The SDGs clarify specific social issues, and, as such, they indicate the exact areas that we should be focusing on in our entire Group business activities or the direction we should be taking. The RYODEN Group’s Management Philosophy and Guidelines for Action agenda often coincide with the SDGs. We would even say that the activities designed to solve issues under the SDGs framework are often the very business activities that we are also striving to attain. We consider the SDGs to be an important factor in the sustainable development of our business activities, so we constantly strive to deepen the relationship between our business activities and the SDGs in order to help solve social issues.

We have established an SDG working group to ensure that our commitment to the SDGs is reflected in the Group's strategy and management, and that we strike a balance between social and economic values. The working group is chaired by the Environment and Quality Director of the Board and includes representatives from each business division. Under the guidance and oversight of the Sustainability Committee, the working group promotes activities in collaboration with the Executive Committee.

In order to further clarify our response to solving social issues, we selected seven SDGs that are the most important and relevant to RYODEN Group business activities. We considered a comprehensive range of factors when selecting those goals, including the degree of importance in relation to our business activities, the focus areas of our medium-term management plan, and the perspectives of various stakeholders.

All seven of the SDGs that we selected are highly important issues both to society and to our Group business activities. We believe that aiming to achieve these goals will enable us to better help realize a sustainable society and achieve further growth as a company.

Importance in our operations	Initiative
ZERO HUNGER	Developing sustainable food production systems
GOOD HEALTH AND WELL-BEING	Developing high-wuality health services,reducing traffic accidents
AFFORDABLE AND CLEAN ENERGY	Optimal energy use
DECENT WORK AND ECONOMIC GROWTH	Promoting innovative working environments
INDUSTRY INNOVATION AND INFRASTRUCTURE	Promoting innovative infrastructure building
SUSTAINABLE CITIES AND COMMUNITIES	Building sustainable,safe and secure cities
CLIMATE ACTION	Responding to climate change

We have selected key initiatives from each of our business activities that contribute to solving social problems.

It is our hope that promoting these activities will help to make the world a better place.

Business division	Issues identified from opportunities/risks	Priority SDG targets	Main initiatives
FA Systems	・Optimal use of energy ・Responding to an innovative work environment ・Promoting innovative infrastructure construction ・Promoting sustainable industrialization ・Responding to climate change ・Reducing and managing waste	・Promoting systems engineering business ・Promoting EMS (Energy Management System) business ・Promoting joint industry-academia research into micro-laser processing
Cooling & Heating Systems	・Dealing with sustainable food production systems ・Optimal use of energy ・Promoting innovative infrastructure construction ・Responding to climate change ・Reducing and managing waste	・Promoting the development of manufacturing customers ・Expanding agribusiness ・Expanding sales of air-conditioning equipment (PAC, low-temperature equipment, ventilation equipment)
Building Systems	・Optimal use of energy ・Promoting clean energy ・Promoting innovative infrastructure construction ・Creating a sustainable, safe, and secure community ・Responding to climate change ・Reducing and managing waste	・Promoting ZEB businesses ・Promoting proposals for BEMSs (Building Energy Management Systems)
Network Systems	・Optimal use of energy ・Responding to an innovative work environment ・Developing high-quality, sustainable infrastructure ・Promoting innovative infrastructure construction ・Creating a sustainable, safe, and secure community ・Responding to climate change ・Managing chemical substances appropriately ・Reducing and managing waste	・Promoting service businesses that use sensing devices and communication technology ・Promoting industrial cameras (MVSs) to improve productivity at manufacturing sites ・Marketing (installation and management) and sales of security equipment and information and telecommunications equipment
Smart Agriculture	・Dealing with sustainable food production systems ・Optimal use of energy ・Promoting innovative infrastructure construction ・Responding to climate change	・Providing a stable supply of agricultural products, regardless of weather conditions, through plant factories (producing business) ・Proposing the use of environmental control systems and natural energy in plant factories
Healthcare	・Developing high-quality insurance services ・Promoting a safe and secure working environment ・Developing high-quality, sustainable infrastructure	・Providing first aid + healthcare applications ・Transforming medical information communications by private LTE construction and sales
Electronics	・Working to reduce traffic accidents ・Promoting clean energy ・Promoting innovative infrastructure construction ・Creating a sustainable, safe, and secure community ・Responding to climate change ・Managing chemical substances appropriately ・Reducing and managing waste	・Entering the new urban development market (MaaS market) ・Establishing a business presence in the connected market ・ADAS, automated driving solutions ・Smart home/Smart factory ・Promoting sales of energy-saving solutions ・Marketing of products (SiC power semiconductor devices) ・Marketing of products (devices for optical communication)

The company's efforts to address environmental, social, and governance risks that could impede business continuity are considered in terms of both importance to stakeholders and importance in our operations, and issues identified as important are designated as critical issues.

Items identified as critical issues	Initiative	Relevant SDGs
Environment	Countermeasures against global warming ・Reducing greenhouse gas emissions from our offices(Activities to achieve the environmental vision) ・Reducing greenhouse gas emissions from our company vehicles
	Initiatives to create a circular society ・Conservation of forest resources ・Reducing waste
	Responding to biodiversity
Social	Promoting diversity
	Human resources development initiatives
	Work-style reform
	Initiatives to improve quality, etc.
Governance	Development of corporate governance
	Response to risk management
	Continuing compliance

We have categorized our risk mitigation efforts under the headings of Environment (E), Society (S), and Governance (G), and identified those issues that we consider important in our operations as critical issues.

We have set targets (KPIs) for initiatives and are driving action on these crucial issues.

Critical	Main Themes	Initiative	Target	FYE2023 results	Relevant SDGs
Summary	Strengthen the management system for sustainability management	・Promote initiatives by the Sustainability Committee	- Follow up on the progress made in sustainability activities by holding meetings of the Sustainability Committee on a regular basis 　(1) Operation of subcommittees　(2) Response to TCFD	・Establishment of the Sustainability Committee
Environment(E)	Countermeasures against global warming
	Reducing greenhouse gas emissions from our offices (Activities to achieve the environmental vision)	・Reduction through transition to and adoption of electricity from non-fossil fuel sources	・Zero greenhouse gas emissions from offices by 2030	・Reduction of greenhouse gas emissions using clean electricity based on a non-fossil certificate with tracking information generated by the Kurihara photovoltaic power station operated by RYODEN (Kurihara City, Miyagi Prefecture) (clean electricity has been used since FYE2022) FYE2023 439 t-CO2 (reduced substantially compared to the FYE2021 level [down 44%] and the FYE2022 level [down 63%]) Reference: 998 t-CO2 in FYE2021 (when clean electricity had not yet been introduced) FYE2022: 696 t-CO2 FYE2023: 439 t-CO2
	Reducing greenhouse gas emissions from our company vehicles	・Reducing greenhouse gas emissions through introducing of non-fossil fuel vehicles (electric vehicles (EV) and fuel cell vehicles (FCV))	・Reducing greenhouse gas emissions by introducing 100% non-fossil fuel vehicles by 2030	・Consideration of disclosure -> 2.6% at the end of FYE2023 (BEV: 5 units/Hydrogen: 1 unit) (1.1% at the end of FYE2022 [BEV: 2 units])
	Initiatives to create a circular society
	Conservation of forest resources	・Conservation of forest resources through using forest cycle paper	・Conservation of forest resources through using forest cycle paper	・Copy paper: Use of 100% forest cycle paper was achieved.
	Reducing waste	・Reduction in final disposal volume	・FYE2031 Reduction in final disposal volume (FYE2031: Reduced by 60% compared to FYE2016 501.6 kg)	・Reduction of the amount of final waste disposal: 609.1 kg in FYE2023 545.0 kg in FYE2022
	Responding to biodiversity Social contribution activities that take biodiversity into account	・Promotion of activities to protect the global environment	・Recovery from the activity stagnation during the COVID-19 pandemic Continuation of activities at all locations and areas	・Activities were voluntarily kept down due to COVID-19, but in FYE2024 they will be resumed at all bases and in all areas.
Society(S)	Promoting diversity	・Supporting the activities of diverse human resources	・Increase the proportion of women in new graduate career-track positions to 30% in FYE2025. ・Increase the number of women professional staff to about 20 (about 10% of professional staff) in FYE2031. ・Increase the number of mid-career recruits as professional staff to about 115 (about 30% of professional staff) in FYE2031. ・Compliance with the statutory employment rate for disabled people	・12.9% for women who entered the company in April 2023(as the result of recruiting efforts in FYE2023) ・8(2%) in FYE 2023 ・62(16.6%) in FYE 2023 ・Not achieved (1.95% as of June 1,2022)
	Human resources development initiatives	・Providing opportunities for continued growth	・Rate of project implementation to strengthen team skills and practices (to be completed in FYE2026) ・Career planning training for all age groups: 30% participation rate of all employees by FYE2026 ・Career planning training for all age groups: A higher participation rate of all employees (those in their 30s and 40s in addition to those in their 50s) ・Increase the number of women professional staff to about 20 (about 10% of professional staff) in FYE2031 (7 in FYE2022, 2%) ・Increase the number of mid-career recruits as professional staff to about 115 (about 30% of professional staff) in FYE2031	・The FYE2023 project to strengthen team skills and practices was implemented and completed for 14 sales department teams in Tokyo, Osaka, Kyoto, Himeji, Kanazawa, and Takamatsu. ・The career planning seminar 50 was held in Tokyo and Osaka, and 88 persons participated in it. ・8 (2%) in FYE2023 ・62(16.6%) in FYE 2023
	Work-style reform	・Health management Achieving work-life balance	・Achieve 100% of employees receiving regular health and stress checks ・Compliance with the five days of paid annual leave per year ・Maintain the annual paid leave utilization rate at 65% or more in FYE2025 ・Increase the annual paid leave utilization rate from 60% to 65% in FYE2025	・Rate of employees receiving regular health and stress checks: 100% for regular health checks and 99.9% for stress checks ・The target of taking five days of paid annual leave per year was achieved. ・The annual paid leave utilization rate in FYE2023 was 79%.
	Initiatives to improve quality, etc Support for strengthening technical capacity for sustainable consumption and production	・Operating a quality risk management system for new businesses ・Tracking down the root cause of serious deficiencies and developing horizontal measures to prevent recurrence	・Hold quality risk review meetings and ensure that all stakeholders are aware of the risks. ・Horizontally develop defect cases and carry out educational activities at information meetings, etc.	・Quality risk review meetings were held in the early stages of RYODEN's new businesses. ・Efforts were made on a regular basis to communicate the fundamental causes of defects for which RYODEN was responsible to all other personnel in the company and apply measures to prevent the recurrence of similar defects to all other departments.
Governance(G)	Development of corporate governance	・Efforts to strengthen governance in line with the CG Code	・Increase the proportion of independent outside Directors of the Board to one third or more（achieved in 2022） ・Strive to strengthen governance continuously by implementing the PDCA cycle: Evaluation of the effectiveness of the Board of Directors -> Identification of issues ->Improvement -> Evaluation of effectiveness (added in 2023) ・Regular reporting of internal audit results to the Board of Directors and strengthening cooperation through communication.Strive to establish even closer cooperation by working to maintain the effectiveness of internal audits (added in 2023)	・The percentage of independent outside directors was increased to one third. In the future, RYODEN will continue to examine the structure of the Board of Directors, including the required number of independent outside directors, while taking into consideration all factors such as the characteristics of businesses, institutional design, and the management environment surrounding the company. ・Internal audits in FYE2023 will be reported in May. ・RYODEN is striving to strengthen the supervisory functions of the Board of Directors by setting its medium- and long-term issues as subjects of discussion and having the Board discuss them (this was initiated last year and is continuing this year), and by doing so, the company will ensures smooth communication between the execution and supervision roles.
	Response to risk management	・Complementing governance with an enhanced risk management system through the Business Risk Committee	・Holding regular meetings of the Business Risk Committee and encouraging internal information sharing	・With the change of the corporate governance structure, the Committee was renamed the "Business Risk Committee" in the second half of 2022. ・The Committee's materials were revised to identify risks in more specific terms, to devise specific measures to deal with them and to make these measures more effective, and to implement them without fail.
	Continuing compliance	・Compliance status is reviewed and reported by the Ethics and Legal Compliance Committee. ・Conducting legal compliance checks at all business sites ・Improving compliance education	・Holding regular meetings of the Ethics and Legal Compliance Committee and encouraging internal information sharing ・Conduct legal compliance checks at all sites (annually) ・Continued to implement 100% of compliance training (e-Learning) for all employees in Japan and overseas ・Continued periodic training of personnel at the section to contact for reporting in order to maintain the reliability of the hotline, feedback to employees on reported cases (summaries), reports to the Board of Directors on the operation of the hotline, etc. (added in 2023)	・Efforts were made to achieve the target written in the left column as planned. In addition, the hotline system was reviewed to make it more reliable, and briefings for employees were held. Other measures taken included reporting the operation of the hotline system to the Board of Directors to strengthen the system's supervisory functions.

Communication is being promoted at each stage in order to permeate the SDGs activities.

SDGs Management Seminar

(March 2021)

We held seminars for upper management (company directors and executives) presented by external experts and centered on the themes of “Overview of SDGs,” “SDGs Management,” and “The Mindset for Sustainable Initiatives.”

Participants exchanged opinions on the content and deepened their understanding of the relationship between management and SDGs.

e-Learning for Employees

(1st Round: February 2021, 2nd Round: October 2021, Overseas: September 2021,3rd Round: November 2022)

All employees in Japan attended the 1st Round which was held with the objective of acquiring basic knowledge of SDGs and focused on the themes of “Why SDGs Now?” “What are SDGs?” “The Age When Non-performance Creates Risk” and “SDGs are Full of Appeal.”

The 2nd Round was conducted for the benefit of all employees based in Japan and overseas and featured the themes of “What are SDGs?” “Social Trends in SDGs,” and “Case Studies of SDGs Initiatives” and included the relationship between ESG and sustainability.

For the 3rd round, we have added topics that are more relevant to our activities, such as critical issues and the status of set KPIs. This e-learning communication will take place annually.

Orientation Meeting for Management About “Our Company’s SDGs Initiatives”

(November 2021)

The meeting shared information with management (section chiefs and above), including the relationship between the company’s management philosophy, guidelines for action, and SDGs, as well as the relationship between business activities and SDGs and the objectives of SDGs within business activities.

Its objective is to make business activities and SDGs contribution activities “relatable” and stimulate communication.

Promoting Understanding through Internal Communication

(November 2021)

We established the “SDGs Corner” in the company newsletter (RYODEN News) to appear four times a year starting in April 2021 and are providing information in installments.

In 2022 also, to promote understanding we published information a total of four times in conjunction with our regular publication.