Materiality

Review of ESG Issues

Nifco first identified ESG issues in 2020 to strengthen the foundation of its ESG management, and it has now conducted its third review and dentified these issues as materiality. The revision was made in order to implement our Medium-term Management Plan, to realize our Long-term Vision and the purpose that lies ahead, and to respond flexibly and appropriately to drastically changing social conditions.

Review process

First, we conducted a value chain analysis to understand and reorganize the impacts Nifco’s business has on society and the environment. Based on the results of this analysis, we identified key themes, assessed environmental and social impacts, and analyzed risks and opportunities that affect the company’s finances.

Materiality Identification Process

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

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.

Materiality and Contribution to SDGs

	Materiality	Issues	Medium- to long-term goals	Related SDGs
G (Governance)	Strengthening sustainability management	Strengthening governance	Manage with awareness of the corporate governance code
		Compliance	Ensuring compliance
	Ensuring information security	Ensuring information security	Maintenance and improvement of information security measures	—
E (Environment)	Responding to climate change	Reduction of CO2 emissions in the entire business	CO2 emissions reduction Process targets: a. Energy conservation promotion b. Introduction of renewable energy
		Research and development, manufacturing, and the sale of products that contribute to the reduction of CO2 emissions	Product development to improve environmental performance
	Zero waste (circular economy) initiatives	Zero waste (circular economy) initiatives	Waste reduction
S (Society)	Improving worker safety and job satisfaction	Improvement of human resource system, employment conditions, etc.	Workstyle reform
		Promotion of occupational health and safety	Promotion of occupational health and safety
	Promotion of human resource development	Promotion of human resource development	Promotion of human resource development
	Prevention of human rights violations and promotion of equal opportunities	Improve understanding of human rights and prevent violations	Human rights-oriented management
		Ensuring diversity and promoting equal opportunities	Respect for diversity Promotion of women’s activities Promotion of global human resources Promotion of the activities of people with disabilities Understanding and responding to LGBT people Promotion of mid-career employment
	Ensuring product safety and quality	Ensuring product safety and quality	Ensuring product safety and quality