Identification of Material Issues

Identication of Material Issues for the SMM Group

We comprehensively revised our Vision for 2020 in 2015 with regards to the key issues for the SMM Group through the process described below. We were guided by the International Integrated Reporting Framework (IIRC Guidelines) and GRI Sustainability Reporting Guidelines Version 4 (G4) on the specifi cprocedures for revision.

Step1 : Identifi cation of sustainability issues (June 2014)

As sustainability issues, we identifi ed a variety of issues that positively or negatively impact the formation of a sustainable society. In doing so, we focused on the guidelines at right, with the result that we identifi ed 102 issues. We further consolidated the issues according to their shared qualities, in the end identifying 58 sustainability issues.

Guidelines referenced

  • Aspects of the GRI Sustainability Reporting Guidelines Version 4 (G4)
  • Issues in ISO 26000
  • Principles and position statements of the ICMM
  • The Ten Principles of the United Nations Global Compact
  • Items noted in the DJSI and other corporate assessments

Step2 : Assessment of materiality and identifi cation of material issues (July 2014 – August 2014)


We evaluated these issues on the two axes of materiality for stakeholders and materiality for the business of the SMM Group. We identifi ed 26 material issues for which importance is high on both axes and for which our current initiatives should be strengthened.

Main perspectives in evaluation of materiality

Materiality for stakeholders
  • Degree of impact on stakeholders’ immediate rights
  • Opinions of stakeholders
  • Requests directed at the SMM Group, organizations to which we belong, and our industry
  • Social issues in areas where we operate, and the scale of these social issues
  • Scale of the potential negative or positive impacts of our business
Materiality for the business of the SMM Group
  • Degree of impact on our social license to operate
  • Degree of relationship with our business policy and business strategy
  • International social norms and industry rules
  • Opportunities for income and sources of competitiveness in the future

Step3 : Consideration of draft revisions to the Vision for 2020 and KPIs (September 2014 – November 2014)

We categorized the identifi ed material issues into our Six CSR Areas of High Priority and formulated draft revisions to the Vision for 2020, in line with our targets and our approaches for addressing the organized material issues as a Group.
We also identifi ed specifi c targets and KPIs for assessing our degree of achievement toward the Vision for 2020.

Step4 : Validation (December 2014 – March 2015)

The Chairman, President, and all 24 executive offi cers took part in 15 hours of deliberations on the considered material issues, the Vision for 2020, the specifi c targets, and the KPIs, with a focus on verifying consistency with our business policy and business strategy. Validation of the fi nal draft was carried out through confi rmation by the CSR Committee and decision by the Board of Directors.

Material Issues Identifi ed by the SMM Group

Effective Use of Resources

  •   1. Utilizing unused resources (low-grade/hard-to-process ores)

  •   2. Development of new applications and effective use of by-products

  •   3. Exploration and development of new resources

Environmental Preservation

  •   4. Energy conservation at SMM business sites

  •   5. Development of products and technologies that contribute to reducing environmental impact

  •   6. Respect for nature preservation areas

  •   7. Preservation and restoration of ecosystems in areas where we do business

  •   8. Minimizing chemical substance emissions into the air, water, and soil
          (including in our portfolio companies and supply chain)

  •   9. Reduction of release and transfer volume of chemical substances

  • 10. Waste management

Contribution to Society and Local Communities

  • 11. Community investments

  • 12. Local hiring

  • 13. Local procurement

  • 14. Utilization of partnerships

  • 15. Management of closed mines

  • 16. Recovery support for areas affected by devastating disasters

Respect for People and Human Rights

  • 17. Human resources development

  • 18. Diversity and equal opportunity

  • 19. Protection of employees’ human rights

  • 20. Avoidance of contributing to human rights infringements with our supply chain

  • 21. Respect for the rights of indigenous populations

Occupational Health and Safety

  • 22. Ensure safety

  • 23. Secure occupational health

Stakeholder Communication

  • 24. Engagement with local communities

  • 25. Engagement with employees

  • 26. Communication with shareholders and investors

Regarding Boundaries

As a result of verifying process to determine material issues, the boundaries have been established as follows. Any other boundaries apply to the SMM Group (see p. 1 for the Group’s scope).

SMM Group & Suppliers
  • Aspect : (Environmental) Emissions (Material issue 8)
  • Aspect : (Environmental) Effl uents and Waste (Material issue 8)
  • Aspect : (Human Rights) Supplier human rights assessment (Material issue 20)