Materiality -Eight key issues identified by PERSOL-
At the PERSOL Group, we believe that we must identify materiality (key issues) that is essential for sustainable growth, incorporate these issues into our management policies and plans, and act accordingly to address sustainability-related risks and opportunities which are likely to impact our management policies, plans and other activities. Based on this awareness, we selected eight key sustainability issues in FY2022.
Our materiality process
For a company to solve social issues and continue to create value over the medium and long terms, it is essential that the company integrate elements of sustainability (including ESG) into its corporate management. At the PERSOL Group, we have discussed the social issues we should solve through our work to achieve our Group Vision and identified material issues in time with the formulation of our new Mid-term Management Plan (FY2023 to FY2025) from the perspectives of both “Solving social issues through our business” and “Foundation for achieving sustainable growth”.
We implemented a three-step process to identify material topics. In step 1, we identified the themes of candidate issues based on global standards, such as the GRI standards, the SDGs and the SASB standards, and on the evaluation items of MSCI, other ESG rating agencies and other organizations. As a result, we listed approx. 300 items and approx. 60 issues. In step 2, we interviewed the management of the PERSOL Group and external experts and evaluated the issues to be considered from the perspectives of both risk and opportunity from the viewpoints of our stakeholders and the Group, narrowing down the list to 26 issues. In step 3, the CEO and senior executives repeatedly discussed the issues based on the evaluations in step 2, and eight material issues were selected through the deliberations of the Board of Directors.
Identifying issues and topics
- Identifying the themes of candidate issues based on global goals and standards,1 ESG evaluations,2 the external environment and other criteria
- As a result, we created a list of approx. 300 items and approx. 60 issues.
*1 GRI, SDGs, SASB, etc.
*2 MSCI, etc.
Assessing each issues importance
- Analyzing key sustainable issues from the perspectives of stakeholders (Organizing major stakeholders' expectations and requests for the PERSOL Group and the industry)
- Analyzing key sustainable issues from the perspective of the PERSOL Group (Identifying and weighting themes which could be opportunities or risks for the Group's businesses)
- Plotted 26 sustainability issues that are material to both our business and our stakeholders on a materiality matrix.
Setting out our material sustainability issues
- In Step 3, based on the 26 issues identified through Step 2, CEO and executive officers had additional discussions and 8 material issues were underpinned through the Board meeting.
Monitoring Efforts to Address Material Issues
We have set initiatives, KPIs, and targets for the solving of each material issue. In FY2023, we will begin to monitor the progress in the achievement of the targets. Progress in the achievement of the targets and initiatives is reported at the meetings of the Sustainability Committee which are held twice a year. The content of the Sustainability Committee's discussions is reported to HMC and the Board of Directors, which provide feedback, and issues are discussed again as necessary.
Linking Corporate Value and Materiality Issues
At the PERSOL Group, we have linked initiatives to address the eight materiality issues with the enhancement of the Group’s corporate value to show how the former contribute to the latter, based on the DCF method* (continuous growth model).
Since the impact of material issues on corporate value and their pathways cannot always be quantitatively demonstrated, we also use qualitative evaluations and analyses. By visualizing the impact on corporate value, we aim to align our understanding with investors and advance our efforts to address material issues and ESG-related risks and opportunities.
* Discounted Cash Flow method. It is one of the widely used methods to valuate companies.
How Our Material Issues and Corporate Value are Linked
As outlined below, the PERSOL Group aims to generate sustainable corporate value by specifically linking each materiality initiative to increased value creation (societal and financial value), lower cost of capital, and higher growth rate. We believe that doing so will increase transparency to investors and stakeholders and ensure the long-term growth and stability of the Group.
Increased Value Creation (societal and financial value)
Increase profits to be generated in the future (financial value) and the contribution value to stakeholders (social value)
| Material issue | Link with corporate value |
| Creating work opportunities | By providing job seekers with a diverse range of job opportunities, we aim to create new career paths and help stabilize and expand employment. Doing so will not only increase PERSOL’s sales and profits, but will also stimulate the economy and enhance the brand value of the PERSOL Group. This will also enable our corporate clients to secure a stable workforce, contributing to increased revenues for our clients. |
| Providing diverse work styles | Offering diverse work styles, such as remote and flextime work, will help people who work improve their work-life balance and increase their productivity. As a result, our corporate clients will also benefit from higher employee satisfaction and productivity, increasing their corporate value from both a societal and financial perspective. |
| Providing learning opportunities | We enhance the skills of our corporate clients’ employees by providing upskilling programs and other training designed to develop career ownership, as well as providing post-upskilling placement services. This not only helps employees build their careers, but also increases the productivity and value-creation capability of our corporate clients. |
| Increasing productivity at companies | We help our corporate clients increase their productivity by providing support in implementing digital tools and improving processes to increase efficiency. This enhances the profitability of our corporate clients and enables them to provide high quality services to their business partners and customers. In addition, for the PERSOL Group, this will also lead to increased sales of services related to productivity improvement for corporate clients. |
| Responding to climate change | By providing GX (Green Transformation) engineer temporary staffing services and support services for carbon neutral management, we will contribute to the realization of a carbon neutral society in partnership with our corporate clients. |
Lower Cost of Capital
Reduce cost of capital,including the risk premium
| Material issue | Link with corporate value |
| Strengthening data governance | Enhancing the reliability and transparency of our data will increase investor and stakeholder trust and lower the company’s risk premium. This also ensures that we deliver safe and secure services for our customers, strengthening society’s trust in the PERSOL Group. |
| Respect for human rights | Respecting the human rights of all employees and stakeholders reduces legal and societal risks, lowers the PERSOL Group’s risk premium, and contributes to sustainable growth. |
| Responding to climate change | Reducing climate change risk by carbon neutrality initiatives will serve to strengthen investor trust and improve the brand image of the PERSOL Group. This will reduce the cost of capital and increase our corporate value as a company dedicated to sustainable growth. |
Higher Growth Rate
Increase the mid- to long-term growth rate of business
| Material issue | Link with corporate value |
| Providing learning opportunities | The PERSOL Group provides learning opportunities for temporary employees and technology professionals. This enables employees and job seekers to quickly acquire specialized skills in order to build their careers. In addition, by improving the skills of the PERSOL Group’s employees, we will enhance the quality of the Group's overall talent base, strengthening its competitiveness. This will establish a foundation for increasing the company's mid- to long-term growth rate and support the sustainable growth of the Group’s business. |
| Active roles of diverse human resources | Promoting diversity and creating work environments that enable a diverse workforce to flourish will help generate new perspectives and ideas, enhancing the PERSOL Group’s ability to innovate. This will enhance our ability to enter new markets and develop new products, helping enhance the sustainable growth rate of the Group’s business. |