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Message from the General Manager of the Sustainability Management Division

Message from the General Manager of the Sustainability Management Division

We will contribute to solving environmental and social issues with the "power to connect" and actively promote communication with stakeholders.

General Manager,
Sustainability Management Division
Corporate Sector
Kazuyasu Yamashita

Creating Business Opportunities Based on Social Issues

Contributing to solving social issues through our business
by enhancing the "power to connect"

As the global shift towards a decarbonized society, the KDDI Group is also aiming to achieve net-zero CO2 emissions in its business activities. Furthermore, we are actively promoting initiatives that will lead to carbon neutrality throughout society.
au Energy Holdings, a member of the KDDI Group, established au Renewable Energy and launched a renewable energy generation business centered on solar power generation. The company will contribute to the shift to a renewable energycentered society that realizes a stable energy supply. KDDI has also launched "Green Mobile" for corporate customers.
This service uses renewable energy sources to generate electricity for the telecommunication services provided to customers.
We also believe that KDDI's strength, the "power to connect," is the key to shaping a better future as an enabler, supporting society's information infrastructure and helping to solve the social issues facing us. Our telecommunicationsbased innovations will contribute to solving all kinds of environmental and social issues. For example, the marine environment is changing drastically due to climate change, etc. In the fishery industry, the catch continues to decline along with the decrease in fishery resources and seaweed beds. We therefore conducted a survey using a waterborne drone, considering the importance of restoring the seaweed beds, which are the marine forests below the sea surface, from the viewpoint of preserving and restoring the fishing environment.
In addition to the above, we are actively working to solve issues in the fishing and agriculture industries through the use of IoT technology throughout Japan. To address the issue of the heavy workload on fishery and agricultural workers, our assets are used to improve work efficiency, reduce costs, stabilize yields, and improve quality. Visualizing the quality of work that has been covered by the experience and intuition of workers as data, reproducing it in a digital space, and presenting solutions can lead to greater employment opportunities for inexperienced workers and young people.
As a telecommunications carrier, KDDI's mission is to connect people. This means connecting people's lives, day-today lives, and hearts and minds. We will strive for a world where new value is created and social issues are solved by enhancing the power to connect and integrating communications into every aspect of our lives.

KDDI Green Partners Fund

We will contribute to enhance the sustainability of society by aiming to achieve the following three goals with respect to the global environment: carbon neutrality for society as a whole, preservation of biodiversity, and realization of a recycling-oriented society.
One of the major driving forces for achieving these goals is innovation through co-creation that transcends corporate and organizational frameworks. Through partnering with startup companies that are actively working to solve environmental issues, we will further expand our impact on society by integrating the technologies of KDDI and its partners and creating synergies.
In 2021, KDDI, together with SBI Investment Co., Ltd. established the KDDI Green Partners Fund to invest in startup companies that address environmental issues. The fund has provided funding to six companies (as of September 2023), as well as business support and joint demonstrations utilizing various assets of KDDI. To further accelerate our contribution to solving environmental issues, we will continue to invest in and support startup companies with superior technologies and services.

Issuing sustainability bonds

We also need a mechanism to financially support the promotion of sustainability activities. KDDI created its Sustainability Finance Framework that limits the use of funds to projects that help solve social issues and preserve the global environment, and issued KDDI Tsunagu Chikara Bonds, KDDI's first sustainability bonds. They correspond to SDGs bonds, in which procured funds are allocated to projects that contribute to solving environmental and social issues.
As a specific use of KDDI Tsunagu Chikara Bonds totaling 100 billion yen, KDDI will contribute to the government's "Vision for a Digital Garden City Nation" initiative by constructing 5G areas. Moreover, we will continue to implement various projects to promote power saving and the use of renewable energy in mobile phone base stations and telecommunication facilities.

SDGs債

Outline of the bonds

Name	KDDI Corporation 30th Unsecured Bond (with inter-bond pari passu clause special clause) (Sustainability Bond)	KDDI Corporation 31st Unsecured Bond (with inter-bond pari passu clause special clause) (Sustainability Bond)
Term of issue	3 years	5 years
Total amount of issue	100 billion yen in total
Issue date	October 27, 2022
Structuring agent	Daiwa Securities Co., Ltd.
Lead managing underwriters	Daiwa Securities Co., Ltd.; Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.; Mizuho Securities Co., Ltd.; Nomura Securities Co., Ltd.

Providing employees with the opportunity for business development through
the internal penetration of sustainability

To implement sustainability management and have a positive impact on society, it is important for each employee to deepen his or her understanding of sustainability and to think autonomously about how to create businesses that address social issues.
For example, within the assessment criteria for the President's Award, an internal award system, a sustainability element is considered mandatory.
Additionally, we conduct workshops focused on sustainability management to provide employees with simulation study opportunities for business development based on solutions to social and environmental issues. Other efforts to create such opportunities include planning sustainability workshops for employees from a wide variety of divisions and launching an internal community focused on discussing sustainability.

Actively Driving Information Disclosure and Communication with Stakeholders

Promoting communication with stakeholders and information disclosure

We focus on proactive information disclosure to communicate our sustainability efforts to our stakeholders. We would also like to contribute to solving social issues not only by our own company but also together with our stakeholders. In addition to the statutory disclosure of sustainability information in our Annual Securities Report, we are actively communicating our current status and perspectives on all aspects of ESG through the KDDI Integrated Sustainability and Financial Report, our website (including Sustainability News), and via various media outlets.
We are also actively engaged in dialogue with our stakeholders, and in particular, continuously focus on discussions with experts on the themes of the environment and human rights. Through such information disclosure and communication, we will strive to improve our activities and create opportunities to address our issues and expectations from outside the Company, and to be a company trusted and chosen by our stakeholders.

Enhancing IR activities and taking on the challenge of new initiatives

Recognizing the significance of investor communication, we have established an Investor Relations Department within the Sustainability Management Division. We ensure the meticulous conveyance of our integrated financial and non-financial information to investors and receive valuable feedback from them.
We have also taken on the challenge of analyzing and visualizing the relationship between our non-financial activities and corporate value. This has allowed us to deepen our understanding of important activities that could not be read solely from financial or non-financial information. This is reflected in the improvement of business activities, information disclosure, etc., and leads to enhanced communication with investors. In FY22.3, we conducted a trial correlation analysis of non-financial data and PBR (Price to Book Ratio), mainly for the purpose of enhancing ESG information disclosure, by utilizing Digital ESG Analytics provided by ABeam Consulting Ltd. In FY23.3, we conducted a more in-depth quantitative analysis, including cause-and-effect relationships, by utilizing a model of "AI Powered Enterprise Value Cockpit" by Accenture Japan Ltd. By including the effects of latent variables such as shareholder evaluation and company size, we visualized the relation between non-financial data and market capitalization, including causal relations.

The CDP, an international environmental non-governmental organization (NGO), has evaluated our efforts to address climate change, and we were recognized for the first time as a "Climate Change A-List" company, the highest rating for an environmentally advanced company.
We are also a member of RE100, an international initiative that aims to use 100% renewable energy. In addition, KDDI's efforts to become a Human Resources First Company, including the introduction of KDDI Version Job Style Personnel System, received the top award for HR Transformation (HRX) of The Year 2022.
We will continue to work even harder to solve social issues through our business and ensure thorough information disclosure and communication.