Key Issues (Materiality) Determination Process

In April 2019, the Pigeon Group identified the Key Issues (Materiality) for which it must find solutions in order to contribute to the development of a sustainable society through its business activities, thereby enhancing its corporate value.
In December 2022, in light of major recent changes in the social environment, Pigeon redefined its Key Issues (Materiality) in order to establish a basis for creating value, pivot to a business model that creates both economic and social value, and realize its Purpose.

Step 1: Selection of issues

1. Selection of social issues

The Group identified social issues in view of international standards and guidelines such as ISO 26000, the Global Reporting Initiative (GRI) standards and the Sustainable Development Goals (SDGs).

2. Selection of issues recognized by directors

Interviews were conducted with eight directors in October 2018.

—Issues relating to company management

  ·Business environment surrounding the Group and prospects

  ·Current business results, variations in results and factors in their variation

  ·Basic management policy (areas requiring strengthening and their background)

  ·Target states of medium-to-long-term future (medium-to-long-term vision)

  ·Recognition of the Group’s competitive advantages and weaknesses

—Items related to ESG/SDGs

  ·Evaluation and recognition of issues related to current ESG/SDGs efforts (including creating shared value (CSV))

  ·Target orientation and form of the Group’s ESG/SDGs efforts

  ·Main hurdles anticipated in reaching the target orientation and form

Step 2: Prioritization

The Pigeon Group examined the social and business environment along with risks and opportunities, prioritized issues in its value chain, and engaged in a series of discussions at meetings of its Sustainability Committee and Governance Committee about the issues that it must address in the medium to long term.
We selected Key Issues (Materiality), from the perspectives of their importance for building a sustainable society and for pursuing businesses that increase the Group’s corporate value.

Step 3: Identification of Key Issues (Materiality)

At a meeting of the Board of Directors, following final deliberations, the Pigeon Group’s Key Issues (Materiality) were identified.