We conducted a new materiality assessment based on the concept of double materiality, identifying our key issues from two perspectives: “Impact on our business” and “Impact on the environment and society.”
Amid significant changes in the external environment, including trends such as digital transformation, carbon neutrality, and diversity & inclusion, there is a growing importance in both establishing a foundation for sustainable growth and addressing social issues through our business activities by turning these trends into business opportunities.
To this end, we have been identifying key social issues (material topics) that should be prioritized for action. Ahead of formulating our new medium-term management plan, we reviewed our material topics between February and March 2024.
In this review, we newly adopted the concept of “double materiality.” Double materiality is a comprehensive approach that assesses not only the financial impact but also the impact on the environment and society.
We identified key issues by evaluating them from the dual perspectives of “Impact on our business” and “Impact on the environment and society,” and designated those with particularly high importance as material issues.
In formulating our new mid-term management plan, we took into consideration the diversification of stakeholder interests and, based on an analysis of the external environment, broadly incorporated the identified materiality into our priority initiatives with the aim of achieving sustainable growth through a virtuous cycle of solving social issues and enhancing profitability.
To remain agile in responding to changes in the business environment, we will continue to conduct regular materiality analyses and reflect the associated business risks and opportunities in our management strategies.
We followed the steps below with support from Business for Social Responsibility (BSR), a U.S.-based nonprofit organization, as a third-party advisor.
Using previous materiality assessments, international goals and standards, reporting frameworks, our corporate philosophy and strategy, and issues identified as important from the stakeholders’ perspective, we created a list of 39 sustainability issues.
For the identified issues, we conducted evaluations from two perspectives—society/environment and business—based on both the significance and likelihood of impact. The evaluation incorporated qualitative information from interviews with 26 internal and external stakeholders*, along with Komatsu’s disclosed information and general risk data. The results were visualized through mapping.
Based on the evaluation results, we extracted issues with particularly significant impacts and identified 18 material issues across six categories: Employees, Human Rights, Customers, Ethics & Governance, Local Communities, and the Environment.
After verifying the alignment between the identified material issues, our Basic Sustainability Policy, and the SDGs, we positioned these issues within our mid-term management plan as key areas for achieving sustainable growth through a positive cycle of solving social issues and enhancing profitability. The plan was approved by the Board of Directors.
To ensure steady progress toward addressing these issues, we established Key Performance Indicators (KPIs), and we will disclose progress in the Komatsu Report.
| ●Employees |
❶Occupational safety, health, and well-being ❷Talent acquisition, skill development, and workplace retention ❸Fair labor practices ❹Diversity & Inclusion (D&I) |
|---|---|
| ●Human rights |
❺Respect for human rights |
| ●Customers |
❻Creating customer value through site optimization ❼Product safety and quality ❽Continuity of the value chain ❾Use of AI and promotion of digital transformation (DX) ❿Business strategy for sustaining competitiveness and profitability |
| ●Ethics & governance |
⓫Privacy, data protection, and cybersecurity ⓬Governance aligned with business transformation ⓭Compliance |
| ●Local communities |
⓮Contribution to local communities |
| ●Environment |
⓯Climate change mitigation ⓰Resource circulation ⓱Nature positive initiatives ⓲Forest conservation through business activities |