Materiality

The I-PEX Group has identified six points of materiality as key issues and incorporated them in its medium-to long-term management strategy “I-PEX Vision 2030” for realizing sustainable business models and medium-to long-term value creation.

To pursue sustainability, I-PEX has established working groups for each materiality to examine the directions of activities, specific initiatives and targets, and to change the mindset of the Group, aiming to solve its key issues while addressing social challenges.

Materiality Selection Process

STEP 1 Define issues

We created a list of issues based on the 17 SDGs and 169 targets, the evaluation criteria used in ESG investment (SASB, MSCI) and our own management issues.

STEP 2 Identify themes

We administered questionnaires and conducted interviews with external stakeholders (investors, external directors) and internal stakeholders (officers, operating divisions, administrative divisions) and identified important issues as high-priority themes.

STEP 3 Analyze and select

Scores were assigned based on secondary research of ESG evaluation criteria (SASB, MSCI), and six high-priority themes were selected using a materiality matrix that has importance to external stakeholders as its vertical axis and importance to internal stakeholders as its horizontal axis.

STEP 4　Systematize and create action plans

For the important issues selected, we defined a medium- to long-term ideal for the Group and systematized initiatives for achieving it. Further, we will create action plans for each point of materiality and based on the plans promote materiality measures integrated with business operations.

I-PEX’s materiality

Materiality	Importance	Initiatives and KPI
Contribute to a comfortable and safe digital society supported by innovation	To maintain a competitive advantage and achieve sustainable growth amid rapid advances in digitalization and changes in consumer lifestyles, we must further develop and refine the diverse technological capabilities we have accumulated over the years. We will make inroads into new business areas by pursuing joint development that brings together the technology, expertise, and ideas held by partner companies with the technology of the Group.	Initiatives Contribute to the “Super Smart Society (Society 5.0)” through “sharpest tip” technologies Develop new technologies and applications through partnerships^1 and “market-in”^2 approach Utilize proprietary technologies at advanced levels through business synergies Raise awareness of innovation and change mindsets
Transform the business structure and expand our field of business	Since the markets for our major segments are heavily swayed by the shortterm performance of customers, we must draw on our core technologies to build a stable earnings structure that does not depend on specific markets and create new businesses. We aim to expand our business into digital arenas and facilitate the evolution of our business model from self-reliance to collaboration, yielding a business model that can raise corporate value.	Initiatives Consolidate and specialize in connection with existing products and narrow focus for new areas of development Convert to an earnings structure resistant to cyclical fluctuations and create new business pillars Allocate management resources to new and growth businesses from a company-wide perspective Shift from manufacturing to value-adding KPI By 2030:Net sales of ¥100 billion or more and operating income of ¥10 billion or more
Build an optimal manufacturing system and promote capital cost and cash flow management	In creating value, it is vital to ensure that we can generate cash flow and strengthen our financial capital while optimizing our allocations to growth investments. A key challenge in the area of manufactured capital will be to pare down assets such as factories and production facilities to boost capital efficiency.	Initiatives Build a speedy, flexible production system, consolidate production sites, and promote allocation (transfer) Promote an outsourcing policy based on profitability and added- value standards Promote capital cost management by introducing ROIC^3 and cash flow management by improving the CCC^4 KPI By 2030：ROE of 8%, Payout ratio of 30%
Tackle climate change and contribute to a recycling-based society	Businesses face a growing responsibility to address climate change. To do our part as a corporate citizen in helping to bring about a sustainable society, it is critical that we further strengthen and promote green manufacturing. Since plastic is one of the main materials used in the Group’s business activities, we see the effective use of resources as a key task alongside curbing CO₂ emissions.	Initiatives Raise energy efficiency in production and expand use of renewable energy Contribute to an energy-saving society through “sharpest tip” technologies Build new business models via circular economy^5 and upcycling^6 KPI By 2030：Reduce CO₂ emissions by 40% (2021 as baseline year) By 2050：Continuing initiatives aimed at carbon neutrality^*7
Strengthen human resource management	Continuously driving innovation and expanding our business domains requires diverse and specialized human capital. Our challenge is to attract and cultivate outstanding talent, and create working environments in which every employee can demonstrate their full potential. We must put in place a framework that encourages employees to grow and to exercise their abilities, thereby strengthening our human resource management to ensure the sustainable growth of the business.	Initiatives Strengthen HR management from a company-wide perspective, perform global personnel evaluations and build career advancement programs Secure and develop personnel with high specialization and the potential to create future businesses Promote diversity, equity and inclusion^8 Enhance employee engagement and motivation KPI* By 2030：Female manager ratio (Japan) of 10%
Strengthen corporate governance	To enhance corporate value and build a robust organization, it is vital for the company and our employees to have a shared philosophy and a common vision. We also aim to create a robust organization from which we can generate greater profitability, expand markets, and acquire new customers. We will do this by enhancing our oversight functions for key management-related matters and by strengthening our framework both to enable appropriate business execution throughout the Group and to enhance corporate value.	Initiatives Further raise awareness of the corporate philosophy Strengthen supervision of important matters related to managements Strengthen global group governance

﹡1
Co-creation and collaboration with other companies and groups
﹡2
Listening to the feedback of customers and identifying their requests and concerns in order to launch new products that address them
﹡3
Return on invested capital
﹡4
Cash conversion cycle
﹡5
Economic activities that generate added value while reducing resource inputs and consumption to utilize resources effectively
﹡6
Utilizing waste to generate new value
﹡7
Balancing greenhouse gas emissions and absorption amounts
﹡8
Working in an environment where diverse human resources are given fair opportunities and diversity is accepted

Back to Sustainability Page