日本語 English

CSO Message

CSO

Working toward effective management of non-financial KPIs

In VISION 2030, we reviewed our material topics and set KPIs linked to them.

In order to make steady progress toward our ideal vision, we have appointed Executive Officers to be in charge of the progress of each KPI, but this is not sufficient.

We need to continue conducting discussions about the validity of both material topics and KPIs.

Furthermore, the issue of how non-financial initiatives are contributing to the achievement of financial targets is also an important one in our efforts to enhance corporate value.

Based on the above, we conducted a review in fiscal 2022 from two perspectives: top-down and bottom-up.

Going forward, we will conduct effective management of non-financial KPIs in conjunction with the risk management system reviewed in fiscal 2022, and steadily implement a management system that integrates both financial and non-financial metrics.

Sustainability in the Mitsui Chemicals Group

In response to global corporate sustainability issues indicated by SDGs and other initiatives, we aim to achieve the sustainable development of society and the Group through the following efforts.

  • Seek business opportunities and strive to solve challenges through business activities
  • Recognize future risks for the Group and uphold our corporate social responsibility

Aiming for “integration of financial and non-financial performance”

Non-financial performance is the foundation of financial performance:
Respond to “prerequisites for business continuity” and foster trust
Non-financial performance leads to the future of financial performance:
Improve “abilities essential to business continuity” and accelerate growth
Non-financial and financial performance mutually affect each other:
By “contributing to a sustainable society,” maximize profits

Review of non-financial KPIs by management

All non-financial KPIs were reviewed at the meeting of the Company-wide Strategy Committee, which was attended by all executive officers with specific titles, including the CEO. Opinions such as the following were raised and issues were recognized: “Non-financial targets cannot be achieved by functional divisions alone, and collaborations with business divisions are essential,” “KPIs should be the key factors that need to be controlled in order to realize the Group’s ideal vision,” and “The deductive causal relationships between KPIs should be shown.” Although we did not make any changes to our material topics or non-financial KPIs in fiscal 2022, management will continue to discuss them, taking into consideration that they will be reviewed as necessary.

Financial/non-financial relationship analysis by all functional divisions

We instructed all functional divisions to create a logic tree that visualizes the relationship between the non-financial metrics set by each division and their financial results.

This is because we wanted employees working on non-financial initiatives to have a sense of ownership, by reminding them that they are also responsible for enhancing corporate value on a financial level.

In addition, we wanted to encourage employees to have deeper discussions about the validity of the metrics and measures.

Consequently, we have achieved a certain level of results. For instance, some divisions considered reviewing their metrics after realizing that “there are some metrics that will not logically lead to financial results.”

We will continue to refine the logic tree in each division, dig deeper into the organic relationships between financial and non-financial metrics throughout the Group, and work to visualize them.

Logic tree (Template)

ロジックツリー(イメージ)

Being linked to Group-wide risk management

In April 2023, we renewed our risk management system, and we believe that material topics should be linked to key Group-wide risks.

We believe that through the process of identifying key Group-wide risks, we can conduct a multi-layered review of material topics and non-financial KPIs linked to them, thereby pursuing effective KPI management.

UPGRADED
Renewal of risk management system

Up until now, the Group has viewed risks as threats, and each division and committee has implemented its own management approach of detecting risks early and preventing them from occurring.
On the other hand, from the perspective of the entire Group working as one to implement VISION 2030 in order to enhance corporate value, the Board of Directors voiced the need for a review of this approach.
In response, we focused on three points in this renewal.
Firstly, we will conduct risk management that aims not only to minimize threats but also to maximize opportunities.
Secondly, we have appointed officers with specific titles as risk owners, and established a Risk Management Committee as a place for each owner to bring up for discussion risks in their respective areas of responsibility.
This allows us to comprehensively and holistically understand risks and prioritize them from a Group-wide perspective.
Thirdly, we will incorporate the results of the discussions into management systems such as rolling strategic plans and annual budgets, and implement the PDCA cycle accordingly.
Since risks are a moving target, we will strive to increase our effectiveness while visualizing the status of our response.
At the same time, we will improve the risk management literacy of management and employees, and transform our organizational culture into one that maximizes opportunities.