Sony Group Sustainability Briefing FY2022

Sep 15, 2022

Introducing initiatives relating to human resources, climate change and AI ethics

Sony Group Corporation (“Sony” or the “Company”) today held its Sustainability Briefing. This year marks the fifth briefing relating to Sony’s ESG and sustainability initiatives since the first was held in 2018. First, Chairman, President and CEO Kenichiro Yoshida spoke on the theme of “learning.” He explained how Sony is learning from creators and users to create Kando (emotion), and how its sensing and AI technology is able to capture reality and learn from it. He emphasized how this “learning” is connecting to the growth of Sony and the sustainability of our planet.

Next, Shiro Kambe, Corporate Executive Officer in charge of Sustainability, and Kazushi Ambe, Corporate Executive Officer in charge of Human Resources, presented the results of materiality analysis conducted by Sony this year, and outlined some of the key initiatives being implemented in relation to areas such as human resources and climate change. As an example of efforts to address new social issues accompanying changes in society and technology, Alice Xiang of the AI Ethics Office and Sony AI explained Sony’s activities related to AI ethics, which have become increasingly important in recent years. Sony today also announced the approval of its net-zero targets from the Science Based Targets initiative (SBTi), underlining the progress of its efforts focused on climate change.

Highlights from the presentation are below. For further details, please refer to the related materials, which will be available on Sony’s Investor Relations website. For further information on the SBTi approval for Sony’s net-zero targets, please refer to the press release issued today.

1. Diverse Learning and Sustainability

Based on its Purpose to “fill the world with emotion, through the power of creativity and technology,” Sony learns from creators and users to provide an array of products and services that are used to create Kando. In order to make the “world,” which is the place where Sony pursues its Purpose, sustainable, Sony continues to value “learning” alongside its employees so that it can contribute to people, society, and the planet from a long-term perspective.

Sensing that captures reality
Sony’s CMOS image sensors that capture the real world and learn from reality are also being used in its new business initiative that delivers the Earth and stars to people in the form of “Kando content.” The STAR SPHERE project provides the opportunity to learn about our planet and environment through the experience of capturing images from nano-satellites equipped with Sony’s camera equipment, and creations that utilize this perspective from outer space. “Watching over” the Earth enhances our ability to “protect” it, and Sony is also engaged in an R&D initiative that aims to function as a platform to watch over the Earth, and in doing so help protect it by contributing to the prevention of natural disasters and the resolution of environmental issues.
AI that learns from the captured world
Sony’s intelligent vision sensor “IMX500” combines CMOS image sensor technology with AI which learns by predictive analysis based on data. It is capable of contributing to advancing the productivity of society, for instance through the realization of smart cities. This technology also enables power consumption to be reduced, for example in data centers, by performing data processing within the image sensor and minimizing the amount of data flowing to the cloud.
Sensing and AI are also indispensable for the evolution of mobility such as Advanced Driver-Assistance Systems (ADAS), and Sony believes the evolution of mobility will also connect to a healthy global environment.

2. Initiatives Across Diverse Businesses/ Materiality Analysis

At Sony, having clearly defined the key sustainability topics for the overall Sony Group, each business is moving forward with various sustainability initiatives that leverage its own specific characteristics. In addition to the introduction of sustainability evaluation indicators as a factor in determining the compensation of senior executives, Sony has established KPIs in each of its businesses, and incorporated them into business performance evaluation.
Taking into account developments such as the changes in the social environment, this year Sony conducted a materiality analysis. As a result, climate change; diversity, equity and inclusion (DE&I); respect for human rights; and technology for sustainability were defined as the most important topics for the Sony Group.

3. Realizing the Sustainable Growth of Sony Through the Growth of Diverse Individuals

In order to achieve further growth, Sony considers it vital to support the growth of the approximately 110,000 individuals who support the diverse businesses of the Sony Group. Based on its people philosophy, “Special You, Diverse Sony,” which expresses the message that each individual, with his or her unique personality, and Sony, which welcomes diverse individuals, can create mutual growth together, Sony’s personnel strategy is structured around three pillars: “Attract Talented Individuals,” “Develop Talented Individuals,” and “Engage Talented Individuals.” Furthermore, Sony is engaging in investment in human capital from a medium- to long-term perspective with the aim of achieving sustainable growth.

“Attract Talented Individuals,” “Develop Talented Individuals,” and “Engage Talented Individuals”
“Attract Talented Individuals”: Sony appoints experts with outside experience to leadership roles across its Group companies, and in managerial roles with responsibility for core headquarters functions. In the area of DE&I as well, Sony is implementing measures both inside and outside the company according to the business, region, and social environment. For example, in its entertainment businesses headquartered in North America, Sony provides development and learning opportunities for people from underrepresented backgrounds within the industry. In Japan, Sony is expanding the Symphony Plan, which supports not only employees engaged in childcare and nursing care, but also those receiving cancer and infertility treatment. Sony is also involving people with disabilities in the creation of products and services from the planning stage.
“Develop Talented Individuals”: Sony University is an initiative to develop future leaders within the Sony Group, and the spectrum of participants continues to evolve, from their area of business responsibility to their nationality and gender. Sony’s Technology Strategy Committee transcends business boundaries to share cutting-edge technology, provide opportunities for broader learning, structure career paths for engineers and support the advancement of its technological capabilities.
“Engage Talented Individuals”: To measure employee engagement, Sony conducts regular surveys and analysis as an important indicator for management. Engagement levels are linked to remuneration for executives as part of the evaluation of their implementation of sustainability initiatives
Human capital development from a medium- to long-term perspective and investment in people
To support human capital development from a medium- to long-term perspective through university-enterprise partnerships, Sony collaborates with the University of Tokyo’s School of Engineering, for instance on study programs, and established the Joint Research Chair with the Tokyo Institute of Technology. Other new initiatives include support for the University of Tokyo’s Metaverse School of Engineering and Nara Women’s University’s Faculty of Engineering. Furthermore, as part of its efforts to assist in the development of innovative and entrepreneurial talent in Japan, Sony is investing in the “Kamiyama Marugoto College of Design, Technology, and Entrepreneurship” as a scholarship partner to support free scholarships for students.
With the aim of enhancing corporate value in the medium to long term, in relation to stock-based compensation that promotes shared value with shareholders, Sony decided to introduce a stock compensation plan through Restricted Stock Units (RSU) this June. Eligibility for this RSU Plan includes employees in addition to executives, and Sony intends to accelerate its investment in human resources through stock-based compensation.
Sony is strengthening its analysis and management of employee data, and alignment with the area of DX, to effectively leverage the abundant business assets within the Sony Group, such as platform services; technology; know-how and expertise; and intellectual property.
Sony’s mentorship program aims to create a connection between management and promising future talent across the Sony Group, and by building relationships as mentors and mentees, ensure that the rich experience accumulated within the Group is passed on to the next generation, leading to new value creation and employee development.
Initiatives for People and Society
Sony is promoting DE&I in relation to society, such as developing hearing aids that incorporate inclusive design methods, and supporting organizations engaged in social justice and human rights protection through the Global Social Justice Fund.

4. Progress of Climate Change Initiatives

Sony is advancing its environmental initiatives along two axes around its “responsibility,” for instance to reduce environmental impact, and the “contribution” it can make by leveraging its diverse businesses and technologies.

Responsibility to the Environment

Based on its long-term environmental plan “Road to Zero,” which aims to achieve a zero environmental footprint, Sony is engaging in activities from four perspectives: climate change, resources, chemical substances, and biodiversity. As announced at its Corporate Strategy Meeting in May, Sony has decided to accelerate its target for achieving net zero greenhouse gas (GHG) emissions from 2050 to 2040, and also accelerated its RE100 goal of operating with 100% renewable electricity from 2040 to 2030. This plan was approved as a net-zero target by the “Science Based Targets initiative (SBTi)*” on August 24. This is the world’s first such approval for a major company in the “consumer durables, household, and personal care products” sector.
Additionally, as a new initiative, Sony has entered into a contract with a renewable power generation company to implement a virtual power purchase agreement that uses a FIP (Feed-in Premium) scheme, the first of its kind in Japan.
As part of its efforts to reduce the environmental impact of its supply chain, from this year, Sony began to support energy-saving activities at certain supply partners, and also to help them set SBT equivalent targets and obtain approval from SBTi.
Contribution to Resolution of Environmental and Social Issues
Sony is also engaged in various initiatives in terms of its “contribution,” to improving the global environment through its technologies and businesses. For instance, Virtual Production is a technology that replaces on-location shooting with virtual sets within a sound stage. As it removes the need for on-site generators or energy to be consumed transporting the crew and equipment to filming locations, Sony estimates a 75% to 80% reduction in GHG emissions can be achieved compared to filming on location.
* Sony’s environmental initiatives are being exhibited until October 7 on the 1st floor of the Sony Group Headquarters (1-7-1 Konan, Minato-ku, Tokyo).

5. AI Deployment and Responsibility

Through the use and application of AI, Sony aims to contribute to the creation of a peaceful and sustainable society while delivering Kando to people around the world. As Sony expanded its AI development and usage, it introduced the Sony Group AI Ethics Guidelines in 2018 ahead of many other companies to ensure the respect of diversity and human rights, prevent discrimination, and enhance transparency and trustworthiness. In 2019, Sony established the Sony Group AI Ethics Committee, comprising senior executive level management with diverse skills and background. In 2021, the AI Ethics Office was established to provide specialist expertise on AI ethics to all Sony organizations.

AI Ethics assessment

As of July 2021, Sony has incorporated an AI ethics assessment as a mandatory requirement in its quality management systems for electronics products.

Integration of research and practice

An AI research initiative at Sony AI launched in 2021 is engaging in areas such as ethical data collection, algorithmic bias detection, and mitigation, in order to prevent and resolve challenges that may arise in the development of AI products and services.
Dialogue with stakeholders
Sony is a member of several organizations in the area of AI, including the Partnership on AI, and Global Partnership on AI. It contributes its expertise to AI policy initiatives globally, and actively pursues dialogue with other companies, organizations, and the academic community on AI ethics issues.

Cautionary Statement

Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:
(i) Sony’s ability to maintain product quality and customer satisfaction with its products and services;
(ii) Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing customer preferences;
(iii) Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;
(iv) the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives;
(v) changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility;
(vi) Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;
(vii) Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations;
(viii) the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending;
(ix) Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;
(x) Sony’s ability to forecast demands, manage timely procurement and control inventories;
(xi) foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets, liabilities and operating results are denominated;
(xii) Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;
(xiii) Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others;
(xiv) the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment;
(xv) shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;
(xvi) risks related to catastrophic disasters, geopolitical conflicts, pandemic disease or similar events;
(xvii) the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and
(xviii) the outcome of pending and/or future legal and/or regulatory proceedings.
Risks and uncertainties also include the impact of any future events with material adverse impact. The continued impact of COVID-19 and developments relating to the situation in Ukraine and Russia could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

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