout the supply chain.

In FY2022, we moved forward with an assessment of

the status of human rights responses to forced laborand promotes th e goal of having employees take on ehuman rights slogans for employees, we provide an

human rights, and we are working to raise awarenessworks. In addition, through various training andawareness-raising

activities,

such

as

onboarding

education for new employees and position-specifictraining, we communicate the importance of respecting
human rights to each employee in his or her work.

The consultation and reporting contact points forand migrant labor within the Hitachi Astemo Group,harassment and human rights issues in general are, inpartners.

system. The Hitachi Astemo Group has established aand developed a plan to survey our procurementIn

FY2023,

we

plan

to

introduceasustainability supply chain assessment tool and carryout a survey of our procurement partners.

principle, integrated into the compliance reporting

global mechanism for handling complaints and is

promoting efforts to address these issues.

44

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 4 Value Chain Management

Quality
Approach to quality assurance activities

Framework for quality assurance and quality assurance activities

At Hitachi Astemo, all employees share the philosophy

To ensure thoroughproviding products and services, we are committed toAssuranceof "quality and reliability first." In addition, whenensuring quality and safety by meeting customers'

needs and specifications, fulfilling relevant laws andquality

governance, Hitachi

Astemo has separated th e company-wide Quality
Department

from

the

Manufacturing

Department to create a system that allows us to act

with the safety and security of our customers as ourstandards, and setting voluntary standards as necessary.

first priority.

in the Quality Assurance Regulations in our company

Compliance with technical laws and regulations

The basic philosophy of quality assurance is also statedregulations, and we promote activities to strengthen
qualityassurance

from

the

perspectivesof"organization and management," "technology," and"human capital"

in

all

processes—from

product

andmaintenanceservices.

planning and development to design, manufacturing,

testing,delivery,

Furthermore, based on the idea that "prevention is theessence of quality assurance," we are strengthening

 We

are

promotingcomplianceactivities

and"preventing defects from recurring."go

not only the technical causes of the product, but also

World

Forum

for

Harmonization

Regulations (WP29) in June 2020.

ofassurance reporting line

independent of business divisions.

Thorough safety design of products and services

design (intrinsic safety design)," "reducing risk throughrisk through information in use." We conduct risk assessments from a broad perspective

recurrence, in order to improve product reliability and During product development, the safety of human life,

customer satisfaction.

overseas group companies, and, as in Japan,

Vehiclethe process, organization, and motivating factors that
led to th e def ect, as well as th e prevention ofquality assurance regulations, reporting defects from

Compliance Management System, established by theprotective measures (safety protection)," and "reducing

thatof quality assurance activities, establishing global

Cyber Security and Software Update Regulations

When a serious defect occurs, we thoroughly discuss

activities

system by globally developing the basic philosophy

continuous improvement of processes through the We strive to ensure safety by "reducing risk throughprevention"

 We are strengthening our global quality assurance

establishing a quality

beyond"defect

Strengthening the global quality assurance system

in cooperation with group companies, etc.

body, and property is our top priority in design, andsafety is verified in all processes—from development
to production, sales, and maintenance.

45

Contents

Introduction

Management

SocialEnvironmental

GovernanceSocial 4 Value Chain Management

Quality
Implementation of quality andreliability training

Response to product defects
In the event of a product defect, the department in charge of the product will take the lead in promptly responding toFocusing on engineers involved in manufacturing, we

and appropriate measures.

maintenance, as well as technical courses by level, such as

the problem. In the event of a serious problem, we report it to the automakers, who are Hitachi Astemo's direct
customers, and promptly report the situation to management, so that Hitachi Astemo can work as one to take prompt
When we determine that a product requires retroactive countermeasures, Hitachi Astemo consults with the automakers
that are its direct customers, as it does when a product defect occurs, and implements measures—such as repair oroffer technical courses by field to improve technologies
related to manufacturing, quality assurance, and"application" and "basics."

replacement—and reports the matter to the competent authorities as necessary.

Response flow when a serious problem occurs
Incident
occurrence

Hitachi Astemo

Obtain information
Quality assurance andcustomer service contact
for each department

Customer,
Retailers

Automobile
manufacturers

Measuresandreports

Quality Assurance
Department
Defect statusconfirmation

Determination ofcritical productdefects

Cause investigation
Site investigation

Actual productsurveyRecall measures
Newspaper/website
announcements

Management level

Investigation of theextent of damage

Determination of
defects
Review meeting

Criticalproduct
defects

Automobile
manufacturers

Information flow

Ministry of Land,
Infrastructure,
Transport and Tourism
and other related
ministries

ReportInappropriate conduct at Hitachi Astemo
Regarding the inappropriate conduct in periodic testing, including of brake components manufactured at our Yamanashi Plant (Minami-Alps City, Yamanashi Prefecture) and suspension
components manufactured at our Fukushima Plant (Kuwari-machi, Date-gun, Fukushima Prefecture) (announced on December 22, 2021): In addition to fact-finding and investigation by theSpecial Investigation Committee to determine the cause, we have also proceeded with our own investigation, which was announced on May 19, 2023.
As a result of the investigation, we have become deeply aware that our culture of compliance and management and supervisory systems had been inadequate over a significant period oftime. Therefore, to prevent reoccurrence of such inappropriate conduct, we have decided to establish an organization-wide improvement plan, review related training and processes, andinvest in human resources and equipment while improving these measures on a constant basis. We sincerely accept the results of this investigation and deeply apologize to our customers
and other stakeholders in society for failing to uphold the highest standards of trust and compliance at all times. We deeply regret the inappropriate conduct and unsatisfactory
supervision revealed in these cases, and we are committed to developing and establishing a strong compliance culture to prevent any recurrence of such conduct.
Outcome of Investigation into Inappropriate Conduct Relating to Certain Products and Measures to Prevent Recurrence46

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 4 Value Chain Management

Customer Satisfaction
Framework to apply customer feedback to Our business
Hitachi Astemo's Sales Department assigns a global

account manager to each major customer to utilize theopinionsofcustomers—suchasautomobile

manufacturers—in business management, products, andsolutions, and to link this to the improvement of thecustomer's corporate value. The person serves as theliaison between Hitachi Astemo and its customers

around the world, and works with the global accountteams in each region of the world and the product sales

Examples of activities to address customer needs
Initiatives

Objective

Technical meeting

After reliably grasping trends in the technology industry, we propose advanced
technology development through discussions to meet the technology roadmap andneeds of our customers.

Actual vehicle
demonstration

We candidly listen to our customers' feedback about th e direction of our advanced
technologies through test drives of actual vehicles, and proactively respond to theirrequests through joint development proposals, etc.

teams in divisions and business units to strengthen

relationships with customers.
In addition, to support the product sales activities ofglobal account managers, divisions and business units,

the Sales Department includes a headquarters that plansand drafts global sales policies, guidelines, priorities, etc.;aheadquartersthat

conducts

marketingandpromotional activities from a technological perspective,
based on the global customer strategy of global accountmanagers; and a global program management for the

Customer satisfaction results

Each customer's rating for our quality is viewed as a customer evaluation, and our KPI is “80% or more achieved” interms of overall achievement.
Target year

Actual results

FY2021

80% or more achieved

FY2022

80% or more achieved

launch of customers' programs, which is organized as asupport structure for global sales activities.

To quickly and reliably identify customer needs in our

global sales activities, Hitachi Astemo proposes
advanced technologies and verifies the technologicaldirection through technological meetings and actual
vehicle demonstrations, which will enhance the value of
our customers' products and be reflected in our business

operations.

47

Contents

Introduction

Management

Environmental

SocialGovernanceSocial 5 Community

Social Contribution Activities
About social contribution activities
Hitachi Astemo aims for sustainable development with all stakeholders, including customers, partners, employees, and local communities. To that end, we will have awareness and takeresponsibility as a member of society, proceed with actions aimed at achieving harmonious growth, share joy with everyone, and build on this.
Examples of social contribution activities●Regional greening activities
In each region where we have business bases, we are
actively deepening exchanges with local communities,
and are making initiatives to create abundant greeneryin the future—such as ecosystem conservation,
greening activities, and forest maintenance.
●Connections with local communities
We are conducting fund-raising activities to support
cancer treatment centers, support disaster-stricken
areas including with donations (from providing land forbuilding temporary housing, to collecting food andclothing and distributing to local governments), andproviding sales support for products created at facilities
for people with disabilities.
●Support for the development of next-generationengineers
We conduct activities to support the learning of thenext generation of engineers by drawing on theexpertise and experience of Hitachi Astemo employees.
We are striving to nurture the engineers who will leadthe future by developing the Kids Engineer
Development Project for elementary school students,
supplying products and technical training to teams ofhigh school students participating in the Honda Eco
Mileage Challenge*1, supplying products to university

student teams participating in student formulary
activities, and dispatching instructors to One School
One Skill*2.

JSAE*3 Kids Engineer 2022

Support for JSAE Student Formula activities
Providing in-person
support as a consultative
judge, brake products andcompany booth exhibitions

A program titled, "Let's make a car that moves
automatically along a line!"

Honda Eco Mileage Challenge

Course on basic fuel supply systems for high school
engineers who plan to participate in the event*1 Using a Honda 4-stroke engine, this challenge calls on participants to explore
the limitless possibilities of how many kilometers can be traveled with one literof gasoline, and to compete with original ideas and technology. The cars in thecompetition drive a specified number of laps (distance) in a specified time, andfuel efficiency is calculated based on fuel consumption.
The event is organized by Honda Motor Company, and in addition to highschool, vocational school, and university student classes, a junior high schoolclass has been newly established since 2005.
*2 This is an educational program organized by the Ministry of Health, Labor andWelfare, in which athletes who have participated in various skills competitions
visit schools across Japan as instructors. There they demonstrate their real skills,
and by experiencing the technical skills together, the participants see the future
possibilities while learning that everyone is a future leader.
*3 JSAE：Society of Automotive Engineers of Japan, Inc.

Social contribution-related expenses
In the promotion of social contribution activities in
FY2022, a total of 9,087 people* were involved in social
contribution activities. Related expenditures wereapproximately 97.7 million yen*, about the same level
as in FY2021, in part due to the continued spread of
COVID-19 affecting many activities.
*Figures are results for the Japan region.

48

Contents

Introduction

GovernanceManagement

Environmental

SocialGovernance

1 Corporate Governance２ Compliance
３ Risk Management
４ Information Management

49

Contents

Introduction

Management

Environmental

GovernanceSocial

1 Corporate Governance

GovernanceCorporate Governance (as of March 31, 2023)
In FY2022, Hitachi Astemo was a company
with a Board of Directors, corporate auditors,
andaccounting

auditors.

The

two

shareholders were Hitachi, Ltd. (hereinafterreferred to as “Hitachi”) and Honda MotorCo., Ltd. (hereinafter referred to as “Honda
Motor”), and Hitachi and Honda Motor held
66. 6%

and33. 4%

respectively.
corporate
including

of

Basic

the

matters

governance
the

Board

votingandofrights,concerning
operation,

Directors,

werestipulated in the shareholders’ agreement,
the Articles of Incorporation, and the rules of
the Board of Directors of Hitachi and Honda
Motor.

Board of Directors composition
The shareholders’ agreement stipulated that the totalcommittee deliberates on the selection of directors andOne of the directors nominated by Hitachi was to be thethem to the Board of Directors, based on the Board of

number of directors would be six, of which Hitachi could
nominate four and Honda Motor could nominate two.

executive officers, remuneration, etc. based on thepredetermined operating guidelines, and recommends

Chairman of the Board (part-time); one of the directors
nominated by Honda Motor was to be an executive

Directors’ decisions.
The shareholder agreement stipulated that Hitachi

executive director. For executive director candidates
nominated by Hitachi or Honda Motor, prior tonominated by Hitachi and one by Honda Motor.
One person from Hitachi was nominated as an auditor of

director, and the remaining one was to be a non-nomination as candidate for directors the representative

Astemo has three auditors, two of whom can be

Hitachi Astemo. The two auditors had many years of

director was to have prior confidence in the candidates,
provided that they satisfied the necessary qualifications

experience and considerable knowledge of accounting
and finance operations.

Two persons from Hitachi and one person from Honda
Motor were elected as Hitachi Astemo directors. In(EC), which consists of executive officers, as a body todeliberate and decide important management matters.

to fulfill their duties as executive directors.

addition, there were to be two representative directors,

Hitachi Astemo has established the Executive Committee

The Board of Directors of Hitachi Astemo is the bodyand Hitachi could nominate any of them after priorconsultation with Honda Motor.

that decides the most important matters in the
management of the company and has the role ofand Remuneration Committee as a voluntary advisory
body to enhance management oversight functions. The

Hitachi Astemo has retained Ernst & Young ShinNihon
LLC as its accounting auditor.

The Board of Directors had established a Nomination

supervising their execution.

Changes in directors and corporate auditors due to the transition to a company with an Audit Committee, etc.

The information contained in this report regarding corporate governance is current as of the end of FY2022 (as of March 31, 2023). To strengthen the supervisory function of the Board of Directors andfurther enhance corporate governance, Hitachi Astemo has announced that it will transition to a company with an audit committee system as of October 16, 2023, by resolutions of the General Meetingof Shareholders and the Board of Directors, and that it will make changes to its directors and corporate auditors. Hitachi Astemo will aim to further enhance its corporate value by strengthening its
corporate governance structure.
Change in board directors and corporate auditors for transition to a company with an audit committee system

50

Contents

Introduction

Management

Environmental

SocialGovernance

1 Corporate Governance

GovernanceCorporate Governance (as of March 31, 2023)
Operational status of the Board of
Directors
The

Board

of

Directors

determines

theStrategic discussion
basic

Hitachi Astemo has introduced an executive officer

execution of duties by executive officers and directors

is important to communicate the status of execution to

management policy of Hitachi Astemo. It supervises theto continuously improve the corporate value of Hitachisystem, in which directors supervise execution. While it
the Board of Directors and convey discussions held at

Astemo and the interests of shareholders. Basic

the Board of Directors meetings, the prerequisite formanagement plan and annual budget, and the Board

Directors meetings. For this reason, Hitachi Astemo setsmanagement

policies

includethe

medium-termof Directors focuses on strategic discussions regarding

basic management policies, in addition to resolutions

this is the n eed to stimulate discussion at Board ofstrategically important agenda items for discussion ateach Board of Directors meeting, with the aim of

stipulated in laws and regulations, the Articles ofenhancing the value of Hitachi Astemo. The agenda of

In FY2022, the Board of Directors met for seven regularfollowing perspectives: 1) How Hitachi Astemo can

Incorporation, or the rules of the Board of Directors.

meetings and three extraordinary meetings. There werealso two written resolutions. To assist the Board of
Directors in its duties, a Board of Directors Office has

been established and staff members assigned.

this strategic discussion is determined from thecreate and grow corporate value as an independentcompany, 2) How it can advance technology leadershipand innovation as a technology company, and 3) How

it can strengthen its global risk management systemand practices. In addition to reporting and discussing

the business strategies of each business division andbusiness unit, the strategic agenda includes issues andstrategies that are important to Hitachi Astemo, such asenvironmental strategy, risk management, finance,

quality, and human resources strategies, and are
actively discussed. In FY2022, 15 strategic discussions

were held by the Board of Directors, and key points
were communicated to management.

51

Contents

Introduction

GovernanceManagement

Environmental

GovernanceSocial

1 Corporate GovernanceCorporate Governance (as of March 31, 2023)
Framework to ensure the efficient execution of duties by directors
Hitachi Astemo’s Board of Directors decides on thedevelopment

appropriatenessofofframeworks

operations.

toensure

Among

the

these

resolutions, the following resolution was adopted as a“framework to ensure the efficient execution of duties

Governance at the Board of Directors Levelby directors.”

 To ensure the efficient execution of duties, directors

clearly separate management supervision functions

from business execution functions and promote theefficiency of the execution of duties.

 The Executive Committee shall be organized anddeliberate on important matters affecting Hitachi

Astemo and its group companies as a whole, in orderto make careful decisions based on multifaceted

considerations.

 To operate our business systematically and efficiently
based onour management policy,

Nominated by
Hitachi

General Meeting of
Shareholders

Board of Directors

Monitoring/auditing

Supervision

CEO: Chief Executive
Officer

Report

EC: Executive Committee

annual budget, and manage business performance

Executive Officer, Director

based on these plans.

 We have established an Investment and Financing
Strategy Committee to improve asset efficiency byallocating investments appropriately and ensuring

the profitability of individual projects.

 Directors receive reports on the results of internal
audits conducted by the parent company.

Monitoring/auditing(Internal)
Audit Office

Division/Business Unit/Function/Region

Part-time
Director

Accounting
auditorErnst & Young
ShinNihon LLC

Hitachi Astemo's Operating Model

we haveformulated a medium-term management plan and

Audit

AuditorNomination
andRemuneration
Committee(Chairperson)

Nominated by
Honda Motor

Board of Directors■ Roles and responsibilities:• Lawful managemen t an d operation of t he e ntire
company, in accordance with the Companies Act.
• Hitach i Astemo’s Board of Direct ors delegates business
operations to executive officers, including the CEO. The
main role of the Board of Direct ors is to su pervise themanagement of the compan y an d the work of theexecutive officers.
• Examination of major de cisions based on the Com panies
Act, et c. The conditions for approval un der theshareholder agreement must be considered.
■ Composition agreed in t he agreeme nt betwee n t he
two companies (shareholders’ agreement):• Comprise d of a t otal of s ix direct ors. Four are nom inatedby Hitachi, and the remainin g two are appointe d by
Honda Motor.
Nomination and Remuneration Committee■ Roles and responsibilities:• A committee attached to the Board of Direct ors
determines the n ominat ion an d com pensation of Hitachi
Astemo's executive officers.
■ Composition agreed in t he agreeme nt betwee n t he
two companies (shareholders’ agreement):• Comprise d of a total of t hree direct ors. Two areappointed by Hitach i (one part-t ime director an d one
full-time direct or) an d one is appointed by Hon da Mot or(part-time director).
Auditor■ Roles and responsibilities:• Elect by resolution of t he General Meetin g ofShareholders.
• Monitor an d au dit t he act ivities of the Board of Direct ors
and management under the Companies Act.
■ Structure agreed in the agreeme nt betwee n the twocompanies (shareholders’ agreement):• Comprise d of a total of three auditors. Two areappointed by Hitachi and one by Honda Motor.

52

Contents

Introduction

GovernanceManagement

Environmental

GovernanceSocial

2 ComplianceBusiness Practices in Accordance with International Norms
Compliance promotion framework

Compliance reporting framework

Compliance educationor

Every year, Hitachi Astemo conducts compliance

the President & CEO and vice-chaired by the CCO

capabilities, Hitachi Astemo in FY2022 again utilized th e

employees around the world. This ensures that th ecomprehensive compliance activities of the Hitachi

wide compliance reporting system that enables users

To

promotecompliance,

HitachiAstemohasToprevent

andpromptly

correct

illegalestablished the "Compliance Committee"—chaired byinappropriate

self-governing

education on corporate ethics to all officers and(Chief“Hitachi Global Compliance Hotline,” a Hitachi Group-

officers and employees with diverse cultural andAstemo Group led by this committee.

to directly report compliance violations or suspected

conduct and compliance, based on corporate ethics.

officer who is responsible for overseeing compliancepublic officials in Japan and overseas. The hotline alsowith the person in charge, we share basic policies andreporting of harassment and human rights issues in

In addition, each group company in the region has aavailable not only to Hitachi Astemo employees, but

compliance activities at each company and promoting

and other business partners. We investigate all reports,

Compliance

Officer)—andpromotes

acts

and

improve

Each regional headquarters has a regional complianceviolations, including the provision of illicit benefits toactivities in the region, and through communication

serves as a point of contact for consultations andinformation on compliance with each region.

general. It allows for anonymous reporting, and iscompliance manager who is responsible for overseeing

also to temporary employees, suppliers, distributors,

andconfirm the facts, respond to the results of th e

Regarding the status of compliance measures, we notnecessary. In FY2022, the Hitachi Astemo Group as acomplianceactivities

through

information sharing at each company.

education

only clarify issues in promoting compliance measuresthrough individual dialogue with regional complianceofficers and group companies, but also conduct regular
audits in the compliance field for all group companies

to confirm their appropriateness. If, as a result of theaudit, any items that require improvement are found,corrective measures are taken promptly.

investigation,

and

take

corrective

measureseducational backgrounds are more thorough in their

Initiatives in FY2022
All employees of the Hitachi Astemo Group havebeen informed about th e new Corporate Ethics andCode of Conduct, which was enacted as of March 1,
2022.

as

whole received approximately 300 reports.

Initiatives in FY2022
As one of the Group's important complianceprograms, we actively conducted promotional
activities for this hotline in FY2022.
For reports received through this hotline, we strive
to promptly investigate, respond, and implement
corrective measures in cooperation with relevant
departments at each business site, plant, andgroup company.

53

Contents

GovernanceIntroduction

Management

Environmental

GovernanceSocial

2 ComplianceBusiness Practices in Accordance with International Norms
Prevention of antisocial transactions
and money laundering

Anti-bribery policy

Competition law compliance policy

Preventing business-related corruption is a major

Hitachi Astemo upholds “acting based on laws andunfair transactions, and stipulates in the Code ofestablished related regulation. They stipulate thatcompetition” as the basis of its business activities. In

transactions. In addition to regular screening of new asrules when providing or accepting entertainment or

and regulations.

has taken measures such as including clauses infunds (political contributions), which must not exceed

Initiatives to prevent competition law violationsgroups, in case the other party is found to be an

and regulations.

conducts global activities to raise awareness ofMoreover, we are working with external specialized

amount and frequency of entertainment and gifts tostrives to thoroughly comply with relevant rules,

To cut off any relationship with antisocial forces,forcompanies.

HitachiAstemohascorrect

corporateethics”

and

“fair

and

free

Hitachi Astemo rejects all unreasonable demands andchallenge

Conduct that it will never engage in antisocial

directors and employees must comply with internal

well as existing business partners for eligibility, Japan

gifts, and when making donations or providing politicaltransaction agreements to exclude organized crime

the scope permitted under anti-bribery-related laws

Similar to its anti-bribery initiatives, Hitachi Astemo

antisocial force after the transaction has commenced.

In addition, the rules also provide specific limits on thecompetition law compliance through education. It

organizations (such as the National Center for Removal

public officials, as well as prohibit facilitation payments

business standards,

partners. In addition, we thoroughly comply with thewith competitors globally to disseminate practical

addition, we strive to comply with other related rules

and guidelines,

and createsof Criminal Organizations and the police) to eliminate

and establish procedures for screening businessstandards for overseas audiences related to contact

The Hitachi Astemo Group as a whole clarified its

Foreign Corrupt Practices Act (FCPA) in the United

precautions.

money laundering prevention provisions to this end toregion, which have become stricter in recent years.

antisocial transactions.

Anti-bribery awareness campaigns

access by antisocial forces.

stance of not tolerating money laundering. It added

strengthen specific initiatives, in addition to preventing

States and other anti-bribery laws in each country and

Hitachi Astemo has created and deployed teachingmaterials in multiple languages, which are used by all
employees to ensure that everyone is aware of th eanti-bribery policy and rules for prevention stipulated
in the Code of Conduct, etc.

54

Contents

Introduction

GovernanceManagement

Environmental

SocialGovernance2 ComplianceBusiness Practices in Accordance with International Norms
Export control

Violations of laws and regulations

Hitachi Astemo's basic policy for export control is tocomply with laws and regulations related to imports

and exports globally and to conduct appropriate
management in accordance with internal regulations tomaintaininternational

peace

and

security.

Inaccordance with this basic policy, Hitachi Astemo has
established the “Security Export Control Regulations.” It

strictly controls all export goods and technologies

In FY2022, there were no cases of prosecution or

sanctionsfromauthorities

relatedtobribery,

competition law or export controls. Regarding tax

compliance, we comply with the laws and regulationsof our bases in each country and region, and have notreceived any fines or other sanctions for violations oflaws and regulations that have a significant impact.

based on laws and regulations, and after examining thedestination countries and regions, customers and uses.
In addition, group companies also support th eir

activities through education and other means toprovide guidance on the establishment of rules andsystems, ensuring that export control is carried out inaccordance with the laws and regulations of therelevant country or region.

As a result, we are continuing our efforts to ensure thatexport control is thoroughly enforced throughout
Hitachi Astemo.

55

Contents

Introduction

GovernanceManagement

Environmental

SocialGovernance3 Risk Management

Addressing Risks and Opportunities, Business Continuity Initiatives
Approach on business continuity(BCP/BCM*)Enterprise risk management
Based on the recognition that it is essential to

The basic policy of Hitachi Astemo is to take measuressurvive as a business entity in times of volatility,

activities, minimize damage to employees and th e

Astemo is working to strengthen company-wide risk

In preparation for th e occurrence of risks, dedicatedAs part of these efforts, we are introducing integrated

response capabilities and readiness of the entire

anticipate future risks and respond quickly in order toto prevent risks that can be assumed in businessuncertainty, complexity, and ambiguity (VUCA), Hitachi

company in the event of risks, and to continue business.

management and strives to increase corporate value.

persons in charge are working to improve the crisisand comprehensive enterprise risk management (ERM).

organization through practical rules, a global humanThe heads of business divisions, business units,

network, and education and training.

Management Officers) in their respective organizations,

impact and cannot be resolved without company-wide

Managers), they promote risk management processes

established with the participation of all functions andfunctions, and regions are positioned as RMOs (Risk
and together

withth eir supporting

RMs

(Risk

In addition, in the event of a crisis that has a significant

efforts, a global crisis response headquarters will be

at all levels of the organization.

related business divisions, business units, and regions.

roundtable, a workshop for senior management,

recovery through flexible response.

Since FY2022, we have also introduced the risk

It will strive to minimize damage and achieve a quick

improved our methods for risk identification, andUtilizing its experience in responding to past crises,

make continuous improvements while strengthening

pandemics, Hitachi Astemo is further improving its

perspective.

*BCM：Business Continuity Management

reviewed our risk analysis and prioritization methods toriskcountermeasures

from

a

company-wide

including major earthquakes in Japan and global

crisis management and crisis response capabilities.

56

Contents

Introduction

GovernanceManagement

Environmental

GovernanceSocial

4 Information Management

Information Security
Framework for promoting information
security

Information security policy
To minimize the risk of information leakage and

At Hitachi Astemo, the Chief Information Security

which may hinder the continuation of the business

implement and operate information security andby the "Product and Information Security Committee"

importantpromoting information security for all Hitachi Astemo

Information “Security Promotion Committee,” etc., andwe recognize cybersecurity risks as one of th evarious measures for information security and personal

implements them in the workplace.

security policy that is consistent with the company's

Security Committee,” chaired by the CISO. In principle,

Security monitoring

management into account, so that we can declare th e

manager at business units and offices, and an

security monitoring by SOC*1, and collects and deploys

suspension of operations due to cyberattacks, etc.,

Officer (CISO), who is responsible and authorized toitself, Hitachi Astemo has positioned information

personal information protection, is responsible formanagement issues. In addition, as a global company,

products, services, and internal facilities. Policies andsecurity

governance

as

one

of

the

management risks. We have established an information
management

policy,takingcybersecurity

risk

response policy of the entire organization both inside

information protection are decided by the “Information

the head of the site serves as the information security

information

security

promotion

department

ispolicy and various measures regarding information

security and personal information protection decided

to each business site and group company through thetheinformation

security

managerthoroughly

Hitachi Astemo provides 24-hour, 365-day-a-year

threat intelligence*2 and incident response by CSIRT* 3

and outside the company.

established to manage security at each workplace andfor early detection and rapid response to global-scale

Information Security Policy

similarsophisticated year by year—evading conventional

1. Formulation and Continuous Improvement ofInformation Security Management Rules
2. Protection and Continuous Management of Information
Assets
3. Compliance with Laws and Regulations
4. Education and Training
5. Accident Prevention and Response
6. Ensuring the Optimization of Operations in the
Corporate Group

educate employees. Group companies have establishedorganizations

topromotecross-sectional

information security in cooperation with each other.

Information security management
Hitachi Astemo has established the “Global Information
Security Management Regulations” based on ISO/IEC
27001, an international standard. In addition, we areworking to comply with the U.S. government standard
SP800-171

andstrengthen

information

security

management. These regulations are globally deployedfrom the headquarters of Hitachi Astemo and eachgroup company. Hitachi Astemo communicates its

cyberattacks. As cyberattack methods become more
detections and having a tendency to delay detection
and causing damage—Hitachi Astemo has beenworking to build a cyber surveillance environment that
constantly incorporates the latest technologies to

respond to this threat. In addition, we conduct
penetration tests* 4 to identify vulnerabilities in thesystem and take countermeasures.

*1 SOC: Security Operation Center*2 Threat intelligence: An initiative to derive knowledge on new threats frommultiple pieces of information related to cybersecurity and utilize it for security
measures.
*3 CSIRT: Computer Security Incident Response Team
*4 Penetration test: A method of testing whether a system has security
vulnerabilities by attempting to penetrate a system connected to a network suchas the Internet using various technologies.

57

Contents

Introduction

GovernanceManagement

Environmental

GovernanceSocial

4 Information Management

Information Security
Preventing of information leaks

Education on information security

Thorough information security audits
and inspections

Hitachi Astemo is implementing common IT measures

Hitachi Astemo conducts e-learning education on

All group companies and departments of Hitachi

processing software for electronic documents, identity

protection for all officers and employees every year. In

personal information protection once a year.

such as device encryption, access control/revocation

information

security

andpersonal

information

management and access control by building an

addition, we provide information security education byfiltering systems as specific measures to prevent

target and purpose, such as classroom training for new

authentication infrastructure, and e-mail and website
information leakage. In response to cyberattacks suchpreparing a variety of educational programs for each
employees and newly appointed managers.

as targeted e-mails, we are strengthening various

In addition, as an education for cyberattacks such as

information sharing efforts through public-private

disguised as actual attack e-mails to employees andmeasures such as multi-layered IT defense, along withpartnerships.

In addition, to prevent information leakage fromtargeted attack e-mails, we send simulated e-mails
conduct “Targeted Attack E-mail Simulated Training” toincrease security sensitivity through the experience.

suppliers when outsourcing operations that handle

Information system administrators are trained tostatus of information security measures of suppliers in

Hitachi Astemo's educational content is shared with all

confidential information, we confirm and examine theadvance,

based

on

Moreover,we

providethe

information

securityrequirement standards established by Hitachi Astemo.
suppliers

withbusiness

information inspection tools and security teaching

Astemo conduct audits of information security and

Audits at Hitachi Astemo are conducted independently
by the Chief Audit Officer appointed by the President &CEO. The impartiality and independence of audits are
ensured by stipulating that auditors may not audit th eir
own departments.

For group companies outside Japan, we conduct global

self-checks, and Hitachi Astemo as a whole is engaged
in audits and inspections.

respond to cyberattacks.

group companies, and Hitachi Astemo as a whole isactively engaged in information security and personal

information protection education.

materials in information equipment, and request that

personally owned information devices inspect anddelete business information.

58

Shin-Otemachi Building, 2-1, Otemachi 2-chome, Chiyoda-ku, Tokyo, 100-0004 Japan
https://www.hitachiastemo.com/en/