Sanrio Materiality Identification Process KGI Formulation Process Issues to address through value creation Issues to address through ESG perspectives

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Initiatives for Materiality Issues

Sanrio Materiality

Identification Process

The process for identifying the items of materiality included forming an internal working group of representatives from throughout our company and collecting opinions from specialists outside the company.

1Identify social issues

We identified key issues from the perspective of future trends and sustainability in the pursuit of our vision.

Domestic and international trends and social needs

  • Political, social, and economic megatrends
  • Entertainment market macrotrends (Web 3.0 and other technologies)
  • Sustainability initiatives of leading companies
  • Principles and guidelines of international organizations, research organizations, and governments, such as the SDGs, MSCI, Top 20 Current Global Issues
2Select and organize social issues

We selected and organized the social issues based on the three perspectives of vision, business domain,and organizational and human resources.

Three perspectives

  • Social issues to address to achieve our Vision, Mission and Values (VMV)
  • Solutions to social issues that can be achieved through operation of existing businesses and future growth businesses
  • Social issues to address to strengthen organizational and human resources and other aspects of the foundation for value creation

The social issues were organized into two broad categories of issues we can help address through value creation and issues we can address through ESG, and specified as our material issues.

  • Issues to address through value creation: Issues that will enhance value created through the value creation model and strengthen the foundation of value creation
  • Issues to address through ESG Perspectives: Issues demanded by investors and society and which need improvement
3Consider opinions of stakeholders

We discussed the items of materiality that we identified with internal stakeholders and external specialists to confirm their validity.

Comments from an external specialist

  • I hope that using value creation to address social issues will mean using Sanrio characters for value creation for the Well-Being of people of all countries and ages. The democratization of creativity is an extremely constructive initiative because encouraging creators to create will raise the overall level of culture in society.
  • Addressing social issues through ESG should include making Hello Kitty and Sanrio as symbols of sustainability that will hopefully clear away environmental and human rights issues in the supply chain.

Mariko Kawaguchi
Specially Appointed Professor,
Rikkyo University

4Management decision-making

We discuss and finalize decisions at management meetings and at Board of Director meetings.

5Confirm progress and review course

We measure the benefits derived from Sanrio Materiality initiatives quarterly.

  • From time to time, check to see if there are any changes, taking into account shifts in the internal and external business environment, such as a change in social conditions or a change in corporate strategy.

KGI Formulation Process

In April 2025, 10-year KGIs (FY3/2036) were formulated as medium to long-term targets. The identification process entailed conducting market surveys in Japan, the United States, and Mainland China, and ascertaining conditions around the world from the two perspectives of social changes that Sanrio aspires to and our role in Sanrio’s contributions. We formulated 10-year targets based on the market survey numbers reflecting the current conditions as of FY3/2026.

1Conducting Market Surveys

Markets surveys were conducted via the Internet and covered respondents from a broad range of ages, from 15 to 69, who live in Japan, the United States, and Mainland China.

2Extracting and Determining Quantitative KGIs

Determining target segments for KGIs for each Materiality issue

  • In the case of quantitative KGIs for Sanrio’s contributions, we decided to focus on Sanrio’s impact on the target segments and measure the effectiveness of initiatives that Sanrio should implement to achieve the quantitative KGIs for social change.

Deciding on two types of quantitative KGIs: social changes and Sanrio’s contributions

  • Based on the results of the surveys, we established two types of quantitative KGIs: KGIs for social changes that show society Sanrio aspires to and KGIs for Sanrio’s contributions that show our role.
  • In the case of quantitative KGIs for social changes, we considered the social issues faced in the target segments for the KGIs.
  • In the case of quantitative KGIs for Sanrio’s contributions, we decided to measure the effectiveness of initiatives that Sanrio should implement to achieve the quantitative KGIs for social change.

3Determining quantitative KGI targets and qualitative KGIs

We set numerical targets for 10 years from now for the quantitative KGIs for social change and for Sanrio’s contributions, and determined qualitative KGIs for the society we aim for 10 years from now.

Issues to address through value creation

Improve Well-Being
Theme
Be close to all people and society
Purpose
To continue to develop businesses that are close to people and support all people and society, based on the spirit of caring and helping each other which Sanrio has valued since its founding.
Approach

Encourage children and young people to accept themselves as they are (self-affirmation)
Be a close friend to children feeling anxiety or in difficult situations, such as illness, disability, abuse, or requiring nursing care

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

Sanrio’s IP are everpresent, close to people’s hearts when they are smiling and when they are not, aiming for a society where everyone’s emotional needs are met and they feel a sense of self-acceptance.

We strive for a society which provides a wide range of opportunities for children to learn while having fun and where more children learn voluntarily through synergies between entertainment and education.

Quantitative KGIs

1 Encourage children and young people to accept themselves as they are (self-acceptance)

Encourage children and young people to accept themselves as they are (self-acceptance)
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Sanrio’s contributions

The anxiety of children and young people is soothed through Sanrio IP

 33％ Raise to 40％ 23％ Raise to 29％ 21％ Raise to 27％

Social changes

I feel that I am unable to accept myself as I am (lack of self-acceptance)

 60％ Lower to 54％ 66％ Lower to 59％ 53％ Lower to 46％

2 Cheer on children in many different circumstances

Cheer on children in many different circumstances
Quantitative KGIs		 Japan
Current Target

Social changes

The parents of children who are ill, have disabilities, or are in difficult situations feel there is insufficient emotional support for their children

 68％ Lower to 58％

Sanrio’s contributions

Bringing smiles to children facing illness, disabilities, and other challenges through Sanrio’s IP.

 29％ Raise to 38％

3 Achievement of 300 billion hours/year or more in Sanrio Time

4 Bringing smiles to 100,000 children through Sanrio Nakayoku Project activities.

KPIs up to FY3/2027
  • Achieve full-year target of 90.0 billion hours of Sanrio Time “Time Feeling Close to Sanrio”
  • Create, nurture, and expand recognition of IP that enhances self-esteem
  • Develop Sanrio Nakayoku Project, Sanrio’s social contribution activity, to bring smiles to a total of 20,000 people
Actions

Initiatives for Sanrio Materiality Issues: Improve Well-Being

Democratize Creativity
Theme
Introduce everyone to the joys of being creative
Purpose
To use the power of Sanrio's creativity to make creativity part of everyone's lives and share the joys of being creative
Approach

Develop mechanisms and platforms for Sanrio and fans to co-create and make self-expression a part of people’s lives
Provide opportunities to nurture children’s creativity

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

We will create opportunities for creativity,foster people’s interest in it, and aim for a　society where everyone can engage in creative activities.

Quantitative KGIs

1 Making creativity a part of everyday life

Making creativity a part of everyday life
Quantitative KGIs		 Japan
Current Target

Social changes

Creators feel they have few opportunities to engage in creative activities

 52％ Lower to 46％

Sanrio’s contributions

Sanrio communicates the joys of engaging in creative activities to creators through Sanrio IPs

 39％ Raise to 45％

2 Introducing children to the joys of being creative

Introducing children to the joys of being creative
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

Parents of children who are high school-age or younger feel there is insufficient support and opportunities to develop their children’s creativity, including creative thinking and imagination

 53％ Lower to 47％ 68％ Lower to 63％ 66％ Lower to 62％

Sanrio’s contributions

Sanrio communicates the joys of engaging in creative activities to creators through Sanrio IPs

 19％ Raise to 23％ 26％ Raise to 30％ 31％ Raise to 35％
KPIs up to FY3/2027
  • Produce UGX*1 through collaboration between companies and creators using Sanrio’s platform 50,000 registered creators
  • Design and host creative training seminars incorporating Sanrio’s expertise
Actions

Initiatives for Sanrio Materiality Issues: Democratize Creativity

*1 UGX (User Generated Experiences): Collective term for user-generated content and user-generated IP, etc.

Raise Children's Educational Standards
Theme
Provide opportunities to learn while having fun
Purpose
To use Sanrio edutainment media to show the fun of learning and use our unique expertise to capture children's attention and make education appealing to them
Approach

Arrange opportunities for children to learn while having fun
Provide support for children with limited education opportunities and experiences due to economic or other circumstances

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

We strive for a society which provides a wide range of opportunities for children to learn while having fun and where more children learn voluntarily through synergies between entertainment and education.

Quantitative KGIs

1 Arrange opportunities for children to learn while having fun

Arrange opportunities for children to learn while having fun
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

Parents of children who are high school-age or younger feel that the children of today don’t enjoy studying

 58％ Lower to 52％ 73％ Lower to 68％ 68％ Lower to 64％

Sanrio’s contributions

Children enjoy studying through Sanrio IP

 18％ Raise to 23％ 26％ Raise to 31％ 30％ Raise to 34％

2 Provide support for children with limited educational opportunities and experiences

Provide support for children with limited educational opportunities and experiences
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

Parents of children who are high school-age or younger feel there are growing disparities in education and learning experiences

 74％ Lower to 65％ 70％ Lower to 63％ 76％ Lower to 68％

Sanrio’s contributions

Sanrio IP supports children’s education and learning experiences

 17％ Raise to 25％ 17％ Raise to 24％ 30％ Raise to 39％
KPIs up to FY3/2027
  • GMV*2 of 10.0 billion yen for edutainmentrelated business
  • Total contact points of 300,000 households for Sanrio English Master
  • Donate edutainment materials to more than six child welfare facilities, etc. over three years
  • Continuously provide English language experiences at least one child welfare facility, etc. per year
Actions

Initiatives for Sanrio Materiality Issues: Raise Children's Educational Standards

*2 GMV: Gross Merchandise Value

Strengthen Social Ties Transcending Borders and Generations
Theme
Connect people around the world
Purpose
To connect people digitally and locationally using Sanrio's assets as a global entertainment company that values the connections between people around the world and has operations in 130 countries and regions
Approach

Provide opportunities and platforms for people living with loneliness and in isolation to foster social connections across borders and generations
Strengthen the social sector (NPOs, NGOs, international organizations) foundation and work together to solve social issues

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

As a global entertainment company, we will foster connections among people across borders and generations through both real and digital experiences and aim for a society that values these bonds.

Quantitative KGIs

1 Provide opportunities to foster social connections for people experiencing loneliness or social isolation

Provide opportunities to foster social connections for people experiencing loneliness or social isolation
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

People aged 15 to 69 feel that an increasing number of people are living with loneliness and social isolation

 72％ Lower to 70％ 79％ Lower to 76％ 69％ Lower to 66％

Sanrio’s contributions

People aged 15 to 69 are connecting with others and supporting one another through Sanrio IP

 19％ Raise to 22％ 18％ Raise to 20％ 24％ Raise to 26％

2 Strengthen the social sector foundation and work together

Strengthen the social sector foundation and work together
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

People aged 15 to 69 feel they don’t know much about NPOs, international organizations, and other social sectororganizations

 68％ Lower to 65％ 65％ Lower to 63％ 66％ Lower to 64％

Sanrio’s contributions

People aged 15 to 69 feel that Sanrio IP contributes to expanding their recognition of NPOs, international organizations, and other social sector organizations

 9％ Raise to 11％ 14％ Raise to 16％ 19％ Raise to 21％
KPIs up to FY3/2027
  • Create digital contact points that foster connections between people, such as SANRIO Virtual Festival. Target number of 5 million users
  • Continuously implement social contribution activities in collaboration with the United Nations and NGOs/NPOs at least twice a year
Actions

Initiatives for Sanrio Materiality Issues: Strengthen Social Ties Transcending Borders and Generations

Invest in Internal and External Human Capital
Theme
Invest in people to connect smiles
Purpose
To foster a workforce of employees who undertake their work with joy, as we believe it can make people around the world smile. To foster future entertainment leaders spreading smiles around the world.
Approach

Increase engagement by creating an environment where all Sanrio Group employees work happily and healthily
Cultivate athletes, creators, and other talents who will be the new leaders of the next generation of entertainment

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

As a leading company in the entertainment industry, we strive for a society in which our employees and others active in the industry can demonstrate their personal abilities to the fullest

Quantitative KGIs

1 Create an environment where all employees work happily and healthily

Create an environment where all employees work happily and healthily
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Sanrio’s contributions

People aged 15 to 69 feel that Sanrio appears to be an easy place to work regardless of gender

 25％ Raise to 27％ 21％ Raise to 23％ 24％ Raise to 27％

2 Cultivate talents who will be the new leaders of the next generation of entertainment

Cultivate talents who will be the new leaders of the next generation of entertainment
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Social changes

People aged 15 to 69 feel that when they see athletes trying hard, they are able to try hard too.

 42％ Raise to 45％ 69％ Raise to 71％ 80％ Raise to 83％

Sanrio’s contributions

People aged 15 to 69 feel that Sanrio IP contributes to expanding their recognition of NPOs, international organizations, and other social sector organizations

 16％ Raise to 18％ 18％ Raise to 20％ 23％ Raise to 26％
KPIs up to FY3/2027
  • Introduce various measures such as strategic job rotation, seconding programs, and internal pitch contests to develop global and creative human resources
  • Improve the brand image by making it “international” and “promising” through sponsorship of athletes, etc.
  • Implement support for creators in the digital field (XR*3 creators, VTubers, etc.)
Actions

Initiatives for Sanrio Materiality Issues: Invest in Internal and External Human Capital

*3XR：Extended Reality

Realize Diversity
Theme
Increase diversity in the company and society
Purpose
Be a globally active company supporting the creation of a society where people of all genders, nationalities, disabilities, and other characteristics can shine.
Approach

Be a company where diverse human resources can demonstrate their true value, and provide an environment where it is easy for everyone to play an active role
Support a society that accepts diversity by providing entertainment that can be enjoyed by everyone—with or without a disability—and use our content to increase opportunities to deepen understanding of people with disabilities and minorities

Qualitative and quantitative KGIs up to FY3/2036

Qualitative KGIs

As a company that respects diversity, we strive for a society where the philosophy of “Minna Nakayoku” (Getting Along Together) is embraced, creating content and environments where everyone feels safe, enjoys themselves, and participates freely

Quantitative KGIs

1 Strengthen the social sector foundation and work together

Strengthen the social sector foundation and work together
Quantitative KGIs		 Japan The United States Mainland China
Current Target Current Target Current Target

Sanrio’s contributions

People aged 15 to 69 feel Sanrio conveys the impression that one can be successful regardless of gender

 25％ Raise to 28％ 20％ Raise to 23％ 24％ Raise to 27％

2 Provide content that can be enjoyed by people of all abilities

Provide opportunities to foster social connections for people experiencing loneliness or social isolation
Quantitative KGIs		 Japan
Current Target

Social changes

The parents of children who are ill, have disabilities,or are in difficult situations feel there is insufficient entertainment content that children can enjoy even in such situations

 57％ Lower to 47％

Sanrio’s contributions

Through Sanrio IP, we provide entertainment that children who are ill, have disabilities, or are in difficult situations can enjoy

 24％ Raise to 33％
KPIs up to FY3/2027
  • Strengthen human resource exchanges with major local bases (North America, Europe, Mainland China, Southeast Asia)
  • In theme parks:
    ①
    Introduce non-verbal shows that can be enjoyed by people of all nationalities
    ②
    Improve customer satisfaction by providing content that can be enjoyed by people with or without disabilities
Actions

Initiatives for Sanrio Materiality Issues: Realize Diversity

Issues to address through ESG perspectives

Care for the Global Environment
Purpose
Fulfill our responsibility to conduct our business in an environmentally friendly manner in order to sustainably provide Sanrio products and services
Approach
Diligently advance environmental initiatives in our business activities, such as the reduction of GHG emissions
KPIs up to
FY3/2027
  • Scope 1, 2:
    Reduce GHG emissions by 60% (vs. FY3/2019)
  • Scope 3:
    Reduce GHG emissions per sales by at least 10% (vs. FY3/2019)
Actions

Initiatives for Sanrio Materiality Issues:Care for the Global Environment

Respect for Human Rights
Purpose
Embody the Sanrio corporate philosophy of Minna Nakayoku (Getting Along Together) by fulfilling our responsibility to set a good example for children. Respect human rights, and be a business that sets standards for the world
Approach
Distribute clear rules for respecting human rights and ensure full compliance throughout the supply chain
KPIs up to
FY3/2027
  • Request that business partners who handle Sanrio products adhere to a code of conduct that respects human rights. Rate of agreements concluded in writing: 100%, in principle
Actions

Initiatives for Sanrio Materiality Issues:Respect for Human Rights

Ensure Customer Privacy and Data Security
Purpose
Continue being a company that people trust by fulfilling our responsibility to provide safe and secure services as we grow the Sanrio+ offerings and expand into other digital domains
Approach
Provide safe and secure digital services to customers with comprehensive data security
KPIs up to
FY3/2027
  • Have in place information security systems that are in line with new laws in each country
Actions

Initiatives for Sanrio Materiality Issues:Ensure Customer Privacy and Data Security

Conduct Transparent and Visible Governance
Purpose
Fulfill our responsibility to continue strengthening our corporate governance by maintaining high management transparency and complying with the Sanrio Compliance Charter
Approach
Provide transparent and sound business operations to maintain our status as a trustworthy company
KPIs up to
FY3/2027
  • Conduct sound business operations through the establishment and management of KGI/KPI
  • Have in place a highly transparent governance system on a global/group-wide scale
Actions

Initiatives for Sanrio Materiality Issues:Conduct Transparent and Visible Governance