Message from the President

On this Sustainability Report
Based on our articulated Purpose of a “Mission to bolster social prosperity and creating satisfaction through packaging,” The Pack Group plans, manufactures, and sells various packages made to order.In recent years, we’ve developed a business model based on providing solutions to various package-related issues facing our customers, in addition to the packages themselves. I believe The Pack Group has been able to earn the trust of its customers and society by consistently focusing on the production of packages alongside evolving our products and services to meet the needs of the times. Our Purpose expresses The Pack Group’s history up to this day as well as our reason for being, aspects of our organization that will remain unchanged. By sharing this message among all Group employees, we will strive to develop and propose packages that reduce the environmental impact of production activities while contributing to solutions to environmental and social issues, as we continue to deliver products and services suited to the coming times.
Starting with this fiscal year, 2024, we’re publishing the Integrated Report and the Sustainability Report as two separate reports intended to help stakeholders better understand The Pack Group. The Integrated Report has been edited mainly from the perspectives of shareholders and investors; the Sustainability Report represents a revision of the previous CSR Report to meet the needs of an even broader range of stakeholders. I hope this Report will help readers grasp The Pack Group’s philosophy and future potential.

Progress on sustainable management
In 2023, which we consider the starting year of our sustainable management, we laid the foundation for increasing corporate value over the long term, chiefly by building a promotion structure and enhancing internal permeation of sustainable management. As a first step, the Sustainable Committee, in which I serve as chairperson, has met monthly since April 2023. Its specific agenda includes topics such as managing the progress on projects related to the Task Force on Climate-related Financial Disclosures (TCFD) and Carbon Footprint of Products (CFP) initiatives, formulating materiality KPIs, promoting understanding of the medium-term management plan at individual worksites, establishing policies related to the Integrated Report and the Sustainability Report, interacting with sustainability rating agencies, and expanding the activities of The Pack Forest^® Environment Fund.
We also publish SHINKA(Evolution), a periodical bulletin intended to inform all employees about matters such as philosophy and policies, company initiatives, and medium-to long-term strategies for sustainable management. This bulletin includes surveys used to gather opinions from the field and to gauge progress on the permeation of sustainable management.
While management creates this top-down promotion structure, we believe hints noticed and improvements made by individual employees at their worksites help realize sustainable management. For this reason, we’re seeking to promote an understanding of sustainability among all employees and provide each individual with a sense of participating in management. We’re confident that building such solid foundations will strengthen the organization. We will continue to pursue these efforts in 2024.

Materiality KPIs and the medium-term management plan
Our priorities henceforth will include making progress toward achieving our materiality KPIs and the targets of the medium-term management plan. As a first step, we've formulated five materiality KPIs, setting specific targets for reducing CO² emissions, promoting women in the workplace, and quantifying environmental goals in areas such as increasing sales of FSC^®-certified products and growing The Pack Forest^® Environment Fund and expanding its activities. We have long focused on reducing our environmental footprint, a social responsibility of any manufacturer of paper products. We've been developing eco-friendly products since the 1990s. In recent years, we've identified as one of our sales strategies promoting a switch to paper packages in line with the movement toward reducing or eliminating plastic use. As companies face demands for greater consideration for the environment around the world, we've set the targets of increasing sales of FSC^®-certified products, which are trusted worldwide, and growing our own initiative of The Pack Forest^® Environment Fund and expanding its activities as ways to increase our social and economic value. Among the activities of The Pack Forest^® Environment Fund, in 2023 it added new forestation sites in cooperation with nonprofits and public agencies. It continues research on potential new contracted forestation sites today, as we strive to carry out even more active initiatives while deepening cooperation with our customers.
While each of the five KPIs concerns matters we've been pursuing for some time, now that we've announced clear deadlines and target figures, we will accelerate efforts toward their achievement while strengthening the promotion structure.
The current medium-term management plan for the three-year period from 2023 through 2025 sets the targets of consolidated net sales of 107 billion yen, operating income of 8.3 billion yen, ROE of 8% or more, and ROIC of 8% or more. This plan consists of three main components: a growth strategy, a human capital strategy, and a financial strategy. Putting each of these strategies into practice will help to achieve our materiality targets. Currently we are in the process of ensuring that all employees understand the plan, as well as the sustainability-related information. While it's true that as a three-year plan the medium-term management plan covers a relatively short period from the perspective of sustainable management, we believe we will be able to make progress on creating value over the long term while making practical improvements and reaching targets in the short term.

Message to stakeholders
Since taking office as President and CEO in March 2022, I have tried to guide The Pack Group's management toward sustained growth and progress in line with our corporate motto, Passionate and Dedicated to Our Partnerships. Amid growing calls for ESG-based management around the world, companies that have pursued profit alone are being forced to transform themselves. The environmental (E) and social (S) components of ESG management can create favorable tailwinds for a company like The Pack Group, whose core business involves paper products. I see my responsibility as the leader of Group management to be one of realizing long-term growth in corporate value by building a structure in which sustainability initiatives are linked to core business growth.
In the process of identifying materiality topics, it became clear that our employees represent the driving force behind our growth. We will continue working in various ways to become an organization in which employees can do rewarding work with a sense of keen motivation. This includes HR development and improvements in our working environments. Together with continuing efforts in areas such as training on digital transformation (DX) and tiered educational programs, we will build a working environment in which diverse human resources can demonstrate their abilities to the fullest while promoting women in the workplace and encouraging men to take childcare leave.
While we're making steady progress toward sustainable management, the levels demanded by international ESG rating agencies, shareholders and investors, customers, and society at large continue to grow more rigorous. We recognize the need for efforts refrecting an even greater sense of urgency. On the topic of governance, we're listening to a wide range of views from both inside and outside the organization, including those of Outside Directors. The Pack Group will take action on the opportunities for further evolution that such evaluations, demands, and opinions from outside the organization provide. We will maintain our aim of achieving long-term growth in corporate value through taking to heart our Purpose. We appreciate your continued support of our company.