Last updated: July 2026

Nifco first identified its ESG issues in FY2020 as part of its efforts to strengthen the foundation of ESG management. Subsequently, the Company conducted its third review in FY2022 and further revised its materiality (key sustainability issues) in FY2025. These revisions were undertaken to support the execution of the Medium-Term Management Plan, the realization of the Long-Term Vision and the Purpose beyond it, and to respond appropriately and flexibly to the rapidly changing business and social environment.

As part of the materiality review process, we first conducted a value chain analysis to identify and better understand the impacts of our business activities on society and the environment. Based on the results of this analysis, we identified key issues and assessed environmental and social impacts, as well as risks and opportunities that could affect our business. The FY2025 revision was reviewed by the Sustainability Committee and approved by the Board of Directors.

Materiality Identification Process

We reviewed ESG issues and identified materialities through the following process:

Flowchart describing the process of identifying Nifco’s materiality. Step 1: Identification of Key Themes using internal references, external standards (GRI/SASB), and value chain analysis. Step 2: Environmental and Social Impact Assessment—material issues are evaluated based on magnitude and likelihood of impact. Step 3: Analysis of Risks and Opportunities Affecting Finances—material issues with financial impact are assessed. Step 4: Grouping and Adjustment—materiality from steps 2 and 3 are combined, grouped, and adjusted to finalize company materiality.

Materiality Regarding Sustainability

The Nifco Group has decided to refer to the double materiality approach in identifying materialities in its response to the Corporate Sustainability Reporting Directive (CSRD) published by the European Commission (EC) because in addition to having business in Europe, it responds to changes in society and manages its business in a way that is more responsive to its stakeholders.

Double Materiality

Double materiality is a way of identifying“ sustainability issues with significant environmental and social impacts,” as required by the Global Reporting Initiative (GRI), and “sustainability issues with significant financial impacts,” as required by International Financial Reporting Standards (IFRS), as materialities.

This diagram categorizes sustainability issues related to Nifco into two types: ① Issues that have a significant impact on the environment and society (impact materiality), and ② Issues that have a significant impact on Nifco’s finances (financial materiality). It illustrates the relationship between these categories and the scope of various disclosure standards (GRI, SASB, TCFD, IFRS, and CSRD).

Nifco’s materiality for FY2025