Sustainability Policy
With the goal of bringing “Innovation from Japan to the world,” all of us are united in our pursuit of “Creating high value-added services” that contribute to the business success of our clients. We strive to generate a positive impact on society through our business activities and to fulfill our responsibility as an innovation-creating company committed to building a sustainable society.
Sustainability Management Structure
The Simplex Group has established the Sustainability Council to move forward with sustainability initiatives under the authority of the council. The Sustainability Council consists of the Representative Director, President and CEO (the “CEO”) and Executive Directors of the Company and its subsidiaries and is chaired by the CEO.
In addition, to discuss specific issues related to employees’ health and safety and execute business, the Company has built an organizational structure with the Health and Productivity Committee and the Office Environment Committee set up under the Sustainability Council, the Safety Committee under the Office Environment Committee and the mandatory Health Committee under the Health and Productivity Management Committee. The Health and Productivity Management Committee seeks the involvement of occupational health physicians and employee representatives to plan, formulate, and implement measures that contribute to the maintenance and improvement of workers’ and their families’ physical and mental health, and as a result, to the improvement of productivity.
Further, to manage risks associated with cyber security and data security, the Company has appointed Chief Information Security Officer (the “CISO”), and has set up the Information Risk Management Committee as an advisory body to the CISO, which consists of representative members from each business division, including the division heads, to build a structure whereby it collects information across the Company to resolve issues.
Governance Risk Management Structure
The Simplex Group carries out company-wide risk management at its Executive Committee meetings, which are chaired by the CEO. However, authority is delegated to the Sustainable Council for matters related to sustainability.
Matters discussed at the Sustainability Council meetings are reported to and discussed at the Executive Committee as part of company-wide risk management. They are also reported to the Board of Directors on a semi-annual basis, enabling executive oversight.
Based on these reports, the Board of Directors incorporates the results of discussions into group-wide strategies, etc.
Materiality for the Simplex Group
Process of identifying materiality issues
01
Identification of issues
While operating companies often prefer to develop systems in-house, we recognize that barriers to successful in-house system development at non-tech companies are high, given social conditions such as technological innovation in generative AI and the rapid decline in the working-age population. In order to resolve these issues, we interviewed each department to determine what materiality issues should be selected for the Simplex Group, and extracted all possible issues.
02
Determination of importance
First, the materiality issues are divided into two categories: business materiality issues, which are issues to be addressed in the normal course of business, and management foundation materiality issues, which are issues that are linked to promoting business and strengthening the management foundation. Then, we evaluate based on two aspects: importance to the Simplex Group and importance to stakeholders, including our clients, business partners, shareholders and investors. In assessing these issues, we refer to domestic and international standards such as the Guidance for Collaborative Value Creation and the SASB Standard＊1, and select items that are important for both categories, as well as items that are important as social issues even if they are important for only one of them.
03
Discussions at executive committee, sustainability council, etc.
The appropriateness of these evaluations is discussed at Management Committees and the Sustainability Council, and materiality issues determined to be important from a management’s perspective are selected.
04
Discussion and decisions by the board of directors
Ultimately, the Board of Directors, including outside directors who are experts in various fields such as management and law, hold discussions and determines materiality issues for the Simplex Group.
05
Feedback from stakeholders
We undertake timely reviews of materiality issues we highlight, taking into account changes in social conditions and the internal environment, as well as feedback from our clients, business partners, shareholders, investors, and other stakeholders.
Sustainability Accounting Standards Board
Addressing Material Issues
We have identified six materiality issues primarily in light of our management philosophy, code of conduct, values and long-term growth strategy. Based on these materiality issues, we develop, implement, and promote strategies, as well as review and revise the materiality issues, as needed, in line with changes in the business environment and society.
01
Innovation and competitiveness
Under our Management Philosophy “Innovation from Japan to the World,” we regard innovation and the retention of competitiveness as an integral element of our materiality issues. We believe it is important that we acquire and develop hybrid talents who are familiar with both business and technology, proactively adopt new technologies, invest in R&D, manage intellectual properties, and constantly evaluate how these elements affect our business.
FY3/2027 Targets
- Investment in R&D: Approx. 4% of revenue
FY3/2024 Results
- Investment in R&D: 1.8 billion yen
02
Client relationship management
For us, a company pursuing a “Client First” mentality as one of its 5 DNAs, our code of conduct, the maintenance and management of good relationships with clients is also an important materiality issue. We believe that we need to manage our supply chain in a manner to raise the customer satisfaction with our products, retain good relationships with customers including the affiliates of our clients, and maintain communication with these customers, as well as ensure our respect for basic human rights.
FY3/2027 Targets
- Average number of business partner engineers and consultants during the period＊2: Approx. 500
FY3/2024 Results
- Average number of business partner engineers and consultants during the period＊2: 522
03
Human capital management
To continue our business, it is highly important that we acquire, develop, and retain superior hybrid talent who are familiar with both business and technology. We believe that the management of human capital from diverse perspectives, including the health and safety of our employees, diversity and inclusion, and training programs, is also one of our important materiality issues.
FY3/2027 Targets
- Average number of engineers and consultants during the period＊3: 2,400
- Number of new graduates hired＊4: 300
- Number of mid-career professionals hired: 150
- Turnover rate: Less than 9%
- Percentage of women to total employees: 20.0%
- Percentage of women in management positions: 20.0%
- Percentage of women out of new graduate hires 25%
- Percentage of paid leave taken＊5: 70.0% or more
FY3/2024 Results
- Average number of engineers and consultants during the period＊3: 1,678
- Number of new graduates hired＊4: 185
- Number of mid-career professionals hired: 118
- Turnover rate: 8%
- Percentage of women to total employees: 15.7%
- Percentage of women in management positions: 6.6%
- Percentage of women out of new graduate hires: 15%
- Percentage of paid leave taken＊5: 66.6%
04
Product quality and safety
The system development business within our business domains is required of mission-critical operations, besides ensuring security of data including clients’ data and the protection of privacy. We therefore have placed the highest priority on offering products with quality and safety, along with a high level of reliability and availability.
FY3/2027 Targets
- Percentage of employees who participate in the annual measurement of the degree of understanding security: 100％
FY3/2024 Results
- Percentage of employees who participate in the annual measurement of the degree of understanding security: 100％
05
Response to global environment issues
For us, a company focused on being “Global” as one of its 5 DNAs, we believe that it is our responsibility to address pressing issues, which the world is working closely together to tackle, such as global warming and diversity, from the perspectives of both business and technology.
FY3/2027 Targets
GHG emissions＊6
- Scope 1 (direct emissions from owned or controlled sources): 0t-CO2
- Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company): ０t-CO2＊7
- Scope 3 (all other indirect emissions that occur in the reporting company’s supply chain): - ＊8
FY3/2024 Results
GHG emissions＊6
- Scope 1 (direct emissions from owned or controlled sources): 0t-CO2
- Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company): 10.3t-CO2＊7
- Scope 3 (all other indirect emissions that occur in the reporting company’s supply chain): 6,880.0 t-CO2＊8
06
Realization of sophisticated governance
Through the delivery of sophisticated IT solutions and services that contribute to customer businesses, the Simplex Group is keenly aware of the importance of governance. The Group has built a governing structure that enhances the oversight of management teams by transitioning to a company with an Audit and Supervisory Committee. We aim for sustainable and sound growth by putting a highly effective governance system into practice in line with our Management Philosophy.
FY3/2027 Targets
- Number of inside and outside directors (Percentage of outside directors) (non-consolidated): To maintain a majority of outside directors
- Number of male and female directors (percentage of female directors) (non-consolidated): To increase the percentage of female directors
FY3/2024 Results
- Number of inside and outside directors (Percentage of outside directors) (non-consolidated): Inside: 4 Outside: 6 (60.0%)
- Number of male and female directors (percentage of female directors) (non-consolidated): Male: 9 Female: 1 (10.0%)
Business partners refer to temporary workers, employees of subcontractors, and equivalents who are engaged in work in the office environment of the Simplex Group.
Average of total number of employees and business partners during the period.
The number of new graduates hired is based on the number of those decided or targeted to be hired during each fiscal year, and the actual date of joining the company is April 1 of the following fiscal year.
Since annual paid leave is granted on the record date of January 1 of each year, the figures are based on the results or target for the period from January 1 to December 31, 2023 and 2026.
Each item is calculated based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain (March 2022, Ministry of the Environment and Ministry of Economy, Trade and Industry). Scope 1 emissions of the Simplex Group are excluded from the calculation because they are negligible.
Scope 2 emissions target is the target for FY3/2026.
Scope 3 emissions target will be disclosed as soon as the targets are formulated.
Materiality Map
In creating the materiality map, the materiality issues are first divided into two categories: business materiality issues, which are issues to be addressed in the normal course of business, and management foundation materiality issues, which are issues that are linked to promoting business and strengthening the management foundation. Then, we evaluate based on two aspects: importance to the Simplex Group and importance to stakeholders, including our clients, business partners, shareholders and investors.
