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Hitachi

Management Message

CEO’s Message

Keiji Kojima President & CEO Hitachi, Ltd.

Support people’s quality of life with data and technology that fosters a sustainable society

In the wake of the financial crisis following the collapse of Lehman Brothers, Hitachi made a major shift to the Social Innovation Business, which aims to solve social issues through co-creation with customers, leveraging our core strengths in IT (Information Technology) × OT (Operational Technology) × Products. For about 10 years until last fiscal year, as one CEO passed the baton to another, we have been on a transformational journey to reform our business structure to further expand our Social Innovation Business.

The three-year term of our Mid-term Management Plan 2021 was, in a sense, about putting the finishing touches on this process of structural reform. Our key objective to become a global leader in the Social Innovation Business guided us to focus our resources on building a global business foundation. Acquiring global leader ABB’s Power Grids business (currently Hitachi Energy) provided us with core infrastructure in the environmental business that is essential for renewable energy use. Further, our acquisition of GlobalLogic, a leading-edge digital engineering firm that is growing rapidly on its strength in collaborating with customers, gave us the global base needed for our Lumada-focused digital business.

In the Mid-term Management Plan 2024, Hitachi aspires to “support people’s quality of life with data and technology that fosters a sustainable society.” In our business activities, we must be mindful of planetary boundaries—tipping points for destructive changes to the global environment—and act to protect the planet. In the social aspect, our next major objective is ‘wellbeing’—where every individual can fully express their individuality and play an active role. Hitachi focuses on research and development that will enable us to use data and technology to build a sustainable society that does not exceed planetary boundaries while realizing wellbeing. We have set an overall theme for our Mid-term Management Plan 2024— “From structural reform to organic growth”— which will pave the way for growth over the next ten years by earning the trust of our customers as their partner in finding solutions to issues.

To meet expectations from global initiatives and stakeholders, we have identified six key material issues which we will address through our deepened commitment to sustainability management, taking into account the greatest strengths we have and the challenges we face. The Senior Executive Committee and the Board of Directors are discussing the status of progress on the management targets we have set based on these, as well as possible new initiatives. In the interest of strengthening governance to achieve the objectives of the Mid-term Management Plan 2024, we are working to clarify our approach to accountability, including linking major KPIs to the performance evaluation of executive officers.

The world has entered an era of highly unpredictable social and economic change. There are critical steps we must take to ensure reliable implementation of our plan in this volatile environment. One crucial focus is gathering information on potential risks so that we are prepared to take rapid action when risks materialize. We are committed to responding to the diverse range of risks we face, including those related to the economic environment, geopolitics, natural disasters and compliance, in a swift and comprehensive manner. In April 2022, we established a central risk management framework and accountability structure for this purpose.

With regards to the environment, we have set up a Group-wide cross-sectoral organization under the Chief Sustainability Officer to promote decarbonization efforts among our customers and within the Hitachi Group. A key aim is to promptly provide customers with relevant knowledge and expertise that the Group has accumulated. We will leverage this new framework to achieve the targets of contributing to reduce CO2 emissions by 100 million metric tons annually by fiscal 2024 and also achieving carbon neutrality in the value chain by fiscal 2050.

We must not lose sight of the fact that the most important factor in continuing to provide value to our customers and the broader society to build a sustainable world is our people. The driving force behind the evolution of our Social Innovation Business is the talents from all over the world who identify with our purpose of solving social issues. Solving increasingly complex social issues requires creativity that goes beyond conventional thinking. Diversity, Equity and Inclusion is the key to achieving this. It is crucial that we encourage collaboration across organizations, regions and generations, and build an equitable and inclusive organization where our diverse talents are able to play an active role. We will develop talents and foster a corporate culture that enables each and every employee to see social issues as their own and to fulfill their best with passion, thereby improving engagement with employees.

To address environmental challenges such as climate change, social issues such as urban population growth, and new social issues that we cannot even predict at this time, Hitachi will take on the challenges and grow through co-creation with our customers and other stakeholders. I invite you to keep your eyes on Hitachi, as we move into the future.

President & CEO Hitachi, Ltd.
Keiji Kojima

Chief Sustainability Officer’s Message

Lorena Dellagiovanna Vice President and Executive Officer, Chief Sustainability Officer, Head of Global Environment Division, and CDIO Hitachi, Ltd.

Sustainability will be the Growth Driver

Hitachi believes a strong commitment to sustainability will be the Growth Driver. Sustainability is not a cost nor is it for compliance. It is a value creation for the business first, and as consequence for the society. It is important to clarify that sustainability is not a concept up in the air, something nice to have, but it’s a key driver for any business to survive in the mid - long term future. It has become increasingly accepted that the objective of maximizing shareholder value requires not only top competitive performance, but also the attention to a variety of sustainability’s issues.

As indicated in the 2024 Mid-term Management Plan, we aim to enhance our corporate value through sustainability with a focus on planetary boundaries and wellbeing.

Speaking to the environment, to accelerate and promote the achievement of Hitachi’s long-term environmental targets as measures, Hitachi developed two business strategies, GX for GROWTH (customer and society decarbonization) and GX for CORE (Hitachi decarbonization). Under GX for GROWTH, we will support customers in reducing CO2 emissions by expanding Hitachi’s greener and more efficient product portfolio and providing customers with End to End (E2E) solutions across sectors. By fiscal 2024, we aim to contribute to reduce CO2 emissions by approximately 100 million metric tons per year. We will accelerate the development of various solutions realizing energy transition, the electrification of mobility and the energy saving. GX for CORE aims to decarbonize our own operations. We aim to achieve reductions in Scope 1 and 2 by investing approximately 37 billion yen over the next three years to meet the carbon neutrality target in fiscal 2030 and 50% CO2 emissions reduction throughout the value chain by the same fiscal year. In addition, we launched a framework for issuing green bonds to mobilize more fund to accelerate activities toward carbon neutrality. Based on these efforts, including preparation of SBTi net zero certification, we aim to improve ESG evaluation.

Vice President and Executive Officer Dellagiovanna speaks at COP26.
Vice President and Executive Officer Dellagiovanna speaks at COP26

At the same time, we are also looking to the future by investing in the R&D of green technologies, such as hydrogen, methanation, and Direct Air Capture(DAC).

Hitachi supported COP26 held on November 2021 as 1st Principal Partner in Japanese companies. In COP26, Hitachi had opportunities to discuss with VIPs such as Ministers and present our activities in several events. Through these activities in COP26, we developed good relationship with stakeholders including government. We recognize that we have a role to play as part of the global community. Through COP26, we were able to demonstrate our strong commitment to climate action. We will focus on advancing decarbonization with our clients and partners to deliver our commitment pledged in COP26. We will continue to monitor the development in COP27.

In terms of society, Hitachi believes that, through the inclusion of diverse talents, we will be able to collaborate and create innovation in data and technology in the digital age to realize a sustainable society and support people’s wellbeing. In addition to strengthening the acquisition and development of digital talents, we aim to enhance employee engagement by creating a culture in which every employee can contribute in solving social issues, and a work environment in which Diversity, Equity and Inclusion (DEI) are fostered on a global scale, thereby achieving both business growth and a sustainable society.

All of the above are in line with Hitachi’s mission to contribute to society but respecting human rights is essential. It is indispensable for the development and sustainability of the company. In accordance with the Hitachi Group Human Rights Policy, we are promoting human rights due diligence (HRDD) and other efforts to embed human rights risk management into our operation and too see that people’s rights and dignity are respected throughout the value chain.

We look forward to co-creating solutions with our customers, partners, and the global community to solve sustainable issues. Together, we will innovate for a sustainable society.

Vice President and Executive Officer, Chief Sustainability Officer,
Head of Global Environment Division, and CDIO Hitachi, Ltd.
Lorena Dellagiovanna