Materiality
- Toward a Sustainable Society: Hitachi’s Materiality
- 15 Sub-Material Topics and Targets
- Stakeholder Dialogue about the Materiality
- Reflecting Sustainability Targets in Executive Compensation Evaluation
Toward a Sustainable Society: Hitachi’s Materiality
Approach & Policy
Strategy & Target
Hitachi practices Sustainability Management, which positions sustainability as the core of its business strategy, and is working toward realizing a sustainable society through the Social Innovation Business.
In the Mid-term Management Plan 2024, we declared our aspiration of “supporting people’s quality of life with data and technology that fosters a sustainable society.” While some of the nine planetary boundaries have already been exceeded, Hitachi is aware of each one and works to protect the planet and maintain society. Hitachi aims to solve social challenges to realize a future that balances protection of the planet and people’s individual wellbeing.
The Materiality Analysis Process
With a comprehensive understanding of social issues, Hitachi has identified six material topics and 15 sub-material topics based on an analysis of risks and opportunities from a sustainability perspective as well as feedback from stakeholders.
Based on these material topics, Hitachi is monitoring measures as well as discussing the progress, and new initiatives for each materiality at the Senior Executive Committee and the Board of Directors.
Materiality Analysis Process
Hitachi is currently working to gain an understanding of and prepare to act on the sustainability reporting standards prescribed by the EU’s Corporate Sustainability Reporting Directive (CSRD), the International Sustainability Standards Board (ISSB), and others. We will continue to review our material topics and the process of identifying them on an ongoing basis, informed by the changing demands of society and needs of our stakeholders.
15 Sub-Material Topics and Targets
| Materiality | Our aspirations | Sub-material topics Targets/KPIs | FY2023 Progress | |
|---|---|---|---|---|
| Environment Contributing to decarbonization and resource circulation 
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As a climate change innovator, Hitachi will contribute to the realization of a carbon neutral society with Hitachi's superior green technologies, by providing value to customers in all business segments. We will also promote resource efficiency toward the transition to a circular economy. | Decarbonization | Carbon neutrality through the value chain Targets/KPIs ● FY2030: Achieve carbon neutrality in business sites (factories and offices) ● FY2050: Achieve carbon neutrality through the value chain |
74% of total CO2 reduction rate at factories and offices (compared to FY2010) |
| Contributing to CO2 reduction through business Target/KPI ● FY2024: 100 million metric tons of CO2 avoided emissions per year |
153 million metric tons per year*1 of CO2 avoided emissions | |||
| Resource circulation | Transition to a circular economy Targets/KPIs ● FY2024: Full application Eco-Design for all newly developed products ● FY2030: Zero*2 waste to landfill*3 from manufacturing sites |
198 products identified as subject of Eco-Design 146 sites (75%) achieved zero waste to landfill |
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| Effective use of water Target/KPI ● Reduction rate in water use per unit (compared to FY2010) |
30% reduction in water use per unit | |||
| Harmonize with nature | Minimize impact on natural capital | Achieving a Harmonized Society with Nature | ||
| Resilience Contributing to the maintenance and rapid recovery of social infrastructure
|
Hitachi helps people live safely by contributing to the rapid recovery of supply chains and the maintenance of social infrastructure by providing system solutions that can respond immediately to risks, such as natural disasters, pandemics, and cyberattacks. | Strengthening supply chains | Build flexible supply chains capable of responding to disasters and risks | Social Innovation Business |
| Maintaining social infrastructure | Resilience and sophistication of maintenance through DX of social infrastructure
Business Case:Contribute to stable energy supply through substation management to approx. 1.9 billion people*4 |
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| Safety & Security Contributing to safe and secure society-building 
|
Hitachi contributes to the realization of comfortable and active lifestyles for people by providing solutions in the building, mobility, and security fields that support urban development for safe and secure living. | Safe and secure urban environments | Safe and comfortable transportation
Business Case:Contributed to a total of 15 billion people annually through railway services*4 |
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| Ensuring cyber security | Secure cybersecurity for social infrastructure and business systems | |||
| Quality of Life Contributing to physical and mental wellness and a prosperous life
|
Hitachi is harnessing our healthcare and digital technologies to help more people develop bonds and enjoy healthier, more prosperous lives. We will also continue to pursue the happiness and wellbeing of our employees, as we believe that their happiness and wellbeing is the ground on which Hitachi’s future will flourish even more fully. | Connected and prosperous society | Increase healthy life expectancy and wellbeing
Business Case:Blood tests and other physical exams: 20 billion tests/year*4 |
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| Build a trustful relationship with others Target/KPI ● Users of happiness service: 90 thousand in FY2024 |
49 thousand users of happiness service | |||
| Employee happiness | More flexible working styles to increase engagement Target/KPI ● Employee engagement (positive response rate): FY2024 71.0%*5 |
68.6％*6 employee engagement (positive response rate) | ||
| Business with Integrity Adhering to ethical standards as well as respect human rights
|
As a Group responsible for social infrastructure around the world, Hitachi will manage its business with honesty and integrity, trusted by society, respect human rights and provide a safe workplace. We will reflect a system of ethical and responsible business conduct, including respect for human rights, in our business activities and decision-making standards, working together with our employees, collaborative partners and communities throughout the supply chain. | Business ethics and compliance | Encourage employees to apply ethical standards in day-to-day work. Target/KPI ● Achieve a score of at least 60 (out of 100) in FY2023, the first year of results from Ethical Culture & Perceptions Assessment, improving it every year |
Score of 76.5 |
| Respect for human rights | Promote human rights due diligence and strengthen monitoring of procurement partners for responsible procurement, including human rights Targets/KPIs ● FY2023: Conduct human rights risk assessments for all BUs (10 BUs) and major Group companies ● FY2024: Respond to human rights risks |
Conduct human rights risk assessments at all Bus (10 BUs) and major Hitachi Group companies | ||
| Occupational safety | Creating a safe working environment without accidents Target/KPI ● Zero fatal accidents |
4 fatal accidents | ||
| Safe and secure products and services | Ensure products and services safety while putting customers first | Quality and Product Safety Management | ||
| Diversity, Equity and Inclusion (DEI) Contributing to a society where everyone can shine
|
Hitachi has a place for everyone, welcoming differences in colleagues’ background, age, gender, sexuality, family status, disability, race, nationality, ethnicity, and religion. At Hitachi, we treat everyone fairly, recognizing differences to allow everyone to perform at their full potential. We respect and value these and other differences because only through them we can understand our markets, create better ideas and drive innovation. | Diverse organization that fosters innovation | Strengthen diversity in management Target/KPI ● Ratio of women and non-Japanese executive and corporate officers: FY2030 30% respectively |
11.8% of women and 25.0% of non-Japanese executive and corporate officers*7 |
| Acquiring and developing digital talent Target/KPI ● FY2024: 97,000 persons*8 |
95,000 persons | |||
| Contribution to a diverse and equitable society | Empower DEI of society through community relationship programs Target/KPI ● Nurture and empower next-generation talent |
Participants in Hitachi Young Leaders Initiative 32 people 437 people cumulative*9 Participants in Hitachi High-Tech science education support activities 59,911 people 427,273 people cumulative*10 |
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*1: Mid-term Management Plan 2024 three-year average *2: Less than 0.5% *3: Wherever this is compatible with local conditions and regulations *4: FY2022 results *5: Target has been raised in FY2023 since we achieved the initial target/KPI in FY2022 *6: Excluding Hitachi Astemo *7: As of June 2024 *8: Excluding Hitachi Astemo *9: Cumulative total since 1996 *10: Cumulative total since 1990
Hitachi has mapped the 15 sub-material topics in terms of importance for Hitachi and stakeholders. The level of importance to Hitachi is defined as the gap between our goals and our current initiatives.
Stakeholder Dialogue about the Materiality
We held a stakeholder dialogue on the theme of materiality in Japan and Europe in fiscal 2021. We received feedback on Hitachi's proposed materiality and measures for each materiality from disclosure experts, leading sustainability companies, European Commission, NGOs, international organizations, and institutional investors. In Europe, we divided it into a planet session and a people session, with Hitachi explaining its measures for the environment, human capital, and respecting human rights, while participants gave suggestions for new perspectives and improvements.
Principal comments from stakeholders
- Hitachi should indicate the direction society wants Hitachi to move along or the goals that Hitachi itself has.
- When it comes to diversity and inclusion, it would be better to include "equity" and make it "diversity, equity, and inclusion."
- For the circular economy, the approach shouldn't just be to reduce materials and waste but also to think about new business models.
- With human rights and decent work, Hitachi should go beyond conventional monitoring, audit, and other compliance approaches to engage with all aspects of supply chains through partnerships with external stakeholders.
We will continuously engage with diverse stakeholders and strive to enhance sustainability management.
Reflecting Sustainability Targets in Executive Compensation Evaluation
Activities
In fiscal 2023, Hitachi amended the executive compensation system to further accelerate growth as a global company, and to further strengthen links between increases in corporate value and compensation. The revised executive compensation system is more closely linked to the Mid-term Management Plan 2024 and incorporates sustainability targets.
Specifically, sustainability evaluations that had been used as an index for individual short-term incentive compensation (STI) are now treated separately and account for a ratio of 20%.
In addition, an additional grant of shares equivalent to 10% of the standard amount of medium- to long-term incentive compensation (LTI) will be granted if the sustainability targets are achieved.
Sustainability evaluation in STI will be aligned to materiality topics including Environment, Business with Integrity and Quality of Life, each linked to sub-materiality topics targets listed below.
Going forward, Hitachi will enhance link of compensation and the growth of the company, cultivating a growth mindset and strive to achieve global growth as One Hitachi.
Materiality Targets Linked to Executive Compensation
Sustainability Evaluation Categories Related to STIs
| Materiality | Sub-material topics target | |
|---|---|---|
| Environment | Decarbonization |
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| Resource circulation |
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| Business with Integrity |
Occupational safety |
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| Quality of Life | Employee happiness |
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Sustainability Evaluation Categories Related to LTIs
| Materiality | Sub-material topics target |
|---|---|
| Quality of Life | Positive response rate regarding employee engagement: 68% more as a whole group |
| Diversity, Equity and Inclusion (DEI) |
DEI achievement rate: (1) Ratio of women executives: 15% or more (2) Ratio of non-Japanese executives: 15% or more |
| Acquisition and development of digital talents: 98,000 or more employees as a whole group |