Sony Group Corporation (6758) Earnings Call Transcript & Summary

It's time for us to start the Sony Group Corporation FY 2021 ESG Briefing. I will be acting as your moderator, and my name is [ Ishi ] from Corporate Communications Department. This briefing is being held for media, analysts and institutional investors whom we have informed in advance. The briefing can be viewed on our Investor information site with live streaming. Today, we will hear from Kenichiro Yoshida, Chairman, President and CEO; Shiro Kambe, Senior Executive Vice President; and Mitsu Shippee, from the Sustainability department. And Kambe and Shippee will also participate in the Q&A session. We expect the session to last for about 90 minutes. First, there will be an explanation from Yoshida. Please take a look at this video. [Presentation]

Hello, everyone. This is Kenichiro Yoshida. At Sony, we are driving diverse businesses centered around the access of people based on our purpose to fill the world with emotion through the power of creativity and technology. Our ability to continue these corporate activities is based on the existence of a sustainable society and a healthy global environment. These are principles I shared in my first blog to employees following my appointment as President of Sony in 2018, titled Sony and the Planet Earth. There are 2 fundamental approaches we take to our environmental activities in the context of Sony and the Planet Earth. They are responsibility and contribution. First, I will talk about efforts to fulfill our responsibility as a company. For example, in 2010, we launched our Road to Zero long-term environmental plan that aims to reduce our environmental footprint to zero. There are 4 key elements to this plan: Climate change, resources, chemical substances and biodiversity. One such recent initiative is the development of our Original Blended Material. It is made from bamboo, sugarcane and post-consumer recycled paper sourced from selected locations, and this blended material itself is also recyclable. At Sony, we are targeting the elimination of plastic waste from all of our small products by 2025. And promoting the use of packaging that incorporates new materials like this is an important part of the environmental activities that we see as our responsibility. Our second approach is to contribute through our businesses and technologies. For instance, working from home amidst the COVID-19 pandemic has renewed our awareness of the importance of connecting with people through the network. Going forward, IoT and the proliferation of things that connect to the network will be vital to enhancing the productivity of society. Sony's AI sensors are contributing to the evolution of IoT, and through image analysis and processing that leverages AI, our image sensors can greatly reduce and optimize the data they collect according to the specific application. This enables a reduction in the amount of data that goes into the cloud, thereby enabling power consumption to be reduced while also having positive implications for security and privacy. An example of Sony's contribution to the evolution of mobility is our development of the VISION-S electric vehicle, incorporating our latest automotive sensing technologies and the cloud platform that connects with the vehicle via 5G. Electric vehicles can function as large capacity storage batteries within a microgrid. And when connected to the cloud, they can continually evolve through software upgrades. For that reason, at Sony, we are positioning electric vehicles and cloud platforms as technologies with the capability of contributing to the environment. In terms of microgrids, we have also introduced the Open Energy System, OES, an energy management system that enables residences to mutually exchange electric power via direct current. Based on a combination of solar panels and storage batteries, we started feasibility testing of the system in 2014 and made the results of our findings available on an open source basis at the end of last year. So far, today, I have touched on our responsibility and contribution in the context of Sony and the Planet Earth, but I think it is also important to reaffirm the position of the Earth where we all live in relation to the Planet Earth and space. The JAXA astronaut, Kimiya Yui, once told me that when he looked down at the earth from space, he could sense how thin the atmosphere is and how much the earth needs our protection. We are currently working with JAXA and the University of Tokyo on joint technological demonstrations and the exploration of opportunities to use satellites equipped with Sony cameras so that we can share this image of the Earth seen by Mr. Yui. This is an ultra small satellite we are jointly developing with the University of Tokyo that we aim to launch into space next year. A key feature is its highly flexible altitude control, enabling users to capture and record the Earth and stars using a broad range of camera work options. Drawing on the lessons gained from those such as Mr. Yui, who considers space to be a place where we can learn more about the Earth, I would like to bring new perspectives of space to even more people in collaboration with creators and partners. While there are important lessons we can learn from outside the company, such as the example of the Planet Earth and space that I mentioned, there is also much that we can learn from our 110,000 employees across the Sony Group. I believe that the diversity of talent enhances the learning capabilities of an organization. Last year, the Sony Group established 2 funds, one to support those around the world affected by the COVID-19 pandemic and the other to contribute to social justice. The various support efforts we are making through these funds are driven by the ideas and passion of our diverse employees. In particular, the latter would have been impossible without what we were able to learn from our U.S. management team, who have been working at the forefront of the growing movement through our society for greater levels of social justice. Following my speech, we will be sharing more on the many social initiatives currently underway across the Sony Group. In order to fulfill our responsibility and contribute to the society and the earth, we will continue to value the learnings we gained from our diverse array of talent and apply them to the initiatives we implement across the Sony Group from a long-term view. Thank you.

Hello, everyone. I am Shiro Kambe. As Kenichiro Yoshida just stated, for Sony to continue to create social value and evolve, it is necessary for the society and global environment in which we live to be healthy. The COVID-19 pandemic, which has continued from last year, and the extreme weather events that are occurring around the world are a stark reminder that the health of the planet is not something we can take for granted. How can Sony, as a global company, go about fulfilling our responsibility and contributing to society and the global environment? I believe this is becoming an increasingly important consideration. Today, I will be focusing on the following points. At Sony, ever since our founding, we have continued to uphold the principle of creating value for the society in which we operate. Following Kenichiro Yoshida's appointment as CEO in 2018, he further strengthened Sony's focus on sustainability as a key element of our management approach. And we have reinforced our efforts in line with this direction, reflecting the value we place on dialogue with our stakeholders and the learnings we gained from these discussions. In 2018, we conducted our first ESG briefing. We have held the event annually since then making this our fourth ESG briefing. At the first event, we introduced Sony's fundamental approach and initiatives related to the environment, society and governance. At our second ESG briefing, we introduced Sony's value-creation model centered around Sony's purpose: to fill the world with emotion through the power of creativity and technology and our corporate direction of getting closer to people. We also focused on the role of employees who represent 1 of the 2 pillars that form the foundation of Sony's value creation. At the third event held last year, we integrated ESG and technology and conducted a joint ESG technology briefing. The focus of this event was technology, the other pillar supporting Sony's value creation, and it outlined the challenge we are undertaking to contribute to sustainability through technology. We are currently engaged in a wide range of ESG-related initiatives. But over the past 3 years, we have focused particularly on integrating activities that were previously driven by the headquarters into the operations of our businesses. We have thereby reinforced the value we are able to create through each business. Although we have defined technology and employees as the most important materiality topics for the overall Sony Group, the social value created by each of our diverse businesses and the ways of addressing these topics to create social value differ from business to business. At Sony's IR Day held in May of this year, the executives responsible for our 6 main businesses presented the key sustainability issues and value-creation initiatives that are priorities in each of their respective businesses as shown in the slide. Our sustainability initiatives are not being implemented by certain headquarters departments alone, but collectively by all the diverse businesses across the Sony Group and each of our employees who identify with these efforts and also see them as part of their responsibility. I am greatly encouraged to see this kind of corporate culture thriving within the Sony Group. Now I'd like to talk about the evolution of Sony's initiatives relating to sustainability, the environment, people and society, including examples of specific measures being implemented within our businesses. First, in relation to the environment. The basis of Sony's environmental initiatives is a Road to Zero long-term environmental plan formulated in 2010. This plan aims to reduce Sony's environmental footprint to zero by 2050 and we are implementing initiatives within each of our group companies, manufacturing sites and also throughout our supply chain and overall product life cycles based on the 4 environmental perspectives you can see here. This is our responsibility that Yoshida referred to. In relation to these efforts, I will focus particularly on the Imaging & Sensing Solutions business, also known as the I&SS business which has a relatively large impact on the environment amongst Sony's businesses. As the I&SS business conducts most of the development and manufacturing of its core semiconductor business in-house, power and water consumption at the company sites is the highest within the Sony Group. As a result, the business accounts for around 80% of direct greenhouse gas emissions of the entire Sony Group. In order to reduce greenhouse gas emissions at our sites, we are first focusing on conserving energy and improving energy efficiency. The Fab 5 at Nagasaki Technology Center, which started operations in April, is a manufacturing site that incorporates various environmental considerations and features the latest energy-saving technology. By installing highly efficient equipment and promoting energy recycling, we estimate that the energy efficiency of clean rooms at Nagasaki Technology Center has improved 30% compared to fiscal year 2015 levels. In addition, we are working to conserve water by collecting and reusing 70% of the water that is used on the production lines. We are also moving forward with the introduction of renewable energy. We aim to achieve 100% renewable electricity by 2040 for the entire Sony Group. In the I&SS business, we are installing additional solar panels at the Kumamoto Technology Center and are also exploring potential new installations at the Oita Technology Center and the Fab 5 at Nagasaki Technology Center. In addition, Sony Device Technology Thailand will be proceeding with the largest scale installation of Sony solar panels within the Sony Group. And together with the purchase of renewable energy certificates, we expect this to run on 100% renewable electricity by the end of this fiscal year. As this demonstrates, in the I&SS business, we consider our responsibility to reduce our environmental footprint and are making every effort to do so. At the same time, in the areas of the Internet of Things, IoT, and mobility where rapid growth is expected, we believe that Sony's image sensors can contribute to solving various social and environmental issues. One example is the world's first Intelligent Vision Sensor equipped with AI processing tonality, which Yoshida introduced earlier. The executive in charge of this business will provide more details later. We are accelerating our environmental initiatives and businesses other than the I&SS business as well. And viewed over the duration of their life cycle, cumulatively, Sony products such as TVs and game consoles consume a large amount of power and we are continually striving to introduce energy-saving measures with regards to these products. As a result, we achieved a reduction of 54% in annual power consumption per product in fiscal year 2020 compared to that of fiscal year 2013. In addition, with the aim of eliminating plastic packaging materials for small-sized products entirely by 2025, we are also working on initiatives such as adopting our newly developed Original Blended Material for the packaging of headphones and reducing plastics in the packaging of Xperia smartphones. The use of plastic materials has also been significantly reduced in the packaging of PlayStation 5. For the products themselves, we are using more of our surplus Sony-developed flame-retarded recycled plastic material in our TVs, which tend to require more plastic usage as they get larger in size. We believe that these initiatives will not only reduce our environmental footprint, but also enhance the value of our products in the eyes of consumers. We are also exploring ways to deploy the environmental technologies developed by Sony across society, either by making them open source or through collaboration with other companies. The OES developed at Sony Computer Science Laboratories, which is the decentralized microgrid system that Yoshida mentioned in his speech earlier is one of such examples. Furthermore, SynecO, which was established in April as the inaugural project of Sony Innovation Fund: Environment aims to contribute to biodiversity and solutions concerning climate change through its knowledge and support technologies related to Synecoculture and other augmented ecosystems. In fact, the plans you see here are plants of an augmented ecosystem. Approximately 50 types of seedlings are planted in a way that is designed for people to interact with their surrounding environment and learn new things. The jacket and polo shirt Yoshida was wearing in his presentation were also created using Sony's environmental technology. They use Triporous, a material that we produce from rice husks, which are surplus biomass. Due to its unique microstructure, the Triporous has purification properties that enable it to clean water and air. We have high expectations that utilization of the surplus biomass to produce Triporous will help contribute to the realization of a more sustainable society and reduce the impact on our environment. We are licensing Triporous to various external partners and is being used in a range of products such as toiletries, cosmetics and clothes. Beyond this, many different initiatives related to protecting the global environment are being implemented by diverse businesses and employees throughout the Sony Group. Please watch the video that we're about to show you now highlighting some of these initiatives. Following the video, Eita Yanagisawa, who's in charge of IMX500 Intelligent Vision Sensor business, will talk about the contributions that this technology can make to the environment and society. [Presentation]

Hello, everyone. I am Eita Yanagisawa from Sony Semiconductor Solutions Corporation. Today, I will be talking about the specific approaches we take in making contributions to society and global environment, activities through our businesses and technologies. I will start by looking at our current operating environment. With the spread of IoT, various devices are connected to the cloud, and cloud system that process and utilize data acquired from these devices in the cloud are becoming more common. However, the number of smartphones, household appliances, cars and other IoT devices connected to network is expected to grow rapidly going forward. And the amount of data flowing into the cloud through networks is expected to reach a volume that is physically difficult to transmit. In other words, there will be a data explosion that exceeds limits of communication capacity. As a result, amount of electric power consumed by IP traffic and data centers will increase dramatically. And if energy conservation measures are not taken, it is estimated that, by 2030, the amount of electric power consumed by devices, data centers and networks alone will greatly exceed the current amount of electric power consumed globally. This means a significant increases in CO2 emissions, which has become much of global concern in recent years. Edge systems are gaining attention as a means of overcoming these various challenges around the cloud system by processing data at the Edge without sending it to the cloud. These are the 6 factors behind the growing interest in Edge system, one of which is a reduction of electric power consumption. In these 6 factors, we have developed the Intelligent Vision Sensor, IMX500, as a powerful first step toward realizing a world of Edge systems through our sensors. IMX500 uses a stacked configuration consisting of pixel chip and logic chip, which is a core technology of Sony's image sensors and is equipped with AI-driven image signaling processing functionality on the logic chip. Processing data within the image sensor means that senor outputs only semantic metadata information, which not only addresses privacy concerns and improves latency, but also significantly reduces data volume flowing into the cloud. Lowering the data volumes reduces the load on IP traffic and data centers, which in turn contributes to a reduction in CO2 emissions. I will also introduce an example from the perspective of solving social issues. This June, we began a trial in Rome, Italy with the aim of helping address the social issues faced by the city using smart cameras equipped with IMX500. Traffic congestion and accidents have long been a serious problem in the city of Rome. Smart cameras equipped with IMX500 hold great promise for solving these issues. Through the co-innovation lab launched as part of the strategic partnership between Sony and Microsoft, we have supported the development of solution by a U.S. company, Nomad Go, to reduce power consumption by making air-conditioning system in buildings more intelligent. Nomad Go's solution uses IMX500 with Microsoft Azure to detect the occupancy rate in areas such as meeting rooms and common spaces in commercial facilities, office buildings and the other locations and heats, cools and ventilates the room exactly as needed, whereas conventional air-conditioning, the systems are controlled by timer and will keep running regardless of the presence or absence of people. IMX500 provides more intelligent solution that contributes to reducing the amount of energy used and the resulting CO2 emissions in order to contribute to society and the global environment through our businesses. I believe that we must develop them, taking a long-term view and thoroughly consider how we can contribute to solving social and environmental issues through these businesses. If we can demonstrate that Sony's technology can provide smart solutions to the issues faced by cities in the world, there will be greater opportunities for us to provide our solution and services and contribute more to the overcoming the challenges we face as a society. Those of us in charge of Sony's Intelligent Vision Sensors business, which is the great potential that address many issues recognize we have very important responsibility and hope to leverage this technology to full its capacity so that we can contribute to a sustainable society and global environment. Thank you very much for your attention.

Hello, everyone. My name is Mitsu Shippee, and I'll be talking about Sony's initiatives concerning people and society. As stated in its purpose, Sony's goal is to create value for the society in which we live through an array of businesses centered on people. Sony is fostering diversity, equity and inclusion, DE&I, throughout the entire group where differences in background, gender and ability are viewed as strengths. The group is also promoting initiatives aimed at fostering diversity and social justice and its engagement with greater society. One example is the utilization of technology and creativity to enhance the accessibility of Sony's products, user interfaces and services. Sony conducts interviews with employees and users with disabilities during the product planning and development process. With the feedback we receive from this user research and usability testing, we improve our products, UIs and services thereby incorporating the needs of diverse customers. Sony is also devoted to creating an inclusive work environment where employees can pursue their careers regardless of any disabilities they may have. We share our founders' belief in creating workplaces that do not offer a charity but rather creating an environment that makes it possible for people with disabilities to make products that are better than those made by people without them. We strive to create work styles and environments throughout Sony's businesses that enable each to grow and be motivated to contribute. For example, the software and product development teams for the mirrorless single-lens reflex camera, Alpha, and other products include employees from Sony Kibou/Hikari Corporation, who are engaged in image annotation that determines the precision and accuracy of image recognition and other AI functions. Employees with mental and intellectual disabilities participate in manufacturing these high-quality products while making the most of their individual strengths to take on challenges. In December 2019, Sony also signed on to The Valuable 500 World Economic Forum initiative focused on the inclusion of people with disabilities. In addition, out of the 500 companies that signed up, Sony was selected as 1 of 13 iconic leaders tasked with leading its respective country, vision and industry in these efforts. Sony will not only encourage the active participation of our own disabled employees enhance the accessibility of our products and services, but will also lead the effort to include people with disabilities in the global society as a whole. Treating all people with dignity and respect is one of Sony's most important codes of conduct. And we have built a corporate culture, which finds strength in the diversity of our businesses and employees. In June last year, we established the 100 million USD Global Social Justice Fund in light of the momentous social justice movement sparked by the protests against racism and calls for change in the United States. Through this fund, Sony Group companies will support organizations that are working to protect human rights, correct racial discrimination and provide education and training to people who lack opportunities in our society and join forces with external organizations to implement meaningful initiatives. To date, about 70% of the USD 100 million endowed have been earmarked and we will continue to implement initiatives through the Global Social Justice Fund. And Towalame Austin from the Sony Music Group will talk about the specific initiatives later. I would also like to talk about the support we offer to creators who are responsible for the KANDO essential to Sony's Entertainment business. As our society grows even more unstable against the backdrop of the COVID-19 pandemic, it is becoming increasingly important to offer physically and mentally healthy environment in which creators can immerse themselves in their work. As an example, the Sony Music Group outside of Japan is already working with NPOs and other organizations to provide support to artists in the U.S. and the U.K. and other countries. In Japan, Sony Music has launched a project to support both the mental and physical health of artists and creatives signed to exclusive management contracts with Sony Music as well as the staff who support them. We will continue to share updates on these activities moving forward. Sony will continue to provide various support so that diverse and talented individuals can maximize their creative potential. Finally, I would like to talk about another global fund that we established in 2020. The COVID-19 pandemic has caused our social environment to change abruptly, and restrictions imposed on people's movement have had an enormous impact on their lives and businesses. In April 2020, Sony set up the Sony Global Relief Fund for COVID-19, a USD 100 million fund that supports the frontline workers fighting COVID-19, children who represent our future and people in the creative community who have been deeply impacted by the pandemic. Currently, about 80% of the USD 100 million have been earmarked for these initiatives. By category, support for creative communities accounts for about 60% of the funding while about 30% has been allocated to health care-related support. We believe that support channel through this fund will continue directly and indirectly to a wide range of areas, including health care, education and the creative community. Direct support was provided to around 5,500 organizations in the form of donations from Sony Group companies to international organizations and NPOs, nonprofit organizations, as well as donations of medical use face shields and aibo, Sony's autonomous entertainment robot into medical institutions and donations of KOOV, coding kids to educational institutions in Japan, United States and China. About 50 organizations in the Sony Group are involved in these initiatives, in many cases, by group employees contributing to their ideas. Thus the initiatives not only encourage social contributions through our businesses, but also enhance engagement of our employees. I would like to conclude my presentation with a video introducing a message from Towalame Austin, EVP of the Philanthropy and Social Impact at Sony Music Group, followed by an overview of the Global Social Justice Fund, which I mentioned earlier. Please enjoy the video.

Thank you for having me here today. As EVP of Philanthropy and Social Impact for Sony Music Group, SMG, I want to walk you through our company's most recent support programs and initiatives. As we know, racial injustice is a worldwide issue that affects our employees, artists, songwriters, consumers and society at large. Hence, we've taken a firm stance on driving support both monetarily and by taking action through authentic partnerships and community involvement. To that end, in a short minute, we will share the Global Social Justice Fund recap video that highlights the impact the fund has had for more than 300 community partners. Partnerships that include our work with Sony Music U.K. and 3T founded by Nao, designed to train 10 black women for roles in the live music and production sector; the National Museum of African American Music, which allows us to partner on curricula, courses and certifications dedicated to black music culture and business; as well as Silence the Shame, a workplace and community wellness training program designed for artists, songwriters, employees and the greater music industry. Globally, Sony Music has supported and continues to support the communities that need it most, inside and outside the music industry. Additionally, we have supported organizations dedicated to ending violence against minorities and communities who have been disproportionately impacted by hate crimes and racist sentiment. In addition, with the unfortunate rise of COVID-19 cases, we continue our COVID-19 relief efforts for the homeless, food insecure and music industry. Internally, we will continue to recognize and value the importance of diversity, equity and inclusion in helping us meet our business goals and consistently work to enable our employees to thrive and strengthen our position as an exceptional place to work. Looking ahead, our department will push forward on environmental sustainability initiatives for SMG, using a newly developed committee to design environmental programs. With that said, I ask you to take a minute to watch our Global Social Justice Fund recap video. Thank you. [Presentation]

So far, we have concentrated mainly on E&S that is initiatives concerning the global environment as well as people and society. Lastly, I would like to touch upon G, that is governance. Corporate governance is essential to ensuring management transparency and enhancing mid- to long-term corporate value. But in recent years, there are increasing expectations for its role in the support and promotion of environmental and social initiatives. In order for Sony to also strengthen its governance from the viewpoint of sustainability, starting for fiscal year 2020, Sony has adopted a key performance indicator for sustainability initiatives as part of the valuation pertaining to the remuneration linked to business results for senior executives. In addition, from fiscal year 2021, we are incorporating initiatives that address sustainability issues into the mid-range plan of each of our businesses such as measures related to employees and the environment identified as key to each respective business. And we have set KPIs for those initiatives as part of our business performance evaluations. Furthermore, the progress of the various sustainability initiatives being implemented across the Sony Group is regularly reported and actively discussed at the Board meetings. We intend to continue to strengthen our governance further, while driving our global environmental and social initiatives within each business and across the Sony Group. Today, I have presented Sony's progress on sustainability management focusing on these themes: long-term approach and diversity; dialogue with stakeholders and learning from them; responsibility and contribution in the environmental area; management and diversity, equity and inclusion centered on people; integration of sustainability efforts into business. There are many other topics that have not been able to cover due to the time constraints. However, please refer to our corporate report and sustainability report for a more detailed information. We will continue to engage actively in dialogue with our stakeholders, of course, taking onboard the feedback we received in response to today's briefing as well. Thank you for your attention.

With this, we complete our presentation. And after this, from 4:48 -- at round for 4:48, we'll start question-and-answer session. [Operator Instructions] So please hold on for a second before we start the question-and-answer session. [Presentation]

So now we would like to begin question-and-answer session. And today, the first 20 minutes will be dedicated to the questions from the media members. And after that, for 20 minutes, we receive the questions from investors and analysts. Shiro Kambe, Senior Executive Vice President; and Mitsu Shippee, Senior General Manager of Sustainable Development, will answer your questions. So first, we receive the questions from the media members. [Operator Instructions]

So now we would like to begin question-and-answer session. [Operator Instructions] The first question is from Nikkan Kogyo Shimbun, Mr. Matsuki. Matsuki-san, please.

From Nikkan Kogyo Shimbun. My name is Matsuki. Can you hear me?

Yes, I can.

So related to the investment related to environment, I have a question. In your presentation, do you have installation of the biomass and the paper and also installation of solar panel. And also, you have the established funds for that. And the investment related to environment, in order to connect that with the growth, I think that is a very important challenge. At this moment, what is positive factor for the profit and business activities? And if it is very difficult to give us financial, the indicator, is there any particular contribution to the business -- the benefit to the business? Please share with them.

Thank you very much. Investment related to environment, how it is related to the improvement of profit and business, and I would like to answer your questions. And as for the investment amount itself, it is not disclosed. And therefore, I am not able to answer your question on that matter. And in Mr. Yoshida's speech and as I also mentioned in my speech, as for the environment, as a global company, we do have a responsibility. That is one of the initiatives. And also, through our technology and our business, we want to contribute so contribution is another aspect. And TCF, the disclosure is carried -- TCFD disclosure is already carried out. So the environment activity in a long-term basis, that is already recognized as a business cost firmly and also we wish to generate the profit, and it is well managed. And as for the contribution part, from the Sony Semiconductor solution to Mr. Yanagisawa mentioned in his presentation, in image sensor, within its own core business, it's still early, the stage, Intelligent Vision Sensor. And that is a unique technology of Sony and that is the combined and we wish to grow this as a business. And also that will lead the contribution to the society and the environment. And in top of that, in early stage, there are other technologies that we have fostered and we would like to make it the license or the open source. And there are 6, the business segments, they are not included in the major business segments of Sony but we would like to have alliance with the partners. If we're able to find the areas where we can make contribution, we would be very happy. That particular area, it's still early days. So we would like to continue to work on that. And in the final end, we would like to lead to the greater corporate value of Sony. Thank you.

We'd now like to go on to the next question from NHK in Inamoto-san, please.

Inamoto from NHK. Can you hear me?

Yes, we can.

So I have 2 questions. First question has been touched on, the Intelligent Vision Sensor is what I'd like to ask about and also it's going to be useful for environment as well. But I'm sorry if I've overlooked this, the power consumption can be reduced by how much? If you have some quantitative data, I'd like to ask about power consumption reduction. Secondly, COVID-19 fund, you talked about 80% has been earmarked. And so, right now, the effect is very long. So it's -- you're continuing the activities. But well, you've decided 100% -- the earmarking for the 100%. And after that, is there going to be a second kind of fund launched?

Thank you very much for the question. First question is about the Intelligent Vision Sensor, how much can we reduce electricity? Second question is the relief fund for COVID-19, what is the future plan. And first question will be answered by myself; secondly, from Shippee. And first of all, with regards to the Intelligent Vision Sensor, this is in the field of IoT and various applications can be considered and so it's not necessarily that in all cases, again, we cannot really generally say. But in one simulation, for example, 4K image camera is contracted and then you send it to the cloud. And then with the Intelligent Vision Sensor, you have AI processing. And only the metadata is transferred from the cloud -- to the cloud. And if you do the comparison in terms of power consumption, it's 1/7400. That kind of number has been seen. So going forward, various applications are possible and we will be conducting POCs and also we will be teaming up with partners. And power and data reduction and privacy enhancement is where we would like to contribute.

Well, with regards to the relief fund for COVID-19, I would like to answer. Now last year, this fund was launched. And since that time -- well, initially, it was for emergency support. That's what we had in mind, but 1 year has passed and 80% has been earmarked. And up to now, it has been used for education, health care, also to support the creative community. And as you have said, COVID-19 impact is still continuing and that is also our understanding, too. So going forward, the government, regions and also industry, impact on the community, we will be grasping what is taking place so that we can continue to provide support, which is suitable for Sony. Thank you.

We'd like to proceed to the next question. Nihon Keizai Shimbun newspaper, [ Bun-san ].

[ Bun ] is my name from Nikkei Shimbun. Can you hear me?

Yes.

Well, it's similar to the question from NHK, well, IMX500 and also about the fund. IMX500. Well, you said 1/7400. I think this is a big change. But for Sony Group, on the whole, well, I don't think this is a mission. But for example, in your -- for example, do you have targets to reduce your power consumption of your products by 5%. What power does it have by 2025? You said 30% reduction in sensing. But if this is realized, the Sony Group, on the whole, this Intelligent Vision Sensor, how much will this contribute to reducing the power consumption of the whole of the Sony Group? That's the first question. And the second, you explained about COVID-19, but about the Justice Fund. Well, this is a huge amount of money and I don't think this will lead to a direct return. And for supporting NPOs, others, you are investing money in such a way under this fund, but it might not be a direct return, but are there any good things that will come out of this? Do you have any specific examples? Do you have any plans to disclose that? To the extent possible, can you share with us those benefits? And you, I think, have to continue to work on this for a certain period of time and I think about 70% of the money is already earmarked. But for -- going forward, are you planning to continue with this, thinking that this is cost that needs to be continued to spend? What are your future plans?

Well, first, about IMX500 and for Sony Group, on the whole, what sort of contribution will we have for the power consumption of Sony Group? And about the Social Justice Fund, what return can we expect and what are the plans going forward? So these were the 2 questions raised. I'd like to first answer the first question and then Shippee will answer the second. About IMX500, well, to explain this a bit further, so Road to Zero or climate change, eliminating use of plastic or carbon-neutral. And for these aspects, Sony with IMX500 is not trying to contribute, but rather we, in our business and also in those products that we are offering to society, we want to reduce the environmental footprint. For example, in the area of Electronics, per product we want to reduce the power consumption. And also for the semiconductor image sensor at the plants, we want to, first of all, make efficient power consumption, reduce the amount of power consumption. And for what is left, we want to convert to renewables. So through such efforts by 2040, we want to switch to renewables, and also by 2050, achieve the Road to Zero. This is a corporate effort. And irrelevant to IMX500, Sony will continue to work on this. We have been, and we will continue to work on this. Meanwhile, our technology in our business, we want to bring about positive effects on the environmental challenges that the world is facing and one of such things is IMX500. And cloud computing is progressing and there are more EVs. And one issue that comes out from this is the explosive use of electricity or explosive generation of data as that will occur. And in response to that, well, this is a challenge to society, environment and we want to think about what we can do. Sony with these image sensors with AI or optimization, we think that we can contribute to these purposes. And the second question, please. About the Global Social Justice Fund and what return or benefits can we expect?

Well, especially about social justice, when it comes to these issues, in the United States, the entertainment business, this has had a major impact. The African Americans, their culture, music, well, for our business, is very relevant, very important and therefore we want to quickly try to respond to social justice issues. I think it is very meaningful that this fund was set up to quickly respond to that. And also, we are providing donations to different organizations. But in operating this fund, we have to address this issue globally. And so in all our businesses -- well, within our company, we have task forces and for each country or region and depending on the business, there are different needs, challenges that need to be addressed and these groups are looking into those challenges. And I think that these activities happen, energized thanks to this fund being set up. So I think this is another outcome that we are seeing by this fund. Now what about the future plans, I think this activity will not lead to an immediate solution. And therefore, we are planning to continue with these activities. And through our sustainability report, we would like to report to you the results of these activities and communicate with you. Thank you.

If I may add, the Social Justice Fund and the COVID-19 Relief Fund, it's not that we are expecting any return from this. We believe that in doing our business, the communities and in order to coexist with these companies, we need to contribute to the communities. So it's not the case that we're expecting any financial return through these activities. I want you to take note of that. Thank you.

The time is very limited. So next question will be the last question from Asahi Shimbun, Suzuki-san, please.

My name is Suzuki from Asahi Shimbun. Can you hear me?

Yes, we can.

So I have 2 questions. The first question is that at Sony Group, you have a wide range of different businesses like Game, Electronics and Financial Services. And so in pursuing ESG, I believe that there are many different kinds of factors and risks involved. And what is the difficulty of Sony because of your wide range in businesses in terms of ESG? I think there is also the strengths because of synergistic effect. What do you think is the strength of pursuing ESG at Sony? And the second question is that, as Kambe-san said, the ESG is not the factor to seek returns. So in terms of enhancing your corporate value, there are many different ways for analysis and there are many discussions. But in terms of the quantitative manner, how do you evaluate the contribution of ESG to the business?

The first question is our initiative on ESG. Since Sony has many different kinds of businesses, what are the challenge and the strengths. And the second question is in pursuing ESG, how it contributes to the corporate value and how we are able to analyze this in a quantitative manner. Thank you very much for those 2 questions. I would like to answer the questions. And answering your first question, as you said, Sony has different kinds of businesses and we do have 6 business segments right now. And as CEO, Mr. Yoshida, has mentioned through the part of technology and creativity, we fill the world with emotion. And as important, the direction of the management, we are getting closer to people. So that is a fundamental approach of the Sony and the fundamental business -- the philosophy of Sony. And with that, the common understanding, for each business, there is different kinds of values generated by business. And also, there are the different issues pertaining to the ESG like image sensor and the semiconductor and electronics. The response to environment is of utmost importance. There are many other issues. And internally, the gender diversity are the very high priority in entertainment business in the United States like Music and Pictures and PlayStation. As Shippee mentioned, social justice is taken as a very important issue. In other words, human rights related to the racial injustice is such a big issue. So there are the difference depending upon the types of businesses. So we need to understand them clearly. And although there are the challenges, the management of each business becomes very serious and positive and that has been very good response over the last 3 to 4 years, in our view. And answering your second question. As for the ESG, very difficult to make the ESG initiative into the numerative -- the actual financial figures. But Mr. Yoshida, Mr. Totoki, when we discuss with them, when we see the management in a long-term view in order to enable the sustainable growth, E&S are essential. So we pursue E&S in a very sustainable manner and that is a way to win the trust of the stakeholders from the media, from investors and from clients, customers and employees. And therefore, in order to win the trust because we wish to get closer to people all the time, so we need to follow this path solidly. And in the long term, I believe that this certainly leads to the higher corporate value. Thank you very much.

Since our time is up, we would like to close the questions from the members of the media. Thank you very much. And the QA for the analysts will start at 5:14. [Break]

Thank you for your patience. We would now like to start the Q&A session for our investors and analysts. And I am [ Hayaka ], in charge of Finance and IR, and I will act as a moderator. [Operator Instructions] So we'd now like to start the Q&A session. [Operator Instructions] First question from JPMorgan Asset Management, [ Ome-san ].

My name is [ Ome ], and thank you very much for the explanation today. And well, I have 2 questions. It has to do with the people management. And first, last year, for the -- there was a change in the compensation system for the senior executives and there is a structure where the compensation is linked to business results. So after a year, what is the result? And what are the issues? And also for the businesses, environment and society, what you emphasized is incorporated into the business plan and I think you evaluate the business not just the senior executives, but in each of the business. In the evaluation or appraisal of human resources, ESG is reflected so that it can be linked to the increased engagement of the personnel. If that is so, please give an explanation. The other question has to do with the -- after April management structure change, as a group, you have a human resource strategy that you have for the group. And compared to the system of the past, what's been improved? For example, what is leading to more motivation and also human resource development? If you could explain on that aspect, too.

Thank you for those questions. So you gave me 2 questions and both have to do with human resource management, I understand it. And first question has do with senior executive compensation sustain -- and incorporating sustainability, which is going forward, and therefore, what is the results or what are the issues that we are facing. And the other is on April 1, we had the change of the corporate structure and Sony Group Corporation started. And so in relation to that, in particular, talent management, human resource management. In connection with that, has there been changes and what has been improved? And I would like to give the answers to these questions. First of all, with regards to including sustainability and compensation evaluation especially linked to the business results. First of all, for the senior executives, every year, with the CEO or other senior executives, there are interviews that are held. And the year's target or medium-range targets are set or also the single-year targets are set. There's a place that is confirmed. And that being the case, sustainability initiatives are also confirmed and the results are reviewed and judged and that will be incorporated into the evaluation of performance. And for the senior executives, we have such arrangements. But in addition to that, for the business companies, the results -- the compensation is linked to the results. We look at the sustainability for each of the businesses, that's incorporated. And so not just the senior executives, but also management and it is also going to lead to enhancing the motivation of employees. What are the issues then? It's not just for sustainability perhaps we can say. A lot of the initiatives for sustainability are from a long-term perspective and it is to be conducted sustainably, and that will lead to good results. So it's not just 1 single year or ending in 3 years, say. So how is that to be reflected in the evaluation of performance? That is a management challenge. Now secondly, about the Sony Group Corporation starting, as you said, one of the mission of SGC mentioned by Yoshida-san, the evolution of the business. In other words, there has to be management of resources and support from technology. And based on that, this year, HR, with regards to talent, we have the Sony people's philosophy. Special and diverse Sony is the philosophy that we have indicated. And how do we support individuals because the characteristic of Sony is that we emphasize individuals and grow them and to capitalize on them. And therefore, in each business, that means that enhancing individuality and to realize growth, we have to take measures that will improve on the growth of the individual. And so again, we have been doing similar things for a long time, but the SGC has taken off, there are things that the group company should do and there are things that the business side should do and I think that has become clear. And also, up to now, it was Electronics and also the head office somewhat together. But this has been separated, that is Electronics and headquarters have been separated. So both are to become autonomous and the support structure should also be enhanced. That's all.

Now I'd like to proceed to the next question. Nakane-san from Mizuho Securities.

Can you hear me?

Yes.

Two questions. First, it's a basic thing. It just might be that I don't understand, but about the sustainability and promotion division of Mr. Shippee. What is your responsibility, role, authority? Well, Totoki-san is the project owner and how do you engage with Totoki-san, the Board members, the Board? And also for the business companies, how do you communicate with them? Well, I think that there are things that you might have different views on, but how do you communicate with the business companies? And how do you develop the relationship? How is it different from the past and present? So about the Sustainability Department, that's the first question. And about the second question, about Green Management 2020. Well, on the results, I think it's described in sustainability report. But the virgin plastics I think this can be resolved, I think. But water, I think that this is also very indispensable. But reading the sustainability report, I really didn't understand what the solution is vis-à-vis water. Well, heading towards 2025 in your initiatives, there are things which are quite challenging, and I'm wondering how you will resolve this issue. And if Sony alone cannot deal with this, the whole industry or the government, other -- and also international organizations, I think there might be some things that would be better done through collaboration with other stakeholders. If you have any such ideas, please share that with me.

First, about the Sustainability Department, what its role and who do they report to, et cetera, so Shippee will respond to that. And if I think that there's a need to add something, I will. And next about Green Management 2020. After this, GM in 2025 -- heading towards 2025, what are the challenges that exist? And if there are challenges, what are your request to the government and others? I think that was the question. So let me -- I'll answer that part later.

About the Sustainability Department. This was in 2020 April established. Up until that time, we were separate organization, so with Environment Group, CSR Group. But these were merged into one because we think that the sustainability is an area that we have to strengthen and that is the reason why we changed our organization. The SGC headquarters organization. So this is our organization. And we are looking into sustainability policies of all of Sony and promotion of such sustainability policies. And to outside stakeholders, we do the communication with regards to sustainability. And we do put together the sustainability report and other reports. That is what we're doing. And the sustainability projects. Totoki, who is the CFO, is the owner of the project. And we, as Sustainability Department and also Corporate Planning, IR, these related departments are working with us so that we can promote sustainability as was explained. So sustainability management, we need to evolve this. And therefore, we are undertaking initiatives to achieve this goal. And as was explained in the performance evaluation, sustainability is included. And this is how we communicate with the business units or business companies.

Well, if I may add just one thing. Over the past 3, 4 years, we have been working on sustainability. And one thing is that we have changed from a headquarter-led initiative to trying to incorporate sustainability into our different businesses. So this is approach we have taken. Now Shippee's CSR environment team, well, they are given the mandate to realize this and work with corporate planning and IR. And so -- and I think that they are supporting these other departments and groups, and I think that this is benefiting others. That is what I see. The second question about the GM 2020 results and earlier you mentioned about water and you said that there are challenges in regards to water. Well, when it comes to water resources, there are different ways of thinking about this, I know. But the international institutions, when I talk with them recently, or CTP, when I talk with these people, I feel that water resources, depending on the region, there are major differences as to the availability. For example, in Japan, we have an abundant, more or less, supply of water. And therefore, in that respect, rather than trying to reduce with absolute volume, we should focus on recycling and not just the quantity that is used. And based on the regional characteristics, programs need to be put together. In 2025, we have remade it as such. In Kyushu, the semiconductors are being produced at that site and we believe that this goal is achievable. Meanwhile, as for the challenges, issues, where do we see challenges? Well, in the area of climate change, for example, in Japan, renewable energy. How much conversion we'll able to achieve in Japan, I think, is the biggest challenge for us. At the last briefing, I explained this, but overseas, especially in Europe and last year china also achieved 100%. United States is more than 50% now. Japan is lagging behind with consuming a large amount of electricity. And therefore, we have to focus on how much we can convert to renewables. And this time, the government has pledged to achieve carbon neutrality, 46% reduction. And we also, be it the Japanese government or international institutions, when we talk with them, we say that the supply of renewables in Japan is important. At the same time, there were regulations in place and there is need to ease these regulations so that companies will find it easier to use renewable energy. And we're starting to see this become a reality at this point in time. So this is an area that we want to work on. That's all. Thank you.

Time left is short. So next question will be the last question. The last question from Mitsui Sumitomo Trust Asset Management, Mr. [ Kubota ], please.

My name is Kubota from Mitsui Trust. I have one question in your ESG initiative, I'm interested in the integration of the business in headquarters and your management philosophy. And as was already mentioned, you can confirm the good results. But in doing so, what is the positioning of ESG? How it has evolved? In question and answers, you have already given us the comments. What is the discussion at the Board and what is awareness of the employees and their motivation? And we would like to have the comments from Kambe-san and Shippee-san. Very difficult to see from outside. So please share that with us.

So within the ESG, how it is penetrated inside the company. So the comments from the two of us. So first, ask Shippee-san and then I will give you comments myself.

Thank you very much over the last few years, in different forms, we have developed sustainability promotion. And for instance, at the very beginning, the long term, the value -- in order to meet the long-term value for the society, for instance, there are limited opportunities in the past to have a dialogue on that. And so there was some gap in the awareness as to the importance of the ESG in the past. But over the last 3 years, how we should create the value and the management based on purposes? And doing so group at the large and in each business segment, of course, there are different issues worked on, but how we should develop ESG? In that context, we are now ready to discuss in-depth. And so the business side and for each employee, since they're more deeply involved, they take the sustainability issue as their own issue. I think now there is a good infrastructure for that. Thank you very much.

Let me add the point. As Shippee already mentioned, over the last 3 to 4 years, the management now promotes the long-term view and sustainable, the management. And because in planning the business, in planning the management, now I think the weight is on the long term, the management and long-term enhancement corporate value and E&S are essential part of realizing this. And now management is fully convinced about that and that is reflected in business promotion. And also, as Mr. Yoshida said, the purpose is very important and that has been penetrated across the Sony Group. And that is another important result. And as already mentioned in my speech, last year or over the last 1.5 years, because of the COVID-19 various challenges have emerged and risk also has emerged. And there are a lot of the unusual weather events. And the management and also employees take those things as their own issues. And in that context, realize the importance of E&S. And we received a lot of feedback from the employees. There are more learning from employees in that respect. We've like listened to them closely. And as one of the very important stakeholders, their views should be reflected in our management. Thank you.

Our time is up. And so the ESG Briefing for the Sony Group Corporation will come to a close. And we thank you for your participation.