Third-Party Opinion

In this report, the description of the value creation story was greatly expanded from 16 pages to 40 pages last year. As for "NTN's strengths," it has been linked to "invested capital" and risks, opportunities and measures, strengths and materiality initiatives in the value chain, business strategies in the Medium-term Management Plan, and efforts to strengthen the financial position and revenue base have been incorporated into the value creation story. Regarding sustainability management, the materiality and KPIs have been linked to the targets for the fiscal year ending March 31, 2023. Integrated thinking was more reflected, the value creation story became compelling, and the positioning of each initiative became easier to understand. The Integrated Report comprehensively covers finance and non-finance to provide an overview while clarifying the roles of entry to other reports and materials.
The value creation story thoroughly explains the investment of R&D resources in six target areas, the restructuring of business and product portfolio through selection and concentration, and the promotion of DX. Strategies to strengthen competitiveness under the Medium-term Management Plan have been steadily implemented, and the direction of value creation is indicated in conjunction with the revitalization scenario of the CFO message.
In terms of sustainability management, each item is linked to the KPIs for materiality and the targets for the fiscal year ending March 31, 2023. In terms of reducing CO₂ emissions, Scope 1 and 2 are set as ambitious targets for carbon neutrality by the fiscal year 2035. Scope 3 is also specified as a target by the fiscal year 2050. In the process of aiming for this goal, it is also mentioned to pursue the creation of economic value, and there is always an awareness of its links to value creation.
Disclosures based on TCFD recommendations, which were endorsed in May 2021, were also added to provide an explanation of the current status of governance, strategy, risk management, metrics, and targets, an awareness of risks and opportunities using scenario analysis and corporate responses. Currently, the creation of sustainability disclosure standards is advancing rapidly on a global level. However, NTN has made disclosures of core content in anticipation of ISSB's exposure draft, and information disclosure based on SASB standards has been expanded from last year. Compliance with global disclosure requirements is progressing, leading to improved corporate evaluation. Looking ahead, strategies will strengthen resilience by addressing the financial impact of risk and opportunities on a company's financial position, performance, and cash flows, and in terms of metrics and targets, the amount of assets and investments related to risk and opportunities. If these items can be shown, it is expected to lead to an increase in trust from global investors.
It should also be noted that the new theme of "prosperous human development" includes initiatives concerning respect for human rights, promote safety and health, human resource development, and promote diversity. The management commitment shows a strong will to develop human resources for the next generation, indicating that the foundation is being laid for the realization of human capitalism. The message that resonates with employees in the opening paragraph, the "NAMERAKA Society" we aim for must have been cultivated on this foundation.
Regarding governance, in the fiscal year 2022, a new NTN PROUD AWARD was established to recognize employee ESG activities, and ESG items were introduced in the Executive Officer evaluation system. These are expected to serve as tools to promote ESG initiatives from both bottom and top perspectives.
Throughout the whole process, the leadership of top executives is becoming widespread, and a story of sustainable growth is being communicated to readers. I am confident that this report can be communicated to stakeholders in an easy-to-understand manner, thereby contributing to the realization of collaboration through the spirit of coexistence and co-prosperity.