Materiality & KPIs

Business environment awareness, Materiality (priority issues), and Vision

Business environment awareness and Materiality (priority issues)

The world is changing rapidly, with international cooperation to prevent global warming, the growth of emerging economies, and a decline in the working population due to a low birthrate and aging population. The automotive industry is also undergoing a once-in-a-century transformation due to the advancement of CASE (Connected, Autonomous, Shared, Electric) technologies driven by the evolution of IoT and AI. EXEDY has used PEST analysis to predict the future, identify risks and opportunities, and derive our priority initiatives and Vision.

	Politics	Economy	Society	Technology
Future predictions	International cooperation to prevent global warming Government regulations on greenhouse gas emissions Growing geopolitical risks Development of legislation to strengthen efforts to address human rights and environmental issues in supply chains	Growth of emerging economies and further diversification of the world Changes in car ownership patterns, such as car sharing. Strengthening of ESG information disclosure rules	The decline in the working-age population is due to the global aging of the population and declining birthrate. Progress in diversity The advancement of labor replacement by AI, robots, etc., and the transformation of perceptions of work. The growing demand for stronger corporate governance	Technological innovation in new technologies (IoT, AI, etc.) and their implementation in society. Acceleration of connected technologies Evolution of charging and energy storage technologies, including electric vehicles

risk	Sales decline due to the discontinuation of sales of internal combustion engine vehicles Increase in direct costs associated with the introduction of renewable energy Loss of customers and investors due to inadequate response to human rights and environmental issues.	Decline in car sales due to the shift to the sharing economy Divestment due to lack of ESG initiatives	Labor shortage Worsening employee turnover due to inadequate efforts to promote diversity Deterioration of business performance due to lack of governance	Sales decline due to the shift from internal combustion engine vehicles to electric vehicles.
opportunity	Increased sales due to increased demand for BEV & HEV products. Further increasing demand for energy-saving products	Sales growth due to the expansion of emerging markets	Creating technological innovation through workforce diversity Building a strong management foundation through strengthened corporate governance	Increased sales through the development of new products via technological innovation.

Materiality
(Priority Issues)

① Preventing global warming
② Respect for human rights
③ Environmental and Compliance
④ Sustainable procurement

① Providing new products that efficiently transmit power.
② Circular Economy

① Creating a Company That Employees Are Happy to Work
② Diversity & Inclusion
③ Governance
④ Compliance
⑤ Health/Occupational Safety and Health

Offer New Value Through Technological innovation

The ideal image

①②

Contributing to the creation of a decarbonized society and minimizing environmental impact.

②③④

Together with our partner companies, we promote business activities that take into consideration social issues such as environmental challenges and human rights.

①

Expanding our range of decarbonization-contributing products and creating and providing new value.

②

Contributing to minimizing environmental impact

①

Creating an environment that encourages growth and challenges

②⑤

Expanding systems to provide a safe and supportive work environment for a diverse workforce

③④

Strong governance and shared values between management and employees

Creating new value in core and new businesses

Our vision

Decarbonization policies and stricter emissions regulations in urban areas are driving increased demand for electrification in commercial vehicles and business applications.
Together with our partner companies, we promote business activities that take into consideration social issues such as environmental challenges and human rights.
Strong governance and shared values between management and employees
Creating new value in core and new businesses
Creating an environment that encourages employee growth and challenges
Expand systems that allow diverse employees to work with comfort
Expansion of products that contribute to decarbonization

Long-Term Vision

Based on our understanding of the business environment, EXEDY formulates its "Long-Term Vision" after deliberation by the Board of Directors, taking into account our priority initiatives and Vision, as well as our corporate philosophy of "fulfillment for society" "fulfillment for our customers" and "fulfillment for our EXEDY family".
Furthermore, we have set SDGs goals to which we will contribute through our business activities aimed at realizing this Long-Term Vision.

Corporate Philosophy Creation of Fulfillment Business Environment Awareness: Opportunities & Risks

		Key Material Issues	Long-Term Vision (we aim to achieve by fiscal year 2050)		Related SDGs
		Key Material Issues	Vision	Our Approach and the Way Forward	Related SDGs
Initiatives toward the Creation of Fulfillment	Initiatives toward the Creation of Fulfillment	Prevention of global warming Environmental Compliance Circular Economy	fulfillment for society Contribute to minimization of the environmental impact, including the creation of a decarbonized society	Transform the business portfolio and expand products that contribute to decarbonization
				Establish a manufacturing system that is carbon neutral and minimizes environmental impact
		Provide New products That Transmit Power Efficiently Offer New Value Through Technological innovation	fulfillment for our customers Create and continuously deliver new value to customers	Create new products that efficiently transmit power in addition to those that make the transportation of people and goods more comfortable
				We will actively enter new business areas and aim to become a unique company that no one else can match.
	Creating a Company That Employees Are Happy to Work Promotion of Diversity and Inclusion Safety and Health Respect for Human Rights	fulfillment for our EXEDY family Be an attractive company where people can feel excitement and passion	Develop an environment that actively encourages challenges and proposals that stimulate growth
			Expand systems that allow diverse employees to work with comfort (nationality, gender, age, disability status, family structure, etc.)
Improvement of Business Foundation	Improvement of Business Foundation	Compliance Governance Sustainable Procurement	Maintain a stable management structure based on strong governance	Comply with the laws and regulations of each country and region and maintain high ethical standards
				Improve fairness and transparency of the Board of Directors
				Strive to share values and aim for a bottom-up business foundation
				Together with our partner companies, we promote business activities that take into consideration environmental issues, human rights, and other social issues.

EXEDY 's efforts toward achieving Long-Term Vision

Regarding our goal of "Contribute to minimization of the environmental impact, including the creation of a decarbonized society," we are taking on this challenge through product expansion and the establishment of a robust production system.
Regarding our goal of "Create and continuously deliver new value to customers," we are concentrating our management resources on new product development in both our existing and new businesses.
Regarding our goal of "Be an attractive company where people can feel excitement and passion," we are creating an environment where employees can grow and expanding systems that provide employees with a safe and supportive work environment.
Regarding "Maintain a stable management structure based on strong governance," we are further improving our governance and promoting business activities that take environmental issues into consideration, together with our partner companies.

KPIs and progress

Key performance indicators (KPIs) and long-term targets (FY2030 and FY2050) related to Long-Term Vision are set after deliberation by the management committee and the board of directors. In addition, the sustainability committee formulates medium-term targets and activity plans and manages progress toward achieving the vision and KPIs.
Please refer to the integrated report for progress updates.

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