New Business Through Sustainability Innovation Combining Social Sustainability and Business Growth
Happy New Year.
I hope you have all started the new year with a fresh outlook. I would like to take this opportunity to share my thoughts with you at the beginning of this new year.
2023 review and current situation
Last year, the Japanese government downgraded COVID-19 to a “category 5” infectious disease, which led to the full resumption of domestic economic activities and the restoration of normal life for the
first time in about three years. The year was also characterized by heightened geopolitical risks, as evidenced by ongoing tensions between the U.S. and China, the prolonged war in Ukraine, and the recent
outbreak of war between Israel and Palestine. In the Mitsubishi Electric Group, under the Business Area (BA) system we introduced in April 2022, the four BA Officers (BAOs) have been pursuing business transformation and new portfolio strategies across traditional business-group boundaries. As a result, we
are forecasting record performance for the current fiscal year, including ¥5.2 trillion in revenue and ¥330 billion in operating profit. In the new year, in addition to ongoing geopolitical risks, there are new concerns about global monetary tightening, particularly in Europe and the U.S., and the real estate crisis in China. However, we will respond to the current external environment through our BA management framework to steadily implement initiatives one by one, striving together to achieve the goals of our medium-term business plan and our transformation into a “Circular Digital-Engineering Company.”
Sustainability management in every sense
In 2022, we established sustainability as a cornerstone of our business, and committed to sustainably increasing our corporate value by addressing critical challenges facing the world. We defined five key
areas to address: carbon neutrality, circular economy, safety and security, inclusion, and well-being. We also introduced our BA management framework to clarify our challenges and facilitate solutions through
our businesses. Thanks to everyone’s efforts, we have made some progress regarding decarbonization
and other issues, but global warming is accelerating by the minute and the risks of climate change continue to grow. In addition, only 15% of the 17 SDGs targets for 2030 are reported to have made progress.1 Accordingly, we need to accelerate our efforts to contribute fundamentally to essential solutions at the
global level. Our plan is to leverage our high technical capabilities and technologies in a wide
range of sectors, which we have cultivated tirelessly, as well as our boundless creativity. In doing so, we expect to deliver completely new value that transcends the scope of our traditional businesses and contributes to sustainability in a more fundamental and strategic way than before.
By contributing to a sustainable world through our businesses, we expect our Group to grow and develop in sustainable ways. We also expect to create businesses that are not “trade-offs” between sustainability
and business development, but rather “trade-ons” that balance the two without compromising either. This is our mission, as stated in our Purpose (corporate philosophy): “Contribute to the realization of a vibrant
and sustainable society.” To vigorously pursue this mission throughout the Group, we launched the Global Initiative for Sustainability Technology (GIST) Project2 last October. Through this project, we are assessing the megatrends of pressing global issues, based on which we aim to leverage our strengths in new “trade-on” businesses capable of providing the world with sustainability solutions.
Summary
Contributing to sustainability through our businesses is a manifestation of our Purpose. It is also closely linked to our Circular Digital-Engineering Company goal and the “My Purpose” activities we are presently
implementing. But to deliver new value and solutions, we need to make full use of advanced data and DX driven by everyone’s strong commitment. This year, I am challenging each of our 150,000 employees around the world to seriously consider how they can make a fundamental contribution to sustainability,
and then to take action to make it happen. I am sure that each of you can find intersections between the company’s Purpose and your own purpose. Please try to imagine the future of our society ten or twenty years and then work together to realize “sustainability innovation” as a unique new value of our
Group. In the meantime, we will earnestly pursue ROIC with an emphasis on asset efficiency. The ROIC target set for each business will be used as a key indicator in our business decisions. Also, we aim to
enhance our Group earning power by ensuring that everyone is aware of their respective business’s asset-efficiency level and how to achieve the ROIC target. I would like to conclude my New Year’s greetings by wishing all of you and your families a healthy and fruitful 2024.
