The Six Capitals
Capitals
MC invests the capitals into its business operations to generate MC Shared Value (MCSV) by addressing societal challenges. The value
created then flows back into the capitals, and the increased capitals lead to further value creation.
MC believes that the capitals, which form the foundation of its business operations, can largely be broken down into three types: (1)
external capital, which exists outside the Company and provides the foundation for societal
trust required to carry out business operations; (2) stewardship capital, which the Company acquires from external sources and
assumes responsibility to increase its value; and (3) internally generated capital, which refers to tangible
and intangible assets acquired and created internally by the Company using external capital and stewardship capital. We have defined
the following six types of capital categorized into each of the above types.
Stewardship Capital
01. Financial Capital
At the core of any company is receiving financial capital from its providers, increasing its value through business, and distributing the increased value. In order to continuously increase the value of financial capital, capital efficiency must be improved while maintaining financial soundness. In Midterm Corporate Strategy 2024, we have set a target of double-digit ROE, which we will achieve through careful selection of quality investments and replacing assets using the Value-Added Cyclical Growth Model. With regard to the distribution of financial capital through shareholder returns, we will meet market expectations by combining flexible share buybacks while maintaining stable dividend growth through a progressive dividend scheme.
02. Human Capital
MC has achieved sustainable growth together with society through its business activities by anticipating the needs of the times and actively attempting to address societal challenges. What has supported this growth are human resources who, through various experiences unique to our Company, combine high aspirations for addressing societal issues, the foresight to anticipate the times and create new value, execution skills to quickly materialize concepts by involving a diverse range of stakeholders, and high moral and ethical standards linked to the spirit of the Three Corporate Principles. We consider human resources, our greatest asset, to be “human capital” which is the source of value creation, and we have been and will continue to actively invest in them.
HR Policies in Midterm Corporate Strategy 2024
In order to create MCSV in the current environment of growing uncertainty, we must remain a vibrant organization that responds promptly to management strategies as well as changes in the operating environment, while also maximizing individual capabilities and value. In the HR Policies of Midterm Corporate Strategy 2024, we have established three pillars: HR Strategy, Strengthen Engagement, and Data Utilization. We will continuously strengthen our ideal vision for the organization through strategy execution revolving around these three pillars.
Internally Generated Capital
03. Business Assets
By changing its earnings model flexibly in accordance with the changing business environment, MC has been able to create and grow highly competitive and prominent business assets, including mineral resources, LNG, salmon farming, and automobiles. We will combine these diverse and strong business assets with our connections in many industries to overcome societal challenges through our business and create new value.
04. Intelligence and Industry Expertise
As MC engages in a global network of business operations across many regions and industries, we have accumulated intangible assets such as “intelligence” and “industry expertise.”
Intelligence
Through the efficient and effective division of functions among our head office, global offices, subsidiaries, and Group Companies, we are constantly collaborating to enhance our ability to respond to change and generate the next source of significant growth. Through this global network developed over many years, we possess multifaceted intelligence and know-how in macroeconomics, industry, and geopolitics. In order to connect this diverse intelligence and further strengthen our ability to respond to the external environment, we have newly established the Global Intelligence (GI) Committee in Midterm Corporate Strategy 2024. By incorporating the analysis of the GI Committee into the MC Shared Value Forum (MCSV Forum), which discusses and formulates cross-industry companywide strategies, we will strengthen the driving force of our Business Groups and collaboration across all industries.
Industry Expertise
We have maintained connections with all industries for many years, and have accumulated industry expertise and know-how, by diving deep into each industry and developing a wide range of businesses.
Each Business Group will strengthen the driving force of its business in each industry, and will work to provide new value by combining this physical frontline field of operations with digital technology, thereby further enhancing industry expertise.
External Capital (Foundation for Societal Trust)
05. Social Capital
To implement our business operations, we need to ensure that their value and significance is widely recognized not only by our customers and partners, but also by stakeholders with whom have no direct contractual relationship. In addition to shareholders, investors, creditors, and employees, who provide the human capital, we regard our customers, partners, local communities, NGOs, and governments and local authorities as our principal stakeholders, and we continuously engage both pillars to ensure business continuity.
Through this engagement and our connections with diverse stakeholders, and by returning the generated value appropriately, we continue to promote the circulation of value throughout society as a whole.
Customers and Partners
MC will contribute to the development of societies and economies by providing a stable supply of products and services that meet the needs of customers and business partners across each business area, from upstream raw material procurement to downstream retail. This will be done by working with our customers and business partners to develop various businesses that could not have been realized alone. Moreover, as a company that handles a diverse range of products and services worldwide, MC is working to achieve a sustainable supply chain as a key issue.
Local Communities
MC believes in the importance of “Addressing Regional Issues and Growing Together with Local Communities” as well as the value of building relationships with communities for the success of its businesses. Furthermore, by growing together with communities through job creation, promoting community development, and procuring raw materials from local communities, MC also strives to minimize negative impacts, including by respecting the rights of indigenous peoples. Particularly for large-scale projects where the understanding and cooperation of local communities is crucial, we hold public hearings and dialogues with local residents as needed. Growing together with local communities is equally as important as advancing our businesses and generating financial returns. This represents the true spirit of MC, which seeks to simultaneously generate economic, environmental, and societal value.
Governments and Local Authorities
To achieve improvements and provide solutions to societal issues through our global business operations, we engage in collaboration, joint initiatives, and dialogue with government and local authorities through our involvement in business associations, public-private sector initiatives, and other forums, with the aim of contributing to societal development.
NGOs
We recognize NGOs as key stakeholders that function as representatives for the planet and its citizens, and we seriously consider the opinions and concerns raised through our robust communication on a day-to-day basis and seek their views to improve our initiatives. Moreover, we are promoting collaborations with NGOs to address environmental and societal challenges.
06. Environmental and Natural Capital
As with social capital, consideration for the environment and nature is also an indispensable element in maintaining the foundation for the societal trust critical to business continuity, and we recognize the Earth as our greatest stakeholder. In order to continuously create MCSV in accordance with the aims of Midterm Corporate Strategy 2024, we have identified the following as part of our Materiality, or important societal challenges to be addressed through our business activities: “Conserving and Effectively Utilizing Natural Capital,” in which we strive to maintain biodiversity and conserve natural capital while reducing our environmental footprint and realizing a circular economy, and “Contributing to Decarbonized Societies,” in which we provide products and services that contribute to decarbonization during the transition period. Using our Materiality as a guideline, we will continue to strengthen our efforts for sustainable growth.
