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Fujikura Group CSR

Third-party Opinion/ Response

Third-party opinion

Hiro Motoki, President, E-Square Inc.

Hiro Motoki
President,
E-Square Inc.

The Fujikura Group report has evolved substantially from the former CSR Report to become the Fujikura Group CSR Integrated Report from this fiscal year. To link it with your corporate website, you are providing additional information on the website that is not available in the paper copy. It is my view that this report has succeeded in pulling together the main points of value creation in the Fujikura Group based on the conceptual integration of how CSR and sustainability are incorporated into corporate management.

The first page is devoted to the core values of the Fujikura Group over its more than 130-year history, the story of future growth that you are targeting, and your sense of values, beginning with activities that contribute to society. This is followed by the Message from the President, in which President Masahiko Ito summarizes the things he routinely talks about and the actions and views that he believes are important. It clearly explains Fujikura’s uncompromising dedication to “tsunagu” (connecting) technologies over its history of more than 130 years, the numerous innovations that have been achieved by all employees recognizing this uncompromising dedication to “tsunagu” technologies as the foundation of Fujkura’s business, and the frequent trips of President Ito to the frontlines in pursuit of integrated Group management. I also think that the overview of value creation and the storyline that explains the three stages the company has passed through since its founding, combined with various scenes of daily life and how “tsunagu” technologies are being used, contains new discoveries, not only for external stakeholders, but also for Group employees.

You clearly explained the voluntary quality management checks of all products that Fujikura conducted in response to the incidents involving improprieties in quality management that were discovered in August, and that you are continuing to work to determine the full extent of the problem. I sensed the company’s determination to pursue honesty as a company from the decisive actions taken to increase number of outside directors from one to four, and to establish a Nominating Advisory Committee and a Remuneration Advisory Committee to strengthen corporate governance.

I have confirmed that the findings I pointed out in the third-party opinion last year have been broadly reflected in this report. As I read this year’s report, I identified the following three points as things to improve in the future:

  • The explanation of value creation in the Fujikura Group flows from the management base, through the business model, to the value provided to society. Maintaining a sustainable advantage is an issue that is extremely important in corporate management. I therefore recommend that you provide concrete examples of long-term relationships of trust and the ability to adapt to change, just as you have for technological capabilities.
  • I think that your use of the concept of CSV (creating shared value) is brilliant. You use it to point out why it is important to recognize anew the challenges the world faces through the United Nations SDGs (Sustainable Development Goals) as globally shared goals for 2030, and how these challenges can be seen as opportunities to achieve sustainable growth. However, the six SDGs that the Fujikura Group is focusing on, which are noted in Priority SDGs, the SDG goals you will work on to pursue the CSV strategy, and the SDG goals mentioned in Relationship between Priority SDGs and CSR Priority Measures are all different. This makes it difficult to understand what areas you should focus on. While I can appreciate your decision to recast the many initiatives you are focusing on in light of their relationship to the SDGs, I think that you should be decisive in narrowing down which of the 17 SDGs and 169 targets that you should work on to manifest the strengths of the Fujikura Group. I think that it will lead to greater results if the entire Group focuses on the same things.
  • The Fujikura Group has specified four material issues and 12 CSR priority measures; however, it is hard to understand the relationship between these in the report. Materiality means the issues that are material, both from the current perspective of society and from the company’s own perspective. I think it might be better to redefine the 12 CSR priority measures as material issues. I think that restating the contents currently stated as the four material issues as CSR priority measures would organize the contents in a manner that would be easier to understand.

The Fujikura Group raises open innovation as one management strategy for achieving its mission. You have established the BRIDGE open innovation hub as a venue for start-ups, and are continuing to develop Fujikura Gakuen, the facility for individuals with mental disabilities that was established during the founding era of the company, as a social contribution activity. There is naturally a common thread running through these two activities. I would like to watch Fujikura take on many challenges aimed at creating a sustainable society in a manner that is characteristic of importance the Group places on cherishing its founding spirit while also working to lead at the forefront of the era.

Hiro Motoki,
President
E-Square Inc.

Response

Takashi Takizawa, Senior Vice President, Member of the Board

Takashi Takizawa
Senior Vice President, Member of the Board

The management environment relating to ESG (environmental, social, and governance) elements that surrounds our Group continues to change at a rapid pace, and institutional investors and other stakeholders are focusing on ESG activities now more than ever before. Moreover, to find the optimal solutions to the complex issues facing the international society, we must simultaneously resolve social issues while achieving growth for our own company by creating shared value (CSV) through business activities that solve social problems. We invited an expert in CSV to engage in a dialog and took other steps, and discussed what types of CSV the Fujikura Group should engage in to prepare for the social changes that may occur in the future. I would like to continue these types of activities and further improve our adaptability to society.

In regard to the incidents involving improprieties in quality management of some Fujikura products, which were announced on August 31, 2018, top management is taking the lead on further strengthening governance of the entire Group by determining the full extent of the problem and implementing measures to prevent recurrence so that this sort of incident never occurs again.

I would like to thank Mr. Hiro Motoki for giving his independent opinion from the broad perspective of an expert. His evaluation concluded that the report pulls together the main points of value creation in the Fujikura Group based on conceptual integration. This was the Fujikura Group’s first attempt at delineating a model for value creation. We will continue to discuss the value creation model internally. I think this will lead to understanding our own strengths and competitive advantages, and to sustainable growth in the future.

Mr. Motoki also addressed the points that could be improved in the report this fiscal year: 1) providing concrete examples of long-term relationships of trust and adaptability to change in the value creation model, 2) the SDGs for each initiative differed and it was difficult to understand which areas should be focused on, and 3) the relationship between the four material issues and the 12 priority measures. The Fujikura Group CSR Committee will carefully consider each of these findings, and consider how to address them in the form of initiatives.

We will pursue further initiatives in ESG elements demanded by society, and will persist in our perpetual efforts to make the Fujikura Group a company that is appreciated by customers and is esteemed by society by improving our adaptability to society. We will continue to do our part to fulfill our social responsibilities to create a sustainable society.

Takashi Takizawa,
Senior Vice President, Member of the Board

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