Naoko Hase
Incubation Producer, Center for the Strategy of Emergence
The Japan Research Institute, Limited
On the occasion of the writing of the Shindengen Group Sustainability Report 2024, I am submitting a third-party opinion of the Shindengen Group’s initiatives and related information disclosures.
When I read this fiscal year’s Sustainability Report, I could see that steady progress has been made in the Shindengen Group’s measures to address climate change and human rights risks and in its human capital management initiatives. I will make three specific observations.
First, in terms of addressing climate change, this report discusses two of the Group’s four ESG material issues, namely “providing value through environmentally friendly products” and “harmony between the environment and our business activities.” To reduce CO2 emissions associated with business activities including the supply chain, the Group has established Scope 1, 2, and 3 emissions reduction targets and has obtained certification from the Science Based Targets initiative (SBTi), thereby raising the objectivity of its numerical targets. I commend the Shindengen Group for taking concrete steps to expedite their efforts to achieve these CO2 emission reduction targets, such as powering the Asaka Office, which is a ZEB ready building, with completely CO2-free power with non-fossil certificates (NFCs) and increasing the supply of renewable energy-based electricity to several affiliated companies. The Group has also set numerical targets for contributing to CO2 reduction through the use of their products, and is marketing a range of environmentally friendly products including the IC series with improved energy conversion efficiency, low-loss bridge diodes, DC/DC converters for four-wheel HEVs, PCUs for two-wheel electric vehicles (EVs), and EV/PHEV chargers. One of the pillars of their “Environmental Vision 2050” is “contributing to a society in harmony with nature.” This theme relates to “natural capital” which has garnered considerable attention in recent years. The priority sectors announced by the Taskforce on Nature-related Financial Disclosures (TNFD) include semiconductors, which is a sector where corporate responsibility may be called into question in the future, so I look forward to seeing even greater information disclosures by the Group in future. For instance, this report mentions that the Group recycles some of the water used in their semiconductor manufacturing so I think it would be a good idea to disclose this type of information.
My second observation pertains to the Shindengen Group’s efforts to address human rights risks. The Group used a human rights risk map to conduct an impact assessment of the human rights risks that may occur both internally and among its suppliers, and then identified the human rights risks that should be addressed on a priority basis. I commend the Shindengen Group for disclosing the results of its human rights due diligence process and supply chain survey, and for its efforts to respect human rights, including among its suppliers.
My third observation pertains to the Group’s human capital management initiatives. This report clarifies the Group’s stance that “the diverse and autonomous fusion of various forms of knowledge will lead to the creation of new value and continued growth” in line with the human resources strategic theme of “connection.” The report also clearly explains that the Group has set and disclosed key indicators in a way that is linked to the key human resources strategic issues of “developing human resources,” “promoting the success of diverse human resources,” “expanding flexible working styles,” “respect for human rights,” and “health and safety.” In the future, I believe that the link between the Group’s management strategy and human resources strategy will become more robust if the human resources strategy is incorporated into each business on the basis of operating themes.
Finally, the concept of “social impact” has attracted increased attention in recent years, particularly among investors who are strongly concerned about sustainability. Through the marketing of environmentally friendly products and the human capital management initiatives, the Group has visualized and disclosed the impact of their business operations on the environment and society (social impact), thereby demonstrating in a more objective manner their contributions to resolving social issues. For instance, the Group has set targets from an environmental perspective such as reducing CO2 emissions through environmentally friendly products and reducing CO2 emissions in business activities, and these are also an indicator for measuring social impact. I consider that publishing these non-financial KPIs in the Medium Term Business Plan and other documents will further impress upon investors that the Shindengen Group is genuinely committed to solving social issues.
Commentary on the Third-Party Written Opinion
I would like to express my gratitude to Ms. Naoko Hase, who is the Incubation Producer at the Center for the Strategy of Emergence, the Japan Research Institute, Limited, for providing valuable input on our Group's sustainability activities.
The Shindengen Group is aiming to increase its corporate value over the medium to long term by practicing sustainability management in accordance with its Basic Sustainability Policy and Corporate Mission.
While aiming to address various issues by innovating the core technologies we have cultivated so far and developing advanced future-oriented technologies in order to achieve a decarbonized society, we will also strive to resolve issues from a social and governance aspect.
Sustainability Promotion Office(Sustainability Committee Secretariat)
Shindengen Electric Manufacturing Co., Ltd.
