Materiality

Materiality of the Shibaura Electronics Group

The Shibaura Electronics Group selected four themes that we should preferentially address for the realization of a sustainable society and the Group’s sustainable growth and then identified the materiality (important challenges) out of each theme. We define them as our Group’s materiality and will aim to contribute to a sustainable society by addressing those challenges.

Themes	Materiality (important challenges)	Relevant SDGs
Monozukuri -manufacturing	◆Manufacturing safe, secure, and high-quality products − Improvement of product quality and assurance of safety and security − Development of new products − Improvement of productivity
Environment	◆Responding to climate change and preserving the earth’s environment − Achievement of the 2050 Carbon Neutral − Efforts to reduce the environmental load
Fostering of human assets Diversity	◆Respect for human rights and fostering diverse human assets − Fostering of human assets − Respect for human rights
Governance	◆Strengthening governance − Strengthening of governance − Thorough compliance

Process to identify materiality

STEP１：Clarifying social challenges

We have selected social challenges based on the United Nations Global Compact Ten Principles and international guidelines, such as the SDGs.

STEP２：Setting priorities in social challenges

We have comprehensively evaluated the selected challenges on the two axes of the importance for the Shibaura Electronics Group and the importance for stakeholders and have narrowed them down to high-priority challenges.

STEP３：Identifying materiality

The Board of Directors decided on the high-priority challenges after the Sustainability Committee discussed them.

Matrix of Materiality

The importance for stakeholders	Extremely high	[Governance] − Pursuit of capital efficiency, such as ROE − Dialogues with shareholders and investors − Information disclosure	[Environment] − Reuse and recycling of resources − Water management − Waste reduction − Contribution to the local community	[Monozukuri - manufacturing] ●Manufacturing safe, secure, and high-quality products − Improvement of product quality and assurance of safety and security − Development of new products − Improvement of productivity [Environment] ●Responding to climate change and preserve the earth environment − Achievement of the 2050 Carbon Neutral − Efforts to reduce environmental load [Human assets and diversity] ●Respect of human rights and the fostering of various human assets − Fostering of human assets − Respect of human rights [Governance] ●Strengthening of governance − Establishment of strong governance system − Thorough compliance
	Quite high	[Human assets and diversity] − Fulfillment of employee benefits	[Monozukuri - manufacturing] − Stable supply of products − Supply chain management	[Environment] − Agreement on the TCFD
	High	[Monozukuri - manufacturing] − Evaluation on partners [Human assets and diversity] − Promotion of the employment of persons with disabilities	[Governance] − Capital and dividend policies	[Governance] − Agreement on the United Nations Global Compact [Human assets and diversity] − Promotion of employees’ health
		High	Quite high	Extremely high
		The importance for the Shibaura Electronics Group