Material Issues

Japanese

Based on analyses from both perspectives--the importance to the Shofu Group and social expectations such as requests from stakeholders--and in line with our Basic Policy on Sustainability, we have identified four priority themes and 16 material issues for the Group to address.

Process for Identification of Material Issue

Step 1

Interviews with Outside Directors and Business Divisions

We conducted interviews with our outside directors to ask what they thought were the social issues that we should give priority to and work on from a long-term perspective.

In addition, we did interviews with business divisions to ask about the status of the initiatives being taken on our medium-term management plan and the status of our responses to social issues in order to extract social issues, risks, and opportunities related to us.

Step 2

Extraction and Examination of Social Issues

We extracted 40 social issues from the following two perspectives: and examination of social issues

  • Issues that can be identified by referring to international guidelines, such as ISO26001, GRI Standards, and SDGs
  • Issues that can be identified by analyzing social conditions, market environment, and the condition of the Company, in addition to the issues identified through the interviews in Step 1
Step 3

Evaluation of Materiality of Social Issues

Based on the list of social issues we prepared, we analyzed, evaluated, and prioritized them from the following two viewpoints: materiality for stakeholders and materiality for the Company. After discussions at the Sustainability Committee, the Managing Executive Board, and the Board of Directors, we narrowed down the list of themes that we should give priority to and work on.

Step 4

Identification of Material Issues

We prepared a draft of material issues based on the list of themes that had been narrowed down. At the same time, we formulated quantitative and qualitative targets and action plans for each material issue. Their comprehensiveness and validity were confirmed at the Sustainability Committee, and after discussion at the Managing Executive Board, they were resolved at the Board of Directors.

Identified Material Issues

Material Issues Target Major Initiatives and Achievements

Contribution to Higher QOL of People
Quality assurance and stable supply of products
  • Zero product recall arising from quality issues
  • Zero voluntary product recall
Ensuring proper use of products
  • Strengthening the system for collecting and evaluating information on safety management
  • Enhancing information provision for proper use of products
  • Established procedures for defect reporting and recalls, etc., at European sales subsidiary
  • Expanded provision of maintenance-related information for machine products
Providing products and services that solve issues in dentistry (providing products and services that have positive impact on society)
  • Strengthening partnerships with dental professionals
  • Increasing the number of countries in which our products are sold
  • Strengthening protection and utilization of intellectual property
  • Providing digital products and services continuously
  • Providing preventive products including Giomer products and services continuously
  • Increasing the ratio of sales of preventive and digital products to net sales
  • Shofu Dental Club members: 18,766 (18,930)
  • Seminars held for dental professionals: 69
  • Countries where our products are sold: 115
  • Acquired intellectual property rights aligned with management, business,and development strategies
  • Sales of CAD/CAM-related products in Japan: up 29.3% year on year
  • Sales of Giomer products overseas: up 21.9% year on year*Giomer products: dental-related products applying the bioactive material S-PRG filler
Providing information for higher dental IQ
  • Raising awareness about diseases of and enhancing information provision to the general public
  • Held one public lectures on civic dentistry
  • Called for haiku and senryu poems about teeth and expanded Instagram presence for the dental education site Haiku
Material Issues Target Major Initiatives and Achievements

Promotion of Corporate Activities Friendly to Global Environment
Contributing to a sound material-cycle society
  • Developing recycling systems for product development, materials, etc
  • Increasing the recycling rate
  • Considered the applicability of plant-derived raw materials in product development, and the recyclability of existing products
  • Recycling rate: 77.8% (82.9%)
Addressing climate change and contributing to a decarbonized society
  • Reducing greenhouse gas emissions by 27% (compared to FY2021)
  • Realizing carbon neutrality by 2050
  • Calculated and disclosed Scope 3 CO2 emissions for the Shofu Group in Japan
  • Shofu Group Scope 1 and Scope 2 CO2 emissions: 5,372tCO2 (5,791tCO2)*Of which CO2 emissions in Japan: 2,936tCO2 (3,498tCO2)
Preventing environmental pollution
  • Maintaining our record with zero environment-related accident
  • Zero violations of environmental laws and regulations
Material Issues Target Major Initiatives and Achievements

Strengthening of the Management Base to Support Corporate Value Enhancement
Respect for human rights
  • Promoting understanding of human rights policy and initiatives throughout the Group
  • Promoting sustainable procurement in our supply chain
  • Conducted in-house human rights training, established human rights consultation desk, etc.
  • Introduced a supply chain risk management system
Enforcing thorough compliance
  • Zero serious compliance violation
  • Zero serious compliance violations
  • Conducted internal training on compliance and related topics
Promotion of risk management
  • Implementing highly effective business continuity management
  • Introduced EDR and monitoring services*EDR: Technologies and processes for detecting and responding to malicious activities and security incidents at endpoints (devices and terminals connected to networks).
  • Established a basic risk management policy and built an implementation framework
Strengthening corporate governance
  • Strengthening group governance
  • Building a highly effective corporate governance structure
  • Revised Board of Directors regulations for all subsidiaries
  • Conducted third-party board effectiveness evaluations and addressed identified issues
Disclosing information appropriately and having dialogue with stakeholders
  • Conducting surveys,questionnaires, and dialogue with stakeholders and taking measures for improvement
  • Enhancing the quality and quantity of information disclosure
  • Proactively conducted shareholder surveys and investor meetings
  • Conducted overseas roadshows
  • Implemented simultaneous disclosure of financial results and timely disclosure materials in Japanese and English
Material Issues Target Major Initiatives and Achievements

Cultivation of a Rewarding Organizational Culture and Development of Human Resources
Enhancing employees' health and ensuring safety in work environment
  • Maintaining our record with zero serious industrial accident
  • Raising employees' awareness about health (including oral health care)
  • Frequency rate: 0.00 (1.87)
  • Certified under the 2025 KENKO Investment for Health Program
  • Conducted harassment training
Promotion of human resource development
  • Strengthening our support for employees' career development
  • Identified career paths, personnel requirements, and skill maps
  • Implemented measures for developing next-generation leaders, global human resources, and DX specialists
Promoting diversity and inclusion
  • Increasing the ratio of female managers
  • Ratio of female managers:
    3.9% (3.0%)
  • Ratio of female hires:
    37.2% (21.6%)
Realizing work-life balance
  • Increasing employee satisfaction
  • Paid leave utilization rate:
    79.2% (79.7%)

Figures in parentheses show last year's results.

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