We are building a sustainable future with the power of our engineering IT
Q. There is a growing trend to evaluate a company’s future and growth potentials from a sustainability perspective. What is Zuken’s basic approach towards sustainability management?
Our business objective is to improve the efficiency of engineering processes in the manufacturing industry leveraging IT. Improving the efficiency of engineering processes can contribute significantly to the reduction of the burden placed on the global environment. Not only in terms of design and manufacturing efficiency, but also by improving efficiency in the procurement and service operations across the entire supply chain. In addition, our technology is indispensable for product development in a manufacturing industry focused toward energy-saving and size/weight reduction designs. The popularization of such products is already underway, helping drive the realization of a sustainable society.
We are cognizant of how Zuken’s business goals are closely tied to the issue of sustainability. Going forward, we aim to be a company that can contribute toward the realization of a sustainable future by incorporating the “realization of a sustainable society” perspective more clearly into our management and growth strategy planning, and by further expanding the range of products and solutions that we offer.
There are many areas where engineering IT can contribute to environmental issues. These areas should be considered as business opportunities for our company.
Q. In considering future business risks and opportunities for Zuken, what are the issues that you foresee in terms of E (environmental), S (social), and G (governance)?
With regard to E (Environmental) issues, our company is engaged in efforts to reduce CO2 emissions by switching to LED lighting in our office buildings and switching to HEV for company- vehicles. Since the software industry is not an industry with a high environmental burden to begin with, the significance of our contribution to reducing the environmental burden in and of itself may not be significant. The entire supply chain has a role to play if we are to make proper headway on environmental issues. Looking at the share of total CO2 emissions the manufacturing industry is responsible for and the CO2 reduction potential of the five digital fields that comprise JEITA (see figure below), there are many areas where the engineering IT that our company offers can help. We believe that this should be viewed as a business opportunity.
The risks associated with environmental issues include preparing for natural disasters, protecting the lives and safety of employees, and ensuring the continuity of business operations. The products and services we provide to our customers are directly linked to product development and manufacturing—the core operations of a manufacturing business. It is important that we create a system where even if our offices were to become temporarily unusable due to a natural disaster of some kind, it will have a minimal impact on our operations. Although it wasn’t a disaster, we decided to leverage the COVID-19 pandemic as an opportunity to make remote working permanent. We will continue to proactively address issues to make it easier for employees to perform their work regardless of where they are based. This includes the IT infrastructure and internal systems necessary to achieve this.
Promoting the hiring of women and their active promotion to key positions
Contributing to the development and reskilling of digital human resources
With regard to social (S) issues, we believe that the decline in the working-age population will have a significant impact on our company. We recognize that this problem is a major risk for companies that handle software—a product of the human brain. On the other hand, engineering IT—the software product that we handle—is able to make significant contributions to labor saving measures, technology transfer, and the utilization of our technical know-how that will allow us to respond to the challenges of a shrinking working-age population. Digital transformation (DX) is necessary for tackling the issue of a declining working-age population in the manufacturing industry. We believe that the core technology for achieving this is engineering IT.
In terms of our company securing and making the most of human resources and its talents, we want to expedite the hiring of women along with empowering them. Because we have been focusing our recruitment activities specifically in the science-related fields, we currently have only a limited number of female employees. We think that our employee policies promote a positive environment where female employees can work productively and can have a fulfilling career at Zuken. All of our female employees are very active in their respective fields. An essential part of our HR policy is to increase the ratio of female employees in the company overall while also increasing their numbers in management positions.
Education is also very important in terms of the utilization of human resources. For the manufacturing industry as a whole, we believe that we can contribute to the development and reskilling of digital human resources by leveraging the engineering IT knowledge that the Group possesses to the manufacturing sector. We would like to increase the number of programs that can be taken online so that they can be accessed more easily without time or location constraints.
We have already participated in several activities and projects to help find solutions to various social issues through manufacturing, and we aim to continue these activities in the future. （⇒ Support for next-generation projects and engineers ). We believe that if more young people become interested in manufacturing through taking an interest in social issues, it will lead to the revitalization of the manufacturing industry as a whole. And if any of them become part of the Zuken Team, that is a plus for us too.
As mentioned above, our vision for sustainability is a management and growth strategy. There is no doubt that governance (G), the mechanism for examining and verifying the results of such strategies, is important. This year, we are moving to the prime market. We will establish a governance system that is consistent with the requirements of the stock market. The new CGC will include various requests for E and S as demanded by companies in the prime market. We will create a system to implement and verify sustainability-related policies and measures as management issues.
Incorporating Sustainability Perspectives into Overall Management and Business Strategies
Q. How do you plan to communicate Zuken’s vision of sustainability management?
Within the broad theme of sustainability, we need to think about what risks we need to prepare for, what contributions we can make, what business opportunities we can take advantage of and then formulate what timeline we need to implement them. We understand that we will not be able to execute the various themes all at once or even in a short period of time, but instead we will steadily drive them over time.
The important points are to incorporate the perspective of sustainability into our overall management and business strategies and to continue to work on them under the leadership of our management team. We plan to incorporate initiatives related to sustainability management into the Medium-term Management Plan to be announced in July. We also intend to disclose our progress and various activities on our website and, as appropriate, in investor-relations information. We are looking forward to hearing feedback from out many stakeholders.