Contribution areas and targets

Six contribution areas

Based on the results of the materiality analysis, we have set six contribution areas in order to achieve the sustainability goals of the “Three Goals,” which are the vision for society toward 2050.GS2028 focuses on business activities that contribute to six areas, aiming to expand contributions to society and environment and achieve dramatic business growth.

Six contribution areas and priority issues

Contribution area	Priority issue
Achieving carbon neutrality	Reducing GHG emissions and enabling the transition to affordable, reliable, and sustainable forms of energy
Improving efficiency in society & industry	Optimizing production, enabling autonomy, and facilitating the efficient use of resources and energy through DX
Optimizing plant lifecycle & protecting environment	Supporting both the long-term optimal operation of plant assets and the reduction of their environmental footprint
Improving health & safety	Promoting life-related innovation and improving safety in plants and communities
Creating a resource-recycling ecosystem	Fostering the development of the bioeconomy and a circular economy
Creating workplaces where people can fulfill their potential	Establishing an equal opportunity workplace where employees can be treated with dignity and fulfill their potential

We will promote the expansion of our contribution to society and environment through medium to long term “social impact indicators.” In addition, we will promote business growth through “business activity indicators” set for each business and “sustainability transition sales,” which measure the business volume of growth areas that contribute to the sustainability of the Group.

Sustainability Indicators for the Three Goals

Social impact indicators

We will further accelerate contribution while continuing to use the “Social Impact Indicators” established in the previous medium-term Business plan.
We conduct materiality analysis when setting each indicator.
>> Click here for materiality analysis

Calculation of social impact indicators

We aggregate the difference between customers’ CO2 emissions from renewable energy-related business or low-carbon energy production, and average CO2 emissions from fossil fuels usage, then record is as a result.

Sustainability Transition Indicators

Our business environment is undergoing major changes, including the energy situation, rising geopolitical risks, and changes in social demands for decarbonization. Through all of its businesses, Yokogawa contributes to the sustainable development of society and industry, while also working to upgrade its business portfolio in response to changes in the business environment over the medium to long term. In order to realize a sustainable society, it is important to accelerate business growth in the areas of clean energy and energy transition, as well as to support customers’ sustainability transitions while addressing the diverse challenges and circumstances faced by customers across different regions and industries.
Based on such belief, in order to clearly indicate how each business should contribute and in which direction it should grow, we upgraded the sustainability transition indicators to management indicators that more integrally capture contribution to society and business growth, following discussions at the Sustainability Committee.

For fiscal year 2026 and beyond, we classify our business domains by industry into three tiers to make it clear how each tier should contribute to sustainability transitions.

Concept of sustainability transition indicatiors^*1

Tier 1 is positioned as a priority growth area that will directly contribute to the realization of a sustainable society, and therefore we have set an average annual growth rate target of 15%, which is significantly higher than the group-wide sales growth rate target under GS2028 (average annual rate of 10% or more). For Tier 2, which is a domain that supports social transitions through energy transition and effective utilization of resources, we aim for an average annual growth of 10%.
Although no growth rate targets are set for Tier 3, it is an important area that supports society and industry, and therefore we will enhance our contribution to our customers’ safe and stable operations and the reduction of environmental impacts. These indicators have been introduced as a new framework for evaluating businesses from the perspectives of both social value and corporate value and to accelerate growth in domains that contribute greatly to a sustainable society, based on the premise that all businesses contribute to society. They point to the direction we are headed in promoting the reform of our business portfolio over the medium to long term.
^{*1 The Stated Policies Scenario (STEPS) of the World Energy Outlook (WEO) published by the International Energy Agency (IEA) was used as a reference when designing the index. According to STEPS, while fossil fuels including oil and natural gas will continue to be used on a certain scale in 2050, the fossil fuel-related fields are expected to gradually lose share after the 2030s, in line with changes in the energy demand structure.
*2 The composition of industries in each tier is determined by reference to the taxonomy standards published by public institutions, while also taking into consideration our business format and management practicality. We will continue to review the system in light of changes in social and industrial structures.
*3 The base year is fiscal year 2023.}

Business Activity Indicators

We have identified key focus areas for advancing our sustainability transition and established targets for each business.