Identifying Materiality

DNP believes that a healthy society and economy as well as comfortable and well-being lives for people can be achieved on a sustainable earth. Toward realizing the “better future” envisioned by DNP, we will identify key issues (materiality) for the sustainable growth of both society and DNP. In identifying materiality, DNP comprehensively ascertains social issues, identifies and evaluates medium- to-long-term risks (variable factors) for DNP in undertaking business activities, and identifies and prioritizes social issues with high materiality for DNP, society and stakeholders. Additionally, to create value and strengthen the management foundation that supports value creation, we have selected “CSR Management Principal Themes” and are progressing with efforts to strengthen management across the entire supply chain.

A “better future” aimed for by DNP

Visualization of a better future that DNP is realizing

Process for identifying materiality

Identifying materialities is a three-step process.The first step is ascertaining social issues. DNP comprehensively ascertains social issues from the perspectives of market changes and megatrends and the materiality of these for each stakeholder as well as international frameworks such as SDGs, the GRI standards and ESG social evaluation items prioritize social issues.The next step is identifying and prioritizing social issues. DNP identifies and prioritizes social issues with high materiality for DNP, society and stakeholders by identifying the relationship of these issues with our Corporate Philosophy and Business Strategy, as well as by identifying short-, medium-, and long-term risks and opportunities and assessing the impact of these on management.The final step is identifying materialities. DNP holds opinion exchanges with relevant internal departments, external experts and outside directors. We identify DNP’s materialities after discussion with and approval by the Sustainability Committee, Management Committee and Board of Directors.

Ascertaining social issues

DNP strives to realize a sustainable, better society and well-being lives through the two approaches of “creating value” and “strengthening business infrastructure,” accurately grasping and analyzing changes and issues in the economy, society and the environment.

Risks (variables) closely associated with DNP’s business activities

Economic risks

Short-term and medium- to-long-term variables in economic activity occurring in each country/region and in the global market
Accelerate development of business models/technologies/products/services, etc.
Acceleration of digital transformation (DX) and establishment of a global network, etc.
Rapid changes in various economic indicators (domestic and overseas economic conditions, industry trends, consumer confidence, prices, exchange rates, GDP and others)
Changes in the balance as well as the fragmentation of the global economy due to geopolitical factors, etc.
Variables in systems that form the basis of economic activities and in market trends
Changes in financial infrastructure due to reassessment of capitalism, the establishment of virtual economic zones and other factors
Changes related to the information infrastructure (strengthening and loosening of various rules and regulations such as GDPR, threats to information security and others)
Depletion of natural resources, shortages or restrictions in the supply of energy and resources, soaring prices, etc.

Social risks

Variables related to human capital and human rights
Declining birthrates and aging population, labor shortage and acceleration of employment mobility
Changes in issues related to the dignity of diverse people living in diverse societies
Changes in various conditions needed for all people to live comfortably (mental and physical health, safety, hygiene and others)
Increasing importance of responding to human rights risks throughout the supply chain, etc.
Variables in systems for building a healthy society and in market trends
Changes in legal and political systems in each country/region and strengthen responses to risks in the supply chain
Expansion of geopolitical risk/country risk
Manifestation of various risks due to differences in culture, systems and rules, and other factors

Environmental risks

Variables related to the sustainability of the global environment that form the foundation of all corporate activities
Increased frequency and severity of natural disasters and increased water risks such as droughts and floods due to climate change
Accelerating plastic pollution and biodiversity loss, etc.
Changing variables in market trends and systems related to global environmental conservation
Strengthening and globalization of disclosure of climate change risks and nature-related information
Tightening of regulations on GHG emissions, revisions to Japanʼs energy policy and acceleration of the transition to a circular economy
Expansion of market for environmentally positive products and services and acceleration of technology innovation, etc.
Creating value

We will contribute to achieving the SDGs by turning risks into chances for expanding business opportunities. We aim to solve social issues through our business activities.

Strengthening business base

We will minimize the impact of assumed risks by prescribing priority themes in CSR management and implementing PDCA.