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CSR Activities of the Hitachi Group

CSR Working Group in Europe. CSR Activities of the Hitachi Group. CSR Promotion Department Corporate Communications Division Hitachi, Ltd. What Does CSR Mean? CSR at Hitachi Group CSR Policy of the Hitachi Group CSR Regional Activities. What Does CSR Mean? CSR at Hitachi Group

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CSR Activities of the Hitachi Group

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  1. CSR Working Group in Europe CSR Activities of the Hitachi Group CSR Promotion Department Corporate Communications Division Hitachi, Ltd.

  2. What Does CSR Mean? • CSR at Hitachi Group • CSR Policy of the Hitachi Group • CSR Regional Activities

  3. What Does CSR Mean? • CSR at Hitachi Group • CSR Policy of the Hitachi Group • CSR Regional Activities

  4. 1,1 What Does CSR Mean? Corporate Social Responsibility (CSR) is corporate management itself What does CSR mean in the global context ? A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.  Source from European Commission (EC), an administrative/executive body of the European Union (EU) CSR means “achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment.” Source from Business for Social Responsibility (BSR) Incorporate demands of society in business operations Voluntary activities Ethical values Successful business

  5. 1,2 Diverse Stakeholders • Manifold individualvalues • Globalization/revolution in IT • Explosion of corporate scandals Global company Consumers Local government International organizations Customers & Suppliers NGOs Local community Investors/financial institutions Corporate competitors Mass media Employees Demands from various stakeholders

  6. 1,3 The Positive Reward and Negative Risk of CSR From an ordinary company to a trusted one . . . and then one that is respected • Responsive to the needs and expectations of society • (initiatives going beyond the law) • Ethical responsibilities (transparency in management, respect for human rights, environmental conservation, a sincere corporate attitude, etc.) • Social responsibilities (helping solve social problems through community contribution activities and business activities, etc.) Enhanced brand value • From trust to respect • Enhance corporate image • Ensure supply of human resources, etc. The minimum level of corporate activity • Lose of trust • Lawsuits • Boycotts, etc. • Ordinary performance in ordinary things • (just fulfilling duties) • Legal responsibilities(compliance, observance of rules and regulations, etc.) • Economic responsibilities (appropriate profits, employment, technological innovation, improved efficiency, etc.) Diminished brand value

  7. What Does CSR Mean? • CSR at Hitachi Group • CSR Policy of the Hitachi Group • CSR Regional Activities

  8. 2,1 History of Hitachi Group’s CSR Activities CSR Committee established (preparatory to a system for CSR promotion) Dec. 2002 CSR Promotion Committee, CSR Promotion Team and CSR Promotion Department established Jun. 2004 Sept.-Oct. 2004 CSR self-evaluation implemented Mar. 2005 “CSR Policy of the Hitachi Group” formulated Kick-Off (1st) Meeting of CSR Managers of Hitachi Group held Jun. 2005 Jun. 2005 1st “Hitachi Group CSR Report” published

  9. 2,2 Structure of CSR Promotion in Hitachi Group President Senior Executive Committee CSR Promotion Committee Business Group Group directors & CEOs· CSR promotion officers Production facilities CSR Promotion Department Affiliated companies President CSR promotion officers Affiliated companies CSR Promotion Team Customer Satisfaction, Quality Assurance, Legal Affairs, Compliance, Public Relations, Environmental Conservation, Employee relations & HR, Corporate Citizenship Senior Executive Committee Decides CSR management policies at the executive level. CSR Promotion Committee Consists of Executiveofficers responsible for CSR. Discusses policies and plans for CSR activities. CSR Promotion Team Consists of managers responsible for CSR in each department.Prepares and follows up on detailed plans for CSR activities.

  10. 2,3 Global CSR Platform HQ in Tokyo, CSR Promotion Dept. Group Company (Parent Company In Japan) Group Company (Parent Company In Japan) Group Company (Parent Company In Japan) Group Company (Parent Company In Japan) Group Company (Overseas Corporation) Group Company (Overseas Corporation) Group Company (Overseas Corporation) Group Company (Overseas Corporation) Regional HQ Corporate Office Sharing policy, planning and activities Sharing and exchanging information Developing global CSR policy and plans ・Coordination function in regions  -Supporting CSR promotion of each group company  -Disclosing and collecting information of group companies ・Coordinating CSR activity policies and planning in each region

  11. 2,4 CSR Policy of the Hitachi Group • Commitment to Corporate Social Responsibility (CSR) • Contribution to Society through our Business • Disclosure of Information and Stakeholder Engagement • Corporate Ethics and Human Rights • Environmental Conservation • Corporate Citizenship Activities • Working Environment 8. Responsible Partnership with Business Partners Issued in March 2005

  12. What Does CSR Mean? • CSR at Hitachi Group • CSR Policy of the Hitachi Group • CSR Regional Activities

  13. 3,1 CSR Policy of the Hitachi Group ① • Commitment to Corporate Social Responsibility (CSR) The Hitachi Group, including all executives and employees, recognizes CSR as a vital part of corporate activity and is therefore committed to a course of social responsibility in accordance with this CSR policy for the sustainable development of society and business. CSR e-learning program Hitachi Group Corporate Social Responsibility Guidebook

  14. 3,2 CSR Policy of the Hitachi Group ② • Contribution to Society through Our Business The Hitachi Group will contribute to the building of a prosperous and vibrant society by providing safe, high-quality products and services through business activities based on its excellent research, technology, and product development. Economy Environment Social A mine sweeper made by Yamanashi Hitachi Construction Machinery used in Afghanistan and other countries

  15. 3,3 CSR Policy of the Hitachi Group ③ • Disclosure of Information and Stakeholder Engagement The Hitachi Group will disclose information openly and transparently in order to maintain and develop a relationship of trust with its various stakeholders, and act responsibly towards them through various means of communication. Hitachi Group CSR Report 2007 Interview with an external CSR expert (Interview with Ms. Mizue Unno of So-Tech Consulting)

  16. 3,4 CSR Policy of the Hitachi Group ④ • Corporate Ethics and Human Rights The Hitachi Group will undertake its business based on the principles of fairness and sincerity, act with the utmost respect for human rights and pursue a high sense of corporate ethics in the global business market which encompasses diverse cultures, morals, ethics, and legal systems. Other examples • Introduction of a “whistleblower” system (April 2003)The system is expanded to domestic and overseas group companies (October 2004) Business Ethics and Compliance Handbook

  17. 3,5 CSR Policy of the Hitachi Group ⑤ • Environmental Conservation The Hitachi Group will strive to minimize environmental effects and utilize resources towards the development of a sustainable society that is in harmony with the environment. Environmental Vision 2015 As a global citizen, we will promote innovation throughout the world while developing the potential of the future generation to pioneer next-generation products and services. Next-Generation Products & Services Working Environmental Partnerships Eco-Mind & Global Environmental Management Super Eco-Factories & Offices Sustainability Compass

  18. 3,6 CSR Policy of the Hitachi Group ⑥ • Corporate Citizenship Activities The Hitachi Group will promote social contribution activities as a good corporate citizen in order to realize a better society. Priority on activities • Education • Environment • Welfare A forestation project in the Horqin Desert of China’s inner Mongolia Autonomous Region commissioned by Hitachi Construction Machinery (Shanghai) Co., Ltd.

  19. 3,7 CSR Policy of the Hitachi Group ⑦ • Working Environment The Hitachi Group will make every effort to create a pleasant and motivating working environment for all its employees and to fully support those employees who desire self-fulfillment and self-development through their work. Employment of physically challenged persons (in Hitachi, Ltd.) • Three key words • Openness • Challenge • Diversity

  20. 3,8 CSR Policy of the Hitachi Group ⑥ • Responsible Partnership with Business Partners The Hitachi Group will make every effort to promote fair and sound business practices among our business partners by fostering a common awareness of social responsibility. Through a designated selection process, suppliers shall be evaluated by product quality, reliability, delivery, price, suppliers’ business stability, technical development ability, fair and transparent information release, compliance with societies’ rules, regulation compliance, respect for human rights, environmental preservation activities, social contributions, good working environment, and recognition of social responsibilities with business partners. Guideline for Procurement Activities

  21. What Does CSR Mean? • CSR at Hitachi Group • CSR Policy of the Hitachi Group • CSR Regional Activities

  22. 4,1 North America - CENA CSR Structure CSR Promotion Committee (Executive Officers) CENA (T. Ishigaki) HAL (M. Tanigaki, CEO) HAL (T. Yamada, SVP) Hitachi, Ltd CHQ Functions Hitachi, Ltd CSR Dept. Hitachi Regional HQ • Advisory Panel • [in planning stage] • Guidance on regional CSR • strategy and implementation • HAL; THF; HDS; HTL, DC; • HAP; Others TBD (HMA, HPSA, • HCC, HCL, HitMed, etc.) Corporate Office Washington, DC (T. Ohde, GM) CSR (B. Larnerd) Corporate Environmental Policy Division (Y. Takahashi, GM) Environmental Strategy Office (Hatchoji, CEnO) The Hitachi Foundation (B. Dyer, CEO) • Gov’t Relations • Business Development • Public Policy Brand Management (Y. Ina) Company/Governance Policy Carol Kale Human Policy B. Larnerd (acting) Environmental Policy B. Larnerd (acting) Social Policy Susan C. Burkhardt • Sustainable Supply Chain (UN Global Compact; EICC) • Ethics, Anti-bribery, Compliance, Whistleblower • Social Reporting (GRI) • Website & Training (eLearning) • “One Hitachi” platform • Community Relations • Education (math/science; art/music) • Disaster response • Profitable health care and security solutions • Strategic partnerships (The Gates Foundation, etc.) • Diversity • Women’s Leadership Development • Working Environment (OHS) • Universal Design • Minimization (CO2, etc) • Optimization (Profitable Climate Protection Solutions – Power, Water, Transportation, Data Center) • Strategic partnerships (e.g. GE, Coke, NGOs, etc.) • NA Governance Committee • NA Diversity Council • Women’s Network • NA Environmental Committee • HCAP • CAC NA Group Companies(receive CSR programs, policies, support, & guidance; communicate stakeholder activism, environmental & brand risks)

  23. 4,2 North America(Future Concept) CSR Alignment to Corporate Strategy Board Stakeholders President & EC Recommend Strategic CSR Investments Promote Corporate Strategy/Planning Regional Chief Exec. Company CSR Policy Engage Environmental CSR Policy “Strategic CSR” activities CHQ/RHQ* – CSR Human CSR Policy Evaluate businesses to invest in or exit Social CSR Policy Identify Strategic CSR innovations and practices to promote CSR Policies & Programs Social Innovation Business Infrastructure Technology/Products -Sustainable materials, components, and technologies to enable Social Innovation Business. Social Infrastructure Business Industrial Infrastructure Business Life Infrastructure Business Information Infrastructure Business Strategic CSR: Identify, invest in, and promote Hitachi innovations and practices that contribute to solving fundamental global issues to enable corporate profitability and deliver stakeholder value. *CHQ means Corporate Headquarters; RHQ means Regional Headquarters. **New strategy announced by President Furukawa November 2006. -Power systems -Rail systems -Auto -Construction -Medical -Home/Urban -Security -Storage Note: Businesses/sectors listed above are for example only, and do not necessarily represent the only CSR focus businesses or innovations. Source: Brian Larnerd, CSR Leader, Hitachi America, Ltd.

  24. 4,3 North America - 2008 CSR Activities Direction of Global Activities (DRAFT) • Improve strategic communication externally (and internally) • Build channels and dialogue with key stakeholders. • Strengthen brand through value of CSR. • Link CSR to corporate strategy and sustainability • Consolidate operations; link financial performance with sustainability. • Identify issues (through stakeholders and materiality) and develop strategy to promote Hitachi innovations and practices that contribute to solving fundamental global issues. • Identify “Materiality” issues and implement “Materiality” framework • Identify specific issues/stakeholders that have influence over our business and reputation. • Identify significant business to address social issues through Hitachi innovation. N.A. Activities Collaborate with CHQ and other regions to implement global CSR concept and common framework. Strategic CSR programs (primary focus: environment, supply chain, compliance, human rights/diversity, health care, security, and poverty) Stakeholder engagement (employees, suppliers, communities, investors, NGOs, nonprofits, government). (environment event in DC 2009). CSR training and awareness (eLearning and website); all NA employees to take CSR eLearning in 2008. Strategic CSR brand/PR campaign – promote Hitachi through direct dialogue, conferences, media (True Stories) and events. Strategic partnerships (with peer companies, universities, & NGOs related to issues of environment, human rights, health care and education). CSR business development (pharmaceutical, automotive, life science, oil & gas, other environmental). Government affairs and public policy advocacy (sustainability needs business models - requiring legislation and policy).

  25. 4,4 Asia - HAS ORGANISATION CHART

  26. 4,5 Asia - Plans for FY08 Key Message 1) Practise Good Supply Chain Management for a Successful Business Item 2) Commitment to CSR Shimo 07 Kami 08 Shimo 08 Supply Chain Conference (TBC) Supply Chain Conference in Thailand, Malaysia and Philippines Supply Chain Conference in India, Indonesia and Vietnam 1 External Speaker:Supply Chain Mgmt Expert Collaboration with Human Resource & Legal/Compliance Dept. • Corporate Ethics/Compliance employee education activities 2 Translate CSR E-Learning programme to local languages 3 Develop CSR E-learning programme Implement CSR E-learning

  27. 4,6 China - Structure and Operating methods China Hitachi Group CSR/Brand Committee (HCH)Group Management Promotion Headquarters Consideration Decision Proposition Discussion Planning Secretariat:(HCH)CCD  Assessing activities / Hearing opinions Group Company Group Company Group Company Group Company Group Company

  28. 4,7 China - Action plans for FY2008 1 “Hitachi-style” promotion of CSR activities Establishing CSR activity awarding system 2 Raising CSR awareness among employees of China Hitachi Group 3 4 Proactive dissemination of CSR activities 5 Proactively gathering of CSR information and sharing it within the Group

  29. This ends our presentation. Thank you for your kind attention. We welcome your comments and inquiries.

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