Materiality

Incorporating Materiality (Key CSR Issues) into Group Business Strategy

To reflect CSR issues in our business strategy, the GS Yuasa Group analyzes and assesses the impact on business and the impact of our business on society and then clarifies the Group's materiality for items that need to be addressed. Regarding the specified materiality, as necessary we have set targets relating to our business strategy and, to achieve those targets, have formulated concrete activity plans and key performance indicators (KPIs) to gauge progress in achieving the goals.

Materiality is periodically revised by the GS Yuasa Group CSR Committee in accordance with evolving stakeholder needs/expectations and social issues. When incorporating materiality into business strategy, the CSR Committee formulates plans that will lead to enhanced stakeholder satisfaction through the strengthening of our corporate infrastructure and enhancement of corporate value.

The GS Yuasa Group aims for enhanced management of financial and non-financial operations, as well as for sustainable corporate and social growth through execution of business processes that incorporate materiality in the Mid-Term Management Plan.

Overview of CSR issues impacting sustainable growth in our Fifth Mid-Term Management Plan

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Category Topic CSR Issues Relating to
Sustainable Growth		 Details of Main Plans and Targets
E Contribute to
sustainability of
the global environment
  • Development and global sales of
    environmental considerations products
  • Reduction of environmental burden of
    business activities
  • Group-wide CO2 emission reduction
    target:
    6%/3 years
  • Group-wide water use reduction
    target:
    8%/3 years
  • Ratio of environmental considerations
    products to overall sales: 35%
S Respect for
human rights
and contribution to
society
  • Respect for human rights
  • Enhancement of productivity and
    motivation through human resources
    development
  • Enhancement of work environments and
    occupational health and safety
  • Products and information sharing
    that is reassuring to consumers
  • Contribution to the addressing
    of societal issues with
    responsible procurement and
    reduction of procurement risks
  • Enhance human rights education and
    human rights risk management
  • Nurture autonomous-minded human resources and
    establish groundwork for utilizing diverse
    human resources
  • Promote measures to
    improve work-life balance
  • Achieve group-wide quality improvement
G Promotion of fair,
transparent, and swift
group-wide governance
  • Respect for international norms and
    compliance with laws of respective countries
  • Protection of intellectual property
  • Thorough management of
    confidential information
  • Swift and appropriate
    management decision-making
  • Promote compliance education,
    preparation of legal information
  • Contribute to elimination of
    counterfeit goods and
    bolster patent infringement
    prevention activities
  • Management that is mindful of
    the corporate governance code

CSR issues relating to sustainable growth are categorized as E (environment), S (social) or G (governance).

Materiality Specification Process

Step 1: Identify risk and opportunity in CSR

For key challenges in the Mid-Term Management Plan, we identify risk in CSR (that hinders the resolution of these issues) and opportunity in CSR (that promotes the resolution of the issues). When identifying these risks and opportunities, our actions are based on international guidelines related to CSR.

Step 2: Specify significant risk and opportunity in CSR

We evaluate and assign a score to the scale of the CSR risk and opportunity identified in Step 1 in consideration of the impact on business (possibility of occurrence x scale of impact on business), which enables us to specify risks and opportunities as key business challenges. Next, we evaluate the impact of our Group's business activities on society relative to these core business risks and opportunities based on the number of related CSR themes and social importance. We then specify risks and opportunities that will be key CSR domains.

Matrix of key CSR domains

graph:Matrix of key CSR domains

Step 3: Determine materiality

We order the core CSR risks and opportunities evaluated in Step 2 and then determine materiality in consideration of the response method to the risks and opportunities. In order to ensure the appropriateness of materiality, where necessary we also incorporate feedback from stakeholders through dialogue with outside experts.

Materiality and Response Plan

A summary of the Group's materiality response plans and the impact of these plans on society and business are presented in the following table.

With respect to materiality shown in the table, we will conduct operation and management based on the measurable target management and management criteria, make ongoing improvements and perform effective maintenance and management. The details of the formulated plans will be reviewed and revised as necessary according to the status of changing circumstances and other factors.

When carrying out the Mid-Term Management Plan, the first year of which is fiscal 2019, we formulated new materiality response plans to address CSR issues relating to sustainable growth under the relevant plan. After summarizing the fiscal 2018 materiality response plans and reviewing the materiality, we established materiality response plans for fiscal 2019 and later. In these plans, we not only establish KPIs and target values to manage the impact of CSR issues on society, but also assess the status of achievement of the plans using financial indicators to ascertain the impact on business.

Summary of Materiality Response Plans
(fiscal 2019–2022)

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Materiality Activity outline Scope of application* KPI
(key performance indicator)		 Impact on Society Impact on Business
Thoroughly fulfilling our CSR and ensuring compliance Provision of legal information and promotion of compliance training Domestic
  1. Number of times compliance education information disseminated annually
  2. Number of significant compliance violations
 Maintenance of a sound and well-ordered society Avoidance of financial losses from compliance violations
Overseas
  1. Achievement ratio of compliance training plan
  2. Achievement ratio of significant compliance violation risk response plan
Respect and protection for intellectual property Thorough avoidance of infringement third-party intellectual property rights, promotion of the use of company intellectual property rights Domestic Achievement ratio of patent acquisition plans in the ASEAN region and China Maintenance of a fair competitive order in society
  • Avoidance of financial losses from infringement of other companies' patents
  • Prevention of lost sales in the future due to sales of counterfeit products
Promotion of the enforcement against infringement products Overseas Achievement ratio of response plan to intellectual property infringement (imitation products)
Strict management of confidential information Promotion of security measures and strengthening of illegal /inappropriate access monitoring Global Cyberattack response ratio at time of detecting high security alerts Achieve a safe and secure information society Avoidance of financial losses from leaks of confidential information
Domestic Information leak confirmation and response ratio at time of large data output
Promotion of information security training Domestic Ratio of employees passing information security proficiency test
Respect for individuality Promotion of human rights education and thorough publicity of internal whistleblower system Domestic Achievement ratio of human rights training plan
  • Raise awareness concerning respect for human rights
  • Provide equal access to judiciary
 Avoidance of financial losses from human rights violations
Overseas
  1. Achievement ratio of harassment education plan
  2. Introduction ratio of harassment whistleblower system
Respect for Diversity Women’s empowerment Domestic
  1. Ratio of women in management positions
  2. Ratio of women among new graduates recruited for career-track positions
 Promotion of participation by women in decision-making
  • Acquisition of shareholders' equity in conjunction with higher external assessment of measures regarding women's empowerment
  • Securing labor capacity by increasing the retention rate for female employees
Promotion of the employment of persons with disabilities Domestic Employment rate of persons with disabilities Promotion of full employment Avoidance of financial losses in conjunction with failing to satisfy the statutory standard for the employment ratio of persons with disabilities
Human resources development Promotion of human resource development programs Domestic
  1. Achievement ratio of training plan for development of autonomous-minded human resources
  2. Achievement ratio of worksite education plan
 Promotion of skill development for young people
  • Reinforcement of organizational capabilities through the utilization of the diverse individuality of employees
  • Avoidance of human resource losses through separation
  • Enhancement of human resource performance
Overseas Achievement ratio of global human resources education plan
Enhancement of work environments and occupational health and safety Promotion of the thorough management of employees' working hours and prevention of the recurrence of long working hours Domestic
  1. Response ratio to prevent the recurrence of long working hours
  2. Annual frequency of labor-management consultations relating to working hours
  3. Operational achievement ratio of standard for number of days of paid leave taken annually
  • Realization of rewarding workplaces
  • Prevention of health damage
  • Promotion of safe and secure working environment
  • Avoidance of financial losses from occupational accidents
  • Avoidance of financial losses from work in excess of statutory working hours and failure to use paid leave
Overseas Achievement ratio of working hours management standards
Promotion of occupational health and safety risk management Global
  1. Number of serious occupational accidents
  2. Missed work frequency ratio
  3. Number of workers not meeting internal blood lead concentration management standards
Domestic Number of worksites in work management category III
Provision of high-quality products Promotion of quality improvement and strengthening of quality communication Global Achievement ratio of targets for claims and in-process defects
  • Improvement in energy efficiency
  • Responses to natural resource depletion
  • Reduce waste generation
  • Promotion of sustainable urbanization
  • Development of a safe and secure society
  • Reduction of financial losses from quality defects
  • Increased profits in conjunction with a stronger replacement business
  • Avoidance of financial losses from the occurrence of product accidents
Strengthening of maintenance service setup Domestic Achievement ratio of operational management standards for product maintenance service systems
Promotion of product safety education Global Number of serious product accidents
Promoting environmental protection Promotion of effective use of water resources Global Ratio of reduction of water use (compared with FY 2018)
  • Elimination of water shortage problems
  • Improvement in energy efficiency and resource efficiency
  • Climate change mitigation
  • Prevention of water pollution and air pollution
  • Reduction of natural resource consumption
  • Reducing waste generation
  • Avoidance of loss of sales opportunities due to delayed responses to issues concerning water security, carbon neutrality, and a recycling-oriented society
  • Avoidance of financial losses from the occurrence of environmental accidents
Contribution to realization of low-carbon society Global Ratio of reduction of CO2 emissions (compared with FY 2018)
Prevention of environmental pollution Global Number of major environmental accidents
Improvement in ratio of use of recycled materials in products provided to markets Global Ratio of recycled lead used as lead raw materials in lead-acid batteries
Developing and popularizing environmentally considered products Expansion of market for GS Yuasa products contained in products contributing to the curbing of global warming Global Percentage of environmentally considered products in total sales of all products
  • Improvement in energy efficiency
  • Reduction of natural resource consumption
  • Climate change mitigation
  • Avoidance of loss of sales opportunities from delayed responses to issues concerning a recycling-oriented society
  • Increased profits from expanded sales of environmentally considered products
Responsible procurement promotion Responses to responsible mineral procurement Global Achievement ratio of responsible mineral survey plan
  • Realization of sustainable supply chain
  • Abolition of forced labor and child labor
  • Reduction of deaths due to violence
  • Eradication of all forms of violence and torture against children
 Avoidance of financial losses from occurrence of supply chain CSR risks
Management of supply chain CSR risks Global Achievement ratio of supplier CSR issues improvement plan

The scope of application may not
cover all Group companies.

Refer here for detailed information concerning
materiality response plans

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