Thanks to all of our stakeholders, the NEC Group is now celebrating 125 years of business. Our customers, suppliers, partners, investors, and local communities have placed their trust in us to continue creating a new future through the development of ICT. I believe that this is the result of the efforts of every member of the NEC Group to co-create in cooperation with our stakeholders. Our Purpose states that "NEC creates the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential." This commitment is an integral part of NEC’s history and DNA, and serves as a compass for our activities going forward.

According to the Global Risks Report released by the World Economic Forum in January 2024, the top five global risks for the next two years are "misinformation and disinformation," "extreme weather events," "societal polarization," "cyber security threats," and "armed conflict.” Also, as I attended the World Economic Forum Annual Meeting 2024 (hereinafter “Davos”) in January, there were many seminars and conferences on generative AI and AI.

In recent years, AI has quickly become widespread throughout the world. At the same time, international affairs are becoming increasingly unstable. Under these conditions, the way we manage digital technologies, such as AI and cyber security, will play in important role in our ability to live harmoniously in the future. In addition to Davos, I have had many opportunities to discuss with global business leaders and government officials themes such as "What should we protect?" and "Can AI contribute to inequality?"

In such an era, organizations that are developing advanced technologies, like NEC, need to ensure that they are trustworthy and able to contribute to the safety, security, fairness and efficiency of society. It is important to use technology responsibly, to act with integrity, and to fulfill commitments to society. In other words, the spirit of integrity must continue to be embodied by all members of management and all employees. In this regard, NEC’s Principles of Corporate Behavior and Code of Values are all pillars of its corporate stance. This position is also in line with the United Nations Global Compact, a global initiative signed by NEC in 2005 that advocates 10 principles in the four areas of human rights, labor, environment, and anti-corruption.

We are aiming to address global issues based on well-established trust and to provide for the realization of a sustainable society. Toward this end, the NEC Group has a number of initiatives that are unique to a tech company. For example, we have a variety of solutions for coping with disasters, which are becoming more severe due to climate change. NEC is advocating "Adaptation Finance," which visualizes the effects of such measures and facilitates financing through this approach. We began this in FY2024, and are in the process of expanding the framework for co-creation through the establishment of a consortium. For the stable supply of food, NEC is expanding sales of AI-based farm management support solutions through a strategic partnership with Sumitomo Corporation. I expect this initiative to become an important part of our future business.

To achieve carbon neutrality by 2040, the NEC Group is continuing to implement initiatives to reduce CO2 emissions. In 2023, NEC was selected for the highest rating of "A-List" (Climate Change, Water) for the fifth consecutive year from CDP, a non-governmental British organization that evaluates corporate disclosure in the environmental field. The results of these environmental initiatives have enabled NEC to reduce its cost of capital by issuing Sustainability Linked Bonds for three consecutive years, using them as KPIs.

With regard to cybercrime and cybersecurity, NEC provides one-stop support for prompt and effective countermeasures by ensuring that its clients' security infrastructure is robust and visualizing the state of cyber attacks. This is backed by its security technology and know-how cultivated through its own risk reduction efforts. NEC is also strengthening the acquisition and training of security and digital transformation (DX) personnel, as it identifies issues upstream from the customer's management and proposes and implements countermeasures. With the recent launch of NEC BluStellar, a value creation model that encompasses NEC’s technologies, including cybersecurity, business models, human resources, and organizations, we will be making even further contributions to solving various social issues.

In order to strongly promote the measures being implemented by the NEC Group, it is essential to accelerate decision-making and execution, and to ensure objectivity and transparency in management. In 2023, NEC transitioned from a Company with a Board of Company Auditors to a Company with a Nominating Committee, etc. While promoting the separation of supervision and execution, NEC is delegating significant authority for business execution to executive officers and promoting business operations with a strong focus on speed.

The benefits of advances in digital technology should be shared equitably by people around the world. Just as NEC has done throughout our 125-year history, the NEC Group will earn the trust of our stakeholders and create value together, thereby contributing to the creation of a world where everyone has the chance to live harmoniously and reach their full potential. To this end, the NEC Group will continue to make steady progress towards the realization of our Purpose and contribute to the achievement of the Sustainable Development Goals (SDGs).