In March 2017, the Sumitomo Heavy Industries Group established the CSR Long-term Targets, which are based on our management philosophy, as the Group's ideal for CSR, and has been promoting these efforts.
In recent years, a refocus has been placed on how issues included in the society should concretely be tackled through business activities.
We have identified seven material issues to be tackled preferentially through our business activities for our Group to continue to grow with the society.
The materialities have been divided largely into the two categories: "Material issues for creating value" and "Fundamental material issues" the former of which has been positioned as issues for which we would contribute to the society by making the most of our strength as the machinery manufacturer, and the latter of which has been positioned as issues for which we would make contributions as the company that is a member of the society.

Material issues for creating value

Realization of a better life and working style

Born as a machine shop of the Besshi Copper Mine, we have contributed to the improvement of labor productivity by freeing people from toil. At present, we are realizing a better life and a better way of working by supplying production facilities and infrastructure such as water treatment using cutting-edge technologies, as well as equipment related to the stable supply of energy.

Environmental Load Reduction

It is essential to improve energy efficiency in all of our products.
We will also make our business a recycling-oriented one, based on the concept of a circular economy that minimizes waste and uses as little new resources as possible when manufacturing machinery using a variety of resources.
We will address climate change issues by reducing greenhouse gas emissions throughout the lifecycle of our products.

Fundamental material issues

Safety, Health and Education of Employees

As a machine manufacturer, we recognize that ensuring the safety of our employees is the most important issue, and we are working on the slogan of "putting safety and compliance above all else."
In addition to safety, we consider the promotion of employee health as one of our issue, and we are promoting health management through our workplaces.
One of the objectives of employee education is to foster human resources who can contribute to society.
We are also working to achieve a work-life balance through the reduction of working hours and the creation of an organization where diverse human resources can demonstrate their abilities.

Ensuring Product Quality

As a machine manufacturer, our business is based on quality control, compliance with the delivery, and thorough fulfillment of our responsibility to supply.

Strengthening Governance

We will improve management efficiency by ensuring management transparency and appropriate supervision.
We will create our frameworks for compliance with business laws, improve information security, and perform fair business practices. We will also perform our sustainability initiatives in the supply chains.

Enrichment of Information Disclosure

We will work to disclose non-financial information so that our stakeholders can understand our initiatives.

Co-existence and Co-prosperity with Communities

We will strive to meet the expectations of local residents and gain their understanding of our business activities at our business sites where operations are accepted by local residents.

Identification Process

(1) Extraction of Issues

After reviewing the SDGs, SASB, ISO 26000, and GRI standards, as well as the initiatives of other companies in the same industry, we identified the most relevant ESG material issues for machinery manufacturers.

(2) Narrowing Down of Issues

Importance to the Society and Stakeholders

Through dialogue on ESG material issues with 14 head office divisions and 15 main business divisions, as well as listening to the opinions of external advisors, we have narrowed down ESG material issues based on the following two axes: the scale of impact on the society and how important those issues are to our Company.
At management meeting and business strategy committee, which are made up of executive officers, we reported on the progress of these activities and confirmed that there were no objections to the narrowed down ESG material issues.

(3) Expert Hearings

In order to confirm the validity of the narrowed-down ESG material issues, we held a hearing with Ms. Mari Yoshitaka as the opinion of sustainability expert.
She commented that material issues for creating value should incorporate not only issues related to the environment but also related to society (eg.a decline in the labor population).

• *Principal Sustainability Strategist, Deputy General Manager, Corporate Planning Dept., Mitsubishi UFJ Research and Consulting Co., Ltd.

(4) Resolutions at the Board of Directors Meetings

We reviewed the framework and importance of the issues through hearings with internal parties and outside sustainability experts.
The resolution for these issues was adopted as management materialities at the meeting of the Board of Directors held in March 2020.
We will continue to monitor trends in social and environmental issues and regularly review our ESG material issues.