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Human Capital

Human Capital Strategy 1 <Strengthening Employee Engagement>

In both the telecommunications and information services markets, various players, both domestic and international, are rapidly joining the fray. With services and equipment diversifying and becoming increasingly sophisticated, we anticipate that this landscape will continue to evolve at an accelerating pace, especially around cloud services. Given the situation, enhancing employee engagement is pivotal for improving productivity, sparking creativity, and retaining top-tier talent. Decreased engagement could adversely affect areas such as the development of new technologies, the introduction of new services, the refinement of existing services, and the execution of growth strategies, potentially impacting the NTT Group's financial performance. Risks

To address such risks, the NTT Group conducts employee engagement surveys and is intensifying efforts to tackle the challenges identified. We introduced a new personnel and salary system in April 2023 that is grounded in specialization. This system aims to cultivate an environment where each employee can acquire and exhibit higher degrees of expertise and skill. At the same time, through the expansion of open recruitment, we are providing more opportunities for our employees to challenge themselves and excel. In terms of managerial positions, we have adopted a job-based personnel system that facilitates optimal staff assignments irrespective of age or tenure. Additionally, we are establishing forums for bidirectional communication between management and employees to ensure that our corporate strategy is communicated and understood. Also, given that creating an environment where diverse talent can thrive serves as a foundation for improving employee engagement, we will continue our efforts to realize a balanced work-life environment. Addressing Risks

In terms of opportunities, we anticipate that boosting employees' willingness to take on challenges and acquire specialized skills will enhance their job satisfaction and sense of fulfillment. This, in turn, is expected to elevate employee engagement, thereby improving labor productivity and creativity across the NTT Group.

(Note)1. The scope of the employee engagement rate calculation includes about 100 domestic Group companies (we plan to extend this to our overseas Group companies in the future).
2. The scope for the rate of newly appointed female managers and male employees taking paternity leave includes six major domestic companies: NTT, NTT DOCOMO, NTT Communications, NTT East, NTT West, and NTT DATA Japan.

(Note)1. The scope for the above indicators includes six major domestic companies: NTT, NTT DOCOMO, NTT Communications, NTT East, NTT West, and NTT DATA Japan.
2. As of the date of this report, the percentage of female board members at our company is as follows: 30.0% for directors, 40.0% for Audit & Supervisory Board Members, and 40.0% for executive officers.

Group Human Resources Strategy

People are the driving force behind creating a sustainable society by delivering value to the world.

We place a strong emphasis on Employee Experience (EX) and are committed to creating a positive cycle where people are the key drivers of value.

Within the NTT Group, we believe that the key to improving EX lies in a diverse group of employees taking charge of charting their career paths from the moment they are hired, gaining work experience, supplementing skills through training, and taking on new challenges after reflection and self-assessment.

To enable each employee to independently shape their career, as shown in the below diagram, we provide an environment of implementing various HR policies from both perspectives of Supporting Growth and Developing Diverse Work Styles and Work Environments. We strive to create an environment where each individual employee takes the initiative to act, thereby generating a sense of growth, job satisfaction, and excitement, and ultimately improving their EX.

Initiatives Related to Human Capital in the New Medium-Term Management Strategy
(Support Career Growth)

We will expand our human capital investments to assist employees in autonomously shaping their careers, thereby supporting the growth of our business.

In line with the specialized personnel system introduced this past April, we will enhance support for obtaining external qualifications and enrich training programs across 18 specializations. We will also expand career consulting functions to offer career design advice. Additionally, we will offer comprehensive career development support that includes life events like childbirth, childcare, and nursing care.

Supporting Growth: Reviewing the Human Resources System

As we shift our business structure and new value creation becomes a necessity, it is crucial to heighten the synergy between our business strategy and human resources more than ever.

The job-type personnel salary system we introduced for all management positions in October 2021 aims to break away from annual and seniority-based systems. It shifts the focus from placing the right person in the right job to finding the right job for the right person. This system more closely aligns compensation with both company and individual performance, thus enabling the positioning of talent where it is most needed to achieve strategies and creating expanded opportunities for employees to take on challenges.

For regular employees, we introduced a new personnel and salary system this April aimed at nurturing them into true professionals with high levels of expertise and skills who can carve out their own careers.

Specifically, we have established 18 specialized areas with an awareness of external markets, including sales (sales, SE, etc.), development (services, product development, etc.), IT (IT architects, IT specialists, etc.), infrastructure engineers, corporate (general affairs, human resources, finance, etc.), real estate and construction, smart energy, and research and development. We have also established "grading standards" that clarify the required expertise and level of action for each area. In addition, based on these "grading standards," we have implemented an absolute evaluation system that allows high-performing employees to be duly recognized, abolished the minimum years of service required for promotions, and established a system in which employees are promoted and paid according to the degree of expertise they have acquired and demonstrated.

Moving forward, in every phase--from recruitment and development to placement--we aim to shift towards operations that emphasize specialization, thereby facilitating the autonomous career development of our employees.

In addition, coinciding with the introduction of our new personnel and salary system for regular employees focusing on specialized expertise, we have also established a Specialist Grade. This grade offers higher compensation to employees who possess particularly marketable skills and deliver exceptional performance.

By implementing a framework that allows for treatment on par with management roles based solely on high levels of specialization--without the need to become a manager--we intend to broaden career options for our employees, thereby boosting motivation and performance even further.

Supporting Growth: Training Options and Career Consulting

To enhance the effectiveness of skill acquisition in the 18 specialized areas attuned to external markets, we have expanded our training programs. These now include roughly 650 courses structured around three main frameworks: (1) Training to support acquiring external certifications tailored to each area of specialization, (2) Training to improve unique specialized skills not solely obtained through certifications, and (3) Training to gain common skills necessary in various fields, such as facilitating meetings. Employees can select from these training programs based on their own career plans and skill development goals, and proceed with their learning accordingly.

However, we recognize that employees may find it challenging to choose the most suitable training program from the multitude of options available. To address this issue, we plan to introduce recommendation features into our Group-wide talent management system that are tailored to each employee's specialized field and rank.

In the context of our new personnel and salary system, it is essential that employees take an active and autonomous approach to designing their careers, leveraging their high levels of specialized expertise. However, a variety of factors, including the field in which they wish to work, desired roles and positions, specialized skills, strengths and weaknesses, and life events, can impact career planning. As such, some employees may require targeted support. To meet this need, we deployed Group-specific career consultants starting in July 2023. These consultants, who hold national certifications and are rich in experience, will provide individualized career advice to each employee.

Additionally, we plan to educate supervisors (primarily department heads; about 10,000 target individuals in fiscal 2023), who are considered the consultants most accessible to regular employees, on career consulting methodologies. By elevating the career consulting abilities of our supervisors, we aim to offer day-to-day and periodic interview-based support to employees as they shape their autonomous career paths.

Supporting Growth: Diverse Career Paths (Diversified Hiring and Employment) and Side Jobs

We conduct a wide range of recruitment activities, and we do not limit ourselves to hiring new graduates, but also actively recruit experienced professionals. While we set a target of 30% for fiscal 2023, our performance for fiscal 2022 significantly exceeded this, reaching 40.7%.

Additionally, for both new graduates and experienced hires, we avoid uniform grading at the time of recruitment. Instead, to assign appropriate grades, we assess employee expertise and skills.

In terms of career planning after employees join the company, we have introduced a Specialist Grade and a Professional Employee System to better reward high-performing staff. Our employees are excelling across various industries and sectors.

Moreover, we offer titles such as Fellow, Senior Special Researcher, and Special Researcher to individuals who have demonstrated high expertise in specific fields and are recognized globally as truly exceptional, top-class researchers with significant achievements.

Systems & Benefits with High Specialization

Further, at NTT Group, to foster skill development and independent career growth, we encourage side jobs. This system allows employees to allocate a portion of their work hours to tasks in other departments while maintaining their responsibilities in their current roles.

Specifically, up to 20% of an employee's work hours can be devoted to tasks in another department for training purposes. This not only facilitates the practical application of their current skills, but also offers the opportunity to acquire new skills and higher levels of specialization that may not be achievable in their existing roles. This system has been making headway in some Group companies, including NTT East, NTT West, and NTT DOCOMO.

Going forward, we plan to further expand the scope and create an environment that fosters proactivity and self-growth for employees within the NTT Group.

Developing Diverse Work Styles and Work Environments: Diversity & Inclusion

We promote diversity and inclusion for the sustainable growth of NTT Group and the realization of a sustainable society. We believe that in order to be a company that flexibly adapts to changes in the external environment and continues to create innovation, we must transform ourselves from a homogeneous organization to one in which a diverse workforce thrives. We also believe that we can contribute to the realization of work-life balance and a sustainable society by improving the wellbeing of our employees, providing fair opportunities, and creating an environment in which diverse human resources can play an active role.

Developing Diverse Work Styles and Work Environments: Women's advancement in the workplace

In the NTT Group, we have established numerical targets for female board members, female managers, and newly-appointed female managers to ensure that a diverse range of opinions is represented in decision-making processes. In June 2023, the percentage of female directors was 21.0% (+3.3 points year-on-year). With regard to fiscal 2022 results, the percentage of new female managers was 29.7% (+0.6 points year-on-year), and the percentage of female managers was 10.4% (+1.7 points year-on-year).

In terms of ensuring diversity, we aim for a continuous promotion of female employees into key managerial roles. At NTT University, we have maintained a female ratio of over 30% among the targeted participants. We carry out various training programs targeted at female employees across all layers of the organization, as well as for those returning from maternity leave and their superiors.

Also, in addition to off-the-job training, we provide on the-job training, including putting employees in tough assignments, with the intention of training female employees with the skills, mindsets and experiences necessary for promotions.

Developing Diverse Work Styles and Work Environments: Gender pay gap (indicator)

In our human resources and salary system, there is no wage gap based on gender.

The main factors for the wage disparity between men and women are as follows:

(1)For regular employees:the ratio of women in managerial positions is lower than that of men

(2)For non-regular employees: men occupy a larger percentage of high-paying specialized posts

NTT Group announced the Plan to Double the Number of Female Managers in December 2013, setting a target of 30% women in new graduate hires. Since fiscal 2013, we have been actively hiring women, leading to a younger age demographic among female employees, and currently, most are in non-managerial roles.

In September 2021, as part of the Transformation to a New Management Style, we set a target for 30% of newly appointed managers to be women. The numbers have been making steady gains, increasing to 29.1% in fiscal 2021 and 29.7% in fiscal 2022.

Female employee wage ratio when male employee wages are set to 100 (Fiscal 2022)

(Note)The data covers six major domestic companies (our company, NTT DOCOMO, NTT Communications, NTT East, NTT West, and NTT DATA Japan).

Developing Diverse Work Styles and Work Environments: Empowering Those with Disabilities

The NTT Group has an employment rate of people with disabilities of 2.51% (+0.04 points over the previous year), and employs approximately 4,000 people with disabilities. Among them, about 1,000 are working in our special subsidiary companies*. In addition to direct employment at workplaces, at our special subsidiaries, examples of work that are performed by people with disabilities include web accessibility diagnosis, production of hand-made paper from recycled paper, office massages, and agricultural and cleaning projects in cooperation with local communities. As a part of the initiative to promote the active participation of people with disabilities, we have been pushing forward with the NTT Art Contest and various initiatives using the remote-controlled robot OriHime.

Special subsidiary companies: NTT Claruty Corp., NTT West Lucent Corp., NTT DATA DAICHI Corporation, and DOCOMO PlusHearty, Inc.

Developing Diverse Work Styles and Work Environments: LGBTQ Initiatives

The NTT Group conducts training for managers and holds ally meetings across the Group to foster understanding of LGBTQ people. In addition, the NTT Group actively supports various events, and participates in Tokyo Rainbow Pride, one of the largest such events in Japan, and the DIVERSITY CAREER FORUM, one of the largest career forums in Japan related to diversity. Moreover, with respect to the approximately 200,000 employees of NTT Group companies in Japan, in April 2018, we began the application, in principle, of all systems for spouses to same-gender partners who have the equivalent of spousal relationships with employees.

24 NTT Group companies were awarded gold ratings in the PRIDE Index 2022, an evaluation index for LGBTQ initiatives in the workplace developed by the organization work with Pride, which indicates achievement in all five indicators of the certification criteria.

Developing Diverse Work Styles and Work Environments: Balancing Work and Childcare/Nursing Care/Medical Treatment

NTT Group encourages active participation in childcare to enhance the work-in-life of employees. In accordance with the revision of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members, NTT Group revised its childcare leave system on April 1, 2022, prior to the revision of the Act, and enhanced the leave system for the period up to eight weeks after childbirth.

Since fiscal 2021, we have been conducting seminars to encourage employees to actively participate in childcare, and are also working to foster such a workplace culture.

Ratio of Male Employees Taking Time Off Work for Childcare

The rate of paternal leave for childcare is calculated based on the Kurumin certification formula*. Following amendments to the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members, we actively encouraged our employees to take advantage of the available leave systems through individual meetings and other channels. We managed to achieve a result of 114.1%, exceeding our fiscal 2022 target of 100%. However, the uptake is mostly for short-term leave at 71.6%, while long-term childcare leave is at 28.4%. To forge an environment in which it is easy to take long-term childcare leave, we will continue to not only promote uptake among individuals, but also actively encourage organizations and supervisors to support this.

Percentage of male workers using paternity leave or other leave for childcare purposes (number of male employees with children up to the beginning of elementary school enrollment in fiscal 2022 who took time off work for childcare / number of employees whose partners gave birth in fiscal 2022)

Balancing Work and Nursing Care

In anticipation of an era of intensive nursing care, we are holding nursing care study sessions across Group companies to create an environment in which employees can balance work and nursing care. There is high interest among employees, and many have taken part. We plan to continue holding these sessions going forward.

Balancing Work and Medical Treatment

To create a comfortable work environment for employees who have constraints due to medical treatment, we are implementing training to build human networks and to educate those around them (especially superiors) to foster better understanding and a transformed mindset and corporate culture.

We have established systems for balancing work with taking leave for medical treatment and are working to create an environment in which it is easy to take leave. Optional seminars to foster understanding are being planned.

Developing Diverse Work Styles and Work Environments: Remote Standard, Hybrid Work

At NTT Group, to further the "work as a part of life" concept, we are creating a flexible work environment through enhancements such as a remote work system, remote work allowances, flexible hours, split shifts, and expanded satellite offices. In July 2022, we introduced the Remote Standard, aiming to eliminate the traditional work style that assumes relocations or temporary solo assignments away from family.

  1. Any residence in Japan is acceptable
  2. Any reasonable transportation method to and from work that can be considered travel expenses (lodging expenses provided as well) is acceptable
  3. No need to relocate to a remote location if the new location is an organization that accepts the Remote Standard

Since the introduction of the remote standard system, we have been enhancing work-life balance, including the decrease in the number of employees given solo transfer assignments by about 800, and the increase in the number of employees who work while residing in remote locations. The remote work implementation rate for fiscal 2022 was 74%.

We also increased the number of satellite office locations to 580 by the end of FY2022, with the goal of 260 or more by the end of FY2022, in order to establish places to work outside of the home and office.

Due to the introduction of the Remote Standard and other measures, there is greater freedom in terms of working hours, locations, and places of residence, thereby expanding the options for work styles suited to individual lifestyles.

However, depending on the state of the team and the work situation, sometimes it is necessary to focus autonomously on work through remote work, while other times call for coming in to the office and working on-site to experience the work firsthand or to enhance teamwork. We believe that there is a need to devise further ways of working according to our objectives.

Moving forward, we will aim to implement an optimal work style (hybrid work) that combines the strengths of both face-to-face and remote interactions, aiming for both flexibility in the way employees work and increased organization and team productivity.

Employee Engagement Survey

At NTT Group, we commenced employee engagement surveys in fiscal 2021. Four indicators for measuring engagement have been established as NTT Group Key Performance Indicators (KPIs).

We have rolled out a Group-wide experience platform, Qualtrics, to approximately 100 Group companies in Japan. This has enabled us to measure engagement scores and pinpoint areas that require improvement. By performing analyses for the purpose of improving engagement, we hope to increase the number of highly engaged employees who identify with the company's and organization's policies and strategies, as well as feel pride and take initiative in their work.

Additionally, with the aim of improving employee engagement as a company, we have incorporated it as an indicator for executive compensation and also set it as a criterion for the performance bonuses of all management staff. As a company and as an organization, we are committed to elevating employee engagement.

NTT Group's Four KPIs

ーThe willingness to make voluntary contributionsー

  1. (1)I am motivated to contribute more than is required to get the job done at the company

ーAttachment to and pride in the companyー

  1. (2)I am proud to work at this company
  2. (3)I would recommend our company as a great place to work to those I know

ーJob satisfactionー

  1. (4)I gain a sense of personal accomplishment through my work

Specific Initiatives

We have conducted correlation analyses with engagement (four KPIs) and have identified the elements that have an impact, and we prioritize our strategies accordingly.

Maintenance Area Initiatives

The items showing a strong correlation and receiving positive evaluations with engagement were "Comfortable work environment and culture" and "Acceptance of diversity (proper recognition and respect as an individual)."

At NTT, we have been advocating for various work styles such as remote work, flexible hours, and the Remote Standard system that do not impose restrictions based on time, location, or place of residence. We believe that these efforts are reflected in the enrichment of the work-life balance. (For specific measures, please refer to "Developing Diverse Work Styles and Work Environments: Remote Standard, Hybrid Work (P. 37)")

Areas Needing Improvement Initiatives

The items with a strong correlation to engagement but lower positive evaluations were "Opportunities for growth (ability to achieve career goals)" and "Strategy penetration (having confidence in the future of the company)/change management (receiving support for organizational changes)."

To support growth, in April 2023, we revised the system to allow for salary hikes and promotions depending on the acquisition and demonstration of expertise. We have also enriched the career consulting function, which allows employees across the Group to discuss their career plans. Additionally, we have established the NTT Group Job Board as a framework for supporting those who want to try to transfer jobs through public recruitment. This has made it possible for each employee to take ownership of their careers and act accordingly. Furthermore, we have prepared around 650 training courses both for specialized fields and as common training. Through NTT Group's internal newsletters, we are also actively introducing a variety of role models. (For specific measures, please refer to "Support Growth (P. 32-34)")

For strategic penetration/change management, we are broadening the scope of management outreach. We are also holding discussions regarding survey results within each company and organization, consistently deliberating over organizational-specific issues. We also implement initiatives that get leaders at each level to commit to their respective actions.

Human Capital Strategy 2 <Health and Safety>

Failing to adequately secure employee health and safety could result in decreased labor productivity and potentially impact the NTT Group's business performance and financial stability. Risks

To address such risks, we at NTT Group not only comply with Labor Standards Act and other related laws, but have also established safety and health management policies. We continue to take a variety of measures and enhance safety awareness throughout the entire NTT Group to prevent accidents and create a safe working environment in the construction of the telecommunications facilities that support NTT Group's business, which includes our subcontractors. Addressing Risks

In response to the opportunity, we are pursuing health management as a key corporate strategy with the understanding that initiatives for maintaining and improving employee health also enhance motivation and productivity and ultimately lead to higher corporate earnings. Specific measures include initiatives such as using a smartphone app (dHealthcare) to encourage employees to improve their health and conducting regular Pulse Surveys to monitor employee health conditions and detect any imbalances. Opportunities

Promotion of Health Management

Health management is pursued as a key corporate strategy with the understanding that initiatives for maintaining and improving employee health also enhance motivation and productivity and ultimately lead to higher corporate earnings. We also believe that giving due consideration for the health of our employees as well as their families will motivate and invigorate each of them (improve EX) and lead to the growth and development of the Group as a whole. Below, we introduce key initiatives being undertaken in NTT Group on various fronts to help employees maintain and improve their health while collecting and analyzing various types of data (PHR, work information, etc.).

Promoting health activities and behavioral changes with "d Healthcare" at the core(healthcare portal)

We are working to implement effective measures through central management and analysis of various information on health promotion measures that have been individually developed. As part of these efforts, we implemented initiatives to make d Healthcare into a portal for an array of healthcare services.

  1. (1)"Pulse Survey" for promoting self-care and line care <Improving convenience>
  2. (2)Viewing the results of periodic health checkups (including physical examinations), etc. <Promoting health activities and behavioral change>
  3. (3)Stress checks <Improving convenience and promoting health activities and behavior change>

Healthcare Portal Concept Image

2023 Certified Health & Productivity Management Outstanding Organization (Large Enterprise Category [White 500])

We were chosen as a 2023 Certified Health & Productivity Management OutstandingOrganization (Large Enterprise Category [White 500]) by the Ministry of Economy, Tradeand Industry and the Nippon Kenko Kaigi. We will continue to strengthen our efforts tofurther encourage health management.

Certified Health & Productivity Management Outstanding Organizations Recognition Program: A program that recognizescorporations, including both large and small-to-medium-sized corporations, that practice particularly excellent healthand productivity management based on initiatives that address local health issues and the health promotion initiativessupported by the Nippon Kenko Kaigi

Initiatives Related to Human Capital in the New Medium-Term Management Strategy
(Global Benefits for Employees and their Families)

As a way to strengthen and enhance our support programs, including for the families of our employees worldwide, we will enhance our program to partially support the educational expenses of employees' children up to college graduation in the event of an employee's death.

Human Capital Strategy 3 <Human Rights>

Should forced labor, child labor, or other forms of human rights violations occur within our Group or supply chain, there is a risk that it could erode the NTT Group's credibility and corporate image, as well as potentially affect our financial performance and business results. Risks

To address such risks, we at the NTT Group are engaged in various initiatives aimed at enhancing awareness and management of human rights across the entire Group. These include conducting human rights due diligence by leveraging external assessment agencies, providing training on human rights issues, and establishing and operating consultation services focused on human rights. Addressing Risks

Regarding opportunities, we believe that actively engaging in direct dialogue with key suppliers as part of our human rights due diligence, as well as disclosing these processes and their outcomes in a transparent manner, will improve our brand image and help us earn the trust of all of our stakeholders. Opportunities

Indicators and Targets Related to Human Rights

(Note)The scope for gauging the rate of direct dialogue with key suppliers is based on 40 companies per year chosen from among the key suppliers who account for more than 90% of the total procurement expenditures of the NTT Group. As of fiscal 2022, this includes 126 companies.

Background of NTT Group Global Human Rights Policy and Approach

NTT is committed to respecting global human rights and believes it is an important corporate social responsibility. NTT Group will strive to correctly understand and recognize each country and region's laws, cultures, religions, and values. We aim to create a safe, secure, prosperous and sustainable society by fulfilling this responsibility. We included the existing NTT Group Global Human Rights Charter in the NTT Group Global Sustainability Charter and established the new NTT Group Global Human Rights Policy in November 2021. While supporting international covenants and treaties as a company with global operations, NTT Group internally and externally discloses its global human rights policy. This policy applies to all employees and board members of NTT Group, and we ask all of our suppliers and business partners to support this policy and respect human rights.

NTT Group Global Human Rights Policy

Due Diligence

Based on the UN Guiding Principles on Business and Human Rights, we will use the human rights due diligence process to identify, prevent, mitigate, and correct human rights issues globally. And we will strive to improve human rights awareness and human rights management throughout NTT Group. In addition, due diligence will be conducted among the stakeholders in the entire business value chain, and direct dialogue will be the basis of our efforts, especially with major suppliers. The status of these initiatives will be disclosed on our website in an effort to continuously evaluate and improve the process.

Value Chain Management

Policy and Approach

In recent years, companies find themselves required to monitor the ESG risks and impact on sustainability, including consideration of human rights and mitigation of environmental impacts, of not only their own Group companies, but also throughout the entire value chain, from raw materials and supplies procurement to disposal and recycling. The NTT Group is committed to deepening mutual understanding and building a trustful relationship with all the suppliers that make up our supply chain. By dedicating ourselves to creating and sustaining a safe and reliable supply chain with everyone under high ethical standards, we aspire to proactively and enthusiastically contribute to a sustainable society. To implement this vision, we have established the "NTT Group Basic Procurement Policy" *1.

For our suppliers, we have published the NTT Group Supply Chain Sustainability Promotion Guidelines*2, which contain detailed requirement items in the seven areas of human rights/labor, health/safety, the environment, fair trade/ethics, quality/safety, information security, and business continuity plans. We ask suppliers to comply with these guidelines by including them in contracts and other agreements. In addition, we have also published the NTT Group Green Procurement Standards*3 as a supplement to our environmental guidelines and are advancing efforts to reduce greenhouse gas emissions throughout the supply chain.

Supplier Engagement Initiatives

Building upon the aforementioned NTT Group Supply Chain Sustainability Promotion Guidelines, we are conducting activities aimed at establishing a reliable partnership with our suppliers. While NTT Group previously conducted an NTT-specific Supply Chain Sustainability Survey for the Group's key suppliers, beginning in fiscal 2022, we initiated new ESG risk assessments carried out by Ecovadis*4, a third-party evaluation organization.

Based on the results of these surveys, we are promoting the enhancement of supplier engagement activities, including direct dialogue with suppliers.

Additionally, in July 2022, our company joined Joint Audit Co-Operation (JAC)*5, a joint audit consortium consisting of global telecommunications carriers, and we became the first telecommunications provider from Asia to do so. Starting in fiscal 2023, we are planning to conduct sustainability audits at the factories of NTT Group suppliers based on JAC's audit standards.

Through these activities, NTT Group will help make a sustainable society a reality by building and maintaining a safe and secure supply chain.