In promoting the Social Innovation Business, Hitachi accurately detects a variety of social issues in each country and region, addressing these issues through co-creation with customers, governments, academic organizations, research institutions and a wide range of other stakeholders.
In response to the recent rise of ESG investing, Hitachi is proactively engaged in dialogue with shareholders and investors on both financial and non-financial information, while also focusing efforts on co-creation to improve disclosure of non-financial information. Going forward, Hitachi will continue to proactively promote dialogues with stakeholders, incorporating the takeaways into operations to realize sustainable management.
| Stakeholders | Main Roles | Means of Engagement (FY2023) | |
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| Customers | Creation of better products and services, response to complaints, appropriate disclosure of information on products and services |
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| Shareholders and investors | Timely and proper information disclosure, obtaining fair recognition and support from capital markets, reflection of shareholder and investor viewpoints in corporate management |
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| Procurement Partners | Building fair and sound business relations, smooth information sharing toward better partnerships |
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| Employees | Proper treatment, promotion of occupational health and safety of human capital, increasing employee engagement |
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| National Governments, Municipalities, Industrial Associations | Compliance with domestic and foreign laws and regulations, policy recommendations, participation in industry-government-academia collaborative projects |
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| Local Communities | Fulfillment of responsibilities as a corporate citizen, involvement in local communities |
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| Academic Associations and Research Institutions | Promotion of technological innovations, participation in industry-government-academia collaborative projects |
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| NGOs and NPOs | Incorporation of diverse public opinions, promotion of stakeholder-focused management, social contributions through nonprofit activities |
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| The Environment | Realization of a decarbonized society, a resource efficient society, a harmonized society with nature |
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Note: Hitachi normally refers to its suppliers (including vendors or providers) as “procurement partners” who build business together on an equal footing
How to address the rapidly changing global trend in ESG disclosure is a major challenge for many corporations and institutional investors in Japan. Hitachi, Ltd. is responding to this issue through co-creation with stakeholders. In June 2020, Hitachi took the lead in establishing the ESG Disclosure Study Group to explore ways of disclosing ESG information that contribute to long-term corporate value enhancement while also keeping an eye on global trends. The study group initially started with 19 companies, and as of June 30, 2024, more than 100 companies, institutional investors, auditing firms and public organizations are participating.
Study group activities are divided into phases according to themes, and in June 2024, the “ESG Disclosure Study Group Report 2024 -Achieving World-Leading Disclosure and Dialogue Standards- ” was published including the results of these activities. This report contains ESG disclosure recommendations for corporations, institutional investors and standard-setting bodies and is disseminated to relevant organizations within and outside Japan. Hitachi, Ltd. serves as the co-chairman and secretariat of this study group, and leads these activities.
One of the key initiatives for the evolution of sustainability management is to clarify how non-financial values such as environmental and social values created by business activities, as well as intangible asset measures such as human resource policies, impact financial performance. It is also important to explore the future direction of sustainability management.
Since 2021, Hitachi, Ltd. has engaged with these challenges through experimental research conducted in collaboration with the Graduate School of Management, Kyoto University. Through various academic approaches, it has been quantitatively confirmed that Hitachi's past and present initiatives toward the environment and human resources could have a positive impact on financial indicators (ROIC and WACC) and profits. Additionally, using AI jointly developed by Kyoto University and Hitachi, we have simulated Hitachi's sustainable management vision for 2035 based on various current financial and non-financial data, as well as market trends. We have identified 11 possible scenarios, the critical junctures leading to them, and the necessary measures to take. By analyzing our ESG initiative from the past to the present and into the future through academic approaches and AI, will drive forward our business and sustainability management.
![[image]Enhancing Hitachi Sustainable Management](2.png)
