Medium- to Long-Term Sustainability Management Plan

Medium- to Long-Term Sustainability Management Plan

1. Sustainability Policy

Under our corporate philosophy of "Everything we do is for our customers," the Kaga Electronics Group seeks to achieve both a sustainable society and sustainable growth of the Group.
Toward this purpose, we will respect dialogue with customers, business partners, shareholders, investors, employees, local communities, and all other stakeholders, based on our Basic CSR Policy, Environmental Policy, and Action Guidelines. We will work to increase our corporate value as we play an active role in achieving a sustainable society.

(1) We will tackle environmental issues through our business activities
Through our business activities, we will take action to cut CO2 emissions, reduce waste, and promote reuse. At the same time, by providing environmentally considerate products and services, we will contribute to bringing about a society that values the global environment.

(2)We will respect human rights and develop human resources
We will respect the human rights of all stakeholders, regardless of gender, age, nationality, social status, disabilities, or other personal attributes. We will develop work environments in which diverse employees can work in safety and health, both physically and mentally, and will develop personnel systems and education and training systems that allow these employees to maximize their individual abilities. We will further work to develop human resources who will take on the challenge of innovation.

(3)We will work to build mutual trust with society
We will work to be a company that earns the trust of society by observing laws and regulations, by strengthening our governance structure, and by sincerely engaging in fair competition, the provision of high-quality products and services, timely and appropriate information disclosure, and other corporate activities.

2. Sustainability promotion structure

The Kaga Electronics Group recognizes the promotion of CSR and sustainability as important management issues. We have established a Sustainability Committee chaired by the Representative Director and President of Kaga Electronics Co., Ltd. Under the committee, we have set up specialized subcommittees for Environmental Management Promotion, Diversity Promotion, Governance, Risk Management, Compliance, and Information Disclosure. This management structure promotes CSR and sustainability across the Group. Under the commitment of top management and in collaboration with business divisions, we work as a united group to promote sustainability through each committee by formulating policies, measures, and targets for ESG issues and managing progress.

● Mission of Each Specialized Committee

  • Risk Management Committee

    Focusing on risk prevention, this committee works to strengthen our ability to respond to crises such as accidents and incidents and our business continuity capabilities.

  • Compliance Committee

    This committee works to enhance compliance, seeking to ensure that all employees adhere to laws and internal regulations while executing their duties and to reinforce responsible behavior in line with social norms.

  • Information Disclosure Committee

    This committee works to disclose information to shareholders and investors in a fair, equitable, timely, and appropriate manner based on the principles of transparency and continuity.

  • Environmental Management Promotion Committee

    Aiming to contribute to realizing a decarbonized society, this committee promotes the active utilization of renewable energy at our business locations in Japan and overseas.

  • Diversity Promotion Committee

    This committee works on diversity promotion, work-style reform, health management, and other initiatives to improve people’s quality of life and build a sustainable society through cooperation between the company and employees.

  • Governance Committee

    This committee works to put governance in place to strengthen management capabilities, in order to remain a valuable company for shareholders and all stakeholders.

3. Identifying Materiality

The Kaga Electronics Group is committed to seriously addressing a variety of issues relevant not only to itself but also communities around the world and thereby living up to the expectations of society. In line with this commitment, the Group has employed four perspectives— Environmental (E), Social (S), Governance (G) and Business (B)—to identify priority issues that are deemed to exert significant impact on its business operations, as listed below. Through its efforts to tackle the materiality of these issues, the Group will practice corporate activities aimed at contributing to the realization of a sustainable society, with the aim of further improving its corporate value.

  Materiality Related SDGs Changes in the socio-economic environment Our initiatives
E Create a clean global environment
  • Growing seriousness of global warming and other environmental problems
  • Urgent call for carbon neutrality
  • Provide products and services designed to help resolve environmental and energy issues
  • Continue initiatives to reduce the environmental burden
S Create an inclusive company as well as an affluent society
  • Changes in social structure as we move toward the popularization of the new normal
  • Human resource shortages attributable to a low birthrate and an aging population
  • Promote workforce diversity and innovative work styles to better adapt to the new normal
  • Develop human resources by passing down and updating KAGAism
G Create a sustainable management base
  • Public calls for more robust corporate governance
  • Growing need for business resilience against changes in the operating environment
  • Further strengthen corporate governance and compliance
  • Thoroughly practice a profit-focused management approach
B Realize sustainable business growth
  • Progress in digital transformation
  • Coming of a “super-smart” society due to the popularization of ICT, such as IoT and AI
  • Intensification of global competition
  • Provide products and services that contribute to the transition to a digital-driven society
  • Create new businesses aimed at helping

4.Medium- to long-term sustainability targets and major KPIs

Key themes Issues to address/examine Medium-term targets Long-term targets Main activities and progress in FY2022
E Achievement of shift to 100% renewable energy
  • Adoption of renewable energy at domestic sales offices
2024: 40% (1%) 2030: 100%
  • Introduced 1.2% of total electricity from renewable energy sources. Continue study to achieve 40% in FY2024.
  • Adoption of renewable energy at domestic manufacturing sites
By 2024: Information gathering/analysis and determination of policy In-house power generation/external procurement Solar panel/biomass power generation/renewable energy businesses 2030: 50%2050: 100%
  • Calculated power generation to install solar panels at sites in Aomori, Fukushima, and Tottori. Started the detailed design.
  • Adoption of renewable energy at overseas manufacturing sites
2030: 30%2050: 100%
  • Started to introduce renewable energy derived electricity using solar panels at sites in China (Hubei) and Vietnam. Expected to cover 30%-50% of annual electricity usage at each site.
Shift to electricity for company-owned vehicles
  • Switch to electric vehicles for domestic sales vehicles (EV, HV, PHV, FCV)
2024: 85% (78.5%) 2030: 100%
  • The ratio of electric vehicles increased by 1.2% year on year to 82.0% (as of March 31, 2023).
S Diversity and human resource management
  • Ensuring diversity in core human resources (Women, foreign nationals, mid-career hires)
Percentage of female new graduates in general positions 2023: 30% (5.8%) Percentage of women in management positions 2024: 15% (13.3%) Percentage of female new graduates in general positions 2028: 40% Percentage of women in management positions 2029: 17%
  • Percentage of female new graduates in general positions increased by 12.3pt year on year to 18.1% as a result of hiring activities based on the Action Plan.
  • Discussions held within the group to improve percentage of women in management positions and set targets for the number of women in management positions at each group company. As of April 2023, the percentage of women in management positions has increased by 3.2pt year on year to 16.5%.
  • Initiatives to employ elderly workers and persons with disabilities
  • Employment of persons with disabilities is 100% of the legally mandated rate (as of March 31, 2023).
Work–life management and enhancement of productivity
  • Enhancement of programs such as childcare/family-care and telework
2022: Implementation of review 2023: Certification 2025: Certification by outside party 2024 onward: Continuation of certification
  • Revised regulations and rules to make telework a permanent system.
  • Acquisition of certification as a Health and Productivity Management Organization
  • Certified in March 2023.
G Restructuring the governance structure in response to the revision of the Corporate Governance Code and the reorganization of Tokyo Stock Exchange
  • Independent Outside Directors: at least 1/3
  • Establishment of Nomination and Compensation Committee
June 2021: Performed Setting of targets in line with next Corporate Governance Code revision
  • Effective June 2023, 6 directors (including three outside directors), with a majority of directors being outside directors. Established the Nomination and Compensation Committee.
  • Diversification of the Board of Directors
By June 2022: Determination of policy
  • Decided to nominate a female candidate as a new outside auditor. Continued to work to appoint a female director.
  • Full compliance with Corporate Governance Code for Prime Market
November 2021: Performed
  • TCFD-compliant information to be disclosed from June 2022.
Further strengthening the supervisory and oversight functions of top management over business execution
  • Adoption of delegation-based executive officer structure
April 2022: Enactment
  • Implemented from April 2022.
  • Transition to structure of company with committees
By March 2023: Determination of policy
  • Continue the company with auditors system, but shorten the term of directors from the current 2 years to 1 year (planned in June 2023).
*Numbers in parentheses represent values when the plan was formulated in November 2021.
Medium- to Long-Term Sustainability Management Plan Veideo. Medium- to Long-Term Sustainability Management Plan / Representative Director, President & COO Ryoichi Kado