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Hitachi

Corporate InformationSustainability

CEO's Message

Resolving Social Issues and Improving Quality of Life Through Social Innovations

We are today going through an era of volatility, uncertainty, complexity, and ambiguity (VUCA) in which the future of society and economy is becoming increasingly difficult to predict. Our lives are being affected by many sweeping changes, such as shifting demographics from urbanization and aging, climate change, and resource shortages. This has heightened expectations worldwide for private businesses, which are the drivers of innovation, to make a bigger contribution to the resolution of society's issues and the achievement of Society 5.0 and the Sustainable Development Goals (SDGs). There is growing global demand, in particular, for intelligent social infrastructure using digital technology—a need that Hitachi is well-positioned to meet.

In the VUCA era, we believe it is all the more important for us at Hitachi to reembrace our Corporate Credo: to contribute to society through the development of superior, original technology and products. This philosophy has remained at the heart of our operations over the 109 years since our founding, and it informs the Hitachi Group Vision to become a company that “delivers innovation that answer society's challenges.” As a global leader with business operations worldwide, we believe it is our mission to contribute to the resolution of social issues and achievement of the SDGs by accelerating our Social Innovation Business.

Our 2021 Mid-term Management Plan, announced in May 2019, outlines our aim to help bring about a sustainable society through our global leadership in the Social Innovation Business, simultaneously increasing social, environmental, and economic value, improving people's quality of life, and enhancing value for our customers. We seek to improve people's lives by providing intelligent social infrastructure globally through our digital solutions. The sources of our strength in these areas are our operational technology (OT) accumulated over a century of developing monozukuri excellence— starting with the five-horsepower induction motor—and our IT skills honed over the past 50 years. We can contribute to the solution of various problems facing society with our OT, IT, and high-quality products.

Among the issues facing contemporary society, climate change is regarded as being one of the most important, as reflected in the goal set in our Mid-term Management Plan of raising environmental value. Roughly 90% of CO2 emissions from Hitachi's value chain come from the use of our products and services. We thus have a responsibility to help achieve a low-carbon society by prioritizing our decarbonization business, which seeks to provide more value to customers and society while using less energy.

When people hear the name Hitachi, I would like everyone to associate us with being an innovation partner. This will require that we accelerate our collaborative creation with a full range of stakeholders worldwide and to construct an “innovation ecosystem” with them.

For instance, in addressing social issues to help achieve the SDGs, we will strengthen our efforts to cultivate the “seeds” of innovation into new ideas ready for implementation through collaborative creation with universities, open innovation at “Kyōsō-no-Mori” of Hitachi's Central Research Laboratory, and venture capital investment.

Human capital is another key driver of our Social Innovation Business, and I believe it is extremely important for our employees to have an awareness in their work that all businesses relating directly to social infrastructure can be seen as contributions to society. Human capital is an important component of our efforts to create social value. In striving to achieve our goals for the medium and long term, I would like for all our employees to consider the kind of value we can provide not only to our customers but also to society so that we may make an even bigger contribution through the provision of social, environmental, and economic value.

Toshiaki Higashihara
Representative Executive Officer
President & CEO
Hitachi, Ltd.
T.Higashihara

Executive Officer's Message: CSR and the Environment

Integrating Sustainability Initiatives into Our Management Strategy

The risks we face from such factors as climate change and a global population explosion have grown to unprecedented levels in recent years and are threatening the sustainability of our way of life. Since the European Union announced an action plan in 2015 to accelerate its transition to a circular economy, in which growth is achieved through the effective use of resources, companies have increasingly been called to shift to sustainable business models. They are being asked to address social issues and help achieve the Sustainable Development Goals (SDGs) through their main business activities, while also integrating sustainability initiatives into their management and business strategies.

Since its founding, Hitachi has had a Corporate Credo of contributing to society through the development of superior, original technology and products, and this has remained at the heart of its operations. Sustainability has been a primary consideration in our management, as we have sought to contribute to a sustainable society through our Social Innovation Business. We will further pursue sustainability management going forward and strive to continually enhance our corporate value in response to global trends.

Our 2021 Mid-term Management Plan, announced in May 2019, outlines a goal of contributing to the realization of a sustainable world by simultaneously increasing social, environmental, and economic value. Toward this end, we must regard sustainability as a management issue and strengthen our governance. In 2017, we thus created the Executive Sustainability Committee chaired by the president and CEO of Hitachi, Ltd. and comprising other members of the Senior Executive Committee, along with the CEOs of every business unit, to discuss and reach decisions on the Group's sustainability strategy as a key management and business issue. The topics discussed at the Executive Sustainability Committee meeting in June 2018 included integrating our sustainability strategy into the 2021 Mid-term Management Plan to respond to climate change and to help achieve the SDGs through our business activities. Deliberations at the December 2018 meeting focused on expanding our decarbonization business and introducing the Hitachi Internal Carbon Pricing (HICP) system as specific approaches to achieving our long-term environmental targets (for CO2 reduction). Other issues discussed included corporate measures that are the foundations of management, such as human rights, CSR procurement, and thedevelopment of human capital; sustainability-related stakeholder engagement; and Hitachi's disclosure policy on ESG information.

Climate change is a priority management issue for us at Hitachi, and we are striving to reduce CO2 emissions throughout our value chain. We announced our long-term environmental targets called Hitachi Environmental Innovation 2050 in fiscal 2016 that includes a CO2 reduction target of 80% throughout the value chain by fiscal 2050 (compared to fiscal 2010). To achieve a resource efficient society, we are responding to the issue of water scarcity and promoting the efficient use of water and other resources. We are also promoting the effective use of plastic and other resources to minimize our impact on natural capital to achieve a harmonized society with nature.

In response to growing calls in recent years from investors and other stakeholders for climate-related disclosures, we are advancing our efforts in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). In fiscal 2018, we participated in the Ministry of Economy, Trade, and Industry's TCFD Study Group on Implementing TCFD Recommendations for Mobilizing Green Finance Through Proactive Corporate Disclosures, which brought together private businesses and financial institutions for discussions on the development of guidelines on climate-related financial disclosures (TCFD Guidance) in promoting constructive dialogue between global corporations and investors.

This report outlines our strategies for climate-related risks and opportunities based on these TCFD discussions. It also contains detailed information on our ESG-related activities, which I hope will be pertinent to our readers.

We will continue to pursue sustained growth for both society and our company through dialogue with and proactive information disclosure to our stakeholders.

Osamu Naito
Hitachi, Ltd.
Vice President and Executive Officer
Head of Executive Officer Support and General Manager of Government & External Relations Group

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