Key Management Priorities

Basic Philosophy

As stated in the Niterra Way (Sustainability Charter), we aim to enhance our corporate value by contributing to the realization of a sustainable society.
To achieve this, we consider solving social issues to be our most important management issue, and with our unique aspirations, we will promote the realization of our vision: "Brightens the Earth through our technologies and ideas." In addition, we will promote both the creation of human resources for "brightens the Earth" so that "diverse and proactive individuals embody the Niterra Way," and the creation of our foundation to "establish new global management foundation to drive transformation."
Specifically, we will contribute to solving social issues through the combination of diverse technologies and provide renewable and circular solutions. Furthermore, our human capital investments will focus on expanding mechanisms that enable diverse talent to work vibrantly and utilize their individual strengths, fostering individuals who can proactively take action during periods of transformation and forge the future, and developing individuals who can create new value with expertise to address more complex challenges. In addition, as part of our management infrastructure development, we will build an organizational platform that supports rapid decision-making and enables strategic risk control.
To achieve these goals, we believe it is important to set more specific initiatives and targets in the fields of "solving social issues," "human capital," and "management foundation," taking a medium- to long-term perspective, and then work towards them.

Process for Identifying Key Management Priorities

Three steps in the specific process: STEP 1: Understanding the external environment; STEP 2: Creating and narrowing down a long list and developing scenarios; STEP 3: Quantifying double materiality and identifying management issues to prioritize.

This diagram maps each item along two axes: social impact and financial impact, identifying "solving social issues," "human capital," and "management foundation" as priority management challenges.

Key Management Priorities

We have identified three priority areas for management issues: "solving social issues," "human capital," and "management foundation." The Sustainability Committee, consulted by the Board of Directors, monitors and oversees the progress of representative themes and main initiatives in each area. We review our policies as needed, taking into account business conditions, global standards, and social trends, and also referencing the opinions of external experts. Any revisions are approved by the Board of Directors.

Key Management Priorities: Solving Social Issues

Brightens the Earth through our technologies and ideas

Contribute to solving social issues by integrating diverse technologies.
Provide regenerative and circular solutions.

Theme	Main initiatives	Goals and Outputs (FY2029)	Achievements (FY2025)	Background
Responding to Climate Change	Reduction of CO₂ emissions	For Scope 1 and 2 FY2030: 46% reduction (compared to FY2018 levels) FY2035: 71.4% reduction (compared to FY2018 levels) FY 2050: Net Zero	31.9% reduction	The impacts of climate change, including the increasing severity of natural disasters, hinder the sustainable development of society. Therefore, reducing emissions of greenhouse gases such as CO₂, which are considered to be the cause of climate change, and aiming for a decarbonized society has become a common challenge worldwide. Our group also recognizes that reducing CO₂ emissions in our business activities and supply chain is a crucial issue. In addition to measures such as energy conservation, manufacturing improvements, work style reforms, and renewable energy generation, we will achieve both planned CO₂ emission reductions through our own efforts and economic growth by introducing new technologies.
Responding to Climate Change	Reduction of CO₂ emissions	For Scope 3 FY2030: 30% reduction (compared to FY2018 levels)	8.5% reduction
Technologies, Products, and Businesses for Contributing to the Resolution of Social Issues	Dissemination and expansion of environmentally friendly automobile-related products (Internal Combustion Engine (ICE) business)	Sales ratio of precious metal plugs: 50% or higher	46%	Our group aims to contribute to a better society by addressing the various challenges facing the world and co-creating and providing new value that helps solve them. The challenges facing the world are diverse, ranging from climate change and energy problems to minimizing the environmental impact of the products and services we use in order to pass on limited resources to future generations, which is also a crucial issue for the sustainability of society as a whole. Our group will make the most of the technologies we have cultivated, mainly in ceramics, and the experience we have accumulated, by proposing new value to people around the world and contributing to the sustainable development of society as a whole.
		Sales ratio of wide range oxygen sensors: 50% or higher	43%
	Dissemination and expansion of environmentally friendly automobile-related products (xEV-related business))	Sales expansion of ceramic bearing balls and ceramic heat dissipation substrates	Overseas sales through the Niterra Group's sales network
	Promotion and expansion of sales for stationary Environment & Energy-related products	Expanding sales of SOFCs as high-efficiency distributed power sources with a view to the use of CO₂- free hydrogen, and developing and commercializing SOECs and reversible solid oxide cells (SOCs) aimed at the widespread adoption of hydrogen production equipment	Expanding sales of SOFC Expanding sales for multi-fuel applications and new uses Development and commercialization of SOEC and rSOC Completion of prototyping and evaluation of 10kW stacks Improved durability through cell development

Key Management Priorities: Human Capital

Diverse and proactive individuals embody the Niterra Way

At Niterra, the personal growth of each individual is the driving force that fosters their contribution to the sustainable development of the Niterra Group.

Theme	Main initiatives	Goals and Outputs (FY2029)	Achievements (FY2025)	Background
Respect for Diversity and Individuality	Establishing and operating human resource systems aimed at achieving optimal placement for each individual and enabling them to maximize their potential to the fullest	Motivational factors in engagement surveys: Average score of 3.56 or higher.	Average score 3.42	Companies face a variety of human resources challenges, including labor shortages due to a declining birthrate and aging population, fierce competition for talent with rivals, and increased turnover rates due to decreased engagement. Promoting human capital management is therefore essential. Our group recognizes that employees are our greatest asset. We believe that respecting the diversity and individuality of our approximately 16,000 employees worldwide and creating an environment where each individual can thrive will solve these challenges and contribute to the development of our group. To achieve our management strategy, we will implement global talent management that identifies and optimally allocates necessary personnel, and further develops their skills and abilities to improve individual performance and enhance organizational strength. We will also work to cultivate highly motivated individuals and build a talent pool by implementing measures to promote the "Niterra Way." The foundation of this is the concept of Diversity, Equity & Inclusion (DE&I). Regardless of gender, age, disability, nationality, lifestyle, or personality, we recognize and accept diverse talent and strive to provide each individual with the most appropriate support and opportunities fairly. In a vibrant work environment, we combine knowledge and ideas, and utilize the new value and concepts that arise from that combination.
	Promoting the empowerment of female, foreign nationals, and mid-career employees	Ratio of female, foreign national, and mid-career employees in managerial posts: 30% (Group in Japan)	27.0%
		Ratio of women employees in managerial posts: 10% (Niterra Co., Ltd. only)	5.5%

Key Management Priorities: Management Foundation

Establish new global management foundation to drive transformation

Transform into a more resilient corporate structure, adapting to changes in the external environment.
Facilitate swift decision-making and strategic risk management.

Theme	Main initiatives	Goals and Outputs (FY2029)	Achievements (FY2025)	Background
Corporate Governance	Increasing the ratio of female and foreign nationals to directors	Percentage of female and foreign nationals as directors: 30% or higher	36% (4 out of 11)	To achieve sustainable growth and enhance corporate value in the medium to long term, we believe it is important to have a board of directors composed of diverse individuals with different backgrounds, including expertise and experience. Furthermore, we place importance on strengthening the board's oversight function and ensuring transparency in decision-making by increasing the proportion of outside directors.
Corporate Governance	Increasing the ratio of outside directors	Ratio of outside directors: Over 50%	64% (7 out of 11)
Risk Management	Management of serious incidents signs and prevention of their occurrence	Implementing risk reduction activities for priority risks identified through integrated risk management	Advancing measures to address priority risks for FY2025 Updating the risk map and identifying priority risks for FY2026 Initiating efforts to implement management risk (strategic risk from a management perspective) management. Selecting global priority risks and reviewing the status of initiatives	In today's rapidly changing business environment, the risks faced by companies are also diversifying, and mishandling these risks can lead to a crisis threatening the company's survival. Our group strives to enhance corporate value by promoting risk management on a daily basis.
Compliance	Implementation of compliance awareness surveys and continuous education / awareness-raising activities for all employees	Conducting compliance awareness surveys and disclosing the results Zero serious compliance violations	Compliance awareness survey completed Four serious compliance violations found	For our group to continue conducting business, it is essential that we remain a company trusted by society. Recognizing our role as a member of society, our group aims to be a company trusted by all stakeholders by appropriately responding to societal demands.
Respect for Human Rights	Human rights due Diligence initiatives	Conducting surveys regularly and disclosing the results	No significant concerns identified in the human rights due diligence assessment Disclosure of FY2024 assessment results and initiatives on the website and other channels	We recognize that our group's business activities affect a wide range of people, including our own employees, our business partners' employees, and local residents. Therefore, we will do our utmost to ensure that the dignity of these people is protected in accordance with international standards.
Information Security	Maintaining and strengthening incident response organizations and building preventive systems	Maintaining an Information Security Management System Conducting IT security audits and disclosing the results Zero cybersecurity incidents globally	Conducted IT security audits and improved maturity levels. Advanced the formulation and establishment of a business continuity framework (IT-BCP) for unforeseen events.	As information technology becomes more sophisticated every day, businesses handle a wide variety of information assets. However, risks, including cyberattacks, are increasing, making it crucial to enhance information security. Our group also considers information assets as a key management resource and will strengthen information security to ensure their proper protection and effective utilization.
Improving Value-Added Productivity	Evolving our business foundation through multifaceted data utilization, including smart factories, to enhance value-added productivity and revolutionize operational efficiency	Improving value-added productivity: x1.4 improvement (compared to FY2024 levels)	[Direct] Finalization of specifications for the information utilization infrastructure and model line [Indirect] Formulation and target-setting for the medium-term personnel plan (through FY2029)	In our group, we believe that improving productivity is not simply about "finishing work faster," but about generating maximum added value from limited management resources (people, materials, money, and time). Through this, we aim to achieve sustainable growth for our company.