My impression of Fujikura Group Integrated Report 2023 is that the intent to realize sustainability through business appears everywhere in the report. The Message from the CEO also makes it clear that “Two things are needed to contribute to the sustainable development of society and solve social challenges from the standpoint of the global manufacturing industry. They are implementing sustainable management and developing products that are useful in building a sustainable society.” I sense the enthusiasm of pursuing both the sustainability of Fujikura itself and society at the same time.

　The new Mid-term Management Plan announced in May 2023 extracts the three areas of superconducting wire rod, fiber lasers, and super fast charging technology for electric vehicles as key areas to focus on in moving beyond the 2025 plan to a sustainable society where the Fujikura Group can plant the seeds of new businesses that can contribute to a sustainable society. Concrete descriptions of products categories, including these three areas, have been added to the outputs of the value creation model, which has only been described in vague terms before, from the perspectives of forecasting and backcasting and this has made it more persuasive.

　Optical cabling solutions based on innovative optical technologies and high-speed wireless communication technologies are described as the core technologies of information and communication infrastructure. By adding wireless to wired, Fujikura pursues all “tsunagu” (connecting) technologies and also fulfills its mission to “create exceptional value for our customers around the world using “tsunagu” (connecting) technologies.” The reports on each business disclose SWOT analysis and clearly state the response to environmental issues, thereby creating reports that give readers a greater depth of understanding of the conditions and outlook for each business and how this correlates with a sustainable society.

　Regarding individual initiatives, Fujikura is putting effort into diversity & inclusion of human capital as one priority measure and this is having the desirable effect of increasing the percentage of new hires who are women. Activity plans for promoting the advancement of women include seminars, creating systems, and opportunities to interact with diverse role models and I look forward to a progress report on such specific initiatives in the future.

　While it would be good to also reference this on the carbon neutrality page, the new plant for SWR® innovative optical cable Fujikura plans to build on the premises of its Sakura Works will commence operation in 2025. By targeting zero CO2 emissions, Fujikura expects this plant to be one example of a concrete initiative that aligns with Fujikura Group Long-term Environmental Vision 2050. The acquisition of SBT certification in July 2023 shows that Fujikura is also continuing to participate in international initiatives.

　These are three points of improvement for future integrated reports:

・As I also mentioned in last year’s independent opinion, there are issues with the alignment in the long-term targets set. In the relationship between Sustainability Targets 2025 and Long-term Environmental Vision 2050, Fujikura describes action items for promoting response to TCFD recommendations in addition to the four challenges in Long-term Environmental Vision 2050 under Environment (E), one of the four sustainability themes in Sustainability Targets 2025. However, response to TCFD recommendations is not included among the priority measures in FY2022. The same thing can also be seen in the other themes of Financial/Future (F), Social (S) and Governance (G). There are action items that are not listed as priority measures, even though they have been set as initiatives for the 2025 targets. Meanwhile, Long-term Environmental Vision 2050 describes four challenges, but there are three main initiatives, which only correspond to part of the content of the four challenges.

・The second point is the approach to double materiality. Amid the progress on creating standards for disclosing information on sustainability globally, Fujikura has designated impact materiality, meaning issues relating to society and environment where corporate activities have a large impact, and financial materiality, meaning sustainability issues that have a large impact on the Company’s finances. The European Sustainability Reporting Standards (ESRS) in Europe, where the Fujikura Group operates its businesses, define double materiality as achieving one or both of these two materialities. Moreover, ESRS has five standards for Environment, four for Social, and one for Governance across all industries, and this is the foundation upon which materiality is considered. ESRS specifies the three perspectives of impacts, risks, and opportunities (IRO) when considering materiality and requires evaluation of materiality. I would appreciate an explanation of how the Fujikura Group is specifying double materiality, or how it is attempting to specify it, based on such trends.

・Over the past few years, some things have been stated repeatedly and the progress made is unclear. TCFD is set as a target in Sustainability Targets 2025; however, the integrated reports over the four years from 2020 onward contain the same description. I do not know how Fujikura has deepened its understanding of the risks and opportunities listed, and how the Group views the financial impact. Nothing is mentioned about governance, risk management, and indicators and targets, which are other areas of disclosure, in addition to TCFD. The integrated reports from 2019 onward have continued to state that the Fujikura Group integrates sales, business units, manufacturing, and development to provide products that meet the needs of customers. Because sales, business units, manufacturing, and development working as a team with customers to create value through the cycle of business activities seems to be a major strength of the Fujikura Group, I would like Fujikura to go one step further and disclose information specifically on what type of system its has put together and give examples of the solutions generated.

　Fujikura’s resolute implementation of the 100-day plan to turn around business operations in a critical business environment resulted in a remarkable V-shaped recovery in financial performance after bottoming out in 2019. Despite the severe realities of the scandal at a U.S. subsidiary which occurred while the Group was working to further strengthen corporate governance, the increase in overall demand in existing businesses, a streamlined strategy for technology development that narrowed down the points of focus, and other efforts are raising expectations for the future development of a Fujikura Group brimming with possibilities. On the other hand, I think that re-editing the integrated report to include new elements without being held back by how things were described in the past and creating a story will, with a little creativity, lead to a convincing story that is easy to understand and will earn good external reviews. I look forward to future progress on the initiatives and information disclosure of the Fujikura Group.

Thank you, Dr. Motoki, for your valuable opinion.

The Fujikura Group put its mission, to “create exceptional value for our customers around the world using “tsunagu” (connecting) technologies,” into practice in management. I understood that such initiatives have earned a certain degree of recognition and we will continue to contribute to the realization of a sustainable society through our businesses in the future.

In the three points raised as areas for improvement, I understood the need to organize critical issues from a long-term perspective in line with the demands of society in relation to alignment with the long-term targets and our approach to materiality. We will consult your advice as we revise the materiality we are currently implementing. We will also consider the disclosure of ESG information, mainly in the integrated report, which will make dialogs with stakeholders even more informative.

We take the advice you have provided seriously and will continue our efforts to resolve societal issues.