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Identifying Sustainability Priority Issues

Identifying Sustainability Priority Issues

Background of Re-identification of Sustainability Priority Issues

ROHM Group aims to solve environmental and social issues in the future and to be a company that continues to be chosen by stakeholders. In April 2021, we established the "ROHM Group Environmental Vision 2050" and declared our commitment to carbon neutrality and zero emissions.
In addition, we have re-identified the key sustainability issues necessary for the sustainable growth of society and ROHM, and have set specific achievement indicators to be achieved from a medium-term perspective as non-financial targets in the "Moving Forward to 2025" medium-term management plan.
By working toward the achievement of the sustainability issues necessary to realize the ideal vision and the medium-term management plan, we will work toward sustainable growth for ROHM and society.

Process of Identifying Sustainability Priority Issues

Sustainability priority issues and medium-term goals were set after analyzing and verifying the results of external evaluations, international guidelines such as ISO 26000, and expectations for ROHM from dialogues with internal and external stakeholders.

STEP1 : Identify Sustainability Priority Issues Candidates: Based on the Group's corporate philosophy, behavioural guidelines and business model, the Group identifies candidate priority issues based on international CSR guidelines such as ISO 26000, GRI Standards, Sustainable Development Goals (SDGs) and ESG assessment results from globally representative ESG assessment organizations such as DJSI, MSCI, FTSE, and Sustainalytics.

STEP2 : Evaluating from Stakeholder Perspective

We have selected five groups of stakeholders who are deeply involved in ROHM Group's corporate activities: customers, suppliers, institutional investors, local communities, and employees. We confirmed the importance of each candidate from the perspective of stakeholders through a questionnaire survey, and analyzed the results.

In the questionnaire survey, about 180 people inside and outside the company gave their opinions on the evaluation of priority issues of ROHM Group.

STEP3 : Identifying and Prioritizing Priorities

Identify and prioritize important issues to be addressed by the ROHM Group not only from the perspective of impact on the sustainability of society, but also from the perspective of enhancing the Group's corporate value.

1. Strengthening Sustainable Technologies, Developing and Supplying Innovative Products
2. Mitigation of Climate Change
3. Effective Use of Resources
4. Strengthening Employee Engagement
5. Diversity Development
6. Ensuring the Health and Safety of Employees
7. Enhancing Corporate Governance
8. Risk Management
9. Sustainable Supply Chain Management
10. Strengthening Product Safety and Quality

STEP4 : Approval

Approved by the CSR Committee (at that time)^*, consisting of all directors and other responsible persons with equivalent authority.

April 2022 onward: EHSS General Committee

Sustainability Management System

Sustainability Priority Issues

Sustainability priority include “creating shared value (CSV), that is resolving social issues through business activities“, in which, by playing a part in solving social issues, our business activities themselves will also lead to ROHM’s own growth. They also include “business activities that could bring positive social impact to the society," in which we will meet the expectations of our stakeholders by mitigating the impact that our business activities have on those around us.

Sustainability Priority Issues

Sustainability Priority Issues	Risk	Opportunity	Medium-term Goal	Theme
Strengthening Sustainable Technologies, Developing and Supplying Innovative Products	・Decline in sales due to stagnation in development of products that contribute to energy saving and miniaturization ・Intensifying competition in the development of energy-saving and compact devices ・Decrease in market share due to rise of competition including from emerging countries ・Intensifying competition in development of energy-saving and compact devices ・Decline in quality due to failure to meet customer quality requirements	・Rising demand for electronic components due to the expansion of new vehicle sales in the xEV (electric vehicle) market ・Expanding sales to the industrial equipment market, such as solar panels, due to the introduction of renewable energy. ・Increase in the number of electronic components installed due to the growing need for energy saving and the increasing sophistication of electronic devices.	・Contribute to solving energy problems through technological development and supply that can lead to substantial power saving	Contribution by developing energy-saving products and supplying them to the market
			・Minimize the burden on the global environment by contributing to the reduction of materials and waste through miniaturization of devices	Contribution by developing and supplying miniaturized products
			・Promote technological development to produce cars that do not cause traffic accidents	Contribution by developing and supplying products pursuing functional safety
Mitigation of Climate Change	・The introduction of a mandatory GHG emissions reduction program and a carbon tax based on GHG emissions*. ・Adverse effects on the environment due to insufficient management of chemical substances	・Increased demand for electronic components due to the expansion of new vehicle sales in the xEV (electric vehicle) market. ・Expanding sales to the industrial equipment market, such as solar panels, due to the introduction of renewable energy*.	・Develop and disseminate products and services that contribute to the realization of a low-carbon, recycling-oriented, and natural coexistence society	Reduction in GHG emission
				Reduction of energy consumption
				Promotion of Introduction of renewable energy
Effective Use of Resources	・Soaring material prices and restrictions on production activities due to resource shortages (rare metals, water, etc.)	・Cost reduction through waste reduction, recycling, and review of energy supply sources ・Creation of brand value as a company with advanced environmental measures	・Build a business foundation that leads to recycling-oriented management	Water resource consumption reduction
Effective Use of Resources				Reduction of waste
Strengthening Employee Engagement	・Increased competition to secure human resources, sluggish retention rate ・Decline in human resource capacity due to delay in reforming the old personnel system and corporate culture	・Improve organizational strength by increasing employee engagement ・Attracting and retaining talented human resources ・Improve productivity by enhancing employee competence and autonomy	・Realize a workplace environment in which employees at ROHM can take on challenges for social and corporate growth without fear of failure	Foster a corporate culture that creates challenges
				Enhancement of job satisfaction
				Improve employee engagement scores
Diversity Development	・Increased competition to secure human resources, sluggish retention rate ・Decline in human resource capacity due to delay in reforming the old personnel system and corporate culture	・Attracting and retaining excellent human resources ・Strengthen competitiveness by promoting diversity management	・Increase the number of human resources who can independently think about things from a broad perspective and create new value	Promote women's active participation
Diversity Development				Global capacity development and personnel allocation
Ensuring the Health and Safety of Employees	・Negative impact on employees due to occupational accidents and occupational illnesses ・Decreased employee engagement due to lack of improvement in the working environment	・Improve productivity by improving the working environment ・Securing and motivating human resources	・Realize a work environment in which employees can work safely and in good physical and mental health	Securing a safe workplace
Ensuring the Health and Safety of Employees				Promotion of health management
Enhancing Corporate Governance	・Scandals due to violations of laws and regulations, corporate ethics, etc. ・Stricter management evaluation by shareholders due to increase in ESG investment, etc.	・Ensure management stability through a strong financial base and respond appropriately to changes in the business environment ・Improve transparency of decision-making by establishing a strong governance structure	・Build a solid management foundation to increase corporate value	Secure diversity of the Board of Directors
				Review of compensation system to improve medium-to long-term corporate value
				Secure the effectiveness of management
Risk Management	・Increase in large-scale disasters (e.g., earthquakes, floods, typhoons, fires) ・Delayed response to information leaks and cyber attacks due to security breaches ・Legal lawsuits such as infringement of patents and other intellectual property rights held by other companies	・Achieve business continuity and growth by establishing a risk management system that responds to changing risks.	・Establish a system that functions effectively against anticipated future crises in order to ensure the safety of employees and their families and to continue business	Strengthening BCM system
Strengthening BCM system	・Stable supply to customers due to outages or reduced capacity utilization of production bases ・Suspension of transactions with overseas companies or suspension of supply of materials such as rare metals due to changes in international conditions ・Noncompliance due to human rights violations in the supply chain or procurement of banned substances	・Resilience through sustainable raw material procurement	・Work with partner companies to build a supply chain that can respond to unprecedented situations and provide society with high-quality products	Strengthening BCM System
				Promotion of green procurement
				Promotion of CSR procurement activities
Strengthening Product Safety and Quality	・Quality problems and customer defection due to inadequate quality control system ・Loss of credibility due to violations of laws and regulations	・Improve customer satisfaction through thorough safety and quality control ・Expand sales opportunities by offering new products that meet customer needs	・Ensure product quality that meets customer needs and create products and services that customers choose	Establishment and establishment of a quality assurance system through front loading
Strengthening Product Safety and Quality				Achieving Appropriate Quality by Incorporating the Customer's Perspective