After sorting the needs of the Group’s various stakeholders, we analyzed the risks and opportunities related to our business, and identified six material issues through discussions by the Sustainability Promotion Committee.

Due to their cross-sectional and multifaceted nature, our approach to material issues is spearheaded by the Sustainability Promotion Committee, which collaborates with the human resources, procurement, legal affairs, and other relevant internal departments as well as the Human Resources Strategy Committee, Risk and Crisis Management Committee, and the Quality Improvement Committee, which operate under the Management Committee. In addition, the Sustainability Promotion Committee monitors the progress of initiatives, identifies the gaps between our targets and the progress made so far, and updates these targets on a regular basis.

In fiscal 2023, our key initiatives for material issues were as follows. With respect to the environment, we updated our 2030 Medium-Term Environmental Targets aimed at realizing carbon neutrality to bring them in line with SBTi standards, and achieved 100% renewable energy for the electricity used at five of our business sites, including the Group headquarters and Canon MJ’s office buildings. To maintain a recycling rate of 99.9% or higher, one of the 2030 Medium-Term Environmental Targets, we also identified potential risks, and determined and implemented measures in response. In terms of respect for human rights, as part of our human rights due diligence process, we identified high-priority issues and determined countermeasures for each one. For risk and crisis management, we established KPIs that are linked to the Companywide risk map and implemented employee training and cyber-attack drills, among other measures. Additionally, as part of initiatives to promote sound governance, we appointed one female outside director to ensure the diversity of the Board of Directors, established a Special Committee in January 2024, and appointed a majority of outside directors to the Nomination and Remuneration Committee.

In fiscal 2024, in addition to implementing measures in accordance with the KPIs we have set, we will work to reduce Scope 3 emissions, strengthen engagement with suppliers to address human rights issues, as well as formulate KPIs and implement measures related to visualizing the skills of highly skilled IT personnel under our human capital strategy.