ESG management

The Sangetsu Group believes that incorporating ESG (Environmental, Social, and Governance) perspectives into management is essential for achieving sustainable growth even in an era of increasing uncertainty and difficulty in predicting the future. This is because we consider engaging in businesses that contribute to resolving environmental and social issues, increasing social and economic value, and operating a corporate governance system that allows decisions to be made based on the perspectives of various stakeholders to be essential for achieving sustainable growth. In social issues, there is a limit to the extent that such issues can be resolved through the efforts of a single company alone. In addition to building an even stronger cooperation framework with group companies, we will be coordinating efforts with a diverse range of partners, including suppliers, customers, industry associations, NGOs/NPOs, municipalities and local governments, and local communities, to integrate our mutual knowledge and strengths for resolving a broader range of social issues. It is also important to disclose our own ESG information externally in a timely and appropriate manner. The reason for this is because it increases management transparency, and being able to receive evaluations and feedback from various stakeholders allows us to recognize the level of our company’s efforts in an objective manner and lead them to improvements. More recently, we have been enhancing dialogue with our shareholders and investors, and going forward we will increase dialogue on ESG-related topics to broaden the scope of discussions on management strategies from a more medium- to long-term perspective. We have identified materiality based on social demands and key industry topics, with the ESG Committee that is chaired by the President and CEO deciding on the direction of measures and managing the progress of indicators. When it comes to the environment, we are working on energy savings, energy creation, renewable energy, and carbon offset to achieve carbon neutrality for Sangetsu alone by FY2029, and achieving the Sangetsu Group’s GHG emissions (Scope 1 & 2) reduction target of “55% reduction in FY2029 (compared with FY2021)” based on the term of the Paris Agreement. During FY2023, we installed solar power generation systems at our logistics facilities for on-site consumption, and also began self-wheeling of some of the generated electricity to be used at our headquarters, as a way of contributing to emissions reduction. Future challenges will be promoting efforts toward reducing GHG emissions at group companies, and organizing activities involving the supply chain for reducing Scope 3 GHG emissions. Another challenge is the development of products with low environmental burdens, and we are focusing on product development from the standpoint of energy savings, resource conservation and longer life. In terms of society, supporting expansion, advancement, and active utilization of human capital has been put forth as a key measure in our Medium-term Business Plan [BX 2025]. In addition to setting quantitative targets related to employee engagement as KPIs, we will also be focusing on cultivating a sense of ownership of employees’ careers, expanding education and training programs, promoting employee health and Diversity, Equity and Inclusion (DE&I), and improving the workplace environment by upgrading offices for creating an environment where employees are able to maximize their capabilities in a confident manner. We are also recognizing that issues stemming from economic disparity are becoming more apparent in society, and that it is our corporate responsibility to help resolve these issues through our business activities and social contribution efforts. From FY2023, we started providing new forms of support to organizations that are involved in resolving social issues, and will focusing on ongoing measures that will contribute to resolving issues. When it comes to governance, we have specified corporate governance that is independent, objective and transparent as our materiality, and we are increasing the diversity of skills and gender to improve the effectiveness of the Board of Directors. During FY2023, we focused on improving the quantity and quality of IR activities, such as increasing the number of IR interviews and holding round table meetings between institutional investors and Audit and Supervisory Committee Members to remain committed to enhancing Sangetsu’s corporate value over the medium to long term. In a rapidly changing business environment, we will continue taking on the challenge of resolving social issues from an ESG perspective and focus on enhancing social and economic value while also contributing to the SDGs.