Materiality

Nine Important Materiality Themes

Based on the respective characteristics of the Space Business and the Media Business, the SKY Perfect JSAT Group has identified nine important materiality themes the Group should address through its business.

Important Themes (Materiality) and Contribution to the SDGs

• The Group’s materiality table is organized based on the ESG/SDGs matrix under the supervision of Mr. Hidemitsu Sasaya.

Targets and KPIs（FY2023）

Targets and KPIs（FY2022）

Building resilient broadcasting and communications infrastructure, eliminating information gaps

Improving the richness of life through a diversity of content

Contributing to the environment to make a decarbonized society and recycling-based economy a reality

Improving the environment in space

Promoting innovation which contributes to the environment and society

Developing a strong base for management

Activities by a diverse array of people

Regional and community development

• No.14: "Promoting partnerships" is a common means of achieving the targets and the goals of each theme, so we do not set individual ones.

Materiality Identification Process

To identify the important issues (materiality), firstly, SKY Perfect JSAT screened social issues it should address based on the SDGs. Then, internal and external perspectives were reflected extensively, through discussion by all organizations of the Group, interviews with a client and business partners, and a dialogue with external experts.

1. Grasping of the current situation and screening of issues to be addressed

To pursue sustainability management so that the Group remains needed by society and continues to grow sustainably, the Group launched the Sustainability Committee. Chaired by the director responsible for corporate planning, the Sustainability Committee consists of leaders of all divisions. Under the Sustainability Committee, a working group with members assigned from all divisions was involved in identification of materiality.

The working group grasped and analyzed the current situation of the Group’s business activities. In the course of discussion to identify the issues to be addressed, they checked against the 169 targets of the SDGs and international guidelines, such as ISO26000, referred to materiality identified by other companies, and reflected the opinions of experts.

Through this process, the working group listed up candidate social issues that the SKY Perfect JSAT Group might tackle.

2. Evaluation and prioritization of issues

Management, the Sustainability Committee, and the materiality working group members had discussions, evaluated the candidate issues and shortlisted them. The degree of importance from the management perspective was determined from the viewpoint of contribution to the Group’s sustainable growth.

Meanwhile, based on the findings from the interviews with the client and business partners and the opinions of the experts, the degree of importance from stakeholders’ perspectives was determined to reflect the needs of stakeholders and society.

The important issues were mapped, using these two axes, and evaluated and prioritized.

3. Third-party opinions

SKY Perfect JSAT had a dialogue with external experts to obtain third-party opinions in order to ensure objectivity and appropriateness of the prioritized important issues.

4. Authorization by the Sustainability Committee, the Management Committee, and the Board of Directors

Reflecting the opinions of the experts, we identified nine important materiality themes and 22 important issues (materiality) under them. The materiality working group, the Sustainability Committee, and the Management Committee confirmed their appropriateness from the perspective of the SKY Perfect JSAT Group and they were authorized by securing the approval of the Board of Directors.

Third-party opinions on the materiality

• Opinions expressed in the dialogue SKY Perfect JSAT executives had with Ms. Mari Yoshitaka and Mr. Takashi Inoue, for which Mr. Hidemitsu Sasaya was the facilitator, are summarized below.

Expert’s Opinion 1: From the perspective of ESG investment

High expectations of an innovative approach to materiality of climate change using satellites and data

From among the materiality issues identified by the SKY Perfect JSAT Group, in my opinion the Group should accord the top priority to climate change. The Japanese government declared its intention of achieving carbon neutrality for Japan and, while meanwhile it is becoming the norm in the world to respond to the Task Force on Climate-related Financial Disclosures (TCFD), many Japanese companies have endorsed the TCFD recommendations and started initiatives. In these circumstances, it is critically important to show how the SKY Perfect JSAT Group views environmental issues.

The materiality theme “Building resilient broadcasting and communications infrastructure, eliminating digital divide” is relevant not only to society (S) but also can contribute to climate change. Using broadcasting and communications infrastructure and data, the SKY Perfect JSAT Group can support reduction of CO₂ emissions through its business. With regard to “Development and promotion of remote sensing,” I recommended the SKY Perfect JSAT Group to emphasize its contribution to the environment.

I made these suggestions at the dialogue. Following subsequent discussion in house, the SKY Perfect JSAT Group identified “Contributing to the environment to make a decarbonized society and recycling-based economy a reality” as a materiality theme. Moreover, regarding “Reduction of CO₂ emissions by promoting use of renewables and improving energy efficiency of satellites and terrestrial facilities” and “Support partner companies for reduction of CO₂ emissions,” the SKY Perfect JSAT Group has clarified its aspirations to reduce the Group’s CO₂ emissions and also support other companies in their efforts to shift to renewable energy. I think these are good choices because these issues communicate the Group’s commitment to addressing climate change.

In an international setting, human rights are highlighted along with climate change, and Japanese companies’ limited awareness concerning human rights is a concern. “Appropriate action for content involving violence, human rights, discrimination, etc.” is an issue that should be emphasized as SKY Perfect JSAT is a media platform provider. In implementing its ethical code for broadcasting, SKY Perfect JSAT should show high awareness of the issues.

Institutional investors around the world believe that companies that embrace diversity are more likely to create innovation. In Japan, gender inequality is viewed as a major problem. But in fact, not only the male-oriented composition but also decision-making by an excessively homogeneous management team is considered to be a management risk. This issue cannot be resolved in a short term and a long-term roadmap is required and it is necessary to consider how to expedite the process and present the plan. In this regard, setting key performance indicators (KPIs) for a materiality theme “Activities by a diverse array of people” will be important.

Expert’s Opinion 2: From the perspective of disclosing sustainability information

Distinctive materiality: Top management’s storytelling is key

For a company, identifying materiality and disseminating it is part of public relations (PR). It is important that top management, as a storyteller, continually communicates the company’s sustainability initiatives, both their financial and non-financial aspects, as a management strategy.

The cardinal rule in PR is to be distinctive. Of the nine important materiality themes identified, “Building resilient broadcasting and communications infrastructure, eliminating digital divide” and “Improving the richness of life through a diversity of content” well reflect the characteristics of the Media Business and the Space Business, and I think these two materiality themes have significant roles to play.

“Improving the environment in space” is a unique theme that other companies cannot easily imitate and it is a good theme suitable for publicizing globally to show the strengths of the Group. At present, there are some 10,000 satellites in space and space debris has emerged as a global issue. If the SKY Perfect JSAT Group takes the initiative on this issue, it could generate global news and might lead to significant SDG branding. From what I hear, space debris elimination has yet to be commercialized as an actual business. If you consider it as a cost for public relations, the Group can earn a sufficient return in the future through enhanced corporate value. Therefore, this theme should be accorded an extremely high priority.

For “Promoting innovation which contributes to the environment and society,” it is important not only to refine the Group’s own technology but also consider partnerships, such as providing financial support to start-ups that are tackling technology development.

Going forward, I recommend Corporate Communications of SKY Perfect JSAT to strategically disseminate the identified important materiality issues. Many Japanese companies are passive about communication and coverage by the media is for the benefit of the media. The SKY Perfect JSAT Group should set itself apart. It is essential to proactively engage in dissemination of information to stakeholders based on a PR plan designed in advance. It is also critically important to make sustainability a story and communicate it as a message. Such an approach will enable the Group to recoup investment in initiatives concerning materiality over the medium to long term and further enhance corporate value.

Expert’s Opinion 3: From the perspective of CSV based on the SDGs

Set the pace as an SDG platform provider to enhance corporate value

The 22 important issues (materiality) and nine important materiality themes identified by the SKY Perfect JSAT Group are organized in light of the 169 targets of the SDGs, seven core subjects of ISO26000, and ESG, using the ESG/SDGs matrix I advocate. They are well presented so that they are easily understood in the international community and by overseas investors.

When identifying materiality, unlike CSR, nonfinancial aspects should not be overly emphasized. Investors are interested in whether resolution of a certain issue will lead to sustainable strengthening of the company’s business. For example, “Building resilient broadcasting and communications infrastructure, eliminating digital divide” is an excellent materiality theme but investors will also check your cost and investment plans. Integrated thinking requires synchronization of financial and nonfinancial aspects. In other words, it is the practice of creating shared value (CSV), that is, to aim to achieve both resolution of a social issue and generation of profit. The SKY Perfect JSAT Group should be aware of these perspectives when reporting on its SDG-related activities.

“Building resilient broadcasting and communications infrastructure, eliminating digital divide,” “Contributing to the environment to make a decarbonized society and recycling-based economy a reality,” and “Promoting innovation which contributes to the environment and society” are positioned as important materiality themes common to both the Media Business and the Space Business. I find them very appealing. I strongly suggest that SKY Perfect JSAT promotes its initiatives for these themes as the “SDG platform provider.” When a leading media platform provider such as the SKY Perfect JSAT Group becomes SDG-oriented, it will have a tremendous rippling effect. The SDGs are a universal language that can act as a powerful magnet attracting companies, causing them to embrace the SDGs, creating a high possibility of innovation leading to excellent SDG-related content. The SDGs are effective for making the social and environmental issues to be addressed objective. It is noteworthy that SKY Perfect JSAT Group used the SDGs in its materiality identification process. Coupled with the high recognition of the SDGs, the materiality identified by the Group is expected to be appealing globally when publicized.

In the next phase following the identification of materiality, two axes will be important: the time axis and the partner axis.

With regard to the time axis, firstly it is necessary to set an ambitious goal for 2030, the target year of the SDGs, and, then, consider specific actions to be taken now by backcasting from 2030. Stakeholders are interested in your medium- to long-term roadmap for realization of the goal for 2030. So, the process the Group used in materiality identification will also be useful in responding to stakeholders’ inquiries about the roadmap.

The second axis is the partnership axis. Innovation is required for achieving the ambitious goal set by backcasting. However, since there is a limit to what SKY Perfect JSAT can achieve alone in dealing with complicated issues, partners are essential. This is also true for other companies. That is why SDG Goal 9 “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation” and SDG Goal 17 “Strengthen the means of implementation and revitalize the global partnership for sustainable development” are relevant in light of the characteristics of the Space Business and the Media Business. Utilizing the Group’s satellite infrastructure and data, SKY Perfect JSAT can support other companies’ renewables initiatives, which will lead to SDG Goal 7 “Ensure access to affordable, reliable, sustainable and modern energy for all.” Among the Group’s materiality issues, “Support partner companies for reduction of CO₂ emissions” and “Development and promotion of remote sensing,” which has great potential for achieving many SDGs, will be welcomed by other companies that are accelerating their initiatives toward carbon neutrality in relation to SDG Goal 13 “Take urgent action to combat climate change and its impacts.” Partnerships will be beneficial for SKY Perfect JSAT, too.

CSV aims at innovation through partnerships in new markets and businesses and the achievement of competitive advantage. This will open up a path toward sustainable enhancement of corporate value.

• The Group’s materiality table is organized based on the ESG/SDGs matrix under the supervision of Mr. Hidemitsu Sasaya.