Identifying and Reviewing Material Issues

MITSUBISHI MOTORS, with recognition of importance of the United Nations Sustainable Development Goals (SDGs), identified material issues as the important issue that we should wrestle from various challenges in the fields of environment, social and governance in FY2018.

During the identification process, we conducted repeated examinations from the perspective of stakeholders’ concern and impact on the Company, and held hearings with experts. After that, we repeated discussions about our material issues at the Sustainability Committee, and the decision was made at the Executive Committee.

In recent years, social trends related to sustainability have changed substantially and rapidly. After carefully considering the most salient impacts our Company has on the economy, environment and human rights, we are flexibly reviewing material issues and enacting measures as necessary. We aim to respond to stakeholders’ needs and expectations as a result.

Identification Process

  1. STEP 1

    Sorting through Issues and Setting Evaluation Standards

    We selected candidates, taking into consideration the SDGs, the GRI standards and external assessments of the Company’s sustainability activities.
    Furthermore, we have set evaluation criteria to determine priorities based on the scope of impact of our activities (boundary) and consistency with business risks.

  2. STEP 2

    Internal investigation

    Relevant individuals involved in practical-level operations within the company met multiple times to exchange opinions and confirm the priorities of measures from the perspective of impact on the company’s business.

  3. STEP 3

    Interviews with outside experts

    Interviews were conducted with five experts who are familiar with social issues. We reviewed important issues that the Company should address from the perspective of its impact on society (economy, environment and people).

  4. STEP 4

    Deciding the Material Issues and Setting KPIs

    The Sustainability Committee verified the materiality matrix that reflects internal and external opinions, and Executive Committee gave its final approval. We also set KPIs for each material issues and assigned people to oversee them.

Flexibly Reviewing Materiality Based on Social Conditions and Awareness of Issues

In FY2020, in light of changes in social conditions due to the aggravation of environmental problems and the COVID-19 pandemic, MITSUBISHI MOTORS’ material issues were reviewed after discussions at the Sustainability Committee and resolved by the Board of Directors.

1. Materiality on "Environment"

The Environmental Plan Package, which we formulated in FY2020, positioned "Pollution prevention" as a priority environmental issue along with "Action to climate change" and "Resource circulation." Accordingly, in terms of MITSUBISHI MOTORS’ materiality, we have raised the impact on our company of "Prevention of pollution" (on the horizontal axis of the figure) from "very high" to "extremely high."

2. Materiality on "People"

In FY2020, considering our responses to the new normal triggered by the COVID-19 pandemic, we have reviewed the material issues of "Work style reform" and "Diversity" and merged them into "Promoting work style reform in response to new normal conditions (Diversity, Work-life balance)." Through the review, we have presented the directions to enhance organizational capabilities and corporate value by creating an environment where diverse employees can maximize their individual abilities and play an active role.

In FY2022, given the need to enhance human capital investment toward our sustainable growth and higher corporate value, after discussions in the Sustainability Committee, we reviewed our material issues and made the following resolutions in the Executive Committee.

The response to the material issues we set in FY2020, "Promotion of work style reforms in response to the new normal (diversity, work-life balance)," achieved certain results during the period of COVID-19 pandemic by expanding flexible work styles based on remote work. As economic activity around the world has gradually returned to normal, we recognize that the need for employee engagement is more important than ever before. Understanding that "employees are capital that support the Company’s growth, we acknowledge the importance of recruiting and promoting diverse talent, recognizing each individual's differences, and providing a workplace environment and equal opportunities where they can thrive.

Based on this understanding, we have revised "Promotion of work style reforms in response to the new normal (diversity, work-life balance)" to "Promoting diversity and inclusion, and enhancement of employee engagement" and have indicated a direction to further strengthen initiatives related to human resources.

The Material Issues We Identified

Reflecting Medium- to Long-term Perspectives when Setting Annual Targets Related to Materiality

MITSUBISHI MOTORS needs to reinforce its management base in order to respond to the various changes taking place in the automotive industry, look at the business environment from a long-term perspective, and respond to medium- to long-term risks and opportunities. To achieve these goals, we recognize the importance of setting annual targets on materiality initiatives from a medium- to long-term perspective.

In FY2021, we took the following steps to set annual targets for individual materiality initiatives.

First, we took a long-term perspective, using 30 years as our time horizon (the period used when formulating Environmental Vision 2050) for responding to environmental issues we consider essential in order to conduct business activities. In the Environmental Policy, we particularly focused on climate change, resource circulation and pollution prevention. For other material issues, we looked ahead to 2030, which is the target year for the United Nations’ Sustainable Development Goals (SDGs). We clarified the social issues (risks) the Company recognizes from a long-term perspective, as well as the effects (opportunities) that could be obtained by addressing these issues. After deliberating with the division general managers in charge of implementing the material issues, we clarified the direction of response.

Looking from the medium-term perspective, or three years into the future, we worked with the division general managers responsible for implementing the material issues to identify the external environment and stakeholders’ needs and expectations. We then set medium-term action targets. The Sustainability Committee deliberated the medium- to longterm aspects of respective material issues, including risks and opportunities, as well as the appropriateness of the annual targets and indicators.

Starting FY2022, we have been reviewing the medium to long-term aspects of each material issue and setting annual targets and indicators. We are progressing with our initiatives based on this review.