The H.U. Group’s definition of materiality covers, as the elements that impact the creation of corporate value in the medium term, general intangible assets including customer assets, intellectual property, and the brand, going beyond the standpoint of environment, society, and governance (ESG).
Each year, the H.U. Group Sustainability Committee will determine whether the materiality cycle needs to be updated in response to changes in the external environment, and the H.U. Group will operate the updated cycle.
Shift from Materiality Identification Process to Update Cycle
Actions in Each Phase
Phase 1: Identify issues (FY2018-2020)
Based on the materiality established in fiscal 2018, and mainly taking into account ISO 26000 and GRI Standards, we identified issues from the perspective of our stakeholders in accordance with our new medium-term plan, which addresses changes in the business environment. Our management engaged in discussions accordingly and, following approval by the President and Group CEO, we disclosed our new materiality in the integrated report 2020.
Phase 2: Align with Vision, Mission (FY2021)
In order to upgrade the issues identified, the H.U. Group Sustainability Committee created a materiality aligned with our Vision, Mission that that are particularly important in terms of “importance to the H.U. Group” and “importance to long-term investors” such as financial reporting, innovation opportunities, and the impact of regulations and industry norms (supporting double materiality *1).
Phase 3: Approve materiality
The Board of Directors of H.U. Group Holdings, the supervisory body, with outside directors, discussed and coordinated the materiality of our group and approved it.
Materiality (approved July 16, 2021)
Phase 4: Update materiality annually from 2022 onwards
We will review and update the materiality once a year, taking into account progress in addressing the issues and changes in the business environment. (supporting dynamic materiality *2).
- *1: The approach that emphasizes materiality from the perspectives of both investors and stakeholders. It was proposed under the “Guidelines on Non-Financial Reporting” of the European Commission (June 2019).
- *2: The idea that materiality is a dynamic concept and can change over time or rapidly. The concept was proposed in a joint statement of the IIRC, SASB, CDP, CDSB, and GRI (September, 2020).