Sustainability Management

Materiality Issues

Materiality issues at Aisin

Aisin has pursued sustainability management in accordance with materiality elements selected in FY2020, but in January 2025, we assessed our materiality program to accommodate changing business conditions and social demands.
In defining our materiality posture, we have identified three priority issues and five paths to achieving them. We will work to resolve these issues in the course of our business activities.

Materiality assessment process

To apply our management philosophy in the real world, we have defined issues that Aisin must address in the context of the long-term business environment and positioned them as materiality issues.
In assessing materiality issues, we from employees to executives, reaffirm the essence of our management philosophy, view it against current social issues, and select topics that the Company should prioritize. The process for identifying materiality issues is as follows.

Issue extraction	STEP1	Catalog general business and ESG-related issues Reference guidelines and disclosure standards: ESRS, ISSB, SASB, GRI, etc.
Prioritize	STEP2	Conduct employee workshops to extract issues related to Aisin's business activities
Prioritize	STEP3	Narrow down key management issues through workshops for executives (including outside directors)
Engage stakeholder (Investors, external experts, local residents, suppliers, employees, etc.)	STEP4	Validate the materiality issues draft
Identify materiality issues	STEP5	Discuss and resolve the materiality issues draft at the Sustainability Conference; report to the Board of Directors and obtain approval.

Risks and opportunities

In identifying materiality issues, we analyze and evaluate risks and opportunities for Aisin based on internal and external environmental changes.
Assessment conclusions are as follows.

External environment	Risks and opportunities for Aisin	Materiality issues
External environment	Risks and opportunities for Aisin	Priority Issues	Paths toward realization
Politics	Risks	Harmony with nature and contribution to a sustainable future Freedom of movement for people around the world Empowering diverse talents for personal fulfillment	Reducing environmental impact across the value chain Providing solutions for a clean energy society Creating life-enriching value through mobility Instilling a corporate culture that embraces challenge Respecting diversity and growing together
Tightening environmental regulations and safety standards Uncertain energy policy Multipolarization and instability of the international community	Slowing automotive market growth Declining demand and sales of existing products due to electrification Lost competitiveness due to poor adaptation to technological innovation Supply chain disruption due to the emergence of geopolitical risk Receding confidence due to environmental and human rights issues along the value chain Stunted creativity due to persistent conventional thought patterns Intensifying competition for talent
Economic conditions
Stagnant growth in developed markets, expansion of emerging economies Slowing economic growth
Society	Opportunities
Societal aging and working-age population decline Changes in lifestyles and values Increased social expectations on companies	Flexible product offerings tailored to each country's energy circumstances Economic development assistance for the Global South Strengthening resilience and expanding business opportunities through localization Enhancing product value through artificial intelligence Contributing to carbon neutrality and the circular economy Helping to reduce traffic accidents Cultivation of new businesses Creating new value by leveraging staff diversity
Technology
Digital technology innovations, including AI Structural changes in the automotive industry		Laying a solid management foundation (safety, quality, compliance, human rights, environment, risk management, governance)

Risks related to sustainability are integrated into our companywide enterprise risk management (ERM). For details on specific risks and responses, please refer to the Risk Management section of this website. Furthermore, opportunities related to sustainability are deliberated at various key meetings and management meetings. Significant opportunities are submitted to and reported to the Board of Directors.

Materiality issues: key goal and performance indicators

We set key goal indicators (KGI) and key performance indicators (KPI) for materiality issues that are approved by the Board of Directors and forged into specific action plans for implementation.

Priority issues	Paths toward realization	Goal (KGI)	Indicator (KPI)	FY2031 target values	Scope
Harmony with nature and contribution to a sustainable future	Reducing environmental impact across the value chain	[Carbon neutrality] Carbon neutrality by FY2051 Carbon-neutral in-house manufacturing by FY2036	Scope 1 & 2 emissions	46.2% decrease compared to FY2020	Consolidated
			Scope 3 reduction	27.5% decrease compared to FY2020
		[Circular economy] Achieve zero-emission plant by FY2041 (landfill waste: 1% or less)	Optimizing resource utilization	10% efficiency improvement^*1
			Waste minimization Waste emissions	11% decrease compared to FY2020
	Providing solutions for a clean energy society	Widespread use of cleantech^*2 products and services in the mobility and energy domains	CO₂ emission reduction via products and services ^*3	20 million t-CO₂^*4
Freedom of movement for people around the world	Providing solutions for a clean energy society		Number of cleantech products commercialized	Three or more
	Creating life-enriching value through mobility	Realizing safe, reliable, comfortable and convenient mobility	Number of drive units sold ^*5 (cumulative since 1969)	270 million
			Number of newly adopted products and services (cumulative since 2025)	500
			Build-out of aftermarket product and service lineup Number of Product and Service Categories	100 or more
			Total users of mobility-related services (MAU ^*6)	183,400
			Number of key new business domains	3 domains
	Instilling a corporate culture that embraces challenge	Ongoing accumulation of new fundamental technologies	Number of inventions^*7	1,500
		Environment conducive to a proactive work style	Positive response rate for employee engagement^*8	-
Empowering diverse talents for personal fulfillment		Environment conducive to a proactive work style	Presenteeism performance Level^*9	85%	Aisin Corporation (parent)
	Respecting diversity and growing together	A work environment where diverse professionals can thrive	Positive response rate for an environment that empowers employees^*10	-	Consolidated
	Respecting diversity and growing together	A work environment where diverse professionals can thrive	Ratio of female managers^*11	4.5%^*12	Domestic group companies
Laying a solid management foundation	Safety	A culture that prioritizes safety	Number of serious accidents^*13	0	Consolidated
	Compliance	Zero serious violations of laws and compliance policies	Positive response rate for ethics survey	90%
	Human rights	Zero serious violations of human rights	Human rights risk assessment survey implementation rate^*14	100%
	Human rights	Zero serious violations of human rights	Human rights training implementation rate^*15	100%
	Governance	Achieved enhanced management transparency and internal controls by transitioning the Board of Directors to a Monitoring Board structure, thereby separating oversight and execution	Ratio of female directors	30% or more	Aisin Corporation

Resource efficiency: sum of the waste discharge reduction rate and the rate of increase in waste recycled for use within the group

Cleantech: technological solutions that reduce environmental impact (e.g., renewable energy, efficiency improvements, resource recycling)

Contribution CO₂ emission reduction: cuts in CO₂ emitted during product use achieved through performance enhancements

Assumption: Based on projections as of July 2025

Drive unit sales: sales volume of AT, CVT, HEV, PHEV, and eAxle units

MAU: Monthly Active Users, number of people who used the service at least once per month

Number of inventions: Total number of patent applications along with confidential and publicly disclosed instances of intellectual property

Positive response rate for employee engagement: Percentage of employee survey respondents who answered “I want to contribute to the company, feel loyal, and am motivated to put in proactive effort”

Presenteeism performance level: Percentage of employees who felt they could perform at 80% or more of their capacity over the past month, with 100% representing performance achievable while healthy.

Positive response rate for an environment that empowers employees: Percentage of employees who responded in the employee survey that “There are opportunities to apply my skills and abilities, and a comfortable work environment is provided”

Manager: key position (section chief) and above

Target values were updated following the expansion of HR activities from the initial four companies (Aisin, Aisin Takaoka, Aisin Chemical, and ADVICS) to the entire domestic group.

Serious accidents: Defined as those involving fatalities

Human rights risk assessment survey implementation rate: (Number of companies conducting human rights risk surveys / Number of consolidated companies) × 100

Human rights training implementation rate: (Number of employees who received training on compliance and human rights / Number of consolidated employees) × 100

The following outlines the materiality (priority issues) through FY 2025, along with actual performance against KPIs and FY 2031 targets.

	Materiality (Priority Issues)	KPI	FY2025 actual	FY2031 target values
Resolution of social issues through business activities	Global warming control Reduction of traffic accidents / Provision of safe means of movement and transportation Promotion of health and welfare	Revenue ratio of products for growing domains that contribute to solving social issues (percentage) ^*16 Revenue in growing domains + HEV unit revenue Total revenue	41%	58%
		Contributing to health and welfare Total number of users of products and services	MAU：35,700	MAU：183,400
	Promoting sustainable industrialization through technological innovation Reduction of CO₂ emissions Pollution countermeasures Reduction of environmentally hazardous substances Resource recycling Improvement of resource efficiency Promotion of shift to clean energy	Ratio of R&D expenses for growing domains	63%	80%
		Lifecycle CO₂ emissions reduction rate	Enhancing Working Group Activities by Priority Category (Production, Raw Materials, Supplier Support, Logistics, Waste, CE, etc.)	Reduction of 25% or more [vs FY2020]
		Reduction rate of CO₂ emissions from manufacturing [total, vs FY2014]	22.4%	Reduction of 50% or more (1.386 million t-CO₂ ^*17/year)
Foundational management support for activities	Labor safety and health Health Human Rights Promotion of diversity Job satisfaction reform Work-life balance Compliance Sustainable procurement	Number of serious accidents	0	0
		Rate of disabling injuries occurring	0.25^*18	0.05
		Ratio of female managers	2.8%^*19	6.0%
		Job satisfaction (result of employee awareness survey; 5-point rating)	3.3 points^*19	4.0 points (Group, consolidated)
		Number of serious violations of laws and ordinances ^*20	0	0
		Rate of compliance with guidelines through the formulation and rollout of Group-wide global guidelines for suppliers (including FY2031 carbon neutrality target of at least −25% [compared to FY2020])	Group/Global Notification to suppliers in five regions (US, China, Europe, India, Asia ex-China)	100%

“Growing domains” defined based on the Medium-to-Long-term Business Strategy published in September 2023.

FY2031 target for CO₂ emissions from manufacturing (total): Calculated using benchmarks from the Seventh AISIN Consolidated Environmental Action Plan

Companies included in calculation of actual results: 12 Aisin Group companies managed under common metrics as of FY2025 (Aisin, Aisin Takaoka, Aisin Chemical, Aisin Light Metals, Aisin Development, Aisin Kiko, Aisin Sin’ei, Aisin Fukui, Hosei Brake Industry, ADVICS, Aisin Shiroki, Art Metal Industry)

Companies included in actual results calculation: Four major Aisin Group companies managed under common indicators as of FY2025 (Aisin, Aisin Takaoka, Aisin Chemical, ADVICS)

Serious violations of laws and ordinances: criminal acts violating major laws or acts ultimately leading to criminal penalties