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Hitachi's CSR Management Framework

To realize the Hitachi Group Vision, which draws on our Corporate Credo and Founding Spirit that form the core of our CSR, and in keeping with a management strategy of actively advancing our Social Innovation Business, we have adopted a framework of nine key themes based on ISO 26000 with the aim of further integrating management and CSR and continually improving our CSR activities by running the PDCA cycle.

CSR Management Framework

We are continuously improving our CSR activities, and have identified nine key themes for our CSR management framework: (1) Recognition of social responsibility, (2) Corporate governance, (3) Human rights, (4) Labor practices, (5) Environment, (6) Fair operating practices, (7) Customers (consumer issues), (8) Community involvement and development, and (9) Review and improvement of CSR activities. To address these nine themes, we are implementing a cycle of activities with three phases. The first phase is to properly recognize our social responsibility. The second is to identify relevant issues, establish priorities for addressing issues, and act on them. The third phase is to confirm and enhance our CSR activities through proactive communication and stakeholder engagement.

Material Issues and Boundaries

In reporting the achievements of its CSR initiatives, Hitachi seeks to identify issues that are of interest to its stakeholders. To ascertain the ever-changing interests of stakeholders in the light of fluctuating economic and social conditions, we have endeavored since fiscal 2014 to give specific examples of our initiatives under a nine-item CSR management framework. We take note of stakeholders' own priorities, analysis conducted by outside consultants, and the opinions of experts in choosing initiatives that correspond to our nine framework items. These are further screened with reference to the GRI Standards and the ESG (environmental, social, and governance) investment indexes, reviewed by the executive officer in charge of CSR, and reflected in Hitachi Sustainability Report 2017.

We also aim to provide a more detailed account of the topics' social impact by clarifying the boundaries (importance to internal and external stakeholders) of each topic.

Material Issues and GRI Standards

1 Recognition of social responsibility

Recognition of social responsibility
Material issues GRI Standards Reporting boundary
Realizing sustainable, innovative management
  • GRI 203: Indirect economic impacts
Internal/External
Understanding issues through dialogue and taking part in initiatives Internal/External

2 Corporate governance

Corporate governance
Material issues GRI Standards Reporting boundary
Pursuing management efficiency and transparency Internal/External
Sharing the Hitachi Group Identity
  • GRI 205: Anti-corruption
  • GRI 419: Socioeconomic compliance
Internal/External
Advancing risk management on multiple fronts Internal/External

3 Human rights

Human rights
Material issues GRI Standards Reporting boundary
Respect for human rights throughout the value chain
  • GRI 412: Human rights assessment
  • GRI 408: Child labor
  • GRI 409: Forced or compulsory labor
  • GRI 410: Security practices
  • GRI 411: Rights of indigenous peoples
  • GRI 414: Supplier social assessment
Internal/External
Respect for workers' rights
  • GRI 402: Labor/management relations
  • GRI 406: Non-discrimination
  • GRI 407: Freedom of association and collective bargaining
Internal

4 Labor practices

Labor practices
Material issues GRI Standards Reporting boundary
GRI 401: Employment
Achieving a fair and equitable work environment
  • GRI 402: Labor/management relations
  • GRI 202: Market presence
Internal
Promoting diversity and inclusion
  • GRI 405: Diversity and equal opportunity
Internal
Promoting occupational health and safety
  • GRI 403: Occupational health and safety
Internal
A strategy for growing together with our global human capital
  • GRI 404: Training and education
Internal

5 Environment

Environment
Material issues GRI Standards Reporting boundary
Advancing our Environmental Vision and long-term environmental targets
  • GRI 201: Economic performance
  • GRI 301: Materials
  • GRI 302: Energy
  • GRI 303: Water
  • GRI 304: Biodiversity
  • GRI 305: Emissions
  • GRI 306: Effluents and waste
Internal/External
Managing environmental risks and opportunities
  • GRI 201: Economic performance
Internal/External
Continuous enhancement of environmental governance
  • GRI 301: Materials
  • GRI 302: Energy
  • GRI 303: Water
  • GRI 305: Emissions
  • GRI 306: Effluents and waste
  • GRI 307: Environmental compliance
  • GRI 404: Training and education
Internal/External
Promoting the Environmental Action Plan (metrics and targets)
  • GRI 301: Materials
  • GRI 302: Energy
  • GRI 303: Water
  • GRI 304: Biodiversity
  • GRI 305: Emissions
  • GRI 306: Effluents and waste
Internal/External

6 Fair operating practices

Fair operating practices
Material issues GRI Standards Reporting boundary
GRI 419: Socioeconomic compliance Internal/External
Promoting work practices in line with international ethics codes
  • GRI 205: Anti-corruption
  • GRI 206: Anti-competitive behavior
  • GRI 415: Public policy
Internal/External
Engaging in responsible procurement
  • GRI 204: Procurement practices
  • GRI 414: Supplier social assessment
  • GRI 308: Supplier environmental assessment
Internal/External

7 Customers (consumer issues)

Customers (consumer issues)
Material issues GRI Standards Reporting boundary
Pursuing customer satisfaction
  • GRI 417: Marketing and labeling
Internal/External
Ensuring accessibility to products and services
  • GRI 417: Marketing and labeling
Internal/External
Ensuring thorough management of quality and safety
  • GRI 416: Customer health and safety
  • GRI 418: Customer privacy
  • GRI 419: Socioeconomic compliance
Internal/External

8 Community involvement and development

Community involvement and development
Material issues GRI Standards Reporting boundary
Promoting sustainable community involvement and development
  • GRI 413: Local communities
Internal/External

9 Review and improvement of CSR activities

Review and improvement of CSR activities
Material issues GRI Standards Reporting boundary
Enhancing CSR management Internal

Incorporating Dialogue into CSR Management

Communication in Response to Stakeholder Expectations

Hitachi incorporates feedback obtained through dialogue with stakeholders in its sustainable practices to improve CSR management.

In February 2017, we held a stakeholder dialogue in Belgium with the aim of improving our integrated reports by taking stakeholder views and opinions into consideration. In Europe, investors have more interest in non-financial information and many corporations have been publishing integrated reports for some time.

The meeting was attended by 17 representatives from such organizations and bodies as the International Integrated Reporting Council (IIRC), the World Intellectual Capital Initiative (WICI), and the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA), as well as corporations with experience issuing integrated reports and major European investment companies.

We received feedback from attendees such as “Identifying crucial issues makes it possible to indicate what value the business can provide in the long term,” and “Recognizing the risks that could impede the entire Group's business operations and identifying countermeasures against them, including processes, demonstrates a corporate commitment to improving risk management and helps enhance stakeholder trust in the company.”

Based on this feedback, in fiscal 2017 we reviewed business risks and opportunities related to each of the 17 SDGs and identified 11 goals that we regard as key social issues for us to address in light of ISO 26000, the UN Global Compact, and other environmental frameworks. In order to achieve these goals, we built the Hitachi Value Creation Model for delivering value created through our Social Innovation Business. Moreover, in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures, we are improving disclosure of our long-term initiatives to address business opportunities and risks posed by climate change. These initiatives are detailed for our stakeholders in the Hitachi Integrated Report 2018.

Moving forward, Hitachi will strive to actively engage in dialogue with stakeholders to enhance our efforts toward sustainability and information disclosure.

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