In preparation for the upcoming start of the third stage of GD2010 (fiscal 2008-10), OMRON in fiscal 2007 worked on formulating the CSR management strategy for the three years of the third stage. The first step was analysis of the current status of OMRON's CSR activities. Based on the results of this analysis, two basic policies were determined: setting direction and goals from medium-/long-term perspectives; and emphasis on international mainstream CSR frameworks and standards.

Under these policies, OMRON thoroughly determined the CSR challenges that the global community demands from companies, then identified core issues and specific issues to be addressed by OMRON.

To determine the direction in which the company should be heading in the long run, OMRON developed a perception of society 10 years into the future and OMRON's CSR vision concerning each core issue. To identify the issues of particular importance to OMRON from among many issues, materiality analysis was also conducted.

These steps finally led to determination of the basic strategy for the third stage of GD2010 and issues to be addressed, focus areas of activities to be tackled up to 2010 (the final year of the third stage), and programs and targets for each year during the period. The following shows the flow of the CSR strategy formulation process for the third stage of GD2010:

GD2010 Third Stage CSR Strategy Formulation Process

The first step of strategy formulation was to thoroughly investigate and analyze core CSR issues that the global community emphasizes by referring to various CSR-related standards, regulations, principles and guidelines available in the world. OMRON then identified the range and specifics of issues that OMRON should address.

All of the issues listed below are important challenges for which the global community expects a proactive commitment from companies. OMRON believes that it should address all of these issues in a way that leverages its distinctive business characteristics.

However, management resources are by nature limited, and it is impossible to handle all issues with an equal application of effort. Therefore, as a second step, OMRON took two approaches toward indentifying the focus areas of activities: determining OMRON's CSR vision for a decade from now, and materiality analysis for each issue.

Issues to be Addressed by OMRON

Resolutions for current global challenges require sustained long-term efforts. Accordingly, OMRON considered it necessary to take into account social changes and the company's direction at least 10 years into the future, even when formulating a CSR strategy that targets only the next three years.

As such, when formulating the CSR strategy for the third stage of GD2010, OMRON anticipated the way in which society might change in 10 years (around the time of 2015-2020). Based on this, OMRON envisioned the social expectations for OMRON and the roles it should assume at that time, and determined its CSR vision. In other words, OMRON defined the ideal image it wants to realize a decade from now. Specifically, OMRON perceived the society 10 years into the future for each core issue and envisioned the roles that OMRON should assume at that time. Based on these forecasts, OMRON's CSR vision for a decade from now was defined.

For example, for the core issue of "innovation driven by social needs and customer issues," OMRON used its perception of society 10 years later to define its roles in that society and its CSR vision. Similarly, for each of the other core issues, namely "fair operating practices and organizational governance," "human rights" and "labor practices," OMRON portrayed its ideal image based on the anticipated social trends that will exist in 10 years.

Various changes projected to occur in 10 years include widening regional and individual wealth disparities accompanying the progress of globalization, and increasingly severe environmental problems such as global warming and shortages of water supplies. Regarding each of these projected changes, OMRON envisioned the ideal image that it aims to achieve. What OMRON seeks to portray is a company that is aggressively committed to addressing the social issues of each age by taking advantage of the uniqueness of its business operations. In addition to incorporating this vision into its CSR strategy, OMRON will constantly keep this in mind when promoting CSR activities so that all activities are aligned in a unified direction.

• OMRON's CSR Vision for a Decade from Now

Together with the anticipation of social changes from a long-term perspective and determination of OMRON's vision, OMRON sought to identify focus areas selected from many extracted issues (see Table). To this end, materiality analysis was conducted, in which OMRON created a materiality map by plotting each issue along the two axes of "impact on stakeholders" and "impact on OMRON."

It was not easy to determine relative materiality because all issues appeared to be important, and there was a concern that OMRON's self-analysis might not be objective enough. To eliminate this concern, OMRON collected and analyzed the latest CSR information from around the world and conducted dialogues with various stakeholders^* to listen to their views on materiality of issues.

Going through this process, OMRON finally completed the materiality map (see Chart). OMRON will regularly review the map and revise if necessary.

*Stakeholders who shared their views through dialogue：

Kyoto CSR Workshop, GLN (The Global Leadership Network), AccountAbility (U.K.), Human Renaissance Institute Co., Ltd., personnel in charge of CSR from business companies and OMRON Head Office, external CSR experts

Materiality Map

The final step of strategy formulation was to determine focus activities and CSR policy for the third stage of GD2010, as well as targets for 2010. To do so, OMRON fully considered its vision for a decade from now and the materiality map, which the company had devised through dialogues with its stakeholders.

The third stage of GD2010 will start from fiscal 2008. In the upcoming three years, OMRON will work with utmost effort to meet the expectations of stakeholders by repeating the PDCA cycle in conformance with the newly specified CSR strategy.