Third-party written opinion

  • Naoko Hase

Naoko Hase
Manager, The Center for the Strategy of Emergence: ESG Research Center
The Japan Research Institute, Ltd.

On the occasion of the writing of the Shindengen Group CSR Report 2023, I am submitting a third-party opinion of the Shindengen Group’s initiatives and related information disclosures.

When I read this fiscal year’s report, I could see that the Group was steadily advancing initiatives from two aspects—creating positive impacts on society and the environment by providing products, and reducing the negative impacts of its business activities—and deepening its sustainability management. I will make three specific observations.

The first is their initiatives concerning environmental issues. To reduce the negative impact of their business activities as a response to climate change, they set a goal of reducing their Scope 1 and 2 CO2 emissions by 42% by the end of FY2030 (compared to FY2021). It is commendable that they aim to have this target certified by the SBTi (Science Based Targets initiative), and that they are revising their target-setting while taking external opinions into account. In terms of results, the Asaka Office which began operations in 2021 has a high energy-saving performance as a ZEB Ready building, and all of its electricity is supplied by non-fossil certificate CO2-free power. Apart from this, they are accelerating their initiatives towards the large-scale reduction of CO2 emission, such as by concluding agreements for the supply of electric power derived from renewable energy with multiple affiliated companies.
To contribute to the environment through providing products, they set a numerical target of reducing CO2 emissions by 800,000 t-CO2 or more by FY2024, and they have expanded their sales of environmentally friendly products such as the IC series, low-loss bridge diodes, and DC-DC converters for four-wheel vehicles. EV/PHEV chargers are products for which demand is expected to rise in the future as society becomes increasingly decarbonized. Furthermore, regarding the Scope 3 CO2 emission reduction target I pointed out last fiscal year, they have set a new target of a 25% reduction by the end of FY2030 compared to FY2021. Going forward, I expect that they will assess the effects (impact) of the products they provide on society and the environment while checking the progress of their set targets, and that they will improve their products based on the results of that assessment.
Under Environmental Vision 2050, they have set the following three pillars: “Contributing to decarbonization,” “Contributing to a recycling-oriented society,” and “Contributing to a society in harmony with nature.” Out of those three, “Contributing to a society in harmony with nature” is a theme that concerns the issue of “natural capital,” which is gaining increased attention. I believe it is a topic whose importance will only increase in the coming years, as shown by the announcement of the final guidelines of the Taskforce on Nature-related Financial Disclosures (TNFD) in September this year, so setting KPIs for “Contributing to a society in harmony with nature” may be an idea worth considering.

The second observation is about governance. In order for the whole company to promote sustainability-focused initiatives, they have strengthened their structure through measures such as establishing a Sustainability Committee chaired by the president and directly under the Board of Directors. Additionally, the assessment of the Board of Directors’ effectiveness is compiled while taking the opinions of external organizations into account as well. I believe the effectiveness of the Board of Directors will increase even further as they improve by receiving objective opinions from external parties.

The third observation is about the social aspect, especially initiatives about human resources. Having set “promoting the success of diverse human resources and expanding flexible working styles” as one of their policies, they have set KPIs such as “Increasing the percentage of female new graduate recruits to 30%.” I believe that having clear targets can accelerate initiatives, so going forward, it may be a good idea to increase the KPIs further, such as those concerning employee engagement and human resource development.
In the annual securities report, they discussed their thoughts and the human resource development policies concerning human capital management as an organization. In the future, however, along with formulating and disclosing their human resource strategy linked with their management strategy, I expect that they will also disclose the story of how they intend to increase their corporate value by drawing out the value of human resources.

Commentary on the Third-Party Written Opinion

We are very grateful to receive the esteemed opinion of Manager Naoko Hase of the Center for the Strategy of Emergence/ESG Research Center of The Japan Research Institute, Limited concerning our Group’s sustainability activities.
The Shindengen Group has announced SDG material issues in line with our sustainability management and Corporate Mission, and we are aiming for medium- to long-term growth in corporate value by putting them into practice.

Additionally, 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 strive to resolve issues from a social and governance aspect as well.

Sustainability Promotion Office(Sustainability Committee Secretariat)
Shindengen Electric Manufacturing Co., Ltd.

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