Addressing Group Material Issues and the SDGs

Vision for Addressing Material Issues
Material Issue Identification Process

In March 2021, the Cosmo Energy Group identified ten important ESG challenges (material issues) that will influence the sustainable development of society and the Group, including its medium- to long-term enterprise value, as the Group strives to help build the society it envisages in 2050. In April 2023, we combined some issues and added others, revising the number to eight. With regard to material issues for sustainable value creation, we will also pursue efforts guided by our “Oil & New: Next Stage” slogan, under the Seventh Consolidated Medium-Term Management Plan, to address societal challenges. These activities will be underpinned by addressing the material issues that form the foundation of business continuity.

We are implementing a variety of initiatives to fulfill the vision we have for addressing material issues.

Most Important Material Issues

materiality

Vision for Addressing Material Issues

Material Issues for Sustainable Value Creation

Material issues	Vision for addressing material issues	Related SDGs
Climate change countermeasures	GHG emissions are managed appropriately Progress has been made toward achieving net zero carbon emissions by 2050
Provision of clean energy, products, and services	Clean fuel that meets customer needs has been developed and is supplied Our company has become a leader in domestic renewable energy generation Clean products have been developed and are being provided across the entire value chain Technologies and services that support low carbonization and decarbonization have been developed and are being supplied
Structural reform of profitmaking businesses	Business profits are generated in a decarbonized society by investing profits from existing businesses in new businesses Enterprise value is being enhanced through new businesses centered on clean technology

Material Issues that Form the Foundation of Business Continuity

Material issues	Vision for addressing material issues	Related SDGs
Promoting human resources’ success, health, and job satisfaction	All employees can demonstrate their abilities to the fullest, regardless of age, gender, nationality, job type, affiliation, or work history Decisions are made through dynamic discussions that incorporate diverse opinions Overwork and harassment are prevented, and employees can work with health and peace of mind Employees take the lead in managing their own physical and mental healthcare, and manage and improve their health Employees autonomously improve and utilize their strengths and expertise to implement business strategies Employees are energetic and challenge themselves, and enjoy continuous growth with job satisfaction and fulfillment
Digital transformation (DX)	A corporate culture that uses digital technology to change work processes and continuously pursue innovation is being fostered to bring about business transformation Efforts are being made to improve customer experience value both in offices and on the service frontlines by providing customers and employees with solutions driven by data utilization, etc., to solve internal and external challenges
Strengthening of Group risk management	Both the Group’s operational risks and strategic risks (including opportunities) have been identified, and risks are appropriately hedged or taken Serious risks for the entire Group are understood and managed	ー
Commitment to compliance and sharing of philosophy and values	Laws, regulations, and social norms are observed Officers, employees, and other staff members understand and observe the Group Management Vision, policies, and internal regulations The Cosmo Energy Group Code of Conduct and policies are widely understood and individuals are able to make appropriate decisions
Safe operations and stable supply	Employee injuries are prevented Plant accidents and product (quality) accidents are prevented Operations are carried out so they do not threaten the safety of the operating area or surrounding residents A stable supply of energy is provided, even during disasters and emergencies

Material Issue Identification Process

We sought the opinions of both internal and external stakeholders in the process of identifying the Group’s material issues. We selected 154 potential issues by referring to international initiatives and guidelines across industries, and then integrated overlapping issues to create a candidate list of 41 issues.

materiality process

A matrix was used for evaluating the importance of each material issue, where the horizontal axis represented the importance of each issue to the Group, and the vertical axis represented the importance to society. We determined the level of importance of each issue to the Group based on the Group Management Vision, the Code of Conduct, the results of workshops conducted among directors, and the details of various initiatives. We then determined the level of importance of each issue to society by aggregating data from various sources including rating agencies, information on industry peers, consumer research, employee surveys, investor interviews, and dialogue sessions with experts. After plotting the resulting data points on the matrix, we were able to identify the Group’s ten most important material issues.

In fiscal 2022, we again interviewed the Group directors and reviewed the Group’s material issues. After considering changes in society, the Group’s DX strategy and human resources utilization policy, etc., we then re-plotted the matrix to reflect these developments. As a result, the Group’s material issues were revised to include the eight most important ones.