Promoting Diversity and Inclusion

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55 Promoting Diversity and Inclusion Hitachi s Approach Hitachi believes that building a corporate culture that fully draws on the diversity of human capital, in terms of gender, age, and values, not only offers employees an opportunity to approach their work with enthusiasm but also contributes to enhancing competitiveness through the provision of solutions that incorporate diverse perspectives. In recent years, with the growing interest among stakeholders for personnel policies enabling flexible workstyles, we are taking a proactive stance toward implementing this approach. Hitachi has recognized the importance of diversity since the 1990s and has built its management systems accordingly, listening closely to employee feedback. As our Statement on Diversity and Inclusion explains, we view diversity as our growth engine. We pay particular attention to career development for women, not only through strict policies on equal pay but also by actively encouraging the promotion of female employees in accordance with trends both within Japan and worldwide and by establishing key performance indicators to track our success. Our other efforts to promote diversity include work-life management policies that enable employees at any life stage to find fulfillment in their work and initiatives to promote the hiring of people with disabilities. With the strong commitment of top management, we aim to make a significant contribution through the efforts of our diverse human capital to the building of a more sustainable society for all. Diversity and Inclusion Statement on Diversity and Inclusion Diversity is the wellspring of our innovation and our growth engine. Hitachi regards personal differences gender, nationality, work history, age, sexual orientation, and philosophy as facets Roadmap for Developing Diversity Management 1990 Phase 1: Support for women s career advancement Introduce, expand support systems for work-life management Phase 2: From women to diversity Support work-life balance; support women s career advancement of people s individuality. By respecting our employees individualities and positioning them as an advantage, Hitachi frames its diversity and inclusion as conducive to both the individual s and the company s sustainable growth. With strong teamwork and broad experience in the global market, we will meet our customers needs. 2009 Diversity & Inclusion Development Center set up 2000 2006 FF Plan* 1 Diversity Promotion Project FF Plan II Enhance Hitachi Group partnerships Reduce overtime; review workstyles Promote diversity awareness; reform work environment Phase 3: Diversity promoted as a management strategy 2012 Diversity for the Next 100 launched Support balance between work and nursing care, etc. Strengthen senior management commitment Promote time- and location-free work Strengthen women s career development 2000 2006 2009 2012 2016 *1 The Gender-Free and Family-Friendly (FF) Plan is an initiative to create a better work environment by supporting efforts to balance work and family life and supporting women in the workplace.

56 Diversity Management Initiative: Diversity for the Next 100 Since the 1990s, we have been at the social forefront, supporting women and other members of our multifaceted workforce. This includes setting up systems to help balance work with child and nursing care. Entering Phase 3 of our diversity management roadmap, we are embracing diversity as a management strategy under the initiative slogan Diversity for Expanding the Scope of Diversity Management Age Senior, middle-aged, young Disabilities Physical, intellectual, mental disability Gender, etc. Men and women, family composition, marital status Widening Scope of Diversity Step 1 Integration the Next 100. This means creating an environment where women and other members of our varied workforce can use their skills in leadership and business management. LGBT Lesbian, gay, bisexual, transgender status Nationality, etc. Nationality, race, ethnicity, language Minorities integrated into existing organizational culture, systems, methods, customs Development Structure of Diversity Management The Diversity Development Project, launched in fiscal 2006 under the president s direct control, was replaced in fiscal 2009 with the Diversity & Inclusion Development Center, which currently operates under the direct supervision of the Human Capital Group of Hitachi, Ltd. Hitachi, Ltd. and 17 Group companies operate the Advisory Committee and the Diversity Development Council to accelerate awareness across Hitachi as a whole, including support for diverse human resources and work-life management. The Advisory Committee ensures follow-through on our diversity management policy, while the Diversity Development Council discusses specific activities and shares best practices. Both meet every six months. Group companies and business groups/sites have also set up their own diversity-promotion organizations and projects, such as those to help develop women s careers, in order to enhance initiatives geared to the challenges faced by individual workplaces. We also hold regular meetings to exchange opinions on diversity with labor unions. Step 2 Legal Compliance Discrimination banned through force of law (Japan s Equal Employment Opportunity Act) Step 3 Respect for Diversity Companies, organizations educate staff about discrimination so differences are actively embraced, respected Step 4 Competitive Advantage Diversity promoted as management strategy Evolution from respect for differences to organizational reform as part of strategy to forge varied strengths into competitive advantage Deepening Diversity Management

57 Hitachi Group Diversity Structure Key Indicators Hitachi, Ltd. President Number and Ratio of Female Managers Advisors: External directors Advisory Committee: Chief Human Resource Officer (CHRO) Executive officers and general managers in charge of personnel affairs and labor administration in Group companies General managers in charge of personnel affairs and labor administration in business units Hitachi Group Diversity Development Council Section chiefs in charge of personnel affairs and labor administration in Group companies, business units, and business groups/sites Organizations and projects at companies and business groups/sites to advance diversity (including issues related to women in workplace) Around 50 projects Diversity & Inclusion Development Center (dedicated organization) Human Capital Group * Participating enterprises (17 companies as of March 2017): Hitachi Metals, Hitachi Chemical, Hitachi Capital, Hitachi Construction Machinery, Hitachi Kokusai Electric, Hitachi High-Technologies, Hitachi Transport System, Clarion, Hitachi Urban Investment, Hitachi Appliances, Hitachi Automotive Systems, Hitachi Consumer Marketing, Hitachi Industrial Equipment Systems, Hitachi Systems, Hitachi Solutions, Hitachi Insurance Services, Hitachi Life (people) 800 600 400 200 0 73 6.0% 5.6% 401 418 434 3.5% 3.8% 3,415 3.7% 3,670 3,727 3,365 6.4% 509 6.3% 474 4.0% 4.1% 2000 2012 2013 2014 2015 2016 (people) 4,000 3,000 2,000 1,000 Female managers, Hitachi, Ltd. (left scale) Female managers, Hitachi Group (right scale) Percentage of total, Hitachi, Ltd. Percentage of total, Hitachi Group Note: Figures include section chiefs and above who are full-time, regular employees. (FY) 0 Developing Women s Careers KPI of Developing Women s Careers Hitachi, Ltd. has created two key performance indicators (KPIs), announced in fiscal 2013, to enable as many female employees as possible to take up leadership positions and to participate in management decision making. These KPIs signal our commitment both internally and to the world to further advance women in the workplace and to improve our diversity management. In addition to reinforcing existing programs, we will use the Hitachi Group Women s Career Success Survey to highlight progress with initiatives and outstanding issues in each business unit and to set numerical targets for each unit, strengthening our management commitment. We will also boost women s individual ambitions and morale through programs such as the Hitachi Group Women Leaders Meeting, which targets female employees at the general manager level and above, and the Roundtable Conference with Female Outside Directors. We intend to create an environment where as many women as possible are able to optimize their potential in management positions. Alongside these efforts, we are working to change the mindset of managers and male staff regarding gender parity and examining our working style as a whole with the aim of transforming our corporate culture. Employee compensation is set according to each individual s roles and achievements, with no divisions or differences based on gender or age. Goals for Hitachi, Ltd. (KPIs) Appoint female executives by fiscal 2015 by promoting from within (including the CSR and Environmental Strategy Division chief as a corporate officer in April 2015). Increase the number of female managers in Japan to 1,000 by fiscal 2020 (2.5 times more than at the end of fiscal 2012). Global Women s Summit In November 2016, we hosted the first Global Women s Summit for female employees of the Hitachi Group. Held in the United Kingdom, the event was attended by more than 120 staff members from 25 Group companies around the world and featured a keynote speech from an external speaker and workshops on topics ranging from unconscious bias to individual career development. A presentation about Hitachi s efforts for the promotion of diversity and inclusion also helped attendees deepen their understanding of the topic. At a subsequent networking reception, the participants shared stories about their careers and the issues they faced at their workplace; 99% of respondents rated the summit either Very Good or Good in a follow-up questionnaire. We look forward to holding more events to promote diversity and inclusion globally.

58 Work-Life Management Hitachi s Work-Life Diversity and inclusion boost productivity and grow Hitachi s business. To ensure that all employees reach their full potential, enhancing our organizational capabilities and creating new synergies, we strive to maintain a work environment that embraces human resource diversity, encourages inclusion, and promotes workstyle flexibility. Hitachi looks beyond work-life balance, promoting work-life management that enables our employees to take charge of improving the quality of both their work and their private lives. We believe that optimizing time spent in and outside the workplace through work-life management enhances our employees professionalism and builds character, resulting in both individual and organizational growth over the long term. Boost productivity and grow business Enhancing Work-Life Management Support Systems Since the 1990s, we have been introducing and improving an In October 2016, we introduced an Allowance for Balancing Child Care and Work to further promote work-life management. array of programs for employees to balance work with family, aiming to create a more employee-friendly work environment. Work-Life Management Support System at Hitachi, Ltd. Child-Care Support System Nursing-Care Support System For women For men Pregnancy Fertility treatment leave (1 year total) Nursing-care leave Nursing-care leave (up to 1 year; can be taken on nonconsecutive days) Leave for prenatal medical appointments, pregnancy problem leave, etc. Childbirth Maternity leave (8 weeks before and 8 weeks Paternity leave (5 days total) Return to work Shorter working hours after childbirth) Work from home Nursing-care leave (5 days per year) Child-care leave Child-care leave (up to 3 years, until the child completes the first grade of elementary Family-nursing leave school; can be taken on nonconsecutive days) Child-nursing leave Half-day leave Return to work Shorter working hours (generally 6, 6.5, or 7 hours) (unlimited) Work from home (career-stream positions) Family nursing leave (5 days per year), child nursing leave (5 days per child per year) Half-day leave (unlimited), leave for overseas spouse transfers (3 years or less) Allowance for Balancing Child Care and Work (up to 100,000 yen per year per child, until the child completes the third grade of elementary school) Company Fulfill potential to contribute to business Enable diverse ways of working (employee-friendly workplaces) Employees Cafeteria Plan* 1 (child-care and nursing-care menu) *1 Flextime and discretionary labor systems are also available. The Cafeteria Plan is a system in which employees can select the support that they need, when they need it, according to their Cafeteria Points.

59 Return and Retention Rates After Maternity and Child-Care Leave (Hitachi, Ltd.) FY 2016 Return rate (%) Male 96.7 Female 97.1 Retention rate (%) Male 100.0 Female 98.6 In-House Child-Care Centers The Hitachi Group, in collaboration with its labor union, has set up in-house child-care facilities as a way to help employees balance work with child-raising. Genki Club Established April 2003 Location Capacity Ages eligible Operating hours 7:30 20:00 292 Yoshida-cho, Totsuka-ku, Yokohama-shi, Kanagawa, Japan (Yokohama Office, Hitachi, Ltd.) Approximately 70 children Genki Club logo. Children aged several months up to 6 years old (who have not yet entered elementary school) of Hitachi Group employees who live near or commute to the Totsuka area in Yokohama. Sakura Hiroba (Hitachi Chemical Group) Established April 2008 Location Capacity Ages eligible 2-27-22 Higashi-cho, Hitachi-shi, Ibaraki, Japan (near Yamazaki Division, Hitachi Chemical) 23 children Operating hours 7:20 20:20 Children aged several months up to 6 years old (who have not yet entered elementary school) of Hitachi Chemical Group employees. Employing People with Disabilities Expanding Hiring of People with Disabilities Hitachi, Ltd. and Group companies in Japan have worked hard to employ people with disabilities, such as by holding a special hiring fair and study meetings for Group companies to share information. As a result, as of June 2017 the employment ratio of people with disabilities was 2.15% at Hitachi, Ltd. and 2.25% for the entire Group in Japan. Both of these figures exceed Japan s legally required employment rate of 2.0%. We will maintain our Group-wide drive to hire more people with disabilities. Key Indicators Employment of People with Disabilities and Employment Ratio (Hitachi, Ltd.* 1 ) Legally required employment rate* 2 2.15 (people) 2.11 (%) 2.08 2,000 2.1 2.02 2.03 1,600 2.0 1,332 1,370.5 1,437 1,200 1.85 1,243 1,150 1.9 981 800 1.8 400 1.7 0 2000 2013 2014 2015 2016 2017 (FY) 0 Employment of people with disabilities (left scale) Employment ratio (right scale) *1 Includes 11 special subsidiaries and related Group companies. *2 The legally required employment rate was 1.8% up to fiscal 2012 and has been 2.0% since fiscal 2013. Notes: Data compiled in June of each fiscal year. The employment ratio is calculated according to methods prescribed in the relevant laws. Excursion (sweet potato digging). Christmas party.

60 Diverse Support Systems for Employees Support Systems that Meet Diverse Employee Needs To respond to the diverse lifestyles and needs of our employees, Hitachi, Ltd. has provided a wide range of support by introducing benefits* 1 that include housing support, such as dormitories, company housing, and a housing allowance system, as well as an asset-building savings program, an employee stock ownership program, group insurance, consolation payments, and a Cafeteria Plan program. The cafeteria plan allows employees to select the benefits they receive. This allows them to tailor a plan to their individual lifestyles and living needs by choosing from a list of options, such as skills development, childcare, nursing care, health promotion, and donations. Employees use Cafeteria Points to select the type of support they need when they need it. For our retirement and pension plans, defined contribution and defined benefit plans have been introduced across the Hitachi Group in response to the diversification of lifestyles among the elderly and the changes in forms of employment. The defined contribution pension plan encourages employees to participate in their postretirement planning by providing asset management and investment education, as well as other support. We increased the choice of benefit options and timeframes for both the defined contribution pension plan and the defined benefit pension plan in order to better meet the varied needs of employees. In October 2016, to actively support the efforts of employees with children to balance work and parenting responsibilities, Hitachi introduced a system of allowances to partially defray day-care and babysitting costs, further enhancing support for work-life management. *1 For full-time, regular employees. Enhancing Work-Life Management Support Systems