Report showing the full picture of the Company-wide reform campaign aimed at returning to a growth trajectory

The keyword that left the strongest impression on me after reading this report is "reform." A common feature of highly regarded reports is that they clearly appeal to readers about "what they want to convey" and "why they want to convey it." This report also conveys the message of "reform for returning to a growth trajectory." The President quoted the saying, "Great companies are born in winter," and the determination and enthusiasm for the "reform" needed to be literally "born in winter" can be felt throughout the report, starting with the President's message. In order to achieve "reform," specific actions and processes for realization are essential in addition to determination and enthusiasm, and this report describes these points in detail. For example, regarding "creation of new businesses," which is one of the materiality issues, we have started a "Business Idea Contest" as part of a company-wide reform movement, and we present a new business roadmap including the results of this contest, along with persuasive descriptions of how to enhance the systems. I hope to see the creation of a more detailed roadmap in the future.
Furthermore, the inclusion of messages from various responsible persons, not just the President's message, also enhances the evaluation of the report. These messages are from the Chairman, Executive Officers, Outside Directors, responsible officers, and department heads, in addition to the CxOs. The messages from CxOs and Outside Directors in reports attract the attention of many stakeholders, not just investors. This is because expressing recognition and determination in the first person has the power to dispel stakeholders' anxieties and doubts, and further enhance their trust.
The inclusion of two pieces of negative information is also sincere and substantial. In last year's third-party opinion, I stated that "in response to the top message, pages should be allocated in the main text to summarize the two factual developments, causes, and measures to prevent recurrence," and this report includes this information without excess or deficiency. From next year onward, I hope to see reports on the effectiveness of the measures to prevent recurrence so that this matter does not fade away.
The description of materiality issues has also become more substantial. In integrated reports, about 90% of companies have identified materiality issues. I believe this is because identifying materiality issues plays an important role in enhancing the quality of communication by clarifying the major issues and opportunities organizations face and clarifying value creation strategies toward achieving their vision. However, there are also many reports in which the materiality evaluation and analysis are conducted vaguely, and materiality issues have become "disclosure for the sake of disclosure." In such cases, the effect of promoting management reform starting from disclosure cannot be expected. Therefore, it is necessary to describe materiality issues in connection with important management issues. Last year, materiality issues were described in connection with the ESG Basic Policy and direction for solving issues, but in this report, they are explained in connection with the three growth strategies of the management plan in addition to those two points.
In writing this third-party opinion, I also looked at the "Sustainability Book" in addition to this report. As stated in this book, "Even for information not required to be disclosed by laws and regulations, we make proactive disclosures of information that we believe is useful for our stakeholders," the amount of information disclosed in this report is also substantial. Some of the information disclosed, such as "List of subsidy achievements" and "Ratio of minimum wage for new employees to legal minimum wage in that region," is rarely seen in other reports.

Promoting integrated thinking and improving the resolution of value creation stories

I have mentioned some of the points that can be evaluated, but the criteria for evaluating reports are becoming increasingly sophisticated. To that end, it is important not to stop making continuous improvements. One important point for improving this report may be to increase the resolution of the value creation story. I believe that each report is also focusing on this point, but according to the Ministry of Economy, Trade and Industry's "Corporate Disclosure Study Group: Interim Report (June 2024)," it points out that there are not many integrated reports that can provide sufficient essential disclosures to convey value creation stories. There are also voices among investors regarding the evaluation of reports that "the evaluation points are whether the story of corporate value enhancement based on the uniqueness of the business model can be captured, and its importance is increasing more than ever" (GPIF: Perspectives and Points for Evaluating Excellent Integrated Reports and Integrated Reports with High Improvement Levels). Therefore, it is not an exaggeration to say that the evaluation of reports is determined by the quality of the value creation story. The core of integrated reports is the value creation story.
In order to create a sense of story, it is essential to write with a sufficient awareness of the "connectivity" of each disclosure item, but when disclosing a lot of information as in this report, it is not easy to connect all the information in detail. In addition, it may be difficult for your company, which has multiple business models, to convey the value creation story simply. Various ideas have been devised by each company, but I believe that the following approaches may be effective: 1) Show connections based on materiality, 2) Show value creation using logic trees and explain the trees, and 3) Structure the report based on the so-called octopus model. All of these require integrated thinking as a basis, so the penetration of integrated thinking is the first step.
There is a growing recognition that human capital is an important element in enhancing corporate value. The Human Capital Version of the Ito Report states that "In an era where human capital is the source of competitiveness, companies are required to quantitatively understand and evaluate human capital and human resource strategies in conjunction with management strategies, and disclose and communicate them to stakeholders." This encourages companies to make more proactive disclosures regarding human capital that are linked to management strategies. In this report, the CHRO message also states, "We aim to integrate management strategies and human resource strategies." This sentiment aligns with the intentions of the Ito Report, but unfortunately, while the human resource strategy is well understood, the integration cannot be perceived. I hope to see descriptions that visualize the connection between the two strategies.

• Recycling-oriented Society Study Group:A citizen group that considers the way of society in harmony with natural ecosystems to be passed on to the next generation from a global perspective, and conducts research, support, and practice for the formation of a recycling-oriented society by citizens, businesses, and governments in local communities. In the sustainability workshops, the group studies and makes proposals on what the reports should look like.
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Career

After working for a newspaper company for 25 years, I changed jobs to an environmental startup, then became a freelancer after working for a publishing company. I have been pursuing the way companies disclose information through university lectures and NGO activities. During this time, I have given lectures, presented papers, written third-party opinions, and provided consulting services.
My publications include "The Path to Environmental Management," "Trends in CSR Reporting and Examples of CSR Reports" (2010-2017), "Trends and Examples of Reports in Japan" (2018-2019), "CSR Practices That Show Results" (co-authored), and "Environmental Solution Company Overview Vol. 1-6" (co-authored).