STEP 1Identify and categorize social issues

We examined the sustainability standards of the Global Reporting Initiative (GRI) and those of the Sustainability Accounting Standards Board (SASB). We also referred to the key metrics that MSCI (a leading rating agency for sustainable investments) uses when evaluating a company’s ESG performance. From this data, we prepared a shortlist of 38 issues (a total of 164 items) that seemed relevant to our stakeholders. We then examined these issues further to identify those that matter the most to our businesses. As a result, we selected the 23 issues to refine the shortlist.

STEP 2Survey internal divisions

To determine how much the issues matter to stakeholders, we polled 12 internal divisions that have a high level of stakeholder engagement. Their responses highlighted certain topics that frequently arise in stakeholder dialogue and are thus important to stakeholders. To determine how much the issues matter to us, we evaluated their relevance to our strategy and business activities as well as the opportunities and risks they present.

STEP 3Determine relative priority of issues

We plotted the issues onto a matrix. In this matrix, the vertical axis indicated how much the issue matters to stakeholders and the horizontal axis indicated how much it matters to us. For example, an issue that mattered a lot to both stakeholders and us would appear in the upper right quadrant of the matrix. This quadrant contained issues such as reduction of carbon emissions, conformance with animal welfare standards (an issue of increasing global concern), sustainable procurement, and development of health-oriented products. We provisionally defined these as material issues.

STEP 4Review by president and experts

President Naoto Chiba reviewed the results and rated each issue for its suitability as a material issue. Next, members of an expert panel and a taskforce debated the selected issues in light of the latest trends. As a result of these two review processes, we settled on 10 material issues in five categories.