Our Viewpoint About Sustainability

Roadmap for Achieving Sustainability Vision 2030

Having established Sustainability Vision 2030, we are promoting sustainability initiatives. In 2022, we established a promotion system, held active discussions on materiality, and defined nonfinancial KPIs in each CXO area (functional aspects). From 2023, the year of Resonac’s inauguration, we began incorporating sustainability assessments into management’s performance evaluations and delving deeper into each area, including the progress and appropriateness of initiatives aimed at achieving the KPIs. To enable our unique essence to blossom from approximately 2026 onward, we are stepping up engagement with various stakeholders.

Sustainability Management

The CEO supervises Resonac’s sustainability and the CSO is responsible for the promotion of sustainability. The Management Committee deliberates and decides on important items such as policies and plans and then consults with and reports to the Board of Directors. Starting in 2022, the Sustainability Promotion Council convenes a monthly meeting that Group CXOs, including the CEO, attend, and a quarterly expanded meeting, which is also attended by the heads of business units, to discuss wide-ranging agenda items. In addition, to address specific issues with agility and on a cross-organizational basis, several projects have been established, which report to the council.
Starting in 2023, Sustainability Partners have been appointed in business units and CXO organizations in order to link the matters discussed at the council’s meetings to organizational operations and disseminate them to employees. By means of communication through Sustainability Partners, we aim to promote sustainability reflecting the current status, issues, and interests of each unit. Moreover, by creating opportunities for horizontal communication among Sustainability Partners, we encourage active exchange of information on changes in customer requirements and other issues that transcend differences among the industries we serve, so that Sustainability Partners can proceed with foresight.

Materiality for Sustainability 

With an eye on 2030, Resonac has identified three issues of materiality in addition to their constituent elements. We have reflected these issues of materiality in the strategies set out in the long-term vision, and aim to incorporate them into our nonfinancial KPIs by approximately 2025.
The three issues of materiality are also related to the ideal state set out in our long-term vision through to 2030: becoming a company that can compete on the world stage, a company that contributes to a sustainable global society, and a company that develops co-creative talent that represents Japan’s manufacturing industry. In addition, they address both the achievement of our long-term vision and the expectations of society. While we have not set KPIs for corporate governance or stakeholder engagement, we will also focus on these areas, which are as important as our issues of materiality in establishing a common foundation for global management.

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Identification of Materiality and Management Cycle

Resonac’s materiality consists of management issues that contribute to realizing its long-term vision in terms of both society’s expectations and degree of importance to the Company. Materiality is determined by reflecting the intent of the frontlines through discussions with each CXO area (function) and feedback from management at Sustainability Promotion Council, and is continually reviewed while exchanging opinions with internal and external stakeholders.
In 2022, we identified materiality, set Companywide nonfinancial KPIs, and discussed initiatives to be promoted through concerted efforts.
In 2023, taking into account actual applications of the KPIs and discussions with external stakeholders, the appropriateness of the KPIs is discussed at Sustainability Promotion Council to monitor, enhance, and refine the KPIs. We began discussion on risks and opportunities based on materiality and reviewed our operating environment. To achieve nonfinancial KPIs, we will discuss various issues and intend to disclose revisions and enhancement of initiatives step by step.

Materiality for Sustainability and Nonfinancial KPIs

The nonfinancial KPIs were formulated based on the thoughts of frontline employees and discussions by the
management team in light of the external environment. We will continually revise the KPIs, reflecting the views and expectations of various internal and external stakeholders through dialogues with them.

Incorporation of Sustainability Evaluation in Executive Performance Evaluation

Recognizing the importance from a medium- to long-term perspective of first strengthening the current structure and promoting measures, in 2023 we began incorporating sustainability evaluation items into short-term performance-linked items of executive compensation. In the process of identifying the evaluation items that vary according to executives, we again discussed the priorities of the nonfinancial KPIs related to materiality and the roadmap toward their achievement. Moreover, these items are designed to link with employee evaluation through management by objective (MBO). Positioning linkage with compensation as an important measure for promoting sustainability, we will continue to consider how best to incorporate sustainability evaluation in executive performance evaluation.

Sustainability evaluation items incorporated in short-term executive performance evaluation in 2023 (examples)
  • Establishment of data infrastructure for strengthening human capital management
  • Promotion of visualization of GHG emissions
  • Introduction of CFP indicator to R&D themes
  • Implementation of specific measures to strengthen risk management
  • Holding of ESG briefings and implementation of measures to enhance ESG assessment