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Materiality

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Material Issues of MHI Group

We at MHI Group consider issues that could have significant impact on the creation of corporate and social values within the group as material issues which need to be addressed with high priority.
The following issues have been identified as material issues through a materiality assessment conducted within MHI Group from both corporate and social perspectives with due considerations given to internationally recognized standards and the concerns of our stakeholders.

Material Issues

1. An Optimal Governance Structure Based on Our Corporate Culture
・An optimized organization to continually contribute to society through our business
・The assurance of fair operating practices and appropriate labour practices
Objective
・Ensure an organizational culture in which values are shared globally and universally
Strategic KPIs
・ Instill globally consistent policies that conform with the international code of conduct (establish universality)
・ Enhance transparency (assure universality)
Enhance disclosure and stakeholder engagement
2. The Use of Global Human Resources
・ The attraction and development of human resources with the ability to respond to globalization
・ Diversity and equal opportunity, including the empowerment of female employees.
Objective
・ Be an organization that embraces diversity (Ensure that barriers to diversity are removed)
Strategic KPIs
・ Improvement in diversity-related indicators
3. Response to Mega Trends
・ Innovation and quality control to meet global needs
・ Enhanced safety and security, including improved information disclosure and transparency
Objective
・ Enact strategic measures and business operations that meet the needs of global society
Strategic KPIs
・ Improvement in stakeholder evaluations (SRI surveys, customer satisfaction surveys and others)

Key Performance Indicators for Material Issues

MHI Group has set KPIs to enable the evaluation of strategic KPI outcomes and progress towards the achievement of target material issues, and conducts CSR activities accordingly. As the number of initiative indicators increases, we will report on targets, results, and case studies for specific initiatives.

KPI for material Issue 1: Number of whistleblowing cases

We have provided two hotlines where any actual or potential breach of the Code of Conduct, and any other actual or potential breaches of ethics, including bribery and corruption, can be reported: the MHI Whistleblowing Hotline, which is available to all employees, including those of Group companies, and the MHI External Whistleblower Hotline. The Compliance Committee Secretariat promptly investigates all reports made to these hotlines, and takes appropriate remedial or preventive action where breaches are identified.

Number of whistleblowing cases, by Type(actual)

Type FY 2015 FY 2016 FY 2017
Labour and the work environment 39 42 49
Overall discipline and breaches of manners 24 28 17
Transaction-related laws 8 11 11
Consultations and opinions 11 3 0
Other 49 34 36
Total (number of corrections and improvements) 131 (85) 118 (64) 113 (59)

KPI for material Issue 2: Number of female managers

In July 2014, MHI set a target to increase the number of the Company's female managers in positions of section manager and higher threefold from the current level by 2020. To this end, the Company is promoting the active participation of women in the workplace in conjunction with its pursuit of diversity management.

Number of female managers

FY 2015 FY 2016 FY 2017
102 126 149
  • People in positions of section manager or higher as of April 1 of each year. In principal, figures are for MHI and Mitsubishi Hitachi Power Systems, Ltd.

Processes Defining Material Issues

Material issues are specified and verified in the following process from the perspective of stakeholder dialogue.

1. Incorporating Society's Perspective

Through taking a stakeholder perspective (Note 1) on the core subjects of ISO 26000, we narrowed potential issues down to 84 items of importance to MHI. We then referred to such guidelines as the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines (Fourth Edition, G4) and subsequently grouped together similar items and reduced the list to 49 items in seven departments.

2. Arranging the Issues from the Perspective of MHI's Business

We conducted hearings with of our 16 departments, confirming the importance of the 49 issues to our business. We also ascertained three major changes that were consistently raised as issues with the business reorganizations the Company has undergone in recent years: changes in the ideal state of the organization, globalization, and changes in the business model.

3. Confirming Appropriateness

We engaged in dialogue with specialized overseas institutions to confirm that our process of identifying material issues was appropriate.

4. Narrowing Down the Issues in Line with Mega Trends

We referred to priority items from 2015 in Building the Post-2015 Business Engagement Architecture (Note 2), published by the United Nations Global Compact, confirming that our business perspective was not divergent from sustainability mega trends. This resulted in consolidating the number of items to 25.

Identifying Material Issues

Based on the shortlist of 25 items determined from the perspectives of the Company's business and mega trends, we identified three material issues for the Company.

Obtaining Management Authorization

The CSR Committee deliberated and decided on the items.

  • 1We referred to the results of stakeholder questionnaire surveys, SRI surveys, records of meetings with institutional investors, supplier surveys submitted to our customers, and stakeholder engagement programs, among others.
  • 2This publication is a call for companies to commit to and promote and support activities aimed to achieve the targets set by the United Nations.

CSR