Message from the Corporate executive in charge of Sustainability
Turning Sustainability into a Driver of Growth
―Creating a Virtuous Cycle of Social and Enterprise Value―
Takayuki Yokota
Director
Representative Corporate Executive,
Deputy President
Sustainability (& azbil Group CSR)
Guided by the spirit of our founding, the azbil Group has established policies on sustainability and is advancing initiatives that contribute “in series” to the global environment and a sustainable society. Through automation technologies that connect people and society, we have reduced environmental impacts by properly managing resource and energy consumption while enhancing the quality of spaces in buildings, factories, and lifeline infrastructure.
To realize a sustainable society, it is indispensable to establish mechanisms that enable the efficient use of limited resources and energy. Addressing these societal challenges is not only an expectation placed upon us by society but also an opportunity for the Group to continuously create value through its business activities and achieve growth. We believe that the essence of sustainability management
lies in achieving our growth while resolving societal challenges.
In FY2026, we formulated our Purpose, “Expanding Technological Frontiers, Unlocking Human Potential.” Guided by our Purpose, which serves as our reason for existence, we carry forward our founding spirit of “freeing people from drudgery” and seek to unlock human potential through the practice of “human-centered automation,” realizing safety, comfort, and fulfillment in people’s lives while contributing to global environmental preservation. Materiality serves as the guidance for putting our Purpose into practice. We incorporated a double materiality perspective that evaluates both the financial impact of environmental and social factors on the Group and the impact of corporate activities on the environment and society, and, in accordance with this evaluation, we identified 11 material issues across five focus areas. Based on this materiality, we have established proprietary targets aligned with the SDGs and are advancing initiatives that are directly linked to the measures set out in our medium-term plan.
In addition to formulating our Purpose, we reviewed our materiality in light of significant changes in the business environment and have disclosed the results of the review in this report. In recent years, the importance of supply chains and human capital has increased globally, while technological innovation and responses to societal challenges have accelerated in areas such as the semiconductor market, the data center market, and GX-related solutions, all of which we regard as growth areas. As a result of reassessing both significance and financial impact in response to these developments, we elevated the priority of supply chain and human capital issues and added “water resources” as a new material issue.
Behind this decision lies the rapid increase in water consumption in data centers and other facilities driven by the widespread adoption of generative AI. Water resources are closely linked to cooling functions in the air-conditioning field and to the stable and efficient supply of water, which is social infrastructure. Over the longer term, water resources could influence not only business continuity but also future growth opportunities for the Group. As we continue to expand our global operations, we recognize that water resource management is an important theme from the perspectives of both physical risks associated with water scarcity and the creation of new business opportunities.
Taking physical risks into account, we are analyzing opportunities from multiple perspectives across each of our business segments: in the Building Automation business, we assess the impact associated with efficient use of cooling water in air-conditioning systems for data centers; opportunities related to water-efficient equipment and services and solutions to prevent environmental incidents in the Advanced Automation business; and the potential of leak detection services in the Life Automation business. We regard water resources not merely as a part of an environmental issue, but as a management issue that requires priority attention, closely tied to both responding to societal requirements and enhancing our enterprise value.
Respecting human rights is also positioned as one of our key management priorities. We are promoting human rights due diligence across the entire value chain, including our supply chain, identifying priority human rights issues and strengthening our initiatives accordingly. In FY2025, we conducted a survey of initiatives across domestic and overseas Group companies and developed a road map for FY2026–FY2027 based on the findings. Furthermore, in April 2026, we established the azbil Group Human Rights Subcommittee, creating a framework to advance human rights initiatives more effectively, including direct dialogue with stakeholders such as human rights organizations.
In addition, we support the recommendations of the TCFD and TNFD and are working to further enhance our identification of opportunities and risks related to climate change and natural capital, as well as the quality of our disclosures. Looking ahead to the introduction of new sustainability disclosure standards, we will continue to advance integrated and highly transparent disclosure practices.
As a foundation supporting these sustainability management initiatives, we regard the strengthening of human capital as a key management priority. For the azbil Group, which creates value through its automation businesses, people are our most important form of capital. Under our medium-term plan, we have committed to significant investment in human capital, increasing total personnel-related investment by approximately ¥32 billion over the three-year period compared with the previous medium-term plan. We are advancing initiatives centered on “implementing health and well-being management” and “developing and strengthening an organization that never stops learning.”
In addition to building personnel systems that enable all employees to work in a positive environment and be rewarded for their achievements, we are focusing on the development and acquisition of global talent and highly specialized professionals who will support future business growth. In our overseas business, we have established a dedicated organization to promote recruitment, development, and retention initiatives tailored to the characteristics of each country and region. We are also strengthening the development of DX talent and reskilling in response to the rapid advancement of AI and digital technologies. By leveraging emerging technologies, including generative AI, we are cultivating people capable of driving business transformation and creating new value while supporting each employee’s autonomous career development.
Moreover, our investment in human capital extends beyond capability development to include the enhancement of employee engagement and the creation of meaningful and rewarding work. Through measures such as the revision of compensation systems, the enhancement of employee benefits, and the employee stock ownership plan (J-ESOPRS), which fosters a sense of ownership, we are also promoting our health and well-being management, including improvements to a workplace culture characterized by openness and transparency. We believe that a corporate culture in which employees can fully realize their potential and where people with diverse values and expertise learn from one another and grow together is the true source of sustainable enterprise value enhancement.
We also believe that realizing the well-being of each employee leads to enhanced enterprise value, which in turn contributes to the well-being of society. Sustainability is not a special activity separate from corporate activities. Through our businesses, human capital, technologies, and management itself, we will create a virtuous cycle of social and enterprise value, pursuing both the realization of a sustainable society and the sustainable growth of the azbil Group. Through these efforts, we will continue to advance the philosophy of “human-centered automation” into the next era for implementation of “Expanding Technological Frontiers, Unlocking Human Potential.”
An Organization That Never Stop Learning
Implementing "Health & Well-being Management