Sanrio Materiality

Process for identifying materiality

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 macro trends (such as Web 3.0 and other technologies)
  • Initiatives of leading sustainability companies
  • Principles and guidelines of international organizations, research organizations, and governments, such as the SDGs, MSCI, and Top 20 Current Global Issues

2Select and organize the 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 for fulfilling our vision, mission, and values
  • Social issues that can be addressed through our current business and by growing our business
  • Social issues to strengthen our foundation of value creation, such as organizational and human resources

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. These were then set as our issues of materiality.

  • Social issues that we can help address through value creation: Issues where we can use a value creation model to generate value and issues that will strengthen our foundation of value creation.
  • Social issues we can address through ESG: Issues that investors and society require to be resolved

3Consider the 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

Discuss and finalize decisions at management meetings and board of directors meetings.

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
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
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
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

*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
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

*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
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
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
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.)

*3 XR (Cross Reality or Extended Reality): Collective term for technologies, such as virtual reality (VR) and augmented reality (AR), that fuse the real world and the virtual world

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
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

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)
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
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
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 BSC/ KGI/KPI
  • Have in place a highly transparent governance system on a global/group-wide scale