Courage to Advance Toward the Next Stage, Inspired by Human Capital Management

I see 2023 as the year in which MARUI GROUP embarked on its advancement toward its next stage. This is also a year in which we have finally started to see connections being formed between the various initiatives we have undertaken thus far, and the vision we imagined has thus begun to take shape. Moreover, the times have caught up with our initiatives, and our values are coming to align with those of society.

This realization is underscored by the recent trends pertaining to human capital management. The basic tenets of human capital management are to position people as the primary proponents of value creation and to invest in these people and utilize their talents to heighten corporate value. This approach stands in stark contrast to prior management conventions, which have viewed people as a cost to be controlled. Human capital management has long been a priority in Europe and the United States, but only just recently, specifically since 2020 or so, has Japan been turning its attention toward this approach. Discussions regarding human capital management in Japan have been advanced largely by the Ministry of Economy, Trade and Industry.

These discussions have led to the decision to make disclosure of information related to human capital in a company’s annual securities report mandatory beginning in the fiscal year ended March 31, 2023. This decision resulted in a sharp rise in the amount of attention directed toward human capital management, prompting many to view 2022 as the start of Japan’s full-fledged promotion of this practice. MARUI GROUP was quick to embrace this trend, providing explanations on its human capital management activities for shareholders and other investors at a financial results briefing held in May 2022 (see presentation entitled “Human Capital-Focused Management of MARUI GROUP #1 Corporate Culture Reforms” for more information). We also included human capital-related information in the annual securities report we disclosed in June of the same year.

In these activities, we came to realize that the approach which has come to be known as “human capital management” is shockingly similar to the approach that MARUI GROUP has been taking for the more than 15 years since 2007.

Of course, it is not as though the term “human capital management” existed 15 years ago, and we were thus not engaged in “human capital management” in the literal sense. Rather, what I mean to say, is that the measures we took to become the type of company we envisioned or to work as we desired as part of exercising MARUI GROUP’s corporate philosophy—“equate the development of our people with the development of our company”—have resulted in an approach that matched that of human capital management.

When we became aware of this pleasant coincidence, we found it most empowering. This realization cast light on the fact that the times had caught up with the principles we have cherished thus far, signifying that our values have aligned with those of society. We were presented with proof that both society and MARUI GROUP value the same principles and that our values matched the times. This feeling of empowerment brought us joy and gave us the courage to start our advancement toward the next stage.

Introduction of New Article, “Exercise of Corporate Philosophy,” into Articles of Incorporation to Further Cement Vision

I would now like to continue our discussion of the topic of human capital management by talking about the steps we have taken thus far and the path we will take going forward.
In 2019, we unveiled MARUI GROUP’s 2050 Vision, which describes our vision of harnessing the power of business to build a world that transcends the dichotomies of impact and profit. This move created the current that would culminate in our definition of impact targets, alongside standard financial targets pertaining to earnings and capital efficiency, in the medium-term management plan that was launched in 2021.

Our impact targets pertain to the social issues MARUI GROUP strives to tackle. The goal in defining these targets was not merely to introduce a new set of targets. Rather, we sought to reshape our approach toward management so that our financial targets would be met as a result of the accomplishment of our impact targets. However, even after we had effectively defined the overarching themes for our impact targets, we still needed to undertake a process of trial and error to determine how best to incorporate these targets into our actual business activities.

As we undertook this process, we began to witness the gradual creation of innovations that enabled us to generate earnings while still having our desired impact on society. Examples of such innovations found in Co-Creation Management Report 2023 include our Kesou brand of sustainable shoes, renewable energy initiatives, social bonds, and the HERALBONY Card. These initiatives may still only be in their infancy, but this does not change the fact that they are helping us produce earnings along with our desired impact.