Nippon Light Metal Holdings Company, Ltd.

Material Issues
of the NLM Group

The NLM Group will contribute to the realization of the sustainable society envisaged by the SDGs through the comprehensive and wide-ranging fields of business related to aluminum. As part of this process, in order to recognize the issues the NLM Group should address in particular and raise them as important management issues for the Group's sustainable growth and the creation of corporate value, our Board of Directors identified the material issues of the NLM Group.
We have set KPIs (target values) for each of the issues and are working towards achieving them based on concrete plans of action.

Steps to Identifying Material Issues

STEP1

Identifying a Group of Candidate Material Issues

Ahead of identifying the material issues, we ascertained the extent of impact of the Group's activities, which cover a wide range of business fields. To ensure there were no omissions in our recognition of related social issues, we first determined the Group's value chain and its scope as a means of verification. Next, based on the requirements of international guidelines such as SASB, GRI, the SDGs and ISO 26000, we produced a list of around 400 wide-ranging social issues related to ESG. We assessed the importance of each issue based on an analysis of the impact on each stakeholder and the NLM Group, and finally narrowed the issues down to a shortlist of 31.

STEP2

Assessing Importance

Working with the consolidated shortlist, we conducted another assessment of importance based on two aspects, the degree of importance to society, and the degree of importance in mid-to-long-term corporate value creation for the NLM Group, and finally identified the material issues.

STEP3

Confirming Validity and Comprehensiveness

When assessing the importance of the items on the shortlist, we also had them evaluated by outside experts active in a variety of fields. We reconsidered and reviewed the items while referencing their opinions to confirm the validity and comprehensiveness of the choices.

STEP4

Identifying the Material Issues

We reclassified the identified material issues into five material issue themes. After undergoing review by the CSR Committee and Group Executive Committee, the issues were approved by the Board of Directors.

The Five Material Issue Themes of the NLM Group
  • Protecting the global environment
  • Providing sustainable value
  • Happiness of employees
  • Responsible procurement,
    production and supply
  • Corporate ethics and governance

List of Material Issues

Protecting the global environment

Material Issues

  • Reducing greenhouse gas emissions from company activities (scope 1, 2)
  • Reducing greenhouse gas emissions in the supply chain (scope 3)
  • Action on climate change (TCFD)
  • Responding to water stress
  • Preventing environmental pollution

Major KPIs/Targets/Major Initiatives

Key Performance Indicator (KPI)
Target *1
Major Initiatives
Total scope 1 and 2 emissions (per unit of sales/Japan only)
FY2021: 1.58 tons CO2/million yen
-30% compared to the FY2013 level, FY2050: Net zero
Continuing to implement energy-saving initiatives and promoting fuel conversion and electrification
Total scope 3 emissions (per unit of sales/Japan only)
FY2021: 4.51 tons CO2/million yen
-30% compared to the FY2013 level, FY2050: Net zero
Horizontal recycling of expanded aluminum materials and use of green aluminum
Number of environmental incidents and complaints
FY2021: 3 environmental incidents and 7 environmental
complaints
0, FY2050: Continue to achieve 0 incidents and complaints
Group-wide expansion of countermeasures and prevention of occurrence and recurrence of similar incidents
Providing sustainable value

Material Issues

  • Efforts to expand the use of renewable energy
  • Developing and providing low-carbon products and services
  • Promoting a recycling-oriented economy and society
  • Developing and providing robust infrastructure
  • Contributing to the stable supply of food
  • Shaping the future through innovation

Major KPIs/Targets/Major Initiatives

Key Performance Indicator (KPI)
Target *1
Major Initiatives
Growth rate of sales of products for eco-friendly vehicles (Japan)
Compared to FY2021: Up 300%
Reinforcing the framework for the research and development of new products for eco-friendly vehicles
Improving the comprehensive capability of the Group as a whole to make suggestions to the automotive market
Rate of purchase of external scrap
Overall Group: Above 30%
Building a system for the stable procurement of scrap as raw materials
Promoting horizontal recycling by strengthening cooperation with external parties
Happiness of employees

Material Issues

  • Occupational health and safety
  • Developing a fulfilling workplace
  • Diversity & inclusion
  • Securing and cultivating human resources

Major KPIs/Targets/Major Initiatives

Key Performance Indicator (KPI)
Target *1
Major Initiatives
Number of lost-time injuries FY2021: 15 in Japan
0, FY2050: Continue to achieve 0 injuries
Preventing injuries and similar injuries through the three principle (Genchi or real site, Genbutsu or real goods and Genjitsu or reality)
Percentage of childcare leave taken by male employees
FY2021: 18.5% (Japan)
FY2024: Above 30% (Japan)
FY2030: 50% or above (Japan)
Providing level-specific training themed on support for balancing work and childcare
Percentage of managers that are women
FY2021: 5.4% (consolidated)
FY2024: 7% (consolidated)
FY2030: 10% or above (consolidated)
Motivating and helping employees to develop their careers through individual interviews
Number of employees who received next-generation
management training FY2021: 13 (Japan)
Percentage of managers who received managerial training
FY2021: 100% (Nippon Light Metal Co., Ltd.)
Next-generation management: 10 or more trainees every year
Managerial: 100% of newly appointed managers
Developing core human resources in a well-planned manner through repeated training and practical experience
Responsible procurement,
production and supply

Material Issues

  • Providing safe and secure products and services
  • Protecting and respecting human rights
  • Developing a stable supply chain
  • A resilient value chain that is flexible to changes

Major KPIs/Targets/Major Initiatives

Key Performance Indicator (KPI)
Target *1
Major Initiatives
Percentage of major suppliers*2 that responded to a questionnaire survey to check that they understand and have approved our CSR procurement policy FY2021: 35%
100%
Conducting a CSR procurement questionnaire survey using a common format
Number of prompt reports FY2021: 15
0, FY2050: Continue to achieve 0 reports
Ensuring thorough activities to prevent recurrence and establishing a framework for preventive activities
Corporate ethics and governance

Material Issues

  • Strengthening governance
  • Reinforcing the compliance framework

Major KPIs/Targets/Major Initiatives

Key Performance Indicator (KPI)
Target *1
Major Initiatives
Number of self-assessments conducted by the Board of
Directors FY2021: 1
Number of times an opportunity to inspect business locations, etc. was provided to Outside Officers
Maintaining a frequency of at least once a year
At least two times a year
Evaluating effectiveness regularly and making improvements based on evaluation results
Providing Outside Officers with opportunities to inspect business locations, etc.
Percentage of managers or employees who found our whistleblowing system reliable
FY2021: 46% of managers and 29% of general employees
Percentage of answers to anonymous employee surveys that are positive: 60% for managers, 50% for general employees
Implementing PDCA through promotion of compliance and surveys
Rate of provision of compliance training FY2021: 11%
Annual percentage of officers and employees provided training:80% or above
Developing learning infrastructure and creating and distributing educational content

*1 The targets are FY2030 targets unless otherwise noted.
　　*2 Suppliers constituting 80% of the Group's total purchases by amount