Materiality

Identifying and Reviewing Materiality
Initiatives within the Dentsu Group

Identifying and Reviewing Materiality

The DENTSU SOKEN Group promotes management based on its sustainability policy, in a bid to contribute to the realization of a sustainable society. In light of the SDGs, international guidelines, DENTSU SOKEN Group business strategies, and Dentsu Group initiatives, in 2022 we identified issues of particular importance to both stakeholders and the DENTSU SOKEN Group. These, we believe, must be addressed as materiality, which we review regularly.

In line with our new medium-term management plan "Contributing to Progress in Society 2027", launched in 2025, we reviewed materiality to reflect changes in the business environment and social issues surrounding the Group.

This resulted in the identification of three priority themes related to people, technology, and governance, as well as nine key issues associated with these. The Group will continue to address materiality and contribute to the creation of a sustainable society.

Material Issues Identified

Key Performance Indicators and Targets

Material Issue¹	KPI	Target	Planned Due Date	Scope of Target²	KPI- and Target-related Initiatives and Data
Strengthening of human capital	Employee count	Consolidated headcount of 6,000 employees	2027	Consolidated	Personnel data
	Operating profit per person	¥5.25 million	2027	Consolidated
	Average training expenses per person	¥200 thousand	2027	Non-consolidated
	Engagement score	Maintain a score of 70% or higher obtained from survey conducted by Great Place to Work^® Institute Japan	Every year	Non-consolidated
	Presenteeism³ loss ratio	12%	2027	Non-consolidated
	Absenteeism⁴ lost days⁵	Within 4.0 days	Every year	Non-consolidated
Promotion of DEI	Percentage of female managers	16.50%	2030	Non-consolidated	Promotion of active workplace participation from women
	Percentage of female hires	30%	Every year	Non-consolidated
	Disabled employee retention rate	Over 90% after 1 year	Every year	Domestic Group 1
Contribution to the resolution of social and environmental issues	Regional revitalization-related sales	¥5 billion	2027	Non-consolidated	Examples of R&D, demonstrative experiments, etc.（Japanese version only）
Creation of new business	R&D investments	Cumulative three-year investment of ¥15.0 billion	2027	Consolidated
Demonstration of our technological implementation capabilities	Advanced digital PJ lead personnel(Tentative name)	(Under review)
Strengthening of corporate governance	Evaluation of Board of Director effectiveness	Ensure and improve effectiveness	Every year	Consolidated	Strengthening of corporate governance
Enforcing of ethical compliance and respect for human rights	Number of Major Compliance Violations	0	Every year	Consolidated	Ethics and compliance initiatives Respect for human rights Fair business practices
	Percentage of employees receiving (e-learning-based) training related to ethics and compliance (including harassment training)	100%	Every year	Domestic Group 2
	Important supplier procurement survey response rate	100%	Every year	Non-consolidated
Enhancement of information security management	Information security compliance training attendance rate	100%	Every year	Non-consolidated	Information security initiatives
Enhancement of information security management	Number of serious leaks of client project-related information, personal information	0	Every year	Domestic Group 2	Information security initiatives

Notes:

1.

The Company does not establish KPIs for its “Application of appropriate risk management practices.” However, it will publicly disclose results generated through activities associated with these material issues on an annual basis.
2.

Non-consolidated: DENTSU SOKEN alone; Domestic Group1: Excluding ESTECH Corporation and Mitsue-Links Co.; Ltd.; Domestic Group 2: Covers DENTSU SOKEN and DENTSU SOKEN Group companies in Japan; Consolidated: Covers DENTSU SOKEN Group companies overseas
3.

A situation in which productivity is declining due to health problems
4.

Absence from work due to health problems (sick leave)
5.

The taking of leave by employees still working due to poor health

Please refer to thisfor the progress of achievements linked to Material issues and the main initiatives and topics related to them.

Identifying Material Issues

We identify and review materiality through the following process. We will continue to review these issues periodically going forward, taking into account changes in the environment and other factors.

Step One Identify Issue Elements

We have identified 40 characteristic elements of material issues by referencing and analyzing SDG-related and other initiatives; international guidelines such as the GRI Standard and the SASB Standard; and requirements of ESG assessment organizations such as the FTSE and MSCI.

Step Two Rate the Importance of Elements

We evaluated the importance of the issues identified in step one from the perspective of the DENTSU SOKEN Group and from that of its stakeholders. For the DENTSU SOKEN Group perspective, we evaluated opportunities and risks in terms of the impact we expected the society and environment to have on the Group, as well as the impact we expect the DENTSU SOKEN Group will have on the society and environment.

Step Three Categorize and Validate Details

We reviewed and categorized details associated with elements of the material issues identified as highly important in step two. They are relevant to our corporate philosophy, long-term management objective Vision 2030, and new medium-term management plan "Contributing to Progress in Society 2027", as well as to Dentsu Group initiatives. At the same time, we closely examined and considered various KPIs and targets.

Step Four Identify Material Issues

With the approval of the DENTSU SOKEN Group’s Sustainability Promotion Council, we have identified three key themes and nine related material issues that must be prioritized in its business operations.

Material Issues Matrix

Initiatives within the Dentsu Group

DENTSU SOKEN is represented on the Dentsu Group’s CSR Committee, which formulates and assesses members’ sustainability strategies with a focus on the year 2030.

By considering risk awareness and opportunities for resolving issues, based on the World Economic Forum’s annual Global Risks Report, the committee assesses the impact of the Group’s activities on society.

See below for information on Dentsu Group initiatives and Integrated Reports.