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Third-Party Opinion / Response to the Third-Party Opinion

Third-Party Opinion

Hiro Motoki, President and Representative Director, E-Square Inc.

Hiro Motoki
President and Representative Director, E-Square Inc.

The "2020 Mid-Term Administration Plan" for envisioning the next 5 years saw the end of its first year, and the Fujikura group will continue to progress strongly to the next leap. As noted in President Ito's message, we are seeing various developments even in CSR, demonstrating the compatibility of both "the realization of a sustainable society" and "the continued development of our group."

Societal awareness of the presence of ESG investments by institutional investors is rising, not only in Japan but globally as well. Your company been listed in the new stock indexes "FTSE Blossom Japan Index" and "MSCI Japan Empowering Women Index (WIN)" set up in July of this year by the world's largest operator of pension funds, the Government Pension Investment Fund (GPIF), and the high quality of your administration, including CSR, was recognized objectively. The former is involved with all ESG, and the latter is involved with empowering women. President Ito holds the idea that "employees are assets" important and while further promoting the improvement of working styles, I think it is fantastic that the company not only is involved with the aforementioned MSCI stock indexes, but also obtained three stars from the "Eruboshi" based on laws supporting the advancement of women in the workplace.

Advances in human rights efforts are visible, and the Fujikura group drew up new human rights principles, conforming to international models and displaying concern for the responsibility of respecting human rights. You plan to continue to make efforts to implement human rights due diligence, but this was an important step to show the company's thinking starting with these human rights principles. Also, among last year's third-party opinions, there was a comment that it would be good to connect the business side with social and environmental efforts, so this year you have moved a step forward in that regard with your business from the viewpoint of CSV (creation of similar values).

For general improvements, it is important to promote detailed efforts so that the "Long-Term Environmental Vision 2050" established last year doesn't turn to mere lip-service. It should be sufficient to display mid- and long-term goals with back casting, set up detailed KPI whose progress can be tracked, and display progress on a yearly basis. For that, I also believe it will be good to display the relationship between the subjects of the 4 challenges connected to long-term goals and environmental management in an easy-to-understand manner. I also think that creating cooperation with global business, active participation in globally recognized frame works like the initiative Science Based Targets (SBT), that advocate goal setting with scientific basis, or the international initiative, RE100, whose goal is the promotion of reusable energy, are important efforts.

Last fiscal year, your company was quick to display its thinking about SDGs (sustainable development goals). However, of the 6 goals chosen from the list of 17 SDGs, the progress of the efforts was put together in a list to be checked, but it is unclear how much progress was made in this last year. The same thing can be said about the aforementioned CSV, but if you could mention how progress of efforts connects to improvement of enterprise value, that would be an even greater appeal to institutional investors who view ESG as important.

By clarifying 2020 goals for policy on important points of CSR and further listing the results of activities within the plan by fiscal year on the CSR site, I believe you are coming closer to the desired disclosure. I think that putting links from the list to activities on your site will greatly increase the convenience for users.

Also, access to ESG information is currently only available from the CSR site, but I think it is desirable to be able to directly access ESG information from the investor information site. This is because reevaluating CSR activities from the viewpoint of increase in enterprise value and actively working to influence investors with a long-term view contributes to qualitative improvement in IR activities.

The Sakura plant's "Sakura Millennium Woods" project plan for use of nature is beginning. I can imagine it coming to be an environment loved by local people and as a place for direct contact with rare species. Along with this position of emphasizing community, I look forward to the Fujikura group's own special CSR progress, giving proof to the administration philosophy, "this is what a business with 100 years of history can do".

Counterpoint

Takashi Takizawa, Director and Managing Executive Officer

Takashi Takizawa
Director and Managing Executive Officer

The environmental changes involving ESG (environment, society, governance) surrounding our group are speeding up even compared to last year. In line with this, the focus on business CSR activities from stake holders is increasing, including from companies and institutional investors. Given that we will not be valued by society without sincerely and quickly responding to the environmental changes society demands, we continue to respond to constant changes and demands with actions like inviting experts for dialogues about important CSR topics. We want to further increase our compatibility with society with these kinds of activities.

We received a third-party opinion with a broad view from the expert standpoint of Mr. Keiji Motoki. Mr. Motoki praised the creation of our human rights principles in the opinion, but they won't be achieved with only temporary measures toward protecting human rights and improving working styles. Rather, we will achieve them by continuing our persistent progress, and as such we will work harder still in addition to advancing our future efforts.

We also received proposals for "setting medium-to-long-term goals for the long-term environmental vision 2050", "mentioning further developments of SDGs and CSV and enterprise value increase", and "further disclosure of 2020 goals and ESG information, and convenience improvements" regarding future activities from Mr. Motoki. The Fujikura Group CSR committee will continue to ask for these opinions, listen carefully to each one, and proceed to consideration as a future effort.

Support for Fujikura Gakuen is in the company's DNA, and it was the starting point for the CSR activities through which the Fujikura group fulfills its social responsibilities. Centered on the Fujikura Gakuen, we will heighten our promotion of ESG efforts and our compatibility with society in order to remain "a corporate group appreciated by customers and valued by society."

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