Sony’s Views on Corporate Social Responsibility (CSR) The core responsibility of the Sony Group to society is to pursue the enhancement of corporate value through innovation and sound business practices. The Sony Group recognizes that its businesses have direct and indirect impact on the societies in which it operates. Sound business practices require that business decisions give due consideration to the interests of Sony stakehold- ers, including shareholders, customers, employees, suppliers, business partners, local communities and other organizations. The Sony Group will endeavor to conduct its business accordingly. Sony Stakeholders Shareholders Environment Products and services Customers through innovation Employees Suppliers Other Business organizations partners Sound business practices Local communities Contents Messages from Management 2 Sony Overview 4 Business at a Glance 6 Sony and Innovation 8 Management 10 Corporate Governance 12 Compliance 14 Quality Control Management 18 Supply Chain Management 19 Sony and People 20 For Shareholders 21 For Customers: Customer Satisfaction 22 For Employees: Employment and Employee–Management Relations 25 For Employees: Human Resources System 26 For Employees: Diversity and Equal Opportunities 27 For Employees: Education and Training 30 For Employees: Work Environment and Occupational Health & Safety 32 For the Community 35 Sony and the Global Environment 40 Sony Group Environmental Vision 41 Overview of Sony’s Environmental Impact 42 Progress of Green Management 2005 44 Environmental Management Structure 46 Energy Saving and Resource Conservation of Products 48 Management of Chemical Substances in Products 50 Environmentally Conscious Products and Services 53 Reduction of Environmental Impact in Logistics 57 Environmental Activities Promoted Together with Artists 58 Product Recycling 60 Global Warming Prevention Measures at Sites 63 Resource Conservation at Sites 66 Chemical Substance Management at Sites 68 Site Environmental Data 71 Independent Verification Report 73 About CSR Report 2005 74 Sony Corporation 1 Messages from Management In our diverse yet closely connected world, business leadership rests on a broader, more comprehensive foundation than ever before. Global enterprise requires a commitment to global citizen- ship, including strong organizational and personal commitments to integrity and ethical standards, cultural sensitivity and respect for stakeholders and the environment. As a truly global company, Sony is enriched by the broad diver- sity of its employees and the communities in which we operate. Our commitment to diversity is both a strategic imperative of our business and a statement of our company’s character. We believe an expansive view of the world improves our company’s perspective; we also enrich the lives of individuals across many cultures through our innovative technology and creative entertain- ment content, helping them to realize their dreams. Sony has always been defined by a strong commitment to corporate social responsibility. This includes policies and pro- grams to ensure strong corporate governance, financial transpar- ency, cultural diversity, employee and customer safety, and sound environmental practices. These policies are at the core of Sony Group’s global operations. Corporate social responsibility also extends to Sony’s and its employees’ support of local communities around the globe. For example, the Sony Group and its employees worldwide recently made a donation to assist victims of the Indian Ocean earthquake and tsunami tragedy. And each year, employees across Sony companies volunteer in local schools, communities and organiza- tions, contributing their talents and energy where they are needed. I believe strongly in these efforts and actively encourage them. Sound business practices and respect for our environment and stakeholders are all core Sony values. Supporting and advancing these values is a very high priority for all of Sony’s senior manage- ment team. As we move forward in rekindling the innovative spirit of Sony and adapting it for the 21st century, we will continue to imbue our social responsibility programs with this same sense of spirit and innovation. By maintaining high standards and expecta- tions, we make Sony a better company, a better partner and a Sir Howard Stringer better citizen everywhere in the world. I hope this report informs Chairman and CEO your understanding of Sony’s corporate social responsibility Representative Corporate Executive Officer activities and inspires your continued support and involvement. Member of the Board 2 SonySony CorporationCorporation Many of you may recall a particular point in time when you first became aware of the significance of environmental and social issues. For me, that point came in the 1970s, when I was study- ing resource engineering. During that time, The Limits to Growth was published, sounding the alarm to the mass-consumer world, which at that time believed in never-ending and uninhibited growth. Realizing the need to co-exist in a world of finite natural resources filled me with a sense of crisis as I became aware that the day would soon come when all the technological skills I had learned could become useless. Since this was something that could have a direct and significant impact on my own life, I became very aware of these issues. Over the past three decades, environmental and social issues have become increasingly severe on a global scale, and I recognize my responsibility to face them directly as a top executive of a global company. In my opinion, a company’s capabilities are built on two aspects: “visible competitive strengths” and “hidden competitive strengths.” “Visible competitive strengths” reflect tangible qualities such as product design, performance features and price. On the other hand, “hidden competitive strengths” reflect factors that are not directly perceived by just holding the product, such as internal component technology, operational productivity, compliance and environmental considerations. I believe that a company’s true competitive strength is now becoming more dependent on those hidden factors. In order to enhance this underlying competitive- ness, it will become essential to increase the level of corporate transparency in environmental and social issues, to acknowledge problems openly, and to include responsible solutions to these problems in management practices. Sony’s business has always been supported by its various stakeholders, such as its consumers, shareholders, business partners, communities and employees. To strengthen our product development activities and to further incorporate the “voice of the customer,” I have recently launched within Sony the “Customer Viewpoint Initiative.” But I believe it is Sony’s mission to pursue customer satisfaction not only from the viewpoint of our end users, but also from each stakeholder’s point of view. As we approach Ryoji Chubachi Sony’s 60th anniversary next year, I would like to ensure that the Representative Corporate Executive Officer results of Sony’s activities exceed our stakeholders’ expectations President and Electronics CEO and that we pursue innovative ways of doing business. I firmly Member of the Board believe that it is Sony’s mandate to constantly offer excitement and new dreams to our stakeholders and to enrich their daily lives. SonySony Corporation Corporation 3 3 Sony Overview Corporate Data Headquarters 6-7-35, Kita-Shinagawa, Shinagawa-ku, Tokyo 141-0001, Japan Established May 7, 1946 Employees 151,400 (as of March 31, 2005) Sales and operating revenue ¥7,159.6 billion (for the fiscal year beginning on April 1, 2004, and ended on March 31, 2005; hereafter referred to in this report as “fiscal 2004”) Organization The Sony Group consists of eleven key business units, music and pictures, and financial services. The Headquar- encompassing six network companies and three business ters, as its name implies, provides global headquarters groups, plus Sony Ericsson Mobile Communications AB functions, ensuring solid cooperation among businesses. and the Sony Financial Holdings Group, operating busi- Sony will continue to strive to realize integrated value nesses in electronics, games, entertainment, including creation throughout the Group, aiming at further growth. Organization Chart (As of July 1, 2005) Headquarters Sony R&D Laboratories Information Entertain- Personal Sony Sony Personal Semicon- Technology Professional Home Micro ment Solutions Financial Ericsson Audio ductor Game & Commu- Solutions Electronics Systems Business Business Holdings Mobile Visual Solutions Business nications Network Network Network Group Group Group Communi- Network Network Group Network Company Company Company cations Company Company Company Information Technology & Communications Network Company Game Business Group IT and network audio products Games Personal Audio Visual Network Company Entertainment Business Group Digital imaging and personal audio products Entertainment businesses, centered on movies and music Professional Solutions Network Company Personal Solutions Business Group Business-to-business (B2B) solutions centered on professional-use products Business-to-consumer (B2C) direct business solutions and services Sony Financial Holdings Group Home Electronics Network Company Leasing, credit, life insurance, non-life insurance and banking services Home electronics devices Sony Ericsson Mobile Communications Micro Systems Network Company Mobile phones, next-generation multimedia