Materiality

SHO-BOND’s Materiality

The SHO-BOND Group has designated four Materialities based on social demands and the expectations of stakeholders. The Materialities are our priorities in order to achieve sustainable growth with our stakeholders as the SHO-BOND Group plays a role in solving social issues while continuing to increase corporate value.

The Materialities involve internal activities and how business activities affect society. We believe that all of these activities contribute to accomplishing the Sustainable Development Goals and achieving the SHO-BOND Group’s Corporate Philosophy.

The SHO-BOND Group will continue to leverage business activities for constant progress concerning these Materialities in order to contribute to long-term sustainable growth and the development of a sustainable society.

Process to Identify Materiality

In April 2020, the SHO-BOND Group identified materiality with the participation of employees, senior management and prominent individuals outside the group.

The SHO-BOND Group will continue to upgrade Materiality initiatives with the input of the group’s internal and external stakeholders.

Identification of social issues	To identify materiality, we first identified 55 social issues to be examined. This process incorporated the SHO-BOND Group’s policies, social demands, the expectations of stakeholders and other factors.	*1. GRI standard, SASB standard, SDGs, ISO26000, 10 Principles of the UN Global Compact, OECD Guidelines for Multinational Enterprises, and others *2. Policies of the Ministry of Land, Infrastructure, Transport and Tourism for public works projects and other policies *3. MSCI, FTSE, Robeco SAM and others
Establishment of priorities	The 55 issues were ranked by using the perspectives of stakeholders and the group’s businesses. The top 22 issues were then chosen as the priority social issues.
Materiality proposal	The 22 issues were divided into four groups based on their characteristics in order to establish a materiality proposal.
Confirmation of suitability	The suitability of the materiality proposal, including the process used to create the proposal, was checked with the participation of senior management and the input of prominent individuals outside the SHO-BOND Group.
Identification and disclosure of materiality	Final conceptual diagram of materiality, with external input, and approval by the Board of Directors.

Materiality Matrix

To identify materiality, a materiality matrix was created by evaluating social issues from the standpoints of the importance to stakeholders and the importance to business operations. Then 22 social issues that were very important from both standpoints were selected as the issues that the SHO-BOND Group should target.

To determine importance to stakeholders, evaluations were performed by using the perspectives of shareholders and other investors in Japan and other countries, local governments, government agencies and other sources of orders for the SHO-BOND Group, manufacturers of building materials, chemicals and other materials procured by the group, construction firms and other subcontractors, residents near business sites and other members of society, government actions and policies, and other stakeholders. For importance to business operations, evaluations were performed by the group’s senior management, including outside directors, and employees.

Materiality and the Sustainable Development Goals

The priority social issues were divided into four categories based on their characteristics in order to determine materiality. We also identified SDGs that have strong ties with this materiality.

Social issues	Materiality	Corresponding SDGs
Establish a resilient infrastructure Leverage comprehensive maintenance resources to contribute to society Ensuring occupational health and safety	Comprehensive maintenance system backed by the organizational capabilities Contribute to the development of social infrastructure by using partner companies interactions and the group’s aggregate resources for all maintenance processes, whether large or small.		Ensure sustainable consumption and production patterns.
			Strengthen the means of implementation and revitalize the global partnership for sustainable development.
Develop and use technologies for social issues Activities to increase productivity Recruiting and training programs Employee retention and sound labor relations Improve economic performance	Productivity improvement through technology development Improve productivity by combining chemical and civil engineering technologies to create new technologies and by conducting training and education programs.		Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
			Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.
Strengthen corporate governance Strengthen risk management Compliance with laws and regulations Fair business practices Information security measures Proper management of intellectual property	Sound governance and measures for more improvements Make sound and transparent governance to maintain the foundation for relationships with all stakeholders.		Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and bulid effective, accountable and inclusive institutions at all levels.
Sustainable use of resources Assessment of environmental impact of projects Proper management of waste materials Measures to combat climate change Measures involving Japan’s falling population Develop sustainable cities Health and safety of customers and consumers Community relationships	Contribution to the development of sustainable cities Position the social infrastructure maintenance business as a key component of the development of sustainable cities that are environmentally responsible.		Make cities and human settlements inclusive, safe, resilient and sustainable.
			Take urgent action to combat climate change and its impacts.

• Environment
• Social
• Governance

Materiality Framework

Non-Financial Information Summary