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Sustainability
Materialities (Key Issues) and KPIs

Materialities (Key Issues) and KPIs

To realize our Sustainability Vision, the Nissha Group identifies particularly important items as materialities. We also set and engage in specific strategy items, KPIs, and action items.

Materialities are evaluated from the 4 perspectives of, Creating Business Opportunities, Risk Reduction, Strengthening Management Foundation, and Corporate Governance, using the two axes of importance to society and stakeholders, and importance to Nissha. In addition, we hold dialogues with stakeholders including customers, shareholders and investors, and include those insights in importance to society and stakeholders. The identified issues and their positioning within the Group are discussed by the Sustainability Committee, and materialities are identified through deliberations and resolutions by the Board of Directors.

Materiality Identification Process

STEP1 Identify related social issues	Identify social and management issues related to the realization of the Sustainability Vision by referencing SDGs, GRI Standards, Responsible Business Alliance (RBA), etc.
STEP2 Prioritize	Incorporate knowledge gained through dialogue with customers, shareholders, investors, and other stakeholders regarding the social and management issues identified in Step 1, while analyzing and prioritizing on two axes: importance to society and stakeholders (considering SDGs, external evaluation, etc.) and importance to Nissha.
STEP3 Verify validity	Examine the validity of the priorities via interviews conducted with business divisions, responsible departments, and ESG task force.
STEP4 Establish materialities, KPIs, and action items	Based on Steps 1 to 3, materialities are identified through deliberations and resolutions by the Board of Directors. In addition, business divisions, responsible departments, and the ESG task force incorporate strategy items, KPIs, and action items which are then approved by the Sustainability Committee.

Creating Business Opportunities

Identified based on important social issues (needs) in the priority markets as stipulated in Sustainability Vision

Materialities	Scenario for Achieving Materialities (Strategy Items)	KPIs and Action Items (FY2026)
Solve medical issues (Medical devices/ Pharmaceuticals)	Expansion of business for Medical market	Net sales of Medical segment
Contribute to the safety and comfort of transportation and logistics, and the reduction of environmental impact (Mobility)	Expansion of business for Mobility market	Net sales of Mobility segment
Promotion of circular economy (Sustainable Materials)	Expansion of business for Sustainable Materials market	Net sales of Sustainable Materials segment

Materialities

Scenario for
Achieving Materialities
(Strategy Items)

KPIs and Action Items
(FY2026)

Solve medical issues
(Medical devices/
Pharmaceuticals)

Expansion of business for Medical market

Net sales of Medical segment

Contribute to the safety and comfort of transportation and logistics, and the reduction of environmental impact (Mobility)

Expansion of business for Mobility market

Net sales of Mobility segment

Promotion of circular economy (Sustainable Materials)

Expansion of business for Sustainable Materials market

Net sales of Sustainable Materials segment

Risk Reduction

Evaluated and identified environmental and social risks that impede business continuity in aiming to achieve Sustainability Vision

Materialities	Scenario for Achieving Materialities (Strategy Items)	KPIs and Action Items (FY2026)
Responding to climate change	Reduction of CO₂ emissions	CO₂ emissions reduction rate: 50.5% reduction (compared to 2020)
Respect for human rights	Reduction of labor and human rights risks	Number of child labor and forced labor cases at primary suppliers in high-risk industries or areas for labor and human rights: 0
Providing responsible products and services	Maintain and expand quality management system in accordance with business strategy Improve quality with an emphasis on product safety and feasibility at the design stage Fostering and improving the quality mindset Monitoring of compliance with laws and regulations	Number of serious quality incidents: 0
Sustainable procurement	Reduction of information security risks for suppliers	Construct a system to evaluate and manage information security based on the varying information security levels of the target overseas suppliers
Data security in response to increased use of generative AI	Continuously enhance security systems to respond to increasingly sophisticated cyberattacks Maintain and improve security literacy among all employees Improve productivity through proactive use of generative AI	Continuously implement phishing email training and educational systems throughout the entire Nissha Group Develop governance related to generative AI and implement employee training throughout the entire Nissha Group

Strengthening Management Foundation

Identified major management foundation elements in the quest for realizing our Sustainability Vision and accelerating business activities

Materialities	Scenario for Achieving Materialities (Strategy Items)	KPIs and Action Items (FY2026)
Enhancing human capital	Utilizing diverse human resources	Female manager ratio Global consolidated: 23% Nissha non-consolidated: 12% Secure and train global management personnel
Enhancement of learning and growth opportunities and employee rotations	Selection rate of leader candidates in selective training programs Nissha non-consolidated: 45% Implement medical shift training based on the shift of human resources to priority markets
Efficiency and productivity improvement	Solve work issues through generative AI/DX tools Shift to value-added work through reducing working hours	Improve efficiency of target processes through the use of generative AI and DX (progress rate: 100%) Numbers of cases adopting generative AI (Japan, overseas)

Materialities

Scenario for
Achieving Materialities
(Strategy Items)

KPIs and Action Items
(FY2026)

Enhancing human capital

Utilizing diverse human resources

Female manager ratio
Global consolidated: 23%
Nissha non-consolidated: 12%
Secure and train global management personnel

Enhancement of learning and growth opportunities and employee rotations

Selection rate of leader candidates in selective training programs
Nissha non-consolidated: 45%
Implement medical shift training based on the shift of human resources to priority markets

Efficiency and productivity improvement

Solve work issues through generative AI/DX tools
Shift to value-added work through reducing working hours

Improve efficiency of target processes through the use of generative AI and DX (progress rate: 100%)
Numbers of cases adopting generative AI (Japan, overseas)

Corporate Governance

Identified major corporate governance elements in the quest for realizing our Sustainability Vision and accelerating business activities

Materialities	Scenario for Achieving Materialities (Strategy Items)	KPIs and Action Items (FY2026)
Improving the effectiveness of the Board of Directors	Upgrade systems related to corporate governance and group governance	Implementation of actions based on the evaluation of the effectiveness of the Board of Directors
Advancement of global governance	Implementation rate for plans to counter key risks through the use of the risk management coordinator

Materialities

Scenario for
Achieving Materialities
(Strategy Items)

KPIs and Action Items
(FY2026)

Improving the effectiveness of the Board of Directors

Upgrade systems related to corporate governance and group governance

Implementation of actions based on the evaluation of the effectiveness of the Board of Directors

Advancement of global governance

Implementation rate for plans to counter key risks through the use of the risk management coordinator