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Materiality

As part of our efforts to help resolve global social issues, we will work conscientiously to achieve the UN's SDGs. At the same time, to build the sustainable society that the world should aim for, in February 2021, we determined the material issues that the Takeuchi Group needs to address.
We spent time deliberating on the material issues we need to address throughout our supply chain, from development, purchasing, manufacturing, and sales of our flagship Compact Construction Machinery to the construction sites where our products operate, right through to product disposal.

Takeuchi's material issues and contribution to the SDGs

Material Issues
No. E S G The seven core subjects of ISO 26000 and Takeuchi's main initiatives. Social issues to be resolved Themes Outline SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1 SDGs1
1 The environment Mitigate climate change Develop, manufacture, and sell battery-powered compact excavators By developing, manufacturing, and selling battery-powered compact excavators, we will reduce our environmental impact and minimize the impact around worksites. 3.9 7.3 9.4 11.6 12.4 13.2 14.3
2 Reducing GHG emissions at factories To help mitigate the effects of climate change, we will work to reduce greenhouse gas emissions, such as CO2, from factories. 7.3 9.4 13.2 14.3
3 Improving factory energy efficiency
Expanding the use of renewable energy
As a countermeasure against climate change, we will work to improve the efficiency of the energy, such as electricity and gas, used by our factories, and we will take the initiative to increase the use of renewable energy provided by solar power generation and others. 7.2、7.3 9.4 13.2
4 Realizing a circular economy 3R factory initiatives We will contribute to a circular economy by reducing, recycling, and reusing waste from factories. 12.3、12.4、12.5 14.1
5 Reducing our environmental impact
Preventing pollution
Managing chemical substances
Develop, manufacture and sell construction machinery with reduced environmental impact We will develop, manufacture, and sell construction machinery with excellent safety and comfort that reduces the burden on workers in addition to reducing the burden on the global environment. 3.9 7.3 9.4 11.6 12.4 13.2
6 Reducing chemical emissions and wastewater from factories For the environment and employee health, we will work to effectively manage chemical substances used in our factories, to prevent pollution from their discharge, and work to reduce wastewater. 3.9 6.1、6.3 11.6 12.2、12.4 14.1
7 Complying with SDSs, REACH regulations, and RoHS Directive We will fully manage the chemical substances contained in our products by using safety data sheets (SDSs). We will comply with the REACH regulation and RoHS Directive. 3.9 6.3 11.6 12.4
8 Consumer issues (responsibility towards customers) Sustainable urban development Improving productivity and work efficiency at sites where construction machinery is operated, by developing products that precisely meet market needs. We will strive to improve our products, services, and customer satisfaction by strengthening our connection with end users and by gathering more feedback from them. 8.2、8.8
9 Developing , manufacturing, and selling construction machinery that contributes to building and maintaining resilient cities and infrastructure This is the essential focus of our business, and the area where we excel. We will widely contribute to society by developing, manufacturing, selling, and servicing continually safer, more efficient, and cleaner construction machinery. 1.5 2.4 3.6 4.a 6.1、6.2、6.4 9.1
9.a
11.1、11.2、11.3、11.4、11.5、11.7、11.a、11.b 13.1 14.1、14.5、14.7 15.2
10 Dealing responsibly with customers Strengthening connections with end users by increasing the amount of information on products and services We will strengthen our connection with end users by providing them with the information they need, aggregating their requests, and implementing systems to use that information within our company. 8.2、8.5
11 Human rights
Labor practices
Respect for human rights
Effective labor practices
Eliminating employment discrimination We will eliminate all discrimination in labor and employment. We will promote equal pay for equal work and the employment of people with disabilities. 4.3、4.4、4.5 8.5、8.8 10.2、10.3 16.3
12 Prevention of harassment We will respect human rights and work to prevent all forms of harassment. 5.1 8.5 10.3 16.1、16.3
13 Labor practices Occupational health and safety
Employees' health
Health management at Takeuchi (nonconsolidated) We will promote employee health, mental health care, and occupational health and safety. 3.3、3.4、3.5、3.8、3.9
14 Human resources Increase education and training programs We will improve and increase our education and training programs for the growth of our employees and the development of their abilities. 4.3、4.4
15 Promoting work-life balance Encouraging the use of internal systems, such as childcare and nursing care leave, and shorter working hours To improve employees' work experience and to promote a better work-life balance, we will respect diverse workstyles and lifestyles, and we will improve employee benefits and strive to implement working-style reforms. 3.4 5.1、5.4 8.5
16 Human rights
Organizational governance
Promoting female participation Appointment of female directors, and development of female management candidates We will promote the active participation of women and increase diversity in management by appointing female directors and developing female managerial candidates. 4.3 5.1、5.5 8.5 10.3 16.7
17 Community involvement and development Developing the next generation in the community Factory tours at Takeuchi (nonconsolidated), sending out lecturers, and cooperating with special needs schools For regional and local community development, we will contribute to nurturing the next generation by opening up factories to social studies tours, sending lecturers to promote public learning programs, and cooperating with special needs schools. 4.1、4.5、4.7 10.2 16.1、16.3
18 Fair operating practices Establishing an environmentally and socially conscious supply chain Establishing and implementing a CSR procurement policy To build a sustainable supply chain, we will set up and implement a CSR procurement policy that addresses the environment, human rights, labor issues, anticorruption, etc. 8.4、8.7 12.1、12.2、12.4 16.3
19 Asking suppliers to agree to our CSR procurement policy To implement our CSR procurement policy, we will obtain the agreement of our suppliers. 8.4、8.7 12.1、12.2、12.4 16.3
20 Dismantling, collecting, and recycling at the stage of product disposal To pass on the planet to the next generation, we will work to establish a system for disassembly, collection, and recycling at the product disposal stage. 8.4 12.1、12.2、12.5
21 Organizational governance Compliance Compliance with laws and regulations, and the exclusion of Organized Crime We will comply with the letter and spirit of the law, such as anticorruption laws and the exclusion of organized crime, strive to operate with social ethics and good sense, and abide by our Action Guidelines. 6.3 8.5 10.2、10.3 12.4 14.1 15.1 16.3、16.4、16.5
22 Corporate Governance Strengthening global governance To ensure fair and transparent management, we will maintain a business management system for prompt and effective decision-making with consistent communication of management intentions, and work to strengthen global governance throughout the Takeuchi Group. 12.6 16.7
23 Risk management Crisis management systems, BCPs, and information security We will work on risk management to analyze, assess, and manage risks that may have a significant impact on our sustainable development. 3.9 8.5 11.5、11.b 12.4 13.1 16.3、16.10

* Specific targets and KPIs for addressing material issues are currently being formulated.
* Click here to print out the list of material issues (PDF).

Process of identifying Material Issues

1. Understanding the issues to address and analyzing the current situation

We established a cross-departmental project team to work on addressing the SDGs. The team was chaired by Toshiya Takeuchi, President and Representative Director, and consisted of directors, general managers, section managers, and working-level personnel. The team members held discussions and reviews to understand and analyze the Company's business operations and to establish activity themes to address in the future.

To clearly identify material issues based on trends in the international community and the expectations of stakeholders and their importance to management, we reviewed the 169 targets of the SDGs as well as global requests and guidelines, such as GRI and ISO 26000, and incorporated the opinions of outside experts.

Through these discussions and reviews, we understood what we were already doing, what we were not doing, and new initiatives that we should focus on in the future. In this way, we identified candidates for Material Issues that Takeuchi should address today and over the medium to long term.

2. Assessing and prioritizing issues

We plotted, on two axes, the priorities for material issue candidates, measuring, on the horizontal axis, the importance from management perspectives for Takeuchi's medium- to long-term business and, on the vertical axis, the importance from stakeholders' perspectives, while integrating the opinions of outside experts . Then, through discussions within the project team, we identified our material issues. To gauge their importance from our stakeholders' perspective, we took into account requests from end users, suppliers, distributors, employees, environmental organizations, local communities, local governments, investors, etc., as well as expectations for the Company.

Outside expert's opinion on material issues

Takeuchi is a unique construction machinery manufacturer that has built an original business model where overseas sales account for more than 98% of sales.
Regarding the material issues, established for the first time, I think they are very good overall.

"Resilient urban development" is part of goal 11 in the SDGs. As compact construction machinery is important for the urban infrastructure, such as housing, electricity, water and sewage, and gas, I think this is a material issue that reflects company characteristics well. This is why I proposed that the "development, manufacture, and sale of construction machinery that contributes to the construction and maintenance of resilient cities and infrastructure" (No. 9) should be a high priority.

I proposed that other material issues should also be given high priority, including "strengthening connections with end users by increasing the amount of information on products and services" (No. 10); "dismantling, collecting, and recycling at the stage of product disposal" (No. 20); and the "appointment of female directors, and development of female management candidates" (No. 16). First of all, No. 10 and 20 will take some time for the Company to complete, and while Takeuchi's strength is in working with distributors and dealers, they have not been so good at communicating with end users (individuals and general contractors). However, when considering the entire supply chain, there are requests from stakeholders that cannot be avoided, such as environmental impact, including waste generated by end users, as well as labor practices, safety, and the comfort of the end users.

The promotion of female participation (under goal 16) is another issue that will take time. The construction machinery industry and construction sites tends to be male dominated, but of course, there are female construction machinery operators, and there will be a strong need for product development that considers female operators. This is why it is essential to have a comfortable working environment where female employees can fully participate. Obviously, our main sales areas are North America and Europe, so it would be a good idea to make this a high priority as well.

Other material issues that the Company needs to address as a construction machinery manufacturer are firmly established, such as the development of battery-operated compact excavators with zero emissions and machinery with low environmental impact as well as initiatives for manufacturing infrastructure, such as eco factories, and for a supply chain that fully considers the environment and society.

I have heard that the Company took my proposals seriously and adopted the above Material Issues, as they tackle this issue for the first time.

Moreover, I think that my proposals contain points that the company can draw on when it considers material issues next time and the time after that.

I look forward to Takeuchi achieving sustainable growth through sustainable management.

Takashi Nawa

Takashi Nawa

Professor, Graduate School of International Corporate Strategy (ICS), Hitotsubashi University
Prof. Nawa graduated from the Tokyo University Faculty of Law and received his MBA from Harvard Business School. He worked in the Industrial Machinery Division of Mitsubishi Corporation for about 10 years. He also worked in consulting at McKinsey & Company for nearly two decades (until 2010). At McKinsey, he was a practice leader for the Asia-Pacific region in the automotive and manufacturing sector and a practice leader in the Japan office for the high-tech and telecom sectors. He is now engaged in a wide range of projects such as next-generation growth strategies and company-wide structural reforms in diverse industries around the globe, including Japan, other parts of Asia, and the US.