Materiality

The TAMRON Group studies medium- and long-term risks and opportunities arising from changes in the external environment and identifies material issues to be addressed for our continuous growth together with society. They are reported to the Board of Directors after they are approved by the CSR Committee. In view of the changes in external conditions and other factors, we will continuously review them.

The Process for Identifying Materiality

External environment

Changing business models
Geopolitical risks
Response to climate change
Resurgence of ESG investment
Respect for human rights
Workstyle and lifestyle changes
Information security
etc

Demands and expectations from society

Contributions to achieving SDGs
Rising ESG investments
Initiatives to Comply with the Code
Demands from society and customers
etc

Key Risks and Opportunities Arising from Changes in the External Environment

Factors	Risks	Opportunities
Shrinking digital camera market Reliance on photographic products business Reliance on specific customers	Contraction of the whole digital caamera market Reliance on photographic products business and specific customers	Growth in the mirrorless camera market Growth in the industrial camera market
Rapid technological innovation	Decline in competitiveness when the development of cutting edge technologies or their application in products is not advanced as scheduled	Obtaining growth opportunities through the development of revolutionary technologies
Investment in new businesses Investment in M&A activities, etc.	Failures to investment in R&D and capital investment for new businesses	Actively tackling M&A activities utilizing a robust financial structure Building the foundations of growth through new management resources acquisitions
Product supply and demand	Fluctuating product prices, too much or too little inventory Lack of procurement of glass materials
Geopolitical risks	Expanding various impacts due to global political, social and economic trend
Climate change and global environmental issues	Impact on production activities due to damage to plants in Japan or overseas Burden from carbon taxes and renewable energy purchase costs	Increased order opportunities due to responding to decarbonized society at an early stage Growing demand for products that save resources, save energy, and achieve low carbon emissions
Securing human resources	Impact on new hires and continuing employment due to intensifying competition to hire and retain talented human resources	Recruiting competent personnel to gain opportunities for growth
Complicity in human rights abuses	Boycotts due to direct or indirect complicity in human rights abuses, impact on corporate activities due to legal violations	Enhancing corporate value through management that emphasizes human rights
Risks unique to the interchangeable lens business	Defects due to improper matching between lenses and cameras
Product quality and safety	Damage to brand value due to declining product quality or defects	Growing demand for a sustainable supply of high-quality products
Information security	Leaking of corporate information and personal information due to damaged information system functions caused by computer viruses and the like
Compliance	Damage to corporate value due to corporate behavior that violates laws or diverges from social normal, such as infringements upon intellectual property rights, bribery, and so on

Identifying materiality

Materiality
Creating emotion and reassurance Creationg new light Contributing to a sustainable earth Empowering employees Developing the foundations of trust and sustained growth