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Hitachi

Mid-term Management Plan 2024 and Sustainability

In accordance with Hitachi’s Mission to “contribute to society through the development of superior, original technology and products,” we have been working to promote Social Innovation Business leveraging its core strengths in IT (Information Technology) × OT (Operational Technology) × Products, and Lumada*1 to help build a sustainable society.

In order to respond to the increasingly complex global issues of recent years, it is essential that we promote management with a long-term perspective and maximally utilize Hitachi’s diverse management resources to achieve further evolution of the Social Innovation Business.

Hitachi has responded by imagining the future—what the earth, society, and people will look and act like in 2050— and back-casting to determine new business opportunities that should be undertaken now and in the medium- to long term to help realize a better future. In April 2022, we established the Mid-term Management Plan 2024 to clarify this vision.

*1
Lumada: Solutions, services, and technologies that leverage Hitachi’s digital technology and are offered to customers to accelerate the digitization of customers’ businesses.

Vision Targets of Mid-term Management Plan 2024

Today and tomorrow, the various stakeholders and social challenges that surround us are growing more complex. On a global scale, the environment is reaching its limit to accommodate lives of abundance and safety for humans, as the thresholds of several of the nine planetary boundaries have already been crossed. Recent changes to workstyles and the diversification of personal values have made wellbeing (physical, mental, and social) a vital part of how we choose to live and work.

Hitachi aims to resolve the increasingly complex social issues through its business, while respecting planetary boundaries and realizing wellbeing for all individuals. To achieve these goals, we will expand Lumada business through even greater utilization of data and technology and achieve further evolution of Social Innovation Business with our three growth drivers: “Digital,” “Green,” and “Innovation.”

Supporting people’s quality of life with data and technology that foster a sustainable society

Three Growth Drivers

Digital

With an understanding of management issues faced by customers, Hitachi will contribute to the enhancement of customer business value through a cycle of co-creation with customers, which involves designing, implementing, managing and maintaining solutions, while working to resolve subsequent issues.
We will expand earnings and achieve global growth by leveraging digital technologies to drive the value cocreation cycle.

Green

Hitachi will lead global GX (Green Transformation) by switching to renewable energy, electrification, energy conservation and automation, and contribute to the realization of a sustainable society. We will proactively invest in the green field to contribute to an annual reduction in CO2 emissions of approximately 100 million metric tons by fiscal 2024. Additionally, we will promote decarbonization in order to realize Hitachi Environmental Innovation 2050, which aims to achieve carbon neutrality throughout the value chain by fiscal 2050. Leveraging knowledge gained through this process and providing environmental value tailored to each business domain and region, we aim to realize both a sustainable society and growth of the Hitachi Group.

Innovation

Focusing on its vision for the world in 2050, Hitachi will identify areas where R&D is required while striving to create innovative technologies and products contributing to the resolution of social issues. At the same time, we will increase the speed of innovation by further accelerating collaborations with promising startups, government and academia.

In April 2024, Hitachi simplified its structure, grouping together businesses with similar characteristics organized into three sectors: Digital Systems & Services (DSS), Green Energy & Mobility (GEM) and Connective Industries (CI) to streamline and speed up its management function. With the addition of the Automotive Systems Business (Hitachi Astemo), We will leverage our three growth drivers—Digital, Green, and Innovation—to provide value to our customers and society, and to promote sustainability management.

Contribution to the SDGs

Hitachi’s Social Innovation Business aims to realize a sustainable society through contributing to the resolution of global social and environmental issues as defined by the SDGs, and we consider it to be a source of sustainable growth for us. We are striving to create social, environmental, and economic value through our Social Innovation Business, as well as working to reduce negative social and environmental impacts. We are also seeking a deeper understanding of business risks arising from social and environmental changes to ensure business continuity with greater resilience.

In 2016, we examined the relationship between the opportunities and risks associated with the SDGs and our businesses to identify 11 goals as Hitachi’s priority SDG issues: five goals where we can make particularly significant impacts through our key businesses and six goals that we can contribute to through our entire corporate activities. In 2022, based on the 2024 Mid-term Management Plan, we added two more goals, Goal 10: Reduced Inequalities and Goal 16: Peace, Justice, and Strong Institutions, expanding our list of priority SDG issues to 13.

Through our active involvement in a broad range of business fields, we believe we can contribute extensively to the achievement of SDGs beyond the 13 goals identified, and we will strive to contribute to the achievement of all 17 SDGs.

Framework for Promoting Sustainability Strategy

Establish a System to Promote Sustainability

Hitachi is working to promote sustainability strategy, including the Hitachi GX Strategy, under the guidance of Vice President and Executive Officer Lorena Dellagiovanna, who was appointed to the newly established position of Chief Sustainability Officer on April 1, 2022.

Under the Global Environment Division, which is managed by the Chief Sustainability Officer, as a framework for implementing the Hitachi GX Strategy, we have established the Internal Environment Initiatives Division to promote efforts to achieve carbon neutrality throughout our in-house production activities and the value chain, 3R activities, and the Global Environment Business Division to lead growth in our environmental business.

In fiscal 2022, we established a new Sustainability Promotion Meeting, with members that include the Chief Sustainability Officer, business promotion division heads at Business Units (BUs) and key Group companies, and RHQ Sustainability Officers, to discuss important measures concerning sustainability, conduct monitoring of progress in reaching targets, and more. Important matters aimed at achieving the Mid-term Management Plan are also discussed or decided on by the Senior Executive Committee and presented to the Board of Directors.

In addition, for important themes such as carbon neutrality, the circular economy, human rights due diligence (HRDD), and Diversity, Equity and Inclusion (DEI), we are working to promote sustainability throughout the Hitachi Group by setting up separate meetings composed of responsible officers from individual BUs and major Group companies to consider Group-wide policies, share information, and so on.

Framework for Implementing the Hitachi GX Strategy
Sustainability Strategy Promotion Meetings Framework
Overview of Sustainability Related Conference Bodies
Meeting Attendees Purpose Frequency
Sustainability Promotion Meeting Chief Sustainability Officer, Business promotion division heads at BUs & key Group companies and RHQ Sustainability Officers Deliberation, implementation and monitoring of material sustainability initiatives Twice per year
Internal Environment Initiatives Division Progress Meeting Heads of Business promotion/ Environment-related/ MONOZUKURI(production)/ Procurement divisions from BUs and key Group companies Formulating and implementing plans based on the environmental action plan Twice per year
Eco-Management Meeting Heads of Environment-related divisions from BUs and key Group companies Deliberation and implementation of actual action plan to achieve Hitachi Environmental Long-term goals Twice per year
CN2030 Promotion Project Meeting Heads and members of Environment-related/ MONOZUKURI(production)/ divisions from BUs and key Group companies Monitoring and implementation of CN action plan and discussion of acceleration Every quarter
3R Promotion Project Meeting Heads and members of Environment-related/ MONOZUKURI(production)/ divisions from BUs and key Group companies Promotion of actions for 3R activities toward realizing CE Every quarter
Procurement related Meeting (Group Procurement Strategy Meeting etc.) Chief Procurement Officer, heads of the procurement divisions at BUs and key Group companies Disseminating Hitachi group global procurement policy and strategy, and discussion on the framework of Sustainable Procurement Twice or more per year
HRDD Execution Managers Meeting HRDD execution managers from BUs and key Group companies Provide information and knowledge necessary for HRDD implementation, and share status of implementation in BUs and key Group companies Once or twice per year
Global DEI Council DEI promotion leaders from BUs and key Group companies Implement DEI promotion policies and initiatives, and share best practices Once or twice per year
Fiscal 2021 Executive Sustainability Committee*1 Agenda Items
Term Agenda Items
May 2021 New DEI-related targets, issues associated with reaching targets, action plans, etc.
June 2021 Reviewing targets and considering promotion measures for Hitachi Environmental Innovation 2050, etc.
July 2021 Hitachi Group priority human rights risk survey results (concerning migrant workers and forced labor), framework for managing human rights risks, etc.
December 2021 Progress reports for DEI-related activities, future measures necessary to link DEI to growth, etc.
January 2022 Materiality plans aimed at achieving the next Mid-term Management Plan and approaches to advancing the circular economy, etc.
*1
Holding sustainability-related discussions under a new committee system from fiscal 2022

Reflecting Sustainability Targets in Executive Compensation Evaluation

In fiscal 2021, Hitachi introduced evaluations that take environmental value into consideration in the executive compensation system for the first time with the aim of accelerating the creation of environmental value. All executive officers, including the CEO, set targets for environmental value and were evaluated for their achievement of individual targets.

From fiscal 2022, in addition to environmental targets such as decarbonization and resource efficiency, we introduced quantitative and qualitative target setting for occupational health and safety and product quality in the compensation evaluation of all executive officers to further advance sustainable management.

Examples of Sustainability Target Reflected in Fiscal 2022 Compensation Evaluations
  Sustainability Targets
Decarbonization
  • Efforts to realize carbon neutrality*1 at business sites (factories and offices) by fiscal 2030
  • Efforts to achieve carbon neutrality*1 by fiscal 2050 throughout the value chain
Resource efficiency
  • Efforts related to resource efficiency
Occupational health and safety
  • Zero fatal accidents
  • Wellbeing initiatives
Product quality
  • Efforts to enhance product quality
*1
Decarbonization targets for fiscal 2030 and fiscal 2050 are set on an individual fiscal year basis overall and for individual BUs.