The Group ensures stable business management by implementing a Group-wide risk management system and working to predict and prevent potential risks, as well as by responding appropriately through measures to counter risks as required for business continuity.
Major risks are categorized into “1. Financial risks” and “2. Risks associated with ESG materiality.” The risks and opportunities for each and their countermeasures are described below.
1. Financial risks
Financial risks are described in detail below in “[Business Risks] 1. Financial Risks” in the Annual Securities Report (Japanese only).
|Financial risks||Events related to financial risks|
|Economic trend risks||Deterioration in business performance in line with economic recession|
|Foreign exchange and interest rate fluctuation risks||Deterioration in business performance due to yen conversion of overseas
subsidiaries’ business performance and interest rate fluctuations
|Geopolitical risks||Outbreak of terrorism, riots, wars, conflicts, etc.|
|Price fluctuation risks of raw materials||Deterioration in business performance due to soaring raw material prices|
|Procurement risks||Insufficient procurement of major parts and materials due to changes in the
situation of suppliers
|Accounting estimate risks||Losses due to unexpected events beyond the scope of accounting estimates|
|Risks of seasonal fluctuations in business performance||Inadequacies associated with a heavy emphasis on the second half of the year,
such as personnel allocation and capital investments
|Acquisition and other investment risks||Occurrence of unforeseen events in the investee companies after acquisitions|
|Risks of bankruptcy of business partners||Unexpected bankruptcy of business partners|
|Funding procurement risks||Credit rating downgrades or depletion of funds due to financial crises or
deterioration in business performance
|Tax-related risks||Cost increases in line with tax system revisions|
|Legal and regulatory risks||Risks associated with the enactment and revision of laws and government
ordinances, and risks associated with penalties, etc.
2. Risks associated with ESG materiality
Risks associated with ESG materiality are described in detail below in the Integrated Report.
|ESG themes||Materiality||Risk category|
|Mitigate/adapt to climate change, prevent disaster
loss through products and services
|Major disaster risks|
|Quality assurance and enhancement||R&D risks|
|Initiatives for a decarbonized society
Water resources conservation
|Climate change risks|
|Respect for human rights
Human resource development
Promotion of diversity
Health and safety
|Safety and inspection risks|
|Human resources risk|
|Information security risks|
|Business continuity risks|