Materiality | MEC COMPANY LTD.

Identifying Material Issues (“Materiality”)

Under the Vision for 2030 of “Create new value through original technology and work with customers to create a sustainable society” the MEC Group has identified six material issues to be addressed by management in order to contribute to the creation of a prosperous and affluent society and environment by creating and fostering value at various interfaces through business activities.
These issues were selected during the development of the Medium-term Management Plan 2022–2024.

Research and development to open up the future
Proper procurement, production, and logistics
Environmental preservation
Quality and safety
Utilization of diverse human resources
Reinforcement of management foundations

Six Material Issues and Related SDGs Actions《FY2023》

Research and development to open up the future

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented	Related SDGs actions
Development of products that reduce environmental impact	Promotion of sustainable product development	Development of a copper surface treatment agent that is 99% fossil fuel free. In FY2024, we will make refinements based on other products.
Development of new business	Execution of image recognition and AI solutions	Promotion of the AI business (Pictel). We accumulated technology through a series of PoCs (Proofs of Concept) with customers.

Proper procurement, production, and logistics

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented
SCM (supply chain management)	Visit raw material manufacturers, hold technical review meetings, and conduct exchanges between presidents to deepen relationships.	Visits to raw material manufacturers: 4 companies Technical exchange meetings: 2 companies Meetings for exchange between presidents: 1 company
CSR procurement	We are promoting the diversification of suppliers of main raw materials, in line with plans.	Achievement of approximately 70% diversification.
Creation of global production and supply system	Improvements to production and supply capabilities at each production site.	Execute necessary investment for production increases at multiple sites, in accordance with medium- to long-term production increase plans at each production site.
BCP responses	Reconstruct BCP at domestic factories (Goals for 2025)	The Company has launched a project and activities are underway to create a new BCP in anticipation of the construction of a new plant in Kitakyushu. [Multi-year plan through 2025]

Environmental preservation

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented
Appropriate chemical substance management	Promote non-use of prohibited substances	Properly handling various chemical substances in accordance with laws including the maintenance of a system that does not use prohibited substances and compliance with environmental laws and regulations.
Appropriate chemical substance management	Provide education and share information	As a chemical manufacturer, provided education on chemical substance management five times, including to employees who do not handle chemicals. In addition, provided proper training to and shared hazard and toxicity information with employees who use and control chemical substances.
Address climate change issues	Strengthening of information disclosure in line with TCFD recommendations	In February 2024, we disclosed additional information concerning the impact and timing of occurrence of risks and opportunities and other information related to the TCFD recommendations.
Address climate change issues	Disclosure of information regarding Scope 3 emissions	We disclosed domestic emissions for Scope 3 Categories 5 (waste generated in operations), 6 (business travel), and 7 (employee commuting).

Quality and safety

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented
Health and safety management	Zero accidents resulting in lost time	Maintained zero accidents resulting in lost time. (Zero accidents not accompanied by lost time)
Quality assurance	Rebuilding and improving quality assurance systems	Continued efforts to rebuild the quality assurance system and completed measures as planned.
Improvement of corporate value through appropriate information disclosure	Disclose information as appropriate	・Continued disclosure of information required to be disclosed in a timely manner without delay. ・Enhanced English-language disclosure of information required to be disclosed in a timely manner. ・Renewal of the website and enhancement of the Sustainability Report.

Utilization of diverse human resources

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented
Health management	Maintain the rate of employees having a medical checkup	・Maintained 100% medical checkup rate ・Increased the number of items to be checked in the stress check from 48 to 60, and developed a more in-depth understanding of the current situation.
Work-life balance	Increase male employees who take child-rearing leave	FY2022: 6 employees FY2023: 4 employees took leave (Average length of childcare leave taken is 47 days)
Work-life balance	Improvement of the work environment	・Conducted money seminars for employees in their 40s and 50s on “work efficiency” and “diverse work styles” in terms of employee benefits ・Preparation of training videos in line with the establishment of a new nursing leave system ・Consideration of periodic training programs on money and health
Career development	Have all employees receive mandatory training	Attendance rate of mandatory training: Approximately 100% Diversified and enhanced education through programs such as “Training by Class”, “Business Skills Improvement Seminars”, and “Career Development Support” so that each employee can maximize his or her abilities.
Diversity	Have at least two more women in positions of section chief level and above (Target as of March 2024)	As of March 2024, the number of female employees in the target positions increased by 2.
Engagement	Maintain trust with the Company (70% or more satisfaction for related items)	Improvement of “job satisfaction” score in annual awareness surveys Satisfaction: 69.4% (FY2020) ⇒ 70.5% (FY2023) As we cannot compare these results with external surveys, we have compared with the results of the previous survey by internal systems (FY2020)

Reinforcement of management foundations

Efforts to Address Material Issues	KPIs for FY2023	Action items and measures implemented
Governance	Attendance at Board of Directors meetings: 85% or more (Outside Directors)	Attendance of Outside Directors: 100%
Information security	Zero serious security incidents	Zero serious security incidents In order to appropriately manage and utilize the information assets held, determined the basic matters to be strictly adhered to, and made efforts to realize uniform information security management through appropriate operation.
Information security	Have all employees perform self-check and achieve the pass rate of 100%	・Had all employees perform self-check and achieved a pass rate of 100% ・Number of IT literacy training sessions: 6 ・Conducted online education as planned on IT systems and information security that employees should understand.
Risk management	Visualize management risks and implement countermeasures	Review management risks as appropriate and implement countermeasures Visualized various risks and countermeasures that impede the MEC Group’s sustainable growth and reported and discussed them at the Risk Management Committee.