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View of Sustainability

Sustainability Management that the Group Aims for

Recently, the business environment has become increasingly uncertain. In addition, in the society that has transitioned to the new normal of living with COVID-19, companies should understand social value and carry out sustainability management.
We believe that we will be able to obtain a “framework for sustainable management” for future growth by incorporating the concept of sustainability into our corporate strategies and business strategies.
We have defined unique new wealth as Well-Being Life, which is the goal of the Group Vision, based on a perspective that combines “sustainability” with our strength of the “ability to connect makers and users.”

“Well-Being Life” as the Goal of the Group Vision

Our strength (core competence) is the ability to connect (discover / dig up, curate) “makers” and “users.”
We have defined unique new affluence as Well-Being Life based on a perspective that combines “sustainability” with our unique characteristics of “beauty,” “health,” “high quality,” “culture,” and “trust” and our strength of the “ability to connect makers and users.” We will disseminate Well-Being Life to stakeholders as an initiative to resolve environmental and social issues that we have rebuilt from a perspective of sustainability.

JFR Group Sustainability Policy

“With people, with local communities, with environment to realize a sustainable society and new happiness in life”

The society where we live, whether in Japan or overseas, faces various social issues including unusual weather, water resource crisis, resource depletion, widening gap, incomplete employment and human rights issues. Among them, environmental risks have been getting particularly remarkable in recent years. The environment surrounding us is changing significantly due to global warming and worsening global environment. Companies are increasingly expected to contribute to a sustainable society by taking actions to address climate change under the Paris Agreement and social issues covered by the Sustainable Development Goals (SDGs) adopted by the United Nations as part of global initiatives. It is essential for companies to tackle environmental, social and governance issues.

In the meantime, Daimaru and Matsuzakaya on which the J. Front Retailing Group is founded have conducted business activities under the corporate credos “Service before profit” and “Abjure all evil and practice all good,” which show their commitment to pursuing the right path, over their long histories of 300 and 400 years. Based on this, we newly developed a vision: Create and Bring to Life ‘New Happiness.’ And we always think of each and every customer’s life and conduct business activities to make their futures happy.

We have many places where we communicate with customers, including retail stores. Various people including customers, employees, suppliers and local people get together and meet there. Local communities where people root assume an important role in keeping these communication places rich. And we believe it is important to hand down the irreplaceable global environment that supports all to the next generation smoothly so that local communities will continue forever as contact points always filled with vitality. That is to say, it is important to keep communication places in order to create and bring to life new happiness, which we aim to realize. And this cannot be realized without a sustainable society.

Defining the places where we communicate with customers as a key area of J. Front Retailing’s sustainability management, we are making proactive, united and serious efforts to realize a sustainable society. To this end, we conducted a questionnaire survey of stakeholders and received various opinions from them. And at the same time, we had many discussions at the Management Meetings and the Board of Directors meetings. As a result, we identified seven materiality issues to be addressed by us including “realization of decarbonized society,” which is the most important issue, “realization of customers’ healthy/safe/secure life,” “promotion of diversity & inclusion,” “realization of work-life integration,” “coexistence with local communities,” “management of the entire supply chain” and “realization of circular economy.” We believe our efforts to address these materiality issues will contribute to achieving the global SDGs. Among these seven materiality issues, the management team puts the greatest focus on “realization of decarbonized society (action on climate change),” which is an urgent issue. We developed the JFR Eco Vision with an eye to 2050 to address this issue, which is our mission as a member of society, and to help realize a sustainable society. Based on this vision, we will aim to achieve both the resolution of environmental issues and corporate growth.

As mentioned above, while meeting our environmental and social responsibilities to all customers to realize a sustainable society, we will create new happiness to be brought to each and every stakeholder’s life. At the same time, we will continue sustainable growth by strengthening corporate governance to tirelessly continue this initiative.

Revised March 26, 2021

Eco Vision

1.Approach

Our lives are exposed to environmental risks such as increasing global warming and unusual weather. We, as a member of society, think it is our important mission to place environmental issues at the top of our agenda and work together to maintain this irreplaceable global environment. For the purpose of achieving our mission, we will take action to resolve environmental issues through business activities. We think it will perpetuate the contact points with various stakeholders as stated in the Sustainability Policy.

Each of us will deepen insight into environmental issues, comply with legal requirements and internal standards, and take responsibility for addressing these issues.

2.Guidelines for action

(1) Efforts to reduce energy consumption and emissions
We will strive to continuously reduce energy consumption and emissions through business activities in stores and offices and the entire supply chain.

(2) Response to a recycling-oriented society
We will work with customers and suppliers to recycle waste from homes, stores and offices and strive to improve the resource efficiency of business activities by recycling resources and using recycled resources.

(3) Provision of products and services that contribute to a low-carbon society
We will develop and provide environment-friendly and high-value-added products and services that contribute to a low-carbon society through stores and offices.

(4) Development of promotion system
We will develop J. Front Retailing Group’s environmental plan at the “Sustainability Committee.” Each company in the Group will set medium- to long-term targets based on the environmental plan, develop and promote a specific action plan, and review them on a regular basis for continuous improvement.

(5) Environmental education and communication with stakeholders
We will actively promote environmental awareness raising activities to increase environmental awareness of individual employees. We will also strive to mutually raise environmental awareness through active dialogue with stakeholders.

October 30, 2018

Social Vision

1.Approach

We are expected to resolve social issues to realize a sustainable society amid expanding social challenges with increasingly diversified social values.

We aim to help stakeholders we meet at our contact points stated in the Sustainability Policy lead a fulfilling life and become a reliable corporation as a member of society by meeting corporate social responsibility through community involvement and business activities in the supply chain.

And we will make ourselves healthy by diversifying the work styles of employees working for the Group who play a central role in realizing our aim mentioned above and respecting their health and human rights.

Each of us will deepen insight into social issues, comply with legal requirements and internal standards, and take responsibility for addressing these issues.

2.Guidelines for action

(1) Promotion of cooperation with local communities
We aim to contribute to revitalizing the area and grow with local communities by combining the “realization of sustainable society” and the “realization of fun in the life” unifying stores and community building in the area through coexistence with local communities to increase the appeal of the area.

(2) Practice of fair business activities
In the entire supply chain, we, together with suppliers as our stakeholders, will not only comply with applicable laws and regulations and social norms in the entire supply chain but also conduct business activities with consideration for social responsibilities such as human rights based on high ethical standards.

(3) Creation of workplaces in view of ease of working and diversity
We will promote work-life balance to realize the environment in which employees and their families feel happy. At the same time, we will promote diversity initiatives to respect and accept various people with different ages, genders, sexual orientations and gender identities, and disabilities so that individual employees can perform at their best.

(4) Development of promotion system
We will develop J. Front Retailing Group’s social initiative plan at the “Sustainability Committee.” Each company in the Group will set medium- to long-term targets based on the plan, develop and promote a specific action plan, and review them on a regular basis for continuous improvement.

(5) Promotion of human rights education
Based on the understanding that respect for human rights is a vital corporate social responsibility, we will provide human rights education to all employees and raise their awareness to carry out such responsibility.

October 30, 2018

JFR Principles of Action and JFR Principles of Action for Suppliers

J. Front Retailing (the “Company”) has developed the Eco Vision and the Social Vision according to the Sustainability Policy, which sets the general ESG policy. They as well as the Corporate Governance Guidelines are the guidelines for our ESG initiatives.
We have recently amended the JFR Principles of Action and the JFR Principles of Action for Suppliers, which describe the specific efforts we have made based on these guidelines.
We have expanded the human rights policy in and added our thoughts on responsible marketing to the JFR Principles of Action and the guidelines for action for suppliers.
These JFR Principles of Action define basic actions to be understood and followed on a daily basis by individual officers and employees of J. Front Retailing Group (the “Group”). The JFR Principles of Action for Suppliers provide for the matters to be complied with by the Group and suppliers to meet their social responsibilities. We request that all our business partners, including our suppliers, understand the JFR Principles of Action for Suppliers.

Corporate Governance Guidelines

【Internal awareness and education on the JFR Principles of Action】
The Group formulated the JFR Principles of Action* in June 2019. These Principles set forth the basic items that each and every officer and employee should observe on a daily basis with the aim of recognizing their own roles and responsibilities and acting with a high sense of ethics in order to fulfill their social responsibilities toward the realization of the Corporate Credo and the Group Vision.
The content of the Principles of Action is disseminated internally to officers and employees via the Group’s intranet.
In addition to posting explanatory guides and educational videos on the Principles of Action on the internal website dedicated to sustainability, we conduct regular education for all employees (including fixed-term employees), such as e-learning programs, on human rights, ethics, and compliance to fulfill social responsibilities. In addition to this, Daimaru Matsuzakaya Department Stores regularly conducts comprehension tests to check the degree of penetration.
In addition, we conduct training on ethics for managers twice a year, which includes content related to the Principles of Action.
*The JFR Principles of Action consist of five policies: the JFR conduct policy, the procurement policy, the human rights policy, the anti-corruption policy, and the occupational health and safety policy.

JFR Principles of Action　　
*Principles of Action for Suppliers

Introduction
Since our inception, we have conducted business activities trusted by customers and other stakeholders based on the corporate credos “Service before profit” and “Abjure all evil and practice all good.” We also developed our vision “Create and Bring to Life ‘New Happiness’” and the “JFR Way” as a set of our values to realize the vision.

We are expected to create additional value through fair and free competition and realize sustainable environment and society to actually create and bring to life new happiness.

These policies set forth basic actions that all officers and employees in the J. Front Retailing Group (Hereinafter J. Front Retailing will be referred to as the “Company” and J. Front Retailing Group as the “Group.”) should understand and follow on a daily basis in terms of acknowledging their roles and responsibilities and acting with a high sense of ethics to fulfill their social responsibilities toward the realization of the corporate credos and vision.

We hereby promise all stakeholders that we will comply with these policies.

1. “JFR Conduct Policy”

(1) Fair business activities
We will comply with laws and regulations and social norms and conduct fair and transparent business activities. We will also comply with rules on antimonopoly, fair competition and fair transactions and not engage in acts that deviate from these rules.

(i) Legal compliance
We will comply with laws and regulations and relevant rules that apply in the countries and regions where we engage in business activities. And we will strive to make highly transparent and objective and sound corporate governance function in management.

(ii) Prohibition of transactions with antisocial forces
We will have no relationship with antisocial forces, organizations, groups or individuals that threaten social order and the safety of civilian life. And we will adopt a resolute stance against their pressure and eliminate them.

(iii) Prohibition of corruption, bribery and the like
We will maintain a healthy and normal relationship with government agencies and civil servants and not give bribes, illegal political contributions, etc.

(iv) Prohibition of giving and accepting of improper benefits
We will not give to or accept from business partners including those in the Group improper benefits that lack or could undermine fairness.

(v) Prohibition of anticompetitive acts
We will not engage in private monopoly, unfair restraint of trade such as a cartel, and other acts that interfere with free and fair competition.

(vi) Disclosure of information
In case we become aware of events that cause doubt about the quality, safety, effectiveness, etc. of the products and services we offer, we will actively disclose information regardless of whether or not such disclosure is required by laws and regulations.

(vii) Prevention of leakage of personal information
We will appropriately manage and protect personal information of customers, third parties and our employees.

(viii) Protection of intellectual properties
We will respect the rights of suppliers that have intellectual property rights in procurement transactions. And we will not engage in any transaction that violates third party’s rights. We will actively disclose information on the quality, safety, effectiveness, etc. of products and services.

(ix) Promotion of responsible procurement
With respect to ESG issues in our supply chain, we will work to resolve them and make improvements with suppliers and address these issues in terms of realizing a sustainable society and enhancing corporate value.

(2) Consideration for human rights and the work environment
We will respect the human rights of everyone in the entire supply chain and not be involved in human rights violations. And we will give consideration to the work environment and realize a safe and pleasant work environment.

(i) Prohibition of discrimination
We will not discriminate on the basis of race, ethnicity, nationality, social status and family origin, gender, disability, health condition, thought and creed, sexual orientation and gender identity, job, employment status, etc.

(ii) Prohibition of harassment
We will respect employees’ human rights and not be involved in any abuse, physical punishment, psychological/physical/sexual harassment and intimidation.

(iii) Provision of safe work environment
We will design and build facilities and ensure the safety of facilities in consideration of the health and safety of employees. And we will monitor the situations where employees contact with biological and chemical substances that are harmful to humans, noise, bad odor, etc. in workplaces and take appropriate measures.

(iv) Respect for freedom of association and collective bargaining
We will respect employees’ rights to form a labor union, to join or not to join it, and to engage in collective bargaining with head offices, business places and associated companies in Japan and abroad.

(v) Prohibition of forced labor
We will not use any form of slave or forced labor such as labor by means of physical or psychological restraint and not engage in human trafficking.

(vi) Prohibition of child labor
We will not hire children who do not reach the minimum labor age and not allow child labor that may impair children’s development.

(vii) Responsibility for local communities
We will strive to contribute to the development of the local communities affected by our businesses.

(viii) Disaster prevention measures
We will prepare measures for possible emergencies including disasters and accidents, keep employees informed about them, and implement disaster prevention measures.

(3) Consideration for the environment
We will comply with all environmental laws and regulations that apply in the countries and regions where we engage in business activities, maintain a proactive stance on environmental conservation through business activities, and strive to contribute to the development of society by reducing greenhouse gas emissions, saving energy and other resources, reducing waste and wastewater, recycling, preventing pollution, conserving biodiversity, and other means.

(i) Actions against global warming
We will work to reduce greenhouse gasses to counter global warming.

(ii) Sustainable use of resources
We will work to save energy and other resources, recycle and reduce waste.
We will also strive to reuse water resources and appropriately manage wastewater.

(iii) Prevention of pollution
We will work to prevent pollution and health damage.

(iv) Biodiversity
We will comply with international conventions and relevant laws and regulations and work to ensure biodiversity-conscious procurement to promote conservation of biodiversity and sustainable use.

(v) Elimination of chemicals
We will not handle products using chemicals and raw materials prohibited by international conventions and relevant laws and regulations.

(4) Consideration for the safety and security of products and services
We will provide products and services that comply with all laws and regulations that apply in the countries and regions where we engage in business activities.
And we will strive to prevent accidents related to products and services from happening.

(i) We will improve the quality of products and services and provide products and services that meet both the safety standards set in each country and by us.

(ii) In case there is a fear that an accident that could affect the safety of customers may happen, we will take appropriate measures to prevent the accident from happening or expanding.

(iii) We will respond to inquiries from customers in good faith and reflect them in improvement of products and services.

(5) Responsible marketing
We will thoroughly carry out responsible marketing activities in order to provide safe and secure products and services. For the products and services we handle, including alcohol, processed foods, and beverages, we will fulfill our responsibilities to customers by taking into account the health effects of misuse and excessive consumption, ensuring the safety of products and services, and providing accurate and easy-to-understand information to customers.
Also for allergy-related labeling, we will fulfill our responsibilities to customers by providing them with accurate product information.

(i) We will have in place an inspection system to ensure the safety of products and services and always pay attention to effectiveness and safety in the process of purchase, sales and consumption of products and services.

(ii) We will have in place an inspection system to ensure the appropriateness of labeling and check when purchasing and selling products.

(iii) We will comply with laws and regulations when providing information to customers and publicize and advertise using appropriate expressions, content and media.

(6) Contribution to local communities
We, as a corporate citizen that coexists with society, will respect local culture and actively engage together with local stakeholders in creative activities that contribute to the development of local communities.

(i) We will strive to engage in activities to realize together economic and cultural development of local communities in order to contribute to the development of local communities.

(ii) We will pursue cooperation with a wide range of stakeholders including local communities, governments and educational institutions.

(7) Responsibility for shareholders, investors and other stakeholders
(i) Disclosure of management information
We will strive to ensure sound management, appropriately return profits to shareholder and maximize shareholder value.
We will emphasize dialogue with a diversity of stakeholders including shareholders and investors. And we will disclose information timely and appropriately through dialogue and respond to them fairly and honestly to meet their trust.

(ii) Prohibition of insider trading
We will not use inside information on the Company, associated companies or suppliers obtained in the course of business to seek personal interests.

(iii) Proper accounting procedures
We will follow proper accounting procedures in accordance with laws and regulations and internal rules to ensure the reliability and appropriateness of financial reporting.

2. “Procurement Policy”

While fulfilling social responsibilities, the Group will procure products and services, increase business competitiveness and enhance corporate value to realize the optimal procurement for business.
The Group will work to realize the optimization of the entire supply chain by providing suppliers with an understanding of this policy and listening to suppliers to communicate with each other.
The Group will strive to provide suppliers with an understanding of this policy.
We expect suppliers to understand and comply with the matters set forth in this policy.

(1) Quality first
Returning to our basic focus on providing safe and excellent products and services that satisfy customers, we will realize “optimal cost” and “high quality” always from “customer’s perspective.”

(2) Fair trade
We will provide all like-minded suppliers with opportunities for procurement transactions and actively consider procuring from new suppliers.　We will judge in a comprehensive manner in terms of quality, cost, delivery time, services, ESG initiatives, etc. to select suppliers fairly.

(3) Thorough compliance
We will strive to trade fairly in compliance with laws and regulations and social norms and by giving full attention to corruption prevention and occupational health and safety.

(4) Prohibition of transactions with antisocial forces
We will have no relationship with antisocial forces, organizations, groups or individuals that threaten social order and the safety of civilian life. And we will adopt a resolute stance against their pressure and eliminate them.

(5) Compliance with the Antimonopoly Act, etc.
We will comply with laws and regulations including the Antimonopoly Act that ensure fair competition and relevant internal guidelines. And we will not engage in acts that restrict competition or will not be involved in bid rigging.

(6) Consideration for human rights
We will protect employees’ health, safety, human rights and other rights protected by law and contribute to improving their lives and working conditions.

(7) Consideration for the environment
We will recognize the importance of environmental conservation and maintain a proactive stance on environmental conservation in our procurement activities. We will comply with international conventions and environmental laws and regulations and work to manage the entire supply chain to create a recycling-oriented and sustainable society.
In particular, in order to promote conservation of biodiversity and sustainable use, we will comply with international conventions and relevant laws and regulations and work to ensure biodiversity-conscious procurement. And we will not handle products using chemicals and raw materials prohibited by international conventions and relevant laws and regulations.

(8) Appropriate management of information
We will put in place appropriate information management system to prevent confidential information and personal information obtained in the course of procurement transactions from being leaked.

(9) Protection of intellectual properties
We will respect the rights of suppliers that have intellectual property rights in procurement transactions. And we will not engage in any transaction that violates third party’s rights. We will actively disclose necessary and sufficient information on the quality, safety, effectiveness, etc. of products and services.

(10) Mutual trust and prosperity with suppliers
We will build a relationship of trust with suppliers based on high transparency and a sense of ethics through procurement transactions and aim to mutually evolve and develop as business partners.

3. “Human Rights Policy”

Since its inception, the Group has conducted business activities trusted by stakeholders based on the corporate credos “Service before profit” and “Abjure all evil and practice all good.”
Respect for human rights underlies all our business activities. Companies are expected to have a better understanding of various human rights issues related to all activities in each country or business and take appropriate actions. We at the Group will act based on this policy.
This policy applies to all officers and employees.
The Executive Officer and Senior Executive General Manager of Management Strategy Unit who assumes the role of promoting ESG at the Group is responsible for this policy and its operation.
The Group will strive to provide suppliers with an understanding of this policy. We expect suppliers to understand and comply with the matters set forth in this policy.

(1) Basic ideas on human rights
We understand that our business affects human rights directly or indirectly in each process of value chain including the procurement and consumption and use of products.
And we support and work on the “International Bill of Human Rights,” the “Guiding Principles on Business and Human Rights” and the “ILO Declaration on Fundamental Principles and Rights at Work” adopted by the International Labour Organization (ILO).
We also support and respect the “Ten Principles of the United Nations Global Compact” as a signatory to the United Nations Global Compact.
We will comply with laws and regulations in Japan as well as in each country or region in which we operate and respect as much as possible and actively promote international human rights standards.

(2) Stakeholders and human rights
We commit to preventing human rights violations by prohibiting any form of discrimination on the basis of race, ethnicity, nationality, social status and family origin, gender, disability, health condition, thought and creed, sexual orientation and gender identity, job, employment status, etc., prohibiting harassment, providing a safe work environment, paying higher than minimum wage, ensuring responsible labor practices including appropriate management of working hours, respecting the freedom of association and collective bargaining, and ensuring equal pay for equal work.
We will not tolerate any form of slave, forced or child labor including human trafficking.

(3) Implementation of human rights due diligence
We will identify negative impacts on human rights related to the Group’s business and work to prevent and reduce these impacts in accordance with the “Guiding Principles on Business and Human Rights.”
We will not violate human rights themselves as a matter of course, and furthermore, we will build a responsible supply chain by taking appropriate corrective actions when finding negative impacts on human rights in our business activities.
We will strive to build a human rights due diligence system, identify the Group’s negative impacts on social human rights, and adopt appropriate and effective remedies.
We will regularly disclose the progress of our efforts to identify and address negative impacts on human rights.

(4) Development of corporate culture that respects human rights
We will provide all officers and employees with education and awareness-raising activities necessary to implement this policy in order to establish a corporate culture that respects human rights.

(5) Dialogue with stakeholders
We will continue to engage in dialogue with stakeholders on human rights issues related to the Group to evolve our efforts to respect human rights.

4. “Anti-Corruption Policy”

Recognizing corruption and bribery as a serious risk factor that severely damages the trust of companies, the Group will prevent the actions that may constitute corruption or bribery and perform fair and highly transparent corporate activities.
The Group will strive to provide suppliers with an understanding of this policy. We expect suppliers to understand and comply with the matters set forth in this policy.

(1) We will not engage in or be involved in any form of corruption including embezzlement and bid rigging.

(2) With a full understanding of laws and regulations, we will not offer to civil servants and the like entertainment or gifts that may cause society’s doubt or distrust or money or other benefits to gain unfair advantage.

(3) We will not offer to or accept from suppliers, etc. entertainment or gifts beyond business practices and social common sense.

(4) We will not use our statuses or positions in the companies to seek personal interests from suppliers, etc.

(5) We will provide education and awareness-raising activities for officers and employees to have an anti-corruption corporate culture take root.

5. “Occupational Health and Safety Policy”

Based on the idea that occupational health and safety is the most important foundation of business activities, the Group will work to improve employees’ occupational health and safety levels with top priority on ensuring health and safety.
The Group will strive to provide suppliers with an understanding of this policy. We expect suppliers to understand and comply with the matters set forth in this policy.

(1) Creation of workplaces with priority on health and safety
We will give top priority to employees’ occupational health and safety in business activities.

(2) Compliance with laws and regulation on health and safety
We will comply with laws and regulations on health and safety and rules, etc. on health and safety set by the companies and business places in the Group.

(3) Creation of a safe and low-risk work environment
We will create a safe and low-risk work environment to prevent occupational accidents.

(4) Maintenance and enhancement of employees’ health
We will strive to improve our health management system and implement all-hands health and safety activities to prevent health problems from overwork and mental distress.

(5) Education and awareness-raising activities
We will provide education and awareness-raising activities for all officers and employees to have a health and safety corporate culture take root.

Established on June 17, 2019
Amended on January 30, 2021
Amended on January 20, 2022

*This policy may be amended according to changes in social conditions and new information.

Creation of the Sustainability Committee and Internal Dissemination Measures

We created the Sustainability Committee to promote sustainability management in all companies in the Group in a cross-organizational manner by addressing ESG materiality issues. The Committee, as well as the Risk Management Committee and Compliance Committee, is positioned as an advisory committee directly under the President and Representative Executive Officer. It meets biannually to develop action plans concerning the five materiality issues of each company in the Group so that they can be addressed by the entire Group and monitor the progress. The Board of Directors receives reports about what was discussed at the Sustainability Committee and discusses and supervises the long-term goals on ESG issues and the progress of actions.

〔Membership〕

〔Major activities〕

JFR Corporate Governance Structure Chart

Sustainability Committee Meetings

≪1st Sustainability Committee meeting≫ (March 2019)

≪2nd Sustainability Committee meeting≫ (September 2019)

≪3rd Sustainability Committee meeting≫ (April 2020)

≪4th Sustainability Committee meeting≫ (September 2020)

≪5th Sustainability Committee meeting≫ (April 2021)

≪6th Sustainability Committee meeting≫ (September 2021)

≪7th Sustainability Committee meeting≫ (April 2022)

≪8th Sustainability Committee meeting≫ (May 2022)

≪9th Sustainability Committee meeting≫ (September 2022)

*The proceedings of the Sustainability Committee meetings are reported to the Board of Directors.

Management Efforts in Accordance with Corporate Ethics

The Group conducts regular internal audits on corporate ethics and anti-corruption.
We have an independent Internal Audit Division under the supervision of the President and Representative Executive Officer. In accordance with the internal audit rules and under the direction of the President and Representative Executive Officer, the Internal Audit Division conducts periodic audits of the Company and its operating companies with respect to the status of compliance with laws and regulations, the appropriateness of corporate ethics, and compliance with internal regulations and rules or makes them properly report the results of their operational audits, examines the appropriateness and effectiveness of their operation processes, and provides suggestions, advice, and proposals to each division of the Company and to the operating companies.
The persons responsible for the internal audit divisions, while giving directions, guidance, and advice to the internal audit divisions of the operating companies, report the status of the internal control functions of the operating companies to the President and Representative Executive Officer through a third-party evaluation of the audit plans and audit results of the operating companies.

Link to Internal Control

Internal Dissemination Measures on Sustainability Management

The Group recognizes that in promoting sustainability management, it is important for employees, who play a leading role in such promotion, to correctly understand the importance of sustainability and CSV, and to make it their own matter.

Direct Dialogue between President and Employees

The Group’s President and Representative Executive Officer provides an opportunity named Catch Ball Meeting to engage in direct dialogue with the Group’s employees. In the spring of 2022, a Catch Ball Meeting was held online. The meeting was a two-way exchange in which the President discussed his expectations for employees in implementing strategies for fiscal 2022, and employees shared their thoughts in response (held eight times, attended by a total of 1,062 people from the entire Group).
In addition, a project under the direct control of the President and Representative Executive Officer was launched to increase opportunities for flat and interactive dialogues with mainly the Group’s young employees across hierarchical levels. We believe that these efforts will nurture the will of our employees and improve their engagement.

Catch Ball Meeting 2022

Understanding of the Level of Sustainability Dissemination among Employees

The Group conducted a “survey on employee awareness of sustainability activities” to ascertain the level of internal understanding and dissemination of the Group-wide sustainability activities (responded by 4,654 people).
As a result, concerning the Sustainability Policy, the seven materialities, and the SDGs, nearly 95% of respondents answered that they are aware or reasonably aware, and we believe that our concept of sustainability, which is the basic premise, is well understood.
On the other hand, only 71.5% of respondents answered to the question about CSV that they are aware or reasonably aware, and we recognize that further efforts are needed to promote understanding and dissemination.
Going forward, we will actively encourage all employees to adopt a CSV perspective in their thinking and actions in order to create a corporate culture, which leads to the creation of new value.

Sustainability Policy
Level of dissemination
96.1%
Seven materialities
Level of dissemination
94.0%
SDGs
evel of dissemination
98.8%
Understanding of CSV
Level of dissemination
71.5%

Stakeholder Engagement

The Group deepens relations of trust through active information disclosure and mutual communication and promotes sustainability management to realize the Well-Being Life of all stakeholders.