Process for identifying materiality

In identifying materiality, DNP comprehensively ascertains social issues and megatrends related to the environment, society and the economy, and evaluates and analyzes medium- to long-term risks (variable factors) and the impact of these on our business based on factors such as the impact on our own business activities, the value we can provide, and our strengths.
Considering these external trends, DNP has specified the four types of societies that it aims for, and to realize these we have specified what DNP should do and the value it should provide and identified these as materiality.

Process for identifying materiality

  • Ascertaining social issues
    DNP comprehensively ascertains social issues from the perspectives of market changes and megatrends and the materiality of these for each stakeholder as well as international frameworks such as SDGs, the GRI standards and ESG social evaluation items.

    Related stakeholders

    Employees, local communities, business partners, shareholders/institutional investors, education/research institutions, NPOs/NGOs, various organizations, etc.

    International frameworks considered

    SDGs, the GRI Standards, SASB Standards, United Nations Global Compact, TCFD, TNFD, UN Guiding Principles on Business and Human Rights, etc.

  • Identifying and prioritizing social issues
    Based on the relationship with our Corporate Philosophy and Business Strategy, identification of short-, medium- and long-term risks and opportunities and an assessment of the impact of these on management, DNP has specified the four societies it aims for as its “better future” and has outlined what it should do to realize this and the value it will provide.
  • Identifying materiality
    DNP holds opinion exchanges with relevant internal divisions, external experts and outside directors. We identify DNP’s materiality after discussion with and approval by the Sustainability Committee, Management Committee and Board of Directors.

Business activities based on materiality

As business activities based on materiality, we are promoting cross-company new value creation, primarily in our focus business areas, through the evolution and cultivation of the strengths of DNP’s unique Printing & Information (P&I).
Concurrently, we are strengthening our business base and thoroughly managing risks as we minimize negative impacts from the dual perspectives of increasing corporate value and strengthening business competitiveness.

Impact of extracted risks (variable factors) on business activities and reflecting these in business opportunities

Economic risks (variables) closely associated with business activities
• Market changes, acceleration of development of new products and technologies
• Acceleration of DX and establishment of a global network, etc.
• Geopolitical influences, rapid changes in various economic indicators
• Changes in financial and information infrastructures
• Depletion of/shortages/restrictions on resources, etc.
Expected impact on business • Changes in business structure, intensifying competition in new businesses and development
• Human rights violations in using AI, spread of false information
• Stagnation and sudden changes in economic and consumer trends, changes in the supply and demand balance
• Intensifying threats to information security
• Impacts on stable procurement, soaring prices, etc.
Reflect in business opportunities • Value creation centered on focus business areas, strengthening collaboration with partners
• Commercialization/efficiency enhancement through AI innovation, accelerate AI utilization
• Integration of cyberspace and physical space
• Provision of highly reliable and transparent information
• Strengthen IT governance, sophisticate security measures, etc.
Social risks (variables) closely associated with business activities
• Labor shortages, employment mobility
• Diversity, changing conditions for people to live comfortably
• Globalization of supply chains, geopolitical risks, etc.
Expected impact on business • Difficulties in securing and developing specialist human resources, rising labor expenses
• Diversification of values, awareness of diversity
• Increasing supply chain risks, including human rights
• Strengthened regulations, manifestation of the impact of geopolitical risks, etc.
Reflect in business opportunities • Build a robust human resources portfolio
• Eliminate labor shortages by improving operational efficiency
• Promote D&I, utilize diverse human resources, and respect the work environment and human rights
• Improve reliability by enhancing the transparency of the supply chain, etc.
Environment risks (variables) closely associated with business activities
• Intensifying disasters and increasing water risks due to climate change
• Accelerating plastic pollution and biodiversity loss
• Accelerating the transition to being nature positive, carbon neutrality and a circular economy
• Expanding environmentally positive markets, accelerating technology innovation, etc.
Expected impact on business • Suspension of operations and disruption of supply chains due to social infrastructure destruction
• Tightening of regulations on GHG emissions, etc.
• Expansion of reuse and recycling, rise in demand for switching to alternative materials
• Reforming business structure toward being nature positive
• Intensifying competition in new businesses and development, changing market trends, etc.
Reflect in business opportunities • Deal with natural disasters through BCP and BCM, multiple production bases
• Provide low-carbon products, services and products made from alternative materials, and effectively utilize resources
• Expand markets through early technology development and product design changes, etc.

This diagram illustrates DNP‘s commitment to a better future. The eight boxes show the four types of society DNP aspires to create and the corresponding four types of materiality for doing so. DNP has declared that the DNP boosts environmental, social, and economic sustainability by engendering change of our own volition, as well as accommodating change that comes our way with a flexible stance with the goal of a society where people can live safe, secure, healthy and well-being lives. Similarly, to realize a society where people can communicate comfortably, we will improve the quality of experiential value and expand on opportunities for everyone by fusing the real and digital. To realize a society where people mutually respect each other, we will create platforms to deepen mutual understanding and recognition so that everyone can feel motivated in life and fulfill their potential. And aiming to realize a society that realizes a balance between economic growth and the global environment, we will realize a nature-positive value chain by working to conserve the environment while reducing our environmental impact. On the left side of the diagram are six items. These are the three value-creating segments of Smart Communication,Life & Healthcare and Electronics, and the three initiatives of strengthening of human capital, strengthening intellectual capital and initiatives for environment, which form the axis for strengthening the management foundation. In the diagram, four vertical axes and six horizontal axes intersect. This section explains how the creation of value and the strengthening of management foundations are related to the four target societies and types of materiality: a society where people can live safe, secure, healthy and well-being lives, a society where people can communicate comfortably, a society where people mutually respect each other and a society that realizes a balance between economic growth and the global environment. First, we will look at value creation. In the Smart Communication segment, the content ＆ XR communication business creates value for all four types of society, focusing on a society where people can communicate comfortably. In the Life & Healthcare segment, the medical & healthcare business will create value for all four societies, with a focus on a healthy, sustainable society where people can live comfortably and fulfilling lives. In the mobility and industrial high-performance materials business, we will create value for all four societies, focusing on a society that realizes a balance between economic growth and the global environment and a society where people can live safe, secure, healthy and well-being lives In the Electronics segment, our digital interface business creates value for all four societies, with a focus on a society where people can communicate comfortably. In the semiconductor business, we create value for all four societies, focusing on a society that realizes a balance between economic growth and the global environment and a society where people can communicate comfortably. Next is strengthening our business base. In the area of strengthening of human capital, we will support for career autonomy of employees and strengthening of organizational capability, carry out hiring, personnel assignment and reskilling based on human resource portfolio, Health and productivity management that increases the happiness of employees, Promotion of D&I utilizing diverse individuality. Support for career autonomy of employees and strengthening of organizational capability, hiring, personnel assignment and reskilling based on human resource portfolio. contributes to all four types of society. Health and productivity management that increases the happiness of employees, contributes to a society where people canlive safe, secure, healthy and well-being lives and Promotion of D&I utilizing diverse individuality contributes to a society where people mutually respect each other. In the area of strengthening intellectual capital, we will carry out Creation of new businesses and enhancement of technological strengths / Global rollout of technological strengths / Strengthening of stable businesses and cultural reform and Sophistication of DX infrastructure. The Creation of new businesses and enhancement of technological strengths / Global rollout of technological strengths / Strengthening of stable businesses and cultural reform will contribute to a society where people can live safe, secure, healthy and well-being lives, a society where people can communicate comfortably and a society where people mutually respect each other, while Sophistication of DX infrastructure will contribute to a society where people can communicate comfortably. In the area of initiatives for environment we will work to build a decarbonized society, a recycling-oriented society and a society in harmony with nature and contribute to a society that realizes a balance between economic growth and the global environment. Finally, as the base for all the above initiatives, we will conduct thorough risk management that supports sustainable growth. The seven areas of risk management that support sustainable growth are Fair Operating Practices, Human Rights and Labor, Environment, Responsible Procurement, Product Safety and Quality, Information Security and Corporate Citizenship.

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