HOYA’s ESG Approach | HOYA REPORT 2022

Organizational Structure and Policy

The HOYA Group, which had been engaged in environmental, social, and governance (ESG) activities centered around the ESG Committee established in August 2019, appointed a Chief Sustainability (ESG) Officer (CSO) and newly established the ESG Promotion Office—a dedicated organization under the CSO—in the HOYA Group’s head office in March 2022, in order to accelerate ESG initiatives. We will promote the HOYA Group’s ESG activities in parallel with collaboration between the head office and business divisions, after setting up in each business division a sustainability/ESG-related department and personnel in charge in a manner suited to each business division.

Sustainability Policy

For the purpose of clearly stipulating the HOYA Group’s basic stance and policy on sustainability and further promoting sustainability activities, we established the HOYA Group’s Sustainability Policy in May 2022.

HOYA Group is committed to contribute towards building a sustainable society and aims to enhance our long-term corporate value by implementing our management principles based on our corporate mission in our day-to-day work.

We will aim to help resolve global social issues through innovation in our businesses.
We will realize fair and highly transparent corporate management by building a relationship based on trust through consistent dialogue with key stakeholders.
We will aim to minimize environmental externalities in our business activities to ensure our future generations inherit a healthy global environment in future.
We respect the human rights of all people involved in our business activities, including those in our supply chain and will strive to prevent any abuse on human rights.
We will create a work environment to promote diversity and inclusion with an emphasis on the wellbeing of our employees in the aim of keeping high motivation and moral to create new value.

For HOYA’s Corporate Mission, Management Principles and Vision, click here.

Material Issues

Having internally discussed and examined matters that contribute to the HOYA Group’s medium- to long-term growth (i.e., material issues), we identified four material issues with the approval of the Board of Directors in September 2021.

Process of Identifying Material Issues

Get a grasp of changes in society and issues related to HOYA’s businesses.
Analyze ESG rating agencies’ evaluation of HOYA and refer to international guidelines^*1.
Interview the management of business divisions.

Use the industry-by-industry Materiality Map^*2 by SASB^*3 that matches HOYA’s businesses and select the candidate issues based on evaluation on two axes, i.e., by mapping stakeholders’ interest on the vertical axis and the impact on HOYA’s businesses on the horizontal axis.

Conduct an evaluation comprehensively by deepening internal discussions while referring to opinions and feedback obtained from investors in and outside Japan who are key stakeholders.

Obtain approval for the identified four material issues at the Board of Directors’ meeting.

*1 SASB, GRI, IIRC, ISO26000, TCFD, RBA, CDP
*2 Industries: Medical Equipment & Supplies, Hardware, Semiconductors
*3 Sustainability Accounting Standards Board

Identified Material Issues

Four material issues have been identified in HOYA as a result of the above process.

Risks and Opportunities of Material Issues

In consideration of the social issues worldwide and HOYA’s business environment, we examined and discussed the following risks and opportunities in the process of selecting material issues.

Material Issue	Risk	Opportunity
Greenhouse gas (CO₂) emissions reduction	Laws, regulations and industry rules and/or demands from customers might become tougher, and if they are not addressed, it might diminish the competitiveness of HOYA’s products/services and/or HOYA’s social credibility Carbon tax and/or carbon pricing (e.g., emissions trading scheme) might be introduced more widely	Electricity-saving production processes lead to cost reduction
Product quality and safety	If any inadequacy/defect in a product occurs, or if an incident involving noncompliance with laws, regulations or standards arises, it might give rise to costs of recall and/or diminish HOYA’s social credibility Laws, regulations, standards, etc. related to product quality and safety might become tougher	Thorough compliance with laws, regulations, industry rules, etc. and execution of business activities in a sound manner help enhance corporate value
Employee engagement and diversity & inclusion	Competition to secure highly talented human resources might intensify on a global scale	Increase in opportunities for value creation and innovation brought about by securing and developing diverse human resources
Supply chain management	HOYA might be suspended from trading or its social credibility might be diminished by the impact of violation of laws and regulations and/or infringement of human rights, etc. in the supply chain	A stable supply of components being secured and a sustainable production system being established by building a relationship based on trust with suppliers

Approach to and Measures for Material Issues

Material Issue	Approach	Measures
Greenhouse gas (CO₂) emissions reduction	Set a medium- and long-term target for CO₂ emissions reduction and create a roadmap to achieve it Set measures and KPIs to achieve the target and steadily implement the measures and monitor KPIs	Replace production equipment with units that have high energy efficiency Consider and promote the introduction of renewable energy Switch lighting to LEDs, promote eco-cars for company vehicles, etc. Promote disclosures based on TCFD recommendations
Product quality and safety	Review and improve the product safety and quality management system and operations on an ongoing basis—especially in the Life Care business, which deals in medical products—so that customers can use products more effectively and safely	Enhance the quality management system on an ongoing basis in response to changes in regulations Maintain ISO9001/13485 certification by enhancing internal QMS audit
Employee engagement and diversity & inclusion	Aim at creating a workplace environment in which diverse employees can fully demonstrate their capabilities with a sense of fulfillment from work so that employees’ growth also translates into HOYA’s growth	Conduct employee engagement surveys and implement measures in response to analyses of survey results Promote the “Minkatsu” diversity project to create a work environment in which everyone can play an active role (mainly targeted at workplaces in Japan)
Supply chain management	Properly manage the supply chain based on the HOYA Supplier Code of Conduct, from the viewpoint of complying with laws and regulations and protecting human rights not only internally but also in the supply chain	Encourage suppliers to abide by the HOYA Supplier Code of Conduct and obtain their signatures Conflict minerals survey

Measures and targets/indexes for material issues will be additionally set and reviewed in the process of holding discussions and carrying out initiatives in-house.
As HOYA’s businesses are wide-ranging, we will also discuss and examine individual sustainability/ESG issues in each business division on top of the common material issues.