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September 26, 2019
Sony ESG Briefing FY2019
Reinforcing Efforts to Generate Social Value from a Long-term Perspective
Tokyo, Japan - Today, Sony Corporation (hereafter "Sony" or "the company") held its ESG Briefing for the fiscal year ending March 31, 2020 ("FY2019"), wherein the company outlined its efforts to generate sustainable social value from a long-term perspective.
The theme of Sony's mid-term strategy (third mid-range plan) for the three-year period starting from FY2018 is to "sustainably generate social value and maintain a high level of profit." To that end, the company aims to generate social value by strengthening management from a long-term perspective through a range of initiatives, including the formulation of "Sony's Purpose & Values," building Sony Group-wide value creation stories and identifying key aspects of the basis of value creation, continuous reinforcement of corporate governance, engagement with Sony's various stakeholders, and more.
1. Value Generated by Sony from a Long-term Perspective
A number of actions are being implemented to strengthen Sony's management from a long-term perspective and achieve the goal of generating sustainable social value:
In order to ensure that Sony remains a meaningful presence in the world, and that all employees are aligned in the goal of generating value from a long-term perspective, this year the company defined its Purpose as "To fill the world with emotion, through the power of creativity and technology." It also defined the Values that support that Purpose: Dreams & Curiosity, Diversity, Integrity & Sincerity, and Sustainability. Together, these comprise "Sony's Purpose & Values."
Management teams and business units from across Sony Group held in-depth discussions on how Sony can best position itself to build clear value creation stories over the long term. These discussions clearly demonstrated the relationship between the value generated by Sony Group as a whole and the value generated by individual businesses. Additionally, materiality assessments were conducted to identify key aspects of the basis of value creation. One result of these initiatives is the "Corporate Report 2019," which was newly published this August.
In addition to Sony's Purpose, Sony's value creation model outlines the relationship between Sony's identity as a "creative entertainment company with a solid foundation of technology," its corporate direction of "getting closer to people," and the business diversity, technology, and employees that form the basis for value creation. The types of value generated through this value creation model across Sony's diverse business domains, including entertainment, electronics, and financial services, can be classified into the three categories below.
Enriching people’s hearts through the delivery of emotional experiences
Helping creators realize their dreams
Contributing to society through the delivery of safety and reliability
Sony sees corporate governance as the basis for promoting management that operates from a long-term perspective. Historically, Sony has engaged in various initiatives to evolve its governance as its businesses have diversified, and the company will keep working to continuously enhance its governance system.
From the perspective of improving the Board of Directors’ effectiveness, Sony appointed three new outside Directors in June of this year, and aims to further diversify the makeup of the Board of Directors. Furthermore, it is increasing the frequency of outside Director-only meetings that are held independently of Sony’s executive management members, with the aim of fostering discussion and collecting more feedback from outside Directors.
In terms of how Sony’s remuneration system for executives is designed, the system is built to incentivize improved corporate value over the mid to long term. For example, the proportion of an executive’s remuneration which is linked to Sony’s share price is set according to that executive’s role, while business results-based remuneration for executives who are in charge of specific businesses is determined using a qualitative set of criteria such as product quality, environmental factors, etc.
2. Employee-related Initiatives
Alongside technology, employees are an important aspect that form the foundation of Sony’s value creation. The key concepts of “Attract” (talent acquisition), “Develop” (learning and development), and “Engage” (employee engagement) form the core of Sony’s HR strategic framework, by which Sony continues providing an environment that unleashes the full potential of individual employees.
Attract: Sony seeks to acquire technologically proficient talent and to further strengthen global employment.
Develop: In addition to fostering the next generation of leaders who will direct Sony Group’s diverse array of businesses, Sony also established “PORT” within its headquarters as a space for diverse groups of employees to come together and grow.
Engage: In this area, Sony will newly establish the "Symphony Plan" starting April 2020, a work-life balance initiative to support employees' various challenges including childrearing, nursing care, and cancer prevention/treatment. In addition to existing support, the Symphony Plan will newly implement a system for cancer support, infertility treatment, and other forms of support at Sony Corporation and other Sony Group companies in Japan. Regarding cancer support, this plan will newly add leave days that can be used when receiving full medical checkups, and expand the flexible working hour system when receiving treatment. As for infertility treatment, the plan will introduce leave days, an extended leave system, and flexible working hour system that can be used with the goal of receiving treatment, and also cover a portion of the treatment expenses.
3. Environmental Initiatives
Under its "Road to Zero" long-term environmental plan, Sony aims to achieve a zero environmental footprint by 2050. Additionally, last year the company announced that it had joined RE100 and set a target of procuring 100% renewable electricity for power used in its business operations by 2040.
Starting from 2019, megawatt-class solar power generators have been installed and are in operation at Sony’s manufacturing facilities in Kumamoto, Japan and Chonburi, Thailand. Combined, these are expected to reduce CO2 emissions by approximately 2,000 tons annually.
Beginning from February 2020, Sony also plans to start operation of intracompany electricity transfer service in Japan that will enable a network of business locations to transmit and distribute megawatt-class solar panel-generated electricity among themselves. The solar power generators will be placed at JARED Ohigawa Center in Shizuoka, Japan, a product warehouse for Sony Music Solutions Inc., and the excess energy generated at this site will be supplied (via intracompany transfer) to the company's Shizuoka Production Center factory, allowing all of the power to be utilized in-house.
This August, Sony launched the “One Blue Ocean Project” to combat ocean pollution caused by plastic waste. The project promotes the reduction and recycling of plastic used in products as well as packaging and manufacturing, and aims to cut down or eliminate single-use plastics across Sony’s manufacturing facilities and offices. In addition, it promotes cleanup activities at beaches, rivers, and other locations around the world.
At the "UN Climate Action Summit 2019" held in New York on September 23, Sony Interactive Entertainment (SIE) made a new commitment to participate in "Playing for the Planet Alliance", which was formed to seek how video games industry can deliver for people and the environment. Within this alliance framework, SIE announced its progress to date and new plans to utilize energy efficient technology, assess and report its carbon footprint as well as educate and inspire the gaming community to take action on climate change.