Message from the Executive Officer in Charge of Sustainability

As the global landscape continues to undergo a major shift, environmental issues such as climate change, along with various societal challenges, are becoming increasingly severe. Addressing these challenges requires greater efforts from governments, societies, and individuals alike, and I believe that the responsibility of corporations like ours, which drive economic activities, is growing ever larger. For more than 20 years, the Cosmo Energy Group has placed sustainability at the core of its business operations, as stated in our Group Management Vision, and we have a history of promoting environmentally-focused management. The pursuit of sustainable value enhancement and development based on this management vision is none other than the cornerstone of sustainability at the Cosmo Energy Group.

On the other hand, as the world is changing rapidly, we too must evolve. While our Group Management Vision remains constant, the means to realize it must be adapted flexibly. To this end, the Sustainability Strategy Committee, chaired by the Group CEO, met seven times in FY2023, and has steadily promoted sustainable management by discussing a wide range of topics—from the latest issues such as climate change and biodiversity to the reevaluation of our internal control system.

In the Sixth MTMP, we established our vision for material issues and, backcasting from this vision, set KPIs for both the long-term and the period of the plan, and built a system to implement the PDCA cycle. We also evolved our sustainable management practices, such as linking ESG assessments to executive remuneration.

In the Seventh Consolidated Medium-Term Management Plan (hereafter, “the Seventh MTMP”), which concludes in FY2025, we have defined three key themes for transforming our management foundation: Human Resources Transformation (HRX), Digital Transformation (DX), and Green Transformation (GX). These three transformation initiatives align with the material issues we aim to resolve by 2050, and addressing these material issues is directly connected to realizing our vision of how we want the Group to be as defined in Vision 2030.

For each of the three transformations set forth as themes in the Seventh MTMP, we have set specific goals as part of our efforts to transform our management foundation.

First, regarding GX, we recognize climate change as one of our most important material issues as a company that handles fossil fuels. In May 2021, our Group announced our Carbon Net Zero Declaration, committing to achieving net zero greenhouse gas emissions from our business operations by 2050. With the announcement of the Seventh MTMP, we expanded this commitment to include the supply chain, aiming for net zero carbon emissions, including Scope 3 as well. As part of our GX strategy under the Seventh MTMP, we are also measuring how our business operations contribute to decarbonization on a societal level. As a group, we will continue to work together toward achieving net zero carbon emissions.

In addition, investment in human resources is essential for executing sustainable management. As Chief Human Resource Officer (CHRO), I also oversee the human resources division, and as part of our HRX initiatives, we are pursuing a “people strategy that motivates employees and harnesses their skills” in an effort to cultivate human resources who can help us realize Vision 2030. To enhance enterprise value, we will work to bolster the capabilities of individual employees and maximize performance by increasing employee engagement, while also focusing on health and productivity management, which serves as the foundation for everything.

In the area of DX, we are working on establishing a DX promotion foundation to strengthen competitiveness and create new value, while also cultivating digital talent. We have defined the development of core digital personnel, who will drive Cosmo’s DX efforts, as a KPI, and are actively undertaking various initiatives to achieve this end.

In 2022 and 2023, we worked to engage in active dialogue with our investors and disclose information in the area of sustainability through measures such as our ESG Presentation. In these times of increasing uncertainty, I believe that sustainable management is a vital practice to boost management resilience. We will meet your expectations by working for the sustainable growth of society and the Cosmo Energy Group by aiming for sustainable enterprise value enhancement, listening to our stakeholders, and continuing dialogue and collaboration.