Hitachi: Standard Ethics upgrades ESG rating to "EE"
March 21, 2024 at 06:01 am EDT
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Standard Ethics has upgraded Hitachi's Corporate Standard Ethics Rating (SER) to "EE" 1 from the previous "EE-". The Company received its first Corporate SER in 2019. The Company is a potential constituent of the new SE Global Railway Manufacturers Index due to be published by end June 2024.
Hitachi, Ltd. is a multinational company engaged in a variety of industries, from digital systems to the railway industry via electronic devices, communications and energy solutions. According to the Standard Ethics methodology, the company is committed to keeping track with a progressive alignment to international ESG indications. It has standard extra-financial reporting, human rights policies and relies on a Code of Conduct, which offers clear formal references to supranational sustainability guidelines.
As things stand, the E (Environment) area of the ESG acronym appears to be adequately addressed. If the current ‘Strong’ (EE) rating is to be maintained, however, greater focus will also be needed in the S and G segments. Further effectiveness in the area of gender equality, for instance, would be welcome: the targets set by Hitachi for achieving gender balance appear to be low, and there is a large gender disparity in the 12-member Board with only two of the members being of the least represented gender.
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Hitachi specializes in manufacturing and marketing of electronic and industrial equipments. Net sales (including intragroup) break down by family of products and services as follows:
- social infrastructure and industrial systems (24.7%): elevators, escalators, industrial facilities, railway systems, power generation units, etc. The group also provides engineering and construction of nuclear, hydroelectric, and thermal power plants services;
- information and telecommunications products and services (20.1%): systems integration, cloud computing, software, servers, hard disks, PCs, ATMs, data communication base stations, payment terminals, etc.;
- materials and components (16.6%): semi-conductor materials, printed circuit cards, cables, copper and forged steel products, magnetic materials, organic and inorganic chemical products, etc.;
- construction equipment (10%) : hydraulic excavators, wheel loaders, mining equipment, etc.;
- automotive systems (9.4%): powertrain systems, control systems, etc.;
- electronic products (9.2%): fiber-optic components, screen tubes, testing and measurement equipment, medical equipment, equipment for manufacturing semiconductors, etc.;
- household appliances (4.7%): heating and air conditioning equipments, refrigerators, washing machines, etc.;
- other (5.3%): mainly transport, financial and logistical services.
Net sales are distributed geographically as follows: Japan (49.2%), Asia (21.3%), North America (12.7%), Europe (10.8%) and other (6%).
HITACHI, LTD. 
