I'm Futoshi Kamiwaki, Senior Managing Executive Officer responsible for ESG Management Department and Head of Business Strategy Department. Thank you for taking time out of your busy schedule to join us today. I'd like to walk you through our ESG management, referring to the presentation material. The slide illustrates the trend in itself and operating income of SEKISUI CHEMICAL Group. Since our foundation in 1947, with plastic molding technology at its core, SEKISUI CHEMICAL, as a leader in Japan's plastics industry, has always dared to challenge new businesses and frontiers in the spirit of 3S Principles, our company credo.
The interlayer film business, which is now our core business, has a long history with its commencement in 1958. At that time, the use of interlayer films for windshields was not a legal requirement. It took us many years to make the business profitable. Nevertheless, we have continued the business with the conviction that this was something necessary for the world.
It is not widely known, but in 1963, we were the first Japanese manufacturing company to go and establish a plant in the United States. Unfortunately, the plant is no longer standing, but I feel that we still embrace the daring DNA of boldly taking on challenges. Page three visualizes our value creation process as a system mix framework, and this information was shared in the Integrated Report this year for the first time. We engage in a variety of businesses and their common core business model, and a competitive strength reside in the two key words shown at the center of this page, process creation and adaptability. We are a chemical company with very little raw material sourced internally. Therefore, our strength is process creation, by which we select and make full use of the most suitable raw materials and add value through advanced processing technology.
Another strength is our ability to identify the needs of our customers and social issues, and to incorporate them into our development ahead of the curve, and to constantly transform our business portfolio. Based on this strength, we have developed our two major business domains, Residential Social Infrastructure Creation and Chemical Solutions. This is our value creation process .
Last year, we formulated our long-term vision for 2030. "Innovation for the Earth" is a statement that we will create peace of mind for the future through a virtuous cycle of the group's sustainable growth and realization of a sustainable society. With ESG management at the core of business management, by 2030 we aim to double our business, achieve sales of JPY 2 trillion with an operating margin of 10% or more, and double our contribution in solving social issues. In our long-term vision, we have defined four business domains indicated by the diagram on the left. We will strive to grow in each business domain and refine our diverse growth engines. We will accelerate the efforts aimed at cultivating and expanding frontier business in the overseas market as well, and plan to achieve half of the JPY 2 trillion in consolidated sales in 2030 with growth from the overseas business.
The plan calls for an investment of more than JPY 2 trillion in R&D, strategic M&A, and other areas by 2030 to achieve significant growth that is not an extension of the existing operations. This is a snapshot of Drive 2022, the Medium-term Management Plan announced last year together with the Long-term Vision. We will accelerate the three drives globally with ESG management at the core. In the first one, the Existing Business Drive, we will promote growth with speed by earning investment returns as quickly as possible and accelerate structural reform to facilitate transformation into augmented earnings capability. I'd like to note that the progress of structural reform has been ahead of the target under the medium-term management plan, given our aim to speed up the process under COVID-19.
In the context of the second drive, the New Business Drive, it is essential to proactively prepare for growth in order to achieve long-term growth. We will accelerate the creation and acquisition of new businesses in new domains. The third is the Business Base Drive, with which we are incorporating ESG management into KPIs as specific initiatives. We have adopted ROIC as a new KPI to strengthen our management ability to sustain business, considering the improvement of capital efficiency as an important management issue, along with the enhancement of profitability. We are pushing forward with these three drives with the key words of fusion and digital transformation.
On the topic of three drives, I'd like to start with business growth and reform. The growth strategy in the upper half of the slide illustrates the businesses that will drive growth in each business domain, and the overarching theme is that we will drive growth with product groups and businesses that contribute to solving social issues. At the same time, we are working to strengthen our earnings structure. The bottom half of the page outlines our structural reform. We continue to work on manufacturing innovation, business structure reform, and business portfolio transformation ahead of schedule.
The second key point is preparations for long-term growth. The slide illustrates key measures taken for each of the four domains. We are not seeking opportunities that are very remote from the existing business. Instead, we have our eyes set on new areas adjacent to our current business domains as opportunities to strengthen our preparatory efforts for. I will elaborate on this point in more details later.
The third drive is strengthening our ESG management base. In addition to net sales, which corresponds to our ability to contribute to social issues, and operating margin, which reflects our ability to generate profits, we have set management ability to sustain business as the third pillar in the current midterm plan. Management ability to sustain business is constituted by efficiency and long-term sustainability. As I mentioned earlier, this is the very reason why we have introduced ROIC as a new KPI. Furthermore, with regards to long-term sustainability, we believe that reducing and controlling risks over the long term, making upfront investments toward non-financial KPIs, and enhancing our management base, among others, will lead to controlling the cost of capital in a broad sense.
We define the difference between ROIC and the financial and non-financial cost as the SEKISUI Sustainable Spread. This concept is applied as an internal indicator with the shared understanding that increasing the Sustainable Spread for each segment will enhance the corporate value of each divisional company.
On page 10, you will find the financial targets under the midterm plan. Targets under the current midterm plan, as well as FY 2022, are shown on the right-hand side of the table, and in the middle are the actual results from FY 2020 and the revised plan for FY 2021. Over the three years, we aim to improve the ROIC by 1 percentage point. Last year was slightly tough due to the impact of COVID-19 and other factors, but we believe that we will be able to beat the ROIC target by achieving the operating income as planned for next fiscal year. Please refer to the bottom half of the page for figures by segment.
From page 11, I would like to offer you more details about our ESG-related initiatives, first by going through this overall snapshot of our ESG management. As an output, we have identified Products to Enhance Sustainability as our target, the aspect of which is the first and foremost priority of our ESG management. Another unique approach to our KPIs is that within the definition of Products to Enhance Sustainability, we have specifically identified products that fall under the Premium Framing for those that can achieve both the delivery of solutions to social issues and profitability. At the same time, we have decided to focus on five non-financial items, referring to the key issues as materiality.
By setting KPIs for each of these non-financial materiality, namely internal control, DX, environment, human resources, fusion, and working toward our targets for FY 2022, we believe that we will be able to lower the cost of capital under the broader definition.
Let's start with the Products to Enhance Sustainability. As a manufacturer, we consider this to be the most important aspect. We define Products to Enhance Sustainability as those that contribute to solving problems, not only for natural environment, but also for the social environment. We have a long history of delivering environment contributing products, having started them in 2006. We have added the perspectives of supply chain and governance to our definition of sustainability products without deviating from our focus on environmental contribution. Products with particularly high growth potential and profitability are designated as products in the Premium Framing. Examples of premium products include Zero Energy Houses in the housing business, FFU for railway sleepers in UIEP, and interlayer film for head-up displays and thermal insulation in HPP.
With a clear definition of these types of products and focusing our management resources to those opportunities, we can realize both the ability to solve social issues and profitability of the business. The key elements in achieving this are the Products to Enhance Sustainability, particularly the products under the Premium Framing. At present, sustainability products account for approximately 60% of our total portfolio, of which half or 30% are the Premium Framing products. Our midterm plan aims to increase this ratio from 60% to about 65% by FY 2022.
Page 13 summarizes how we certify the Products to Enhance Sustainability. It shows an excerpt from the evaluation criteria for which we have asked the advisory board consisting of outside experts to evaluate appropriateness. The advisory board's inputs and reviews are used to certify products that enhance sustainability, so that we can ensure the high standard and transparency of the criteria and not become subjective. Let me give you some specific examples of products that enhance sustainability, focusing on those that fall under the Premium Framing.
First example is the high-performance interlayer films for automobiles in HPP. In addition to safety, which had always been a priority, the functions required have changed considerably over time. This is a product group that has been underpinned by our strength, adaptability. Specifically, sound insulation interlayer film can maintain the conventional sound insulation performance, even with thinner glass, while contributing to the overall weight reduction of the vehicle. Another example is the heat insulation interlayer film. With the shift to EV, there is a growing need to reduce the load on air conditioning systems to achieve longer battery life. Strong demand for interlayer film for HUDs is driven by safety for its ability to allow drivers to continue driving without looking away, and this is growing by more than 15% per annum. We believe that our products can make a broad contribution to safety, security, comfort, and energy conservation.
In the housing business, SMART HEIM with a Net Zero Energy specifications is one of our strengths. This is the home that is self-sufficient and economic, fit for the general shift to carbon-free society as it helps to reduce CO2 emissions at home. The bottom left shows the percentage of Zero Energy Houses, which is currently 85%, is about to reach 90%. There are multiple ranks of zero-energy homes, and majority of our zero-energy homes have achieved the highest ranking, meaning that the actual energy reduction rate is more than 100%. We believe that our zero energy house makes a tremendous contribution to CO2 reduction.
Next, let's move on to some typical examples from UIEP. We have developed synthetic resin sleepers for railroads, which we call FFU. We have also established SPR, or sewage pipe renewal method, which makes trenchless pipe rehabilitation possible. With this method, spiral wound pipelining fully restores deteriorated pipelines without digging. As UIEP has a variety of products that helps to solve social issues, we can contribute to the society in many ways. For example, offering solutions against the natural catastrophes with increasing severity or offering countermeasures to cope with shortage of construction workers on site with lighter products for simplifying the construction process. This is how we'd like to position UIEP in the context of making social contributions. These are some of the examples of products that enhance sustainability.
Now, I'd also like to talk a little about materiality, such as Internal Control and DX. If we have major incidents in the areas of safety, quality, accounting, legal, ethics, and information management, they could pose the most severe damage on our corporate value. Therefore, from an internal control perspective, our main goal is to reduce major incidents in these five domains to zero as much as possible. One of the past incidents, which was reported in the media, was the leakage of technical information on conductive fine particles. As shown on the slide, we have taken measures at the management level to prevent recurrence of such incidents, and we are placing great importance on preventing them from happening again. Detecting such incidents as early as possible is one of the intentions of DX.
In addition, DX is also important as a foundation for improving productivity and supporting structural reforms in the medium to long term. We have identified four domains outlined at bottom right as areas of focus for DX.
Next, let's switch to the topic of environment. To achieve both economy and ecology, in other words, the preservation of the global environment and sustainable business, we have formulated the Long-term Environmental Management Vision 2050. What we did was we defined the ideal state to be achieved in 2050, and by back casting from there, we set the medium-term targets. By 2050, we aim to achieve zero GHG emission from business activities. We will accelerate our efforts by first switching to renewable energy for electricity procurement and augmenting the sales of low carbon products, such as the zero-emission homes. We've set a milestone of converting 100% of our purchased electricity to renewable energy by 2030 and have set aside an ESG investment framework in 2020 to promote this initiative.
One of the KPIs is the carbon efficiency of our business activities, and the improvement in carbon efficiency is shown at the upper right. The data points indicate net sales and EBITDA per GHG emission. With the rising curve, it's fair to say that good progress is made on the improvement. Furthermore, with what we have observed at COP26, we are aware of the need to bring forward the target for FY 2030, and we are currently reviewing this internally.
On page 19 is a case study of the environmental initiatives. We are currently developing a system called SMARTHEIM DENKI, which is a unique approach of switching to renewable energy. There are nearly 200,000 SEKISUI HEIM homes with solar panels installed all over Japan. When the feed-in tariff period is over, there will be a huge surplus of electricity available, which we will purchase in full and use it to power our factories. This is the SMARTHEIM DENKI initiative shown here. This initiative will be one of the pillars as we first focus on switching all of our purchased electricity to renewable energy.
Next is analysis of the TCFD scenario. We endorsed TCFD in 2019, and accordingly, our information disclosure covers the analysis of risks and opportunities based on the following four scenarios. They are two degrees Celsius scenario, the four degrees Celsius scenario involving increased urban concentration, and scenario involving regional dispersion. In all the scenarios, we are moving ahead with the preparation of converting them into opportunities.
What's unique about SEKISUI CHEMICAL is that we have offerings including zero-emission homes, highly resilient infrastructure materials, and energy-saving materials in mobility field, which all help to underpin our ability to respond to various risk cases with the business. We also recognize that we need to upgrade the two-degree scenario to 1.5-degree scenario, and work is underway to update the scenario. I'd like to share our initiative on biorefinery as one of our environmental case studies. In the biorefinery, combustible waste is gasified without the need for waste separation, and using the microbes, the gas is converted into ethanol, the raw material for plastics.
Currently, construction of the verification plant is underway in Kuji City, Iwate, with a 1/10 scale, and it is slated for completion next spring. We are planning to start the 1/10 scale demo operation with actual waste from next fiscal year and go through a process of establishing the technology and verifying the cost and quality. We will be working with the municipalities and relevant ministries and look for partnering companies who will consume the ethanol. The target date for commercialization is 2025.
Another initiative that I'd like to share is the film-type perovskite photovoltaic battery. As we shift to a carbon-free society, this product should play a central role as a next-generation solar battery. It is a photovoltaic cell that uses semiconductors with a perovskite crystal structure as a power-generating material and can be manufactured by the roll-to-roll method, which is similar to a printing process. The cells are lightweight, flexible, and have relatively high durability, and these characteristics have been achieved by applying our sealing material technology and film formation technology, which we have cultivated in the HPP business.
Our challenge today is elevating the power generation efficiency to the next level. We have applied for NEDO's Green Innovation Fund, and we would like to make this a theme that can be jointly addressed by the public and the private sector. We are also working on this project with the aim of commercialization by 2025.
Another KPI is fusion. We will accelerate innovation by integrating our 28 technology platforms with various internal and external stakeholders and companies. A typical example of this is town and community development. In this project, SEKISUI HEIM homes with Zero Energy Home specification are built with structure to tolerate torrential rain source system for storing drinking water in case of water supply cut embedded under the ground. The concept is to incorporate resilience and peace of mind in our town and community development, a style that's very unique to SEKISUI CHEMICAL. As the slide illustrates, such development give birth to communities that are created by integrating many of the products from SEKISUI CHEMICAL Group. They are a good showcase of fusion that's unique to us, and we believe increasing the number of such unique fusion is an important agenda for ESG management.
Lastly, a few words on corporate governance. Until August, we had three Outside Directors, including a female director, but one of them left the board due to job transfer to the government's digital agency, so we now have two Outside Directors out of the total of nine. One criteria in the Corporate Governance Code is to have at least 1/3 Of the board to be constituted by Outside Directors. We are currently working to have at least 1/3 of our board members, including women, to be constituted by Outside Directors by the next general meeting of shareholders.
Our Corporate Governance System is indicated on the right. The core of our governance system is a Sustainability Committee circled in red, which reports directly to the President. One executive is appointed per materiality, and the committee discusses the materiality and reports back to the Board of Directors for deliberation. This is how the committee functions as the highest decision-making body for ESG management.
This will be the last slide from me, the topic on the board's compensation. The compensation is structured to be 60% basic remuneration, 24% bonus incentive, and 16% stock-based, so 40% of the total remuneration is linked to performance. The compensation is designed to be linked not just to the financial performance, but also to the performance of Products to Enhance Sustainability and various non-financial KPIs that I have explained so far. This format is not just specific to Directors, but similar pay structure also applies to Executive Officers and managers with some difference in the ratio of different types of compensation. Basically, ESG-related KPIs are also linked to their performance pay.
Let me also touch upon the topic of cross-shareholdings. We have been actively selling our strategic stock holdings this fiscal year, and we will continue to do so in the future to steadily reduce our holdings. That will conclude my part. Now I'd like to hand over to Mr. Murakami, who will walk you through our initiatives on human resources and human rights.
I'm Kazuya Murakami, Executive Officer and Head of Human Resources Department. My presentation will cover the human resources and human rights topics. The total number of employees on a consolidated basis was 26,577 as of the end of the previous fiscal year, and the breakdown by company and by area is shown on the slide. The bottom left of the page illustrates what we want to achieve in talent management. Our vision for human resources management is to be a dynamic company where everyone is eager to take on new challenges. This is linked to our long-term vision, and various measures have been implemented to achieve our goal.
Main initiatives are outlined by the table on the right, and I'd also like to talk about our KPIs. In the upper left corner is the vision management and KPIs. The KPIs we are examining here is the degree of challenging behavior expression. Our top management is leading the vision caravan to disseminate the long-term vision throughout the organization, not in a top-down manner, but with empathy. This way, management speaks directly to employees of various ranks. Within each organization, the ideal state is structured as the action goal to be realized. In other words, we want to increase the number of employees that have responded, can feel empathy or in the planning stage to move to the next level, taking actions illustrated by the bar graph.
During the course of the current midterm plan by March 2023, we would like to increase the ratio of employees taking actions to 30%. The bottom left shows the status of the intragroup job posting. We believe that the open job posting system, which allows employees to raise their hands and be transferred to the department of their choice, is working well in practice. Although only 20-30 employees are using this posting system each year, a cumulative total of 233 employees have been transferred to the departments of their choice.
Next, on the upper right is the status of female managers. The percentage of women in management positions is still limited, and their goal is to raise the percentage of women newly appointed to management positions to 30%, which is the percentage of female among the new graduate hiring. For female employees who are potential candidates for management positions as well as for their supervisors, we are working on career development and human resource development through the Career Development Program. Below, you will find the indicators for human resources diversity and well-being.
While the rate of male employees taking paternity leave is gradually increasing, there is still room for improvement. With regards to health management, we were certified as a Health & Productivity Stock Selection, which we had longed for for a long time, and we have also been able to steadily increase the number of companies deemed as White 500.
Next, I would like to provide you with an overview of our human rights initiatives. Since the establishment of a Human Rights Policy in FY 2019, we have been conducting comprehensive activities based on the UN Guiding Principles and in compliance with global standards. Going forward, we plan to integrate the policy into our business and expand the scope of a grievance mechanism to include our supply chain. As an example of our efforts, the bottom half of the page highlights our case study on how we are conducting human rights impact assessment. The potential risks have been identified and assessed by a third party. At present, our view is that there are no major risks, but we plan to expand the scope of this assessment in the future.
On page 30, you can see the external evaluations we have received on our ESG management. In order to live up to these evaluations, we will continue to promote effective ESG management measures that meet the expectations of our stakeholders. I look forward to your continued support. This concludes my presentation. Thank you very much for your attention.