Message from the Managing Officer for Sustainability

Maintain unwavering principles while changing what needs to be changed.

I am Tetsuya Kumakawa, and I have been appointed Senior Manager of Corporate Strategy Department April 2025. Nisshinbo Holdings reorganized its structure to centralize the planning and execution of its corporate strategy and sustainability promotion activities. The Company will advance its sustainability initiatives in tandem with the corporate strategy by identifying core issues and implementing focused measures tailored to the opportunities and risks presented. The management team will continue to evolve toward sustainability, which is unique to Nisshinbo, while ensuring that all employees and other stakeholders understand and agree with the significance of the Company's activities.

What is sustainability for Nisshinbo? Sustainability is linked to the basic spirit that has been passed down since the company's founding: Public Entity and Consistent Integrity. Nisshinbo changed its business portfolio in response to social issues, but its basic spirit, which is the source of its intangible asset of the trust accumulated over its history, remains unchanged. Based on this spirit, Nisshinbo will continue to contribute to the resolution of social issues. Above all, the most important factor is people. At Nisshinbo, the belief that business is people has been deeply rooted in the corporate culture for many years. We believe that a company is made up of people, and that all employees, or human resources, are the most important source of value creation for the company. The attitude of each and every one of the employees is to respond to the expectations of customers and society has led to the cultivation of trust over the long history of the Company.

Currently, the Nisshinbo Group is undergoing further portfolio transformations. With the many overseas operations and businesses that have joined the group in recent years, we believe that the only way to ensure that employees of different nationalities and corporate cultures understand the thinking of top management is to engage in repeated dialogues and provide ongoing consistent education even if it takes time. We recognize that in order to survive in the future, we must hold fast to unshakeable principles while changing what needs to be changed. We will continue to work on creating a new corporate culture with a strong sense of unity.

Identifying the fundamental challenges for Nisshinbo and tackling them

All activities related to sustainability will be carried out with an awareness of current social trends while considering the fundamental issues from a corporate management perspective and what needs to be addressed with a clear commitment as Nisshinbo.

Each employee has the aspiration of seeing the growth of the company as their own growth.

I believe that human resources are particularly important for sustainability activities. All corporate activities are carried out by people. I believe that if we can bring together good human resources, then other things will naturally follow.

In terms of human resource diversity, we actively recruit individuals with experience from other companies, which has led to the acquisition of new knowledge in a variety of situations and has resulted in securing human resources who are essential for the growth of the company. In the 6th Sustainability Promotion Plan (FY2025–2027), we have raised career recruitment targets and aim to achieve a management ratio of 20% or more. While the number of female managers remains relatively low, it is steadily increasing. The proportion of women at the time of new graduate recruitment is nearly in line with the targets set in the 5th Sustainability Promotion Plan (FY2022–2024), and we have also established an environment that supports diverse work styles. As a result, we will raise the KPIs and further strengthen our efforts in this area.

In terms of human resource development, we improved the environment for post-employment education and training by introducing a learning management system, which allows employees to voluntarily participate in a variety of different programs. Some programs are required for salary increases and promotions, and we feel that the curriculum has become more advanced with the incorporation of external training courses. The education system is jointly operated by the Nisshinbo Group, which allows horizontal exchanges between group companies. As our business portfolio undergoes major changes, we will continue to focus on creating an environment that will enable our employees to gain new skills and play an active role in different areas.

We believe that it is important to attract and nurture talented individuals is to actively communicate the aspirations of the company and its employees and enhance the appeal of Nisshinbo. In some of our businesses, we provide opportunities for each employee to consider their aspirations. If employees have aspirations with regard to their work, and those aspirations harmonize with the company's aspirations, they will be able to play an active role and achieve personal growth. We will continue to implement initiatives that encourage employees to consider and clarify their aspirations.

Next, regarding the environmental field, our company must reduce the environmental impact of its business activities. Under the 5th Sustainability Promotion Plan (FY2022–2024), we already achieved a 55% reduction in greenhouse gas emissions compared to 2014 levels (target: 35% reduction). This reflects the effects of progress in the use of renewable energy by domestic group companies, as well as the transfer of the TMD Group's business and the addition of the Kokusai Denki Electric Group to the Nisshinbo Group. Going forward, we will set even higher KPIs for achieving carbon neutrality and work diligently to achieve the targets.

On the other hand, improvement in the sales percentage by the products that contribute to the development of a sustainable society by mitigating the environmental impact, which was targeted to account for 60% or more of sales, stands at 47%. Although this target was not achieved in FY2024, we believe that we should increase this ratio. In the 6th Sustainability Promotion Plan (FY2025–2027), we set a target of 65% or more and will proceed with this as one of our pillars.

We are currently conducting a comprehensive survey to analyze and evaluate the potential risks and opportunities related to natural capital, such as biodiversity conservation and the TNFD, and will implement the appropriate measures if any significant issues arise. Other environmental indicators and targets are generally progressing smoothly.

Sustainability initiatives promoted together with many stakeholders

With regard to respect for human rights for all stakeholders, we will continue to conduct human rights awareness activities and training both domestically and internationally. Through repeated training and education, we will work to eliminate harassment and compliance violations. We are also continuing our human rights due diligence activities and plan to undertake a full-scale human rights risk assessment from FY2025 onwards.

We operate in collaboration with many business partners. Given the current uncertain business environment, we believe that implementing measures to strengthen the supply chain is necessary while taking into account the possibility of drastic changes in the external environment. We must listen carefully to the opinions of business partners and strengthen the supply chain while preparing for unforeseen circumstances. Furthermore, we will work with all stakeholders to address major issues that we cannot resolve alone with the aim of becoming a company that contributes to the creation of a sustainable society.

I believe that it is important for companies to be recognized for their value to society in order to conduct business activities. By advancing the management strategy and sustainability activities in tandem, we will enhance corporate value. Going forward, we will continue to steadily advance sustainability management while responding to the expectations of all shareholders, employees, and other stakeholders. We ask for your continued support and encouragement.

Tetsuya Kumakawa

Managing Officer
Nisshinbo Holdings Inc.