Materiality

Fundamental Approach
Materiality Identification Process
Risks and Opportunities Related to Materiality and Social Issues
Materiality, Key Measures, and Relevant SDGs

Fundamental Approach

With an eye on the United Nations Sustainable Development Goals (SDGs) and various other environmental, social, and governance issues, the Nittobo Group has identified materiality (important management tasks) that should be addressed in order for us to continue contributing to the realization of prosperous communities.

Materiality Identification Process

From the perspectives of both strategic CSR (that is, contributing to society by taking advantage of our strengths and through our business activities) and fundamental CSR (that is, preparing the structures and initiatives forming the foundation of sustained growth), we have identified seven materiality issues. In addition, for each social challenge corresponding to our materiality, we have sorted out the Nittobo Group’s risks and opportunities and are promoting measures to reduce the former and enhance the latter.

1. Issue Selection

Discussed the Nittobo Group’s purpose and value creation

2. Analysis and Plan Creation

Each business division analyzed its environment and formulated a vision for the future
Held multiple intensive discussions between the President and business divisions

3. Management Decision-Making

Discussed in depth by the Board of Directors with External Directors’ input and provided feedback to the business divisions

4. Setting and Development of Materiality

Defined 7 materiality items
Developed specific initiatives to realize our vision

Risks and Opportunities Related to Materiality and Social Issues

Materiality		Social Issues	Risks	Opportunities
Provide products and services that contribute to environment/energy		Intensification of Global Warming and Environmental Issues Formation of a recycling-oriented society Acceleration of laws and regulations	Increase in environmental costs Restrictions on business due to environmental regulations Elimination of non-eco-conscious products and companies	Increasing demand for sustainable products Expanding demand for composite materials to meet the needs of lightweight automobiles and aircraft Increased demand for insulation materials due to stricter energy conservation regulations
Adapting to climate change and a resource-recycling society
Provide products and services that contribute to digital society		Arrival of a Super Smart Society Higher speed telecommunication (5G/6G) Evolution of AI technology, arrival of IoT era	Decline in technological superiority Replacement by other materials Speed of technological development in the electronic materials industry	Increasing demand for devices that require high-speed, high-capacity processing Utilization of the production system in Japan and in Taiwan, where electronic materials are concentrated Opportunities to expand sales and develop next-generation products through first-mover advantage
Provide products and services that contribute to health/security/safety		Societal Structure Issues Aging society with a declining birthrate (in Japan) Population issues, etc.	Shrinking domestic market due to declining birthrate Business continuity risks specific to biologically-derived materials Replacement by other diagnostic reagents	Global shift from treatment to prevention due to increased awareness Expanding demand for diagnostic reagents in Asia due to population growth and rising income levels Utilize three raw material production bases in the U.S. Utilize the value chain from upstream (antigens, antibodies, raw materials) to downstream (product manufacturing and sales)
Realizing continuous, sustainable growth for the Company		Increased geopolitical risks Intensifying competition due to industry reorganization, entry from other industries, etc. Increasing sophistication and complexity of social demands Accelerating the rate of change
	Strengthen management foundation		Diversification of factors causing changes in the socioeconomic environment Price fluctuations of fuels, materials, etc. Impact of geopolitics and human rights issues, etc. on the supply chain	Selection and concentration Capture growth opportunities through innovative technology development
	Foster human resources for innovation		Decline in workforce due to low birthrate and aging population Intensifying competition to recruit young and specialized human resources	Increasing diversity Fluidization of the labor market Innovation expected through human resource development
	Continuously revise corporate governance		Expanding and refining CSR scope Compliance and security in a remote environment	Permeation of corporate philosophy Strengthening the corporate foundation by gaining trust from society

Materiality, Key Measures, and Relevant SDGs

Materiality		Key Measures
Provide products and services that contribute to environment/energy		Develop new eco-conscious products
Adapting to climate change and a resource-recycling society		Reduce CO₂ emissions Implement recycling and reusing
Provide products and services that contribute to digital society		Grow profits through Special Glass Strengthen development capabilities for new products Strengthen solution capability to increase value for customers
Provide products and services that contribute to health/security/safety		Expansion of sales channels in the field of in vitro diagnostic reagents Strengthen development capabilities for new products Strengthen solution capability to increase value for customers
Realizing continuous, sustainable growth for the Company
	Strengthen management foundation	Lean management that is not substantially affected by economic fluctuations Optimize business portfolio and review unprofitable businesses Transform technology development and production technology through the introduction of IT and digital transformation Maintain sustainability in procurement and the supply chain
	Foster human resources for innovation	Cultivate human resources for innovation Implement diversity and inclusion Workstyle reform and business reform Improve employee engagement
	Continuously revise corporate governance	Continuously revise corporate governance Thoroughly implement corporate ethics and compliance