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Third-party written opinion

  • Naoko Hase

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

I wish to submit a Third-Party Opinion on Shindengen Group’s CSR activities and the information contained in the “Shindengen Group CSR Report 2017”, as well as comment on the site-visit I performed of the Akita Shindengen Co., Ltd. factory.
In 2017, the Shindengen Group refreshed the brand, and declared in “Our Promises” that they “will preserve the natural environment and provide products and services that contribute to social development.” The Shindengen Group has been contributing to the realization of a sustainable society by providing environmentally- friendly products that employ advanced core technologies (semiconductors, power supply, and module technology). Recently, Shindengen is focused on the electric vehicle (EV) industry, and have developed EV chargers and electronic components for environmentally-friendly cars such as DC-DC converters, diodes, and power modules. It is highly commendable how Shindengen have promoted installation of EV chargers at government offices and roadside stations with local governments in the Akita, Yamagata, and Miyagi prefectures.
Regarding disclosure, they also deserve credit for clearly stating that they aim contribute to the United Nations Sustainable Development Goals (SDGs, 2015) of “Affordable and Clean Energy” and “Climate Change”. EV chargers reduce greenhouse gas (GHG) emissions, and improve social infrastructure. Shindengen should continually strive to disclose such efforts in order to improve brand image and attract investor interest.
The Shindengen Group has established the Shindengen Group Productivity Innovation System (SPIS) across the Group to improve products, service quality, environmental activities, productivity and safety. The Akita Shindengen Co., Ltd. factory, has made significant efforts to improve manufacturing efficiency, setting clear goals, targets, and regularly performing status checks. It is commendable that the Group has developed good practices not only in domestic factories but also overseas. Shindengen’s quality assurance activities, SPIS; Vehicle Quality (VQ); and Quality Kiken Yochi, or quality risk prediction (QKY) are particularly noteworthy, with the Group having received quality awards from clients. Regarding environmental activities, the Group has undertaken activities to improve material and energy efficiency such as cross-cutting check systems to improve yield rates. However, there is still room for improvement by utilizing renewable energy. For example, globally, more than 100 companies have already participated in “RE100” (an initiative of businesses committed to 100% renewable energy). I look forward to Shindengen’s consideration of greater use of renewable energy in the future.
Regarding employment, Shindengen have established several programs such as vacation leave, shorter working hours, childcare leave, and nursing leave to promote a more flexible work environment, and greater work-life balance for employees. Since 2016, the statistics for childcare and nursing leave, have been disclosed in the CSR report which is noteworthy. For better communication with stakeholders, Shindengen should consider disclosing the annual leave uptake rate, and employees with physical and/or intellectual disabilities rate on their website. Of note, at Akita Shindengen Co., Ltd., the rate of employed persons with physical and/or intellectual disabilities is considerably high at 2.6%, and to Shindengen’s credit, they have developed manufacturing processes that accommodate these employees. Furthermore, in terms of human resource development, impressively the profile of each employee in R&D department is displayed with his or her research project at reception to improve motivation and morale. Shindengen should consider expanding this across the Group, and publishing research activities on their website.
Regarding diversity, it is important for Shindengen’s management to appreciate the nature of their increasingly globalized operations. I visited various Companies in the Shindengen Group, and apparently identified differences, for example, in the way gender equality, and support of women is managed. Before further efforts are made to improve diversity in individual Companies, it is important that Shindengen develops the Group’s policy, and basic diversity principles to ensure greater consistency in application across the Group. I look forward to Shindengen’s consideration of developing such framework on diversity.

Commentary on the Third-Party Written Opinion

We thank Naoko Hase, an ESG Analyst from the Japan Research Institute, Ltd., for her valuable comments on, and suggestions for our Group’s CSR activities.
Shindengen Group has conducted CSR activities according to the seven core subjects of ISO26000. Naoko HASE has evaluated that the Group’s products and initiatives are contributing to realizing a more sustainable society, and that appropriate disclosure has been made in relation to the UN’s SDGs. It was also advised that the Group should continue to make efforts in the fields of renewable energy, and diversity initiatives including supporting gender equality in the workplace.
Based on the evaluation and advice received, the Shindengen Group will continue to strive to improve environmental activities, and corporate value in-line with our Long-Term Vision.
Thank you for your guidance and support

CSR Committee Secretariat
Shindengen Electric Manufacturing Co., Ltd.

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