Sustainability Challenges and Targets

In regard to sustainability challenges and targets (materiality), we identified issues of high importance by evaluating trends in the international community and social issues that are closely related to us from two perspectives: ① importance to stakeholders, ② importance to YASKAWA.

These issues were discussed at internal meetings, including those of the Board of Directors, and issues of particular importance were identified as materiality. We have also clarified the direction of each focus area and strategy, and set quantitative and qualitative KPIs. Through the resolution of identified materiality issues, we are working to realize a sustainable society and increase corporate value, which we aim to achieve under our sustainability policy.

Sustainability Challenges and Targets（Materiality）and Their Progress

Create Social Value and Solve Social Issues through Business Activities

Materiality	Realize revolutionary industrial automation with partners through “i³-Mechatroncis”
Initiatives [Targets]	Accumulation of “i³-Mechatronics” project success cases
FY2021 Results	•Strengthened customer approach with key products (YRM-X controller, YASKAWA Cockpit) based on i³-Mechatronics concept •Expanded performance through collaboration with leading manufacturers in a wide range of industries, including semiconductors, electronic components, medical, food, consumer electronics, and apparel
Desired Outcomes	Solve customer management issues with i³-Mechatronics, a solution concept

Materiality	Build clean social infrastructure and foundation for safe and comfortable living
Initiatives [Targets]	•Achieve CCE 100 (Contribution to Cool Earth 100)^*1[FY2025: 100 times] •Expanding examples of mechatronics technology applications
FY2021 Results	•61 times •Promoted initiatives in mechatronics application areas with a focus on energy conservation, clean power, food and agriculture, and humatronics
Desired Outcomes	•Use Yaskawa’s technological capabilities to improve the environmental performance of products and reduce the environmental impact of the world by expanding sales •Apply and expand Yaskawa’s existing mechatronics technology and take on new domains

Materiality	Develop new technologies and business domains through open innovations
Initiatives [Targets]	•Strengthen initiatives in new areas through M & A and alliances •Reinforcement of Industry-Academia-Government collaboration •Expansion of venture investments by YIP^*2
FY2021 Results	•Continued aggressive search for growth opportunities through M & A and other means to create technological synergies in the core FA business and its surrounding areas •Additional investment in Doolim-Yaskawa Co. Ltd. (Jan. 2022) •Number of industry-academia-government collaboration cases: 27 •Comprehensive collaboration with Kyushu University •Cumulative total of venture investments: 17 •2 cases of investment in FY2021 (Additional investment in Novel Crystal Technology, Inc. and　new investment in VC Cell Therapy, Inc.)
Desired Outcomes	•Leverage M & A / Alliance to provide feedback on business expansion and technology in new areas •Promote external collaboration to develop the world’s first and best technologies and products •Demonstrate business synergies through venture investment and collaboration

Strengthen Management Foundation that Contributes to Sustainable Society/Businesses

Materiality	Sustainable and productive manufacturing
Initiatives [Targets]	Introduction of cutting-edge manufacturing •Improving production efficiency at own plants (improving productivity indicators^3) [FY2022: +19%^4 FY2025: +23% (compared to FY2019)] Reduction of greenhouse gas emission through the Green Process •Reducing greenhouse gas (CO₂) emissions [FY2025: -30%^5 (compared to FY2018)] Improvement of product safety and quality •Improving product quality through the introduction of new systems [FY2022: Start of global operation of market quality information centralized system] Construction of a sustainable supply chain •Improving the rate of compliance with Sustainable Procurement Guidelines [FY2022: Compliance rate: 100%^4(target: major suppliers of Yaskawa Electric) FY2025: Compliance rate: 100% (target: major suppliers of Yaskawa Group)]
FY2021 Results	Productivity indicator +18% (compared to FY2019) Reduction of greenhouse gas emission -4.3% (compared to FY2018) •Accelerated implementation of temporary and permanent measures to address quality issues through real-time collection of market quality information in Japan and Asia •Coded quality information to address quality issues globally •Used predictive failure diagnosis with constant monitoring tools for customer equipment to improve maintenance proposals Asked 56% of Yaskawa Electric’s major business partners to conduct an investigation and confirmed a 100% compliance rate
Desired Outcomes	Promote global production efficiency and optimization through domestic and overseas expansion of the “Yaskawa Solution Factory” concept Reduce CO₂ emissions and address global climate change issues Provide optimal maintenance throughout the life cycle with the ultimate goal of “not stopping customer equipment” Implement supply chain management based on adherence to sustainable procurement guidelines

Materiality	Create a rewarding workplace and human resource development
Initiatives [Targets]	Diversity and inclusion •Raising the ratio of female managers [FY2025: Non-consolidated/Group in Japan: Double (compared to FY2021)] Human resource development •Increase the ratio of professional human resources^6[FY2025: Corporate average 75% or more^4] Occupational safety •Improvement of lost-time injury frequency rate [FY2025: Non-consolidated: Maintain 0.2 or less Major production bases in Japan and overseas: Maintain 0.4 or less] Human rights and work practices •Implementation and establishment of human rights due diligence processes for employees [FY2022: Implementation of human rights due diligence for group companies in Japan FY2025: Implementation at all global sites] Contribution to local communities •Development of human resources in science and engineering who will realize “evolution of manufacturing” [FY2022: Launch of a new manufacturing human resource development program]
FY2021 Results	•Ratio of female managers: 0.8% (non-consolidated) •Increased the female percentage of new graduates hired •Professional rating ratio: 47% (as of the beginning of FY2022) •Lost time injury frequency rate:0.32 (non-consolidated), 0.20 (domestic group), 0.53 (global)^*7 •Publication of human rights policy and implementation of human rights due diligence (non-consolidated) •Studied the status of initiatives taken by domestic groups •Formulated draft program (overall picture), implemented some remote programs •YASKAWA Innovation Center Visitors: 3,295
Desired Outcomes	Demonstrate the strengths of diverse human resources by promoting the active participation of women Develop human resources based on personnel philosophy and improve the job satisfaction of employees Eliminate work stoppage accidents and create a safe workplace Raise employees’ awareness of human rights and create a workplace where human rights are respected Promote social contribution activities to coexist and co-create with local communities by developing human resources for the evolution of manufacturing

Materiality	Fair and transparent governance system
Initiatives [Targets]	“Aggressive” governance system utilizing the Corporate Governance Code •Implementation of the Principles of the Corporate Governance Code (Reasonable explanation where not implemented) Strengthening of information security •Improving the level of information security through the use of external auditing organizations Enhancement of compliance •Strengthen compliance through internal reporting
FY2021 Results	Implementation of the principles of the Corporate Governance Code required of companies listed in “prime market” Conducted external security threat analysis, identified challenges and enhanced response Continued appropriate responses to whistleblowing and other compliance issues
Desired Outcomes	Promote sustainable growth and increase corporate value through constructive dialogue with investors Raise the level of the security organization and build an autonomous and continuous information security system Prevent escalation by early detection of compliance risks

*1 A target of reducing CO₂ emissions through Yaskawa products by 100 times or more of the CO₂emissions of the Group by FY2025

*2 Abbreviation of Yaskawa Innovation Program. New business creation scheme with CVC functions launched in FY2016

*3 Revenue per person for indirect and direct personnel at plants in Japan (compared to FY2019)

*4 Target was revised in April 2022.

*5 The target value was changed following the revision of the 2050 carbon neutral target in May 2022.

*6 Refers to human resources who have a rating of 3 or higher on a four-point scale in accordance with company rules

*7 Three factories in China (Shenyang, Changzhou and Shanghai) and Yaskawa India