Materiality supporting Asset Assembler model

We will aim for MSV by using sustainability activities centered on initiatives on materiality that support Asset Assembler model.

We identified materiality by creating a list of material issues which society requires us to address. This process included international ESG guidelines such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) as well as items required by ESG research organizations. We then performed a quantitative evaluation of the issues and verified their significance from two perspectives: the level of importance to stakeholders and the level of importance to Nippon Paint Group’s businesses. In addition, we used external experts to receive objective viewpoints and held discussions with our partner companies around the world to identify material issues associated with our business model and the business environment. These issues were then designated as our materiality.

Risks and Opportunities Related to Materiality (Relevant SDGs)

Materiality (Relevant SDGs)

Risks

Opportunities

Climate change

Risks

Enforcement/change of policies and legal regulations such as introduction of a carbon tax Impact on production and shipment from extreme weather, such as typhoons and heavy rainfalls, that are becoming increasingly common in recent years Changes in customer behavior toward transition to a decarbonized society

Opportunities

Expansion of the market for environmental products, such as products contributing to decarbonization Development of new businesses through research and development

Resources and environment

Risks

Impact on business activities from depletion of energy and water resources Tightening of regulations on wastes and increase of waste disposal cost Changes in customer needs related to raw materials

Opportunities

Expansion of the market for environmental products Enhanced competitiveness by advancing recycling technologies, improving resource efficiency, and utilizing diverse raw materials

Diversity & Inclusion

Risks

Difficulty of securing human resources that satisfy diversity requirements with a decrease in the university graduated population Slowing of business activities that reflect diversity in customer needs

Opportunities

Securing diverse and competent human resource talent as a global company Creating wealth for companies, workers, and local communities by creating diverse and inclusive organizations

Safe people and operations

Risks

Significant impact on operations if a major accident occurs at a production site Impact on safety assurance due to changes in manufacturing processes accompanying substantial increases in production

Opportunities

Improving worksite safety and hygiene by sharing best practices and education plans from around the world Improving employee motivation and Company competitiveness for acquiring human resource talent

Growth with communities

Risks

Significant damage to the corporate brand if the company is not perceived as a corporate citizen by local communities Damage to the public image of the paint industry caused by inadequate activities oriented toward the local community

Opportunities

Improving public awareness of the corporate brand through value chain investment in communities Promoting the sound growth of communities through social contribution activities to increase the positive public view of our Group

Innovation for a sustainable future

Risks

Significant hindering to future corporate earnings owing to inability to generate innovation due to slow response to new markets

Opportunities

Expansion of market for products that contribute to controlling and adapting to climate change Products and services that address social issues contribute significantly to society and help boost corporate earnings in the long term

For details of risks, please see "Business and Other Risks" on our website.

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