Value Creation Story
Materiality
The primary social issues that the Group aims to tackle through its corporate activities have been identified as five items of materiality, as illustrated in the diagram on the right.
The materiality initiatives help balance the growth of the Group with solutions for social issues, and form a foundation for our medium- to long-term management strategies.
Materiality of the Sumitomo Osaka Cement Group
Contribute to the Sustainment and Ongoing
Development of a Prosperous Society
1
Develop and Utilize Human Resources
4
Enhance Governance
5
Materiality
3
Care for the Global Environment
2
Contribute to the Development of a Recycling-Based Society
Process of identifying materiality
In light of the Sumitomo Osaka Cement Group’s corporate philosophy, and based on our ongoing businesses and CSR activities, we have identified the material issues that the Group considers particularly important and should continue to work on, reflecting interests and expectations of our internal and external stakeholders.
STEP1
Identify Issues Collect and identify materiality candidates
STEP2
Introduction
Value Creation Strategy
Assign Priority Perform priority ratings from Company and societal perspectives
STEP3
Value Creation Story
Confirm Validity Confirm validity at the Board of Directors’ meetings
Sustainability
Very high
Materiality matrix
Five items of materiality
1 Development of a
Contribute to the
Sustainment and Ongoing Care for the Global
2 Environment
3 Recycling-Based
Contribute to the
Development of a
4 Human Resources
Develop and Utilize
Prosperous Society
Society
5 Enhance Governance
Contribution to building social infrastructure and improving national resilience
2 Reducing environmental impact
Prevention of air and soil pollution, prevention of water pollution, and appropriate water intake and use
1 Contribution to building social infrastructure and improving national resilience
Cement business, Mineral Resources business, Cement-Related Products business
1 Contribution to building an IoT/ICT-driven society Optoelectronics business, Advanced Materials business
2 Responding to climate change
Promotion of energy substitution by recycling, installing energy-saving equipment, use of waste thermal power generation and biomass power generation, and development of technologies leading to CCUS
3 Resource recycling in cement plants
Receiving of waste and byproducts
3 Biomass power generation business
3 Receiving of disaster waste
2 Preserving biodiversity
Tsushima leopard cat protection activities, expansion of marine products business (artificial marine reefs and seaweed beds), and reforestation of mine sites after mining
Governance
Degree of importance for stakeholders
High
High Very high
Degree of importance for Sumitomo Osaka Cement
Sustainment and Ongoing Development of a Prosperous Society
Reducing environmental impact
1
2
Contribute to the
Care for the Global Environment
3
Contribute to the Development of a Recycling-Based Society
Cement business/Mineral Resources business/Cement-Related Products business
Contribution to building an IoT/ICT-driven society
Optoelectronics business/Advanced Materials business
Prevention of air and soil pollution, prevention of water pollution, and appropriate water intake and use
Responding to climate change
Promotion of energy substitution by recycling, installing energy-saving equipment, use of waste thermal power generation and biomass power generation, and development of technologies leading to CCUS
Preserving biodiversity
Tsushima leopard cat protection activities, expansion of marine products business (artificial marine reefs and seaweed beds), and reforestation of mine sites after mining
Resource recycling in cement plants
Receiving of waste and byproducts
Receiving of disaster wasteBiomass power generation business
Material issues that form the foundation of business activities
4 Develop and utilize human resources
Respect for human rights, diversity and inclusion
Occupational safety and health, health and productivity management
5 Enhance governance
4
Data Section
Develop and Utilize Human Resources
Respect for human rights, diversity and inclusionOccupational safety and health, health and productivity management
5
Enhance Governance
Highly effective corporate governance
Strengthen risk management and compliance
Value Creation Story
Response to Risks and Opportunities
The primary social issues that the Group aims to tackle through its corporate activities have been defined as five items of materiality.
Introduction
Value Creation Story
We identify the anticipated risks and opportunities for these five items of materiality, and through identification, clarify the issues to be tackled by the Company.
Sustainment and Ongoing Development of a Prosperous Society
Care for the Global Environment
national resilience
Materiality
Risks
Opportunities
The Company’s response (FY2024)
Contribution to building social
Contribute to the infrastructure and improving
Contraction of domestic cement market
Increase in renewal demand due to aging of existing infrastructure
Carry out business portfolio reform Secure and maintain fair cement prices Expand the Australian Cement business
Contribution to building an IoT/ ICT-driven society
Reducing environmental impact
Responding to climate change
Increased development difficulties associated with the rapid upgrading of technologies required by the market (Advanced Materials)Intensified competition in high-value-added products and devices (Optoelectronics)
In the event that the appropriate response is not taken:
Air pollution and water pollution arises in the environment near the plantsReputational damage
Transition risks
Introduce an impact fee system for carbonIncrease research and development spending and capital investment to achieve carbon neutralityChange the recycling collection environment, etc.
Physical risks
Impact of accidents at cement plants, etc.Increase in semiconductor demand due to progress in automation and unmanned technologies in each industry (Advanced Materials)Increase in demand for high-capacity, high-quality transmission optical communications associated with the increase in data transmission volumes (Optoelectronics)Growing demand for energy-saving and power-saving devices (Optoelectronics)Preserve the environment in the vicinity of cement plantsContinued operation of plants
Transition opportunities
Reduce coal consumption and promote energy savingsCreate new businesses and carbon businessesRecycling market: Advancements in recycling technologies and an increase in accepted productsOptoelectronics business and Advanced Materials business: Increased demand for optical communications components and semiconductor manufacturing equipment components, etc.
Physical opportunities
Increase in demand for infrastructure due to measures for national resilience, and increase in the maintenance, renewal, and repair of concrete, etc.Increase in demand for marine products due to heightened social interestEnhance production facilities for electrostatic chucks (Advanced Materials)Strengthen development and production systems through an increase in personnel (Advanced Materials)Advance into the 1.2T/1.6T market for optical communications equipment LN modulators (Optoelectronics)Take measures to prevent air pollutants contained in gas emissions, and keep emissions below legal standards (Cement)Prevent water pollution (sedimentation tanks, oil-water separation tanks, oil monitors)Identify water intake and discharge by source and respond to water risksImplementation framework centered on the Sustainability CommitteeConsider potential revisions to SOCN2050Undertake various research and development activities with the goal of creating new businesses
Install test production facilities for recycling CO2 into artificial limestone (Tochigi Plant)TCFD-based information disclosureGenerate blue carbon through the supply of marine productsApplication of internal carbon price (ICP)Greenhouse gas emissions reduction through fluorocarbon elimination treatment at cement plantsPrepare for TNFD-based information disclosureProtect marine habitats through the supply of marine productsTsushima leopard cat protection activities through cooperation with
Value Creation Strategy
Preserving biodiversity
Reputational damage if appropriate response is not takenGain social trust
local governments
Reforestation at abandoned mines (Shuho Mine, Ibuki Mine, etc.)
Next-generation CO2 seedling cultivation technology using BECCS (bioenergy with carbon capture and storage)Expand the collection of waste and byproducts through aggressive capital investment such as the increase of chlorination infrastructure at each
Sustainability
Contribute to the Development of a Recycling-Based Society
Resource recycling in cement plants
Intensified competition in waste collection associated with the shift from fossil energy to thermal energy-related wasteIncreased acceptance of diverse waste materials due to the enhancement of recycling facilitiesPrompt acceptance of disaster waste
cement plant
Reduce emissions of industrial waste from plastics products and promote recycling, etc.Promote reduction in final waste disposal volume (four cement factories + Hachinohe Cement)Build strong cooperative relationships with local government bodies by
Governance
Receiving of disaster waste
Shutdown of cement plants due to large-scale disastersAssisting with early recovery by supplying cement and cement-related products
entering into comprehensive partnership agreements in areas where
factories and business offices are based
Biomass power generation business
Intensified competition of biomass fuel collection associated with the shift from fossil energy to thermal energy-related waste
Expansion of new biomass fuel use
Enhance facilities using new biomass fuel
Develop and Utilize Human Resources
Enhance Governance
Respect for human rights, diversity and inclusion
Occupational safety and health, health and productivity management
Highly effective corporate governance
Strengthen risk management and compliance
In the event that the appropriate response is not taken:
Violation of employee human rights through discrimination and harassment, outflow of human resourcesProcurement anxiety caused by human rights risks in the supply chainReputational damage, the emergence of unanticipated costs
In the event that the appropriate response is not taken:
Outflow of human resources, recruitment difficultyLower labor productivity caused by illness and injury, increase in health-related costsIncrease in work-related accidentsDecline in corporate value due to the decline in the effectiveness of the governance system, reputational damageReputational damage due to violation of laws and/or regulations, and to compliance breachesBusiness continuity risksProtect the human rights of employees and retain human resources by prohibiting all types of discrimination and preventing harassmentCreate innovation based on a variety of values and perspectivesContinue stable procurement by building a healthy supply chain structureGain social trustPrevent workplace accidents through ongoing health and safety education, and improve labor productivity through the promotion of health managementIncrease employee motivationSecure and retain human resources by enhancing various systems (human resource development and a good work environment)Improve corporate value by building a highly effective governance system, gain social trustGain social trust by observing laws and regulations, and by being compliantSustained continuation of businessImplementation framework centered on the Sustainability CommitteeImplement human rights education to disseminate our human rights policyConduct human rights due diligence at affiliated companies (domestic Group companies)Promote initiatives related to the Plan of Action for the Promotion of Female Participation and Career Advancement
Data Section
Apply various training systems (training for new employees, rank-based training, on-the-job training)Implement safety training held by headquarters and by each business office, and external safety trainingEnhance teleworking and flexible working hours, etc.Operate an online obstetrics/gynecology and pediatrics consultation serviceReview directors’ remuneration systemReview the skills matrix for directorsStimulate discussion at Nomination and Remuneration Committee meetingsReview risk mapping by the Risk Management CommitteeHead office business continuity planning (BCP) training and CSIRT trainingFormulate BCP at the plantsConduct compliance educationOperate a whistleblowing hotline
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