The global supply chain, which had been expected to normalize during the recovery from the COVID-19 pandemic, was further exposed to vulnerabilities following Russia’s aggression against Ukraine. Amid historic inflation, Western countries shifted gears toward monetary tightening, while the foreign exchange market also experienced significant changes. We must now be increasingly aware of the impact of these changes on both the real economy and the global financial landscape. Relations between the United States and China also remain unpredictable, and the impact of the downturn in China’s real estate market forces us to expect low growth for the foreseeable future.

Despite the highly uncertain nature of our current business environment, led by the Three Corporate Principles as our corporate philosophy since our founding, as we have done in the past, we will capitalize on our collective capabilities, including our accumulated intelligence and industry knowledge in line with the changes and issues faced by society in each era, and constantly push forward to create value by addressing these challenges. I myself plan to maintain a constant state of preparedness that envisions a range of possibilities. While connecting the high-quality information that we obtain from our offices throughout the world and utilizing the multifaceted intelligence unique to MC that it creates, I aim to foresee half a step or even one step ahead and to be strongly aware of our response to future changes.

For example, regarding decarbonization, with the passing of the Inflation Reduction Act in the United States, we expect decarbonization projects and technological innovation to progress at an accelerated pace. Even in Europe, while initiatives may be forced to slow down temporarily given the current challenging conditions, based on the clear agenda of balancing decarbonization while decreasing its dependence from Russian energy, there will likely be no change in the long-term goal of a transition to green energy. China’s response to the transition to electric vehicles is also eye-opening.

I believe that the trend toward decarbonization taking place in all industries throughout the world is irreversible, however, the path and timeline to reach decarbonization differs by country and region. Given this circumstance, I am convinced that decarbonization represents a great opportunity for us, given our diverse portfolio and active involvement in a wide range of businesses related to low carbonization and decarbonization.

Turning our eyes to Japan, in the past 30 years Japanese companies have transferred earnings made overseas back to Japan, however, those funds have not always been well used for domestic growth investment, leading instead to low growth in the long term for the Japanese economy. However, given Japan’s stable political situation and public security, as well as technological capabilities on a global basis, it has definite potential to once again follow an economic growth track.

What is important here is the fact that we are indeed a global company and a Japanese company at the same time. If Japan loses its national strength, its presence will decline comparatively on a global basis. This means that the presence of Japanese companies will also decline. This is exactly why I believe that we should contribute to bolstering Japan’s national strength. Effective and meaningful ways for us to do so include fostering new industries and taking part in creating a new future through regional revitalization.

Based on this understanding, in our Midterm Corporate Strategy 2024 announced in May 2022, we set “Integrated EX/DX initiatives to Create a New Future” as one of our growth strategies, which we are working diligently to execute. My goal is for us to realize our three agendas of achieving a carbon-neutral society, providing a reliable supply of energy, and maintaining and enhancing industry competitiveness. I hope that the realization of these goals will contribute to a tangible recovery in the Japanese economy through the creation of MC Shared Value (“MCSV”), while also leading to our own growth.

More than a year has passed since the announcement of our Midterm Corporate Strategy 2024, and I feel a strong sense of the progress that we have made. Here, I would like to introduce specific examples of this progress in various areas.

I would also like to share my thoughts on human capital, one of our most important forms of capital in MC’s value creation. Human capital and diversity, equity, and inclusion (DE&I) are terms that we hear more and more these days and we have always viewed human capital as an essential source of all our value creation. It is a topic that I constantly consider. To maximize the value of our human capital, strengthening employee engagement is essential, and we are strongly aware of DE&I as one of the means of doing so. In our current world, in which the barriers to enter an industry are getting lower, companies with greater diversity are winning, and promoting DE&I is becoming more important than ever in companies’ competitive strategies. Based on this belief, in our Midterm Corporate Strategy 2024, we have set forth the goals of
“Enable motivated professionals who take pride in actively fulfilling their responsibilities with a view toward creating MC Shared Value, while interconnecting with members of our diverse and versatile talent pool. Strive to optimize the value of our human capital by creating such a dynamic, spirited and vibrant organization.” Since I became President and CEO, I have endeavored to provide as many opportunities for dialogue with our employees as possible, starting with the President and CEO’s Town Hall Meeting launched in the fiscal year ended March 31, 2023. I can sense that these opportunities have led to our diverse and versatile employees approaching their work with a high sense of morale. I feel strongly that accepting human resources with diverse values equally as expressed in the spirit of the Three Corporate Principles is extremely important in being an organization in which every individual can work in a dynamic, spirited and vibrant way, and that this will lead to further growth for MC. Based on this belief, as the person responsible for promoting DE&I, I wanted to take even more action, and decided to launch the DE&I Working Group. I also believe that the awareness of many of our employees are changing because of these initiatives.

Lastly, I would like to share something that left a strong impression on me since becoming President and CEO. We have created numerous opportunities for dialogue with various stakeholders including shareholders, investors, and the media, and through these dialogues,
I could directly feel that expectations for MC were greater than
I anticipated. We take the opinions of our stakeholders into consideration in our corporate management, and as a concrete example of our response to these opinions, in 2023 we created a new position of Chief Stakeholder Engagement Officer (CSEO) to further strengthen dialogue with a wide range of stakeholders. The CSEO and I plan to lead even more proactive dialogues with our stakeholders, and while considering their opinions, we will aim for sustainable growth through the creation of MCSV.