• Creating Shared Value (CSV)
• Foundation for shared-value creation (S)
• Harmonization of shared-value creation with environmental protection (E)
• Value-creative discipline (G)

While a variety of issues involving the environment and society may represent a risk that threatens corporate sustainability, working to solve those social issues can also lead to new business opportunities. Our goal is to achieve a sustainable society and sustained corporate growth by fully understanding the risks and opportunities related to materiality, striving to reduce the risks while creating a new business model that solves social issues.

Creating Shared Value (CSV)

Materiality	Risks ♦ | Opportunities ♠	Main Initiatives
Contribute to development of ICT/mobility society Solve energy and climate change problems Solve medical and food problems	♦ Increasing difficulty of development with intensifying competition; lengthening lead times ♦ Shift in share of low-cost alternative materials ♦ Existing product obsolescence ♠ Strong in-house development technology capabilities ♠ Customer credibility backed by multiple industry standards ♠ Portfolio of distinctive, differentiated products	Transform business portfolio Commercialize products that balance social value with economic value Engage in new businesses that contribute to solving social issues

Foundation for shared-value creation (S)

Materiality	Risks ♦ | Opportunities ♠	Main Initiatives
	♦ Declining labor productivity and outflow of personnel ♦ Declining quality of stakeholder engagement ♠ Strengthened foundation for creating innovation ♠ Improved employee engagement in their work	Respect for human rights, achieving work-life balance Enhancement of support system in skills development
	♦ Uniform thinking and loss of new business opportunities due to imbalance in personnel attributes and skills ♠ Nurturing a culture of collaboration among diverse values that is conducive to new ideas and technological innovation	Strengthen diversity promotion system Diversity management that leads to results
	♦ Loss of credibility among stakeholders, damage to corporate value due to inappropriate responses ♠ Forming a fair market valuation ♠ Improved management transparency	Voluntary, timely and appropriate information disclosure Ongoing stakeholder communications
	♦ Negative impacts on business activity due to illegal actions and compliance violations by suppliers ♠ Improved sustainability of society and long-term competitiveness	Encourage understanding among suppliers, strengthen collaboration Internal communication and education
	♦ Risk of disasters or other problems due to insufficient education and training ♦ Loss of societal trust due to accidents or scandals ♠ Nurturing a culture of safety ♠ Accumulating expertise in preventive maintenance	Ensure thorough education and training; verify and observe safety rules Conduct occupational safety and health risk assessment Promote LINK activities across plants Promote Company- and Group-wide environmental safety activities
	♦ Cost of responding to regulations and societal demands ♦ Cost of deploying high-efficiency equipment ♠ Optimization of production conditions through deployment of AI/IoT; improving productivity by predicting and preventing problems	Ultra-stable operation of production equipment Improve outputs through use of high-efficiency equipment Introduction of remote monitoring and diagnostic technology using smart technology
	♦ Loss of societal trust due to inaccurate data handling and shipping of inappropriate products ♦ Strengthened chemical substance regulations in each country ♠ Facilitating continuous improvement and ensuring customer satisfaction through Company-and Group-wide quality assurance activities (Q-MGC) ♠ Sharing and centralization of information to enhance customer satisfaction and societal trust	Promote Q-MGC Company- and Group-wide Work to improve data management through DX Ensure thorough safety assessments and provision of product information Respond to chemical substance regulations in each country
	♦ Discontinuous change in social and industrial structures ♦ Securing and developing personnel competent in cutting-edge technology fields ♠ Strengthened technology platform and creation of innovation built on collaboration among Group’s own technologies	Centralize R&D structure; pursue Group synergies Focus corporate resources on high-priority themes Collaboration between MGC’s creativity and open innovation Create a communicative research environment

Harmonization of shared-value creation with environmental protection (E)

Materiality	Risks ♦ | Opportunities ♠	Main Initiatives
Air quality control Water and biodiversity conservation Reduction of industrial waste	♦ Increased cost of responding to stronger environmental regulations ♦ Decline in competitive advantage due to delays in technological response to resource and energy conservation needs ♦ Reputational risks regarding environmental protection ♠ Participation in Fukushima gas power station and geothermal project ♠ Commercial development of methanol and ammonia as hydrogen carriers and CO2-free fuels ♠ Participation in CCUS proof of concept testing	Create businesses that balance environmental and economic value Promote Company-wide responsible care activities Continuous improvement activities through ISO, RC-MS PDCA cycles Contribute to environmental protection through business Promote biodiversity preservation in alignment with stakeholders

Value-creative discipline (G)

Materiality	Risks ♦ | Opportunities ♠	Main Initiatives
Corporate governance Compliance Internal controls Risk management	♦ Slumping business activity, loss of societal trust and damage to corporate value due to compliance violations ♠ Establish a stable management foundation by improving decision-making transparency and responding appropriately to change ♠ Gain stakeholder trust	Strengthen risk management in internal controls Strengthen corporate governance structure