As part of its Purpose, NEC’s reason for being, NEC has committed itself to creation of the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential.
Under the Mid-term Management Plan 2025, which places this purpose at the core of management, we aim to create social and environmental value through the promotion of our growth businesses, while strengthening the non-financial and ESG foundations that underpin sustainable growth of the company and society.

In fiscal year ended March 31, 2023, we primarily promoted the following ESG initiatives.
First, in the area of the environment, we issued our first Sustainability-Linked Bond in July 2002. We have set Sustainability Performance Targets to be listed continuously in the A-list of CDP Climate Change, and for Scope1 and 2 CO₂ emissions reduction rates. This is an example of how we are leveraging the strength of our environmental initiatives, which we have been developing since the 1970s, to reduce our cost of capital. We have also revised our target date for achieving virtually zero CO₂ emissions throughout our supply chain to 2040, 10 years earlier than the previous target of 2050, and signed "The Climate Pledge.
We also promote businesses that contribute to carbon neutrality, as typified by its disaster prevention and maintenance business. Through providing disaster prevention solutions and infrastructure maintenance services that utilize our satellite, sensor, and AI technologies, we are contributing, not only to extend the life of social infrastructure, but also to reduce CO₂ emissions from infrastructure reconstruction caused by disasters.

In the area of social issues, we continue to strengthen our cyber security and information security initiatives, which are one of the NEC Group's strengths. In addition, to improve employee engagement, we continued to hold 11 town hall meetings in Japan (with a total of 120,000 participants) and 9 abroad (with a total of 10,000 participants) in fiscal 2023 with a hybrid format of live and webinars, as a way to facilitate two-way communication with employees. Moreover, a causal analysis was conducted to confirm the effectiveness of various human capital-related initiatives, including these town hall meetings, and to improve measures, and the causal relationship between human capital-related initiatives and improved engagement scores was clarified. We will continue to analyze non-financial initiatives that lead to improved corporate value and allocate investments appropriately.

In the area of governance, we have been studying the possibility of changing the design of the Board of Directors to strengthen its supervisory function by separating supervision and execution. From June 2023, we shifted from a Company with Board of Company Auditors to a Company with a Nominating Committee and other committees. In order to improve the transparency and objectivity of management, the Board of Directors is composed of a majority of independent outside directors, and independent outside directors serve as chairpersons of the Nominating Committee, Compensation Committee, and Audit Committee. At the same time, for achieving the Mid-Term Management Plan 2025, we are accelerating decision-making and business execution by delegating substantial authority to the executive officers in business execution.

I believe that for NEC to become an organization that is trusted by its customers, the market, society, and the world, it must act with integrity toward its stakeholders and fulfill its responsibilities and commitments; in other words, the spirit of integrity must be at the core of its management. Integrity is clearly stated in the Principles of Corporate Behavior in the NEC Way, and is also the reason why we signed the United Nations Global Compact in 2005, a global initiative for the sustainable growth of society and business that advocates 10 principles in the four areas of human rights, labor, environment, and anti-corruption, clearly demonstrates its commitment to these principles.

Through the implementation of the NEC Way, we will continue to work with its customers and various stakeholders to "seize the future together" to maximize the power of digital technology and thereby create a sustainable society in which everyone has the chance to reach their full potential. By realizing a "Truly Open, Truly Trusted" world, we can contribute to the achievement of the Sustainable Development Goals (SDGs).