Ladies and gentlemen, thank you for waiting. It is time to begin the Sony ESG Technology Briefing for fiscal year 2020. I am Kato from Corporate Communications. This briefing is being presented for the media participants, analysts, and institutional investors who have been informed in advance. This briefing is being streamed via internet and can be seen on our investor relations site. Today, our Chairman, President and CEO, Yoshida, will first talk about Sony's contribution to society and the environment through the business operations from a long-term perspective. Following that will be Executive Deputy President Katsumoto talking about initiatives and approaches to technology, which is a source of value creation. We have Senior Executive Vice President Kambe, who will present our activities in terms of ESG, which forms the foundation of the value creation. We'll have a Q&A. The whole program is expected to take 90 minutes.
First, we have Mr. Yoshida with his message, but first, please watch this video.
You are living here, or here, or maybe here. At Sony, we are focused on the potential that resides here. This is where we live, learn, connect, and thrive. Since Sony was founded, we've approached business in a way that is socially responsible. We celebrate diversity of thought, ideas, and people. We harness this diversity to drive innovation in entertainment and technology to ensure our long-term sustainability. Our purpose, to fill the world with emotion through the power of creativity and technology, is rooted in making contributions to people and to society. We pursue our purpose by getting closer to people. Today, we explore more ways to move people emotionally. We also see the possibilities in connecting people to people. We champion technologies that allow creators to connect with their audiences, and fans to connect with each other.
As we look to the future, our long-term view is focused on supporting people. We are evolving Sony technology to enable advancements in healthcare, mobility, and financial assurance. Our imaging and sensing technologies enable us to see even those things invisible to the human eye. When integrated with AI, we are able to capture images and data and analyze it in real-time to deepen insight. More precise real-time imaging shows potential to enhance healthcare in the diagnostic and surgical settings. Advanced imaging and sensing technologies have potential to improve mobility, offering greater safety for drivers, passengers, and pedestrians. We also support people with financial services that provide assurance. We embrace opportunities to support wellbeing, security, and quality of life. As we evolve our technology to meet the demands of the future, we also apply our creativity to pressing global challenges.
By cultivating awareness and dedicating talent and expertise, we are addressing important environmental issues. Our work in education envisions a new infrastructure for connected classrooms, greater global access, and enriched learning for the next generation of leaders and creators. These initiatives demonstrate our commitment to more equitable opportunities for all learners. To encourage a more just society, we have committed resources to supporting equality around the world. We are also contributing to the medical frontline, education, and the creative community during this challenging era. It is our desire to make the world a better place. We are committed to people wherever they are, whether here or here or here. When you are inspired to innovate, create, and make a difference, you are here.
Hello, everyone. I am Kenichiro Yoshida. We recently announced our joint development of a satellite incorporating our camera system with the University of Tokyo and JAXA. At Sony, we believe that conveying images of the Earth's natural beauty to people around the world reminds us that our planet Earth exists in space. Images of space can also contribute to cultivating a sense of emotion regarding how much we must cherish the Earth, and we want to share this sense of awareness with the greater community. We are also collaborating with JAXA on the development of a bidirectional laser communication technology using the International Space Station. In this collaboration, we have succeeded in transferring high-definition images between space and the Earth. As introduced in the video earlier, Sony's purpose is to fill the world with emotion through the power of creativity and technology. This defines the significance of our existence.
Based on this purpose, we strive to contribute to society and the global environment in which we all exist through the businesses we operate that are centered around people and from a long-term perspective. Looking further ahead, we realize that space exists beyond the confines of the Earth. The young girl who appears in our purpose statement is also looking to space. I will now touch upon our value creation activities centered around society and the Earth. First, I would like to introduce our environmental initiatives, which draw on the strength of our diversity. Sony Computer Science Laboratories is conducting research on Synecoculture, which is an initiative that aims to redress the loss of biodiversity and soil degradation caused by conventional monoculture farming practices. Synecoculture aims to allow the natural strength of ecosystems to flourish through the power of wildlife by densely populating an area with varied plant life.
By introducing Synecoculture, we have succeeded in cultivating desertified land that was beyond natural repair into rich vegetation within the span of one year. Diversity, which is the keyword for Synecoculture, is also one of the values that we cherish at Sony as we strive to create sustainable social value. Earlier, I stated that people are the core of all of Sony's businesses. Our 110,000 employees around the world are the people who drive our diverse businesses that support the creation of content to move people's hearts, and they also develop Reality, Real-time, and Remote technologies that connect people to people, and they support people through initiatives related to safety, health, and assurance. We will continue to contribute to society and the environment in multifaceted ways through our diverse talent and business portfolio. Next, let me focus on how Sony is creating social value through its core sensing technology.
At this year's CES in January, we showcased our initiatives in the area of mobility that utilizes Sony's imaging and sensing technologies. The proliferation of electric cars utilizing sensing technologies will enhance passenger and vehicle safety and is expected to reduce CO2 emissions while functioning as part of electric smart grid infrastructure. Another example of our advanced sensing technology is the world's first Intelligent Vision Sensors incorporating AI processing functionality that we announced in May this year. These sensors can be used to analyze customer behavior in a store, providing data that can be applied for optimal allocation of products. They can also contribute to improving the efficiency in manufacturing environments by analyzing the movement of objects and people.
By deploying a trained AI model within the edge device itself rather than the cloud, we believe this technology can deliver ultra-fast processing speeds while also contributing to reduced data transmission and energy consumption. REON POCKET, which went on sale in Japan in July, is an example of decentralized energy conservation targeting the individual as opposed to heating and cooling systems for entire buildings or spaces. REON POCKET is a product that was developed by a team of Sony employees with a strong concern for the environment and features Sony's thermal control technologies as well as our sensor-based motion detection algorithm. The common keyword to all three of these examples of our sensing technologies is decentralization. At Sony, we will continue to leverage decentralized sensing in order to help alleviate the impact on the environment.
Our purpose, which I mentioned earlier, is the foundation for all of the Sony Group's activities. Furthermore, the contributions we are making to society and the environment through diversity and decentralized sensing that I introduced today are just a few of the initiatives in which our diverse employees are engaged. Extending our scope beyond the Earth to space, we will continue to contribute to realizing a sustainable society and environment from a long-term perspective. Thank you.
That was Yoshida, our CEO and Chairman. Now, the Executive Deputy President, Toru Katsumoto, will present.
Hello, everyone. I am Toru Katsumoto. Last year, we held Technology Day for the first time to introduce Sony's technology. Today, I will give an update on Technology Day, as well as speaking on the ways that technology is contributing to the Sony Group's diverse portfolio of businesses. Technology is a key element of both Sony's purpose and its identity as a creative entertainment company with a solid foundation of technology. In addition, technology is one of Sony's two most important material topics that support long-term value creation, along with employees. While Sony operates a diverse portfolio of businesses, people are at the center of each and every business as relayed in Sony's corporate direction of getting closer to people.
Based on this management direction, Sony is working to develop technology that will help us get closer to what motivates people. That is, what motivates our creators and users. Following the digitalization of content, our technologies accumulated by the electronics and image sensor businesses have been found to be useful across all business areas, including games, pictures, music, and financial services. For example, the high-definition video technology realized through TV and camera development is also utilized in game and movie content production. The Sony Group's diverse business portfolio has made it possible to connect engineers with a site of each business, accelerate the development and evolution of technology, and generate true synergies in each business domain. I believe that this is a huge strength of the Sony Group that is not shared by any other company.
Going forward, we plan to further enhance our topics for R&D in the areas of entertainment and finance. To that end, for example, in the area of entertainment, we have established R&D centers in places such as Culver City in the U.S., where Sony Pictures Entertainment is headquartered, in order to accelerate the collaboration between creators and engineers on the front lines of production. Approximately 10% of Sony's annual R&D expenses of JPY 500 billion is used for corporate R&D. This ratio is consistently maintained each year from the perspective of financial discipline, and the topics for R&D are managed according to priority, including new important topics. In addition, we have allocated 5% or less of corporate R&D expenses to long-term basic research topics, so that we can respond flexibly to changes in trends in the medium to long term.
From the perspective of employees, we are also promoting the acceleration of measures with a strong emphasis on diversity and globalization. Since last year, we have engaged in dynamic rotation of key positions between our offices in Japan and overseas. Furthermore, we established a new R&D center in India this July in order to attract talented people. In China, we opened a new facility in Shenzhen in addition to our preexisting facility in Beijing. We have also established English as the common language at this R&D center. Therefore, English will be used as the standard language for all important meetings and minutes to ensure a system that allows immediate sharing with all team members globally. Through these R&D activities, we will aim to contribute to society and the global environment, in addition to contributing to Sony's diverse businesses that I mentioned earlier.
Due to the recent spread of COVID-19 around the world, there is growing awareness regarding the safety and security of people and the sustainability of the environment. People can no longer gather in groups, and there are limitations on producing high-quality film and music content, as well as enjoying live performances and sporting events. Technology will be used as a method to solve these issues. This effort will be centered on 3R technologies, which refers to the reality and real-time technologies that Sony has focused on until now, with the added element of remote. Reality technology, which delivers the ultimate in sound and video, has been an area of expertise for Sony until today. Sound and video has been an area of expertise for Sony until today.
Additionally, we are creating new value by realizing in real time the entire process of understanding an input and then delivering it to the output side as information. I believe there will be a huge amount of value provided by realizing reality and real-time technologies remotely. I will introduce real examples of 3R technologies. This very presentation, in fact, is being filmed using a Virtual Production Lab that we just launched this August. Through capturing and recording the image and 3D data of film studio sets as well as real locations, a composite image is faithfully reproduced on the Crystal LED display in the background. When combined with live actors as well as physical props, it is possible to create images and video with reality that are indistinguishable from footage filmed in real sets or on location.
In the field of sound, we have developed a technology called 360 Virtual Mixing Environment. It allows music engineers to recreate a studio sound mixing environment at home by utilizing virtual sound technology for headphones, as well as spatial sound technology such as environment and individual optimization. With this technology, it is now possible to remotely create intended sound environments, such as that used in movie theaters. This technology was used for sound mixing for the feature film Ghostbusters: Afterlife, which is scheduled to be released next year and received high praise from the sound engineer who worked with it. Using volumetric capture technology that was shown off last year during Technology Day, we held Ikimonogakari Volumetric LIVE as a live music streaming event this August. One significant evolution for this event was that everything was performed in real time, including modeling, rendering, and streaming.
Having accomplished this feat of connecting everything in real time, we are one step closer to our larger goal of transmitting space itself. In the future, we aim to make it possible to see and speak to people in remote areas while shifting perspectives in real time, and to provide a video experience that allows users to share a common space and exchange ideas remotely. AI is a technology that can be applied and contribute to all of the Sony Group's business areas, including sensing, financial services, and entertainment. Rather than competing in the area of developing new AI algorithms themselves, Sony's R&D efforts regarding AI are primarily focused on determining which AI algorithms are the best and easiest to use, depending on each area and the limitations of the time, and figuring out applications for Sony's diverse businesses.
Sony has started early-stage development on autonomous intelligence and deep learning, which are the mechanisms by which AI systems learn and develop autonomously. These new technologies have started to attract attention as next-generation AI technology. As Mr. Yoshida explained at the start of this briefing, in May, we announced an Intelligent Vision Sensor equipped with an AI processing function. By enabling high-speed edge AI processing and extracting only the necessary data, we can achieve results such as low power consumption, reduced communication costs, and shortened delay time of data transfer. In the same month, we also announced a collaboration with Microsoft on smart camera solutions and aim to provide new customer value by developing an optimal system that combines edge AI processing and cloud platforms. The Sony Group is also engaged in technology development to address a number of social issues.
We have developed the fluorescent KIRAVIA Dyes, a material for fluorescent reagents used to analyze the characteristics of tissues and cells, and are currently providing licenses to other suppliers and commercializing reagents. The reagents using KIRAVIA Dyes are expected to be used in research areas such as regenerative medicine and immunology, utilizing flow cytometry as well as the broader life sciences field. Since entering the flow cytometry business in 2010, we have commercialized various flow cytometers by applying Blu-ray disc technology. Recently, the Vanderbilt University Medical Center in the United States used Sony's SH800 cell sorter to sort cells that form antibodies against the novel coronavirus and can be used as vaccines and antiviral treatments. Going forward, we will continue to contribute to society by leveraging Sony's technologies in the life sciences field, such as through accelerating research in advanced medicine.
Mr. Yoshida spoke of creating space entertainment. This is another example of a contribution by Sony's technology, specifically as it utilizes the technologies of imaging, sensing, and communication. As another example, we jointly developed SOLISS, a compact optical communication device that enables long-distance optical communication with JAXA. SOLISS, which uses Sony's optical disc technology, underwent testing in orbit at the International Space Station and succeeded in two-way optical communication with optical ground stations, as well as in transmitting high-quality images. In order to realize a sustainable society, it is necessary to prevent inconvenient situations and to reduce inefficiency. To that end, it will be necessary to conduct sensing on various subjects on the Earth and transmit necessary information back to society at low cost, at the right time, through AI processing.
By using such technology as Sony's high-function, low-energy system-on-chip, AI tools, and low-power wide-area networks, we will work to move from the coexistence of people and people to the coexistence of people and the environment that surrounds them. Today, I spoke about technology's contribution to the Sony Group's diverse portfolio of business. The details of the specific projects that I introduced today, as well as other initiatives involving technology, are published on Sony's technology site under the theme of Sony's Technology 2020. Please look forward to the further evolution of Sony as a creative entertainment company with a solid foundation in technology. Thank you for your attention.
That was Executive Deputy President Toru Katsumoto. Going on, we will hear from Senior Executive Vice President Shiro Kambe.
Hello, everyone. I am Shiro Kambe. At the start of this briefing, Yoshida-san talked about Sony's purpose, ways of thinking about people, planet, and space based in that purpose, and finally, examples of initiatives to create value through our business at Sony. Katsumoto-san introduced the technologies that will support this value creation. I will be explaining Sony's ESG initiatives, particularly those related to planet and environment, and people and society. First is the environment. The foundation of Sony's environmental measures is formed by the Road to Zero, a long-term environmental plan for the Sony Group to achieve a zero environmental footprint throughout the life cycle of its products and business activities by the year 2050.
For the Road to Zero, which was established in 2010, we have back-casted from the year 2050 and set specific medium-term targets to be accomplished every five years. Through achieving those goals, we aim to steadily reduce our environmental impact and accomplish the zero target by 2050. Today, I will be speaking about the progress of Green Management 2020, one of our current medium-term targets, as well as Green Management 2025, the medium-term target for the next five years. I will also be explaining our contribution to the environment through our technology and businesses, which will be particularly focused on from this year. While Road to Zero is an initiative to reduce the environmental impact of Sony's businesses, it will be a challenge to see how technology and businesses can have a positive effect on maintaining and improving the global environment.
The following are the main results as of fiscal year end 2019 of the Green Management 2020, which is set to be accomplished by fiscal year end 2020. Compared to our target of a 30% reduction in energy consumption per product, we have accomplished a reduction of approximately 50%. Compared to our target of a 5% reduction in greenhouse gas emissions at business sites, emissions have been reduced by 12%. We are also actively introducing renewable energy, such as using solar panels to generate electricity in-house at eight business sites in Japan and overseas. In a first for Japan, the power generated by solar panels is self-consigned and transferred between Sony Group companies. However, we are unlikely to achieve our targeted reduction of virgin plastic use in products and our targeted reduction of water consumption at business sites.
Regarding the virgin plastic use, it has been increasing in recent years due to factors such as stricter regulations on the import and export of used plastic negatively impacting the procurement of recycled plastics, and an increase in the size of TVs. Taking these as issues, we will work on them as focus items in the next medium-term plan. Regarding water usage reduction, we will implement measures focusing on business sites with high usage and areas with high risk, considering that water is an unevenly distributed resource. Regarding disclosure in accordance with the TCFD recommendations, we conducted a scenario analysis for the Imaging & Sensing Solutions segment this year. Specific details are published on our investor relations site, so please view them there. Next, I will introduce an overview of the next medium-term goal, Green Management 2025.
In GM 2025, we focused on the four points as shown on the slide, based on the issues we identified in GM 2020. The main goals are as you can see here. While maintaining the basic structure of setting targets for each stage of the product life cycle based on these four perspectives, such as climate change, resources, chemical substances, and biodiversity, we reevaluated some items and incorporated new points, such as a response to ocean plastic pollution and further introduction of renewable energy. We will also continue to raise awareness about sustainability and the environment through Sony Group's entertainment business. The climate change targets addressed in GM 2020 were approved as Science Based Targets, a first for a Japanese company, and the long-term climate change targets set during the process of the GM 2025 formulation have been reapproved as Science Based Targets.
Next, I will talk about our initiatives that contribute to the improvement of environmental issues through technologies and business. Sony has been managing the corporate venture capital Sony Innovation Fund for the last four years with the aim of supporting open innovation in the technology areas of AI, IoT, and communication. This time, we have established the Sony Innovation Fund: Environment as a measure to cultivate new technology for the environment. This new fund will focus on supporting venture companies engaged in improving environmental issues such as climate change, resources, chemical substances, and biodiversity. From a long-term view, Sony aims to achieve both a contribution to the global environment as well as a return on investment. The fund will start at an amount of JPY 1 billion. It is intended primarily for investment in startups in the seed to early stage, but we are considering expanding the scale in the future.
We are considering investing in the field of Synecoculture and human augmentation of ecosystems, which have been developed primarily by Sony Computer Science Laboratories as a potential candidate for the first round of funding for the Sony Innovation Fund: Environment. Moving forward, we will continue to search both internally and externally for technologies that help solve environmental issues, as well as the ventures that hold those technologies, invest funds, and support commercialization. In addition to this fund, we will continue to promote initiatives that contribute to the environment through Sony's unique technology and businesses, such as the VISION-S and Intelligent Vision sensors introduced earlier by Yoshida-san and Katsumoto-san from a long-term perspective. Next, I will introduce some of our initiatives for people and society. COVID-19 is heavily impacting Sony Group employees and their families, as well as group businesses on a global scale.
Despite these challenging conditions, many employees have made a great deal of effort and are working with a sense of mission to continue fulfilling our purpose of delivering Kando to the world. We are also actively expanding activities in support of people who have been severely impacted by COVID-19 in the areas of medical, education, and the creative community. The core of these support efforts is the establishment of the $100 million Sony Global Relief Fund for COVID-19 on April 2nd, 2020. As you can see on the slide, we are conducting several measures in the medical field, including donating funds, manufacturing and donating medical use face shields, and developing various technologies to support medical professionals and patients through our collaboration with M3, Inc. In the field of education, we are delivering online learning opportunities to children around the world.
Regarding the entertainment community, which shares the greatest connection to Sony's businesses, we are offering our support to the artists, creators, and other members of this industry who have been negatively impacted by things such as the cancellation of live events and a pause in content creation activities. We will continue to leverage our assets at Sony and engage in collaborative projects with our many partners to carry out a number of support activities going forward. I will go over our initiatives regarding human rights and diversity. One of Sony's core principles is that all human beings should be treated with dignity and respect. At Sony, we believe in building a culture that makes business and employee diversity a strength.
In the midst of the COVID-19 pandemic, the movement for anti-racism and social justice that spread all over the world after the tragic incident in the U.S. in May of this year was an extremely significant event for Sony, which holds diversity as a common value across the whole group. Immediately following the start of this movement, Yoshida-san and top management from group businesses such as Sony Music Group and Sony Pictures Entertainment disseminated messages of support to Sony employees and to the larger community, and town hall meetings and other platforms for employee dialogue to consider issues of human rights and social justice were held. On June 5th, we established the $100 million Global Social Justice Fund through Sony Music in U.S. and asserted our commitment to supporting social justice and the protection of human rights in the long term.
To- date, this fund has been used for various purposes, including donations to organizations that are working to protect human rights and fight against racism, activities to raise awareness within Sony and related business communities, and sponsoring the establishment of the Black Information Network, BIN, a radio program targeting the African American community. There have been more tragic events in the United States recently, and we strongly feel the importance of continuing these activities in the long term. Regarding human rights, we are also addressing human rights and working environment issues along the global supply chain for the electronics business. Sony has been a founding member of the Responsible Business Alliance since 2004 and now serves on the board.
We have established the Sony Supply Chain Code of Conduct, which applies the industry's best practice RBA Code of Conduct and have a system in place to ensure compliance with the code at our manufacturing sites, as well as our suppliers. However, Sony understands there are still challenges in grasping the exact situation and conditions of second and third tier suppliers that do not have a direct business relationship with Sony, and we are working further with RBA and others to address these issues. Next, I will talk about governance. This year marks the 50th anniversary of Sony becoming the first Japanese company listed by the New York Stock Exchange. In that time, through repeated trial and error, we have worked to strengthen global management and corporate governance across the group. Due to time constraints, today, I would like to introduce only the evolution of diversity in the board of directors.
These are the current directors. The number of directors has decreased by one since last year from 13 to 12 members. Of the 12 directors, 10 are outside and non-executive directors and four of the directors are women and four are non-Japanese nationals. As you can see, we have achieved further diversity of our board of directors. Additionally, from this year onwards, we have been disclosing a so-called skill matrix that shows the experience and expertise for each director. As you can see, Sony's board of directors is made up of diverse members based on their experience, expertise, gender, and nationality. In the process of selecting director candidates, in addition to securing the necessary expertise in areas such as accounting and risk management, we place particular importance in experience managing global enterprises.
Given Sony board's role as a supervisory authority for Sony, which develops a diverse portfolio of businesses globally. Finally, I would like to present the evaluations from external evaluating organizations regarding Sony's ESG efforts. While we have received overall positive evaluations and ratings, I believe that continued efforts will be necessary. Today, I introduced some of our initiatives related to technology and ESG, which form the foundation for Sony's value creation from a long term perspective. There are many topics that I was not able to cover in this time. Please refer to these reports for more details. I hope to continue strengthening our dialogue with our stakeholders, including through feedback from today's briefing. Thank you very much for your kind attention.
That was Mr. Kambe, the Senior Executive Vice President. This concludes the series of presentations. Now we will open the Q&A session at 4:43 P.M. Those of you who have already registered are from the media, investors and analysts who have signed up in advance. Please call in to the number that has been informed to you already. If you have not signed up in advance, you can still continue to listen in to the Q&A session over the web. Please wait momentarily until we resume. Thank you. Ladies and gentlemen, we will now start the Q&A session. Today, in the first 20 minutes, we will invite questions from the members of the media, and then in the last 20 minutes, we will respond to questions from sell side analysts. The respondents are the Executive Deputy President in charge of R&D and Medical Business, Toru Katsumoto.
Senior Executive Vice President responsible for Legal, Compliance, Corporate Communications, Sustainability, External Relations, Quality, Information Security, and Privacy, Shiro Kambe. The General Manager of Environment Group, Sustainability Promotion Department, Keiko Shiga. We will first respond to questions from the media. If you have a question, please press asterisk and then number one on your phone. When it is your turn to ask your question, we will call out your name. Please identify your affiliation and name before you pose your question. Please limit your questions to two questions per person. If you'd like to cancel your request for question, please press asterisk followed by number two. If there is a connection problem, and if the audio is disrupted, then due to time constraints, we will move on to the next question. Thank you for your kind cooperation in advance.
Now we would like to start the Q&A session. If you have a question, please press asterisk and then number one. The first question is from Nikkei ESG, Baba-san, please.
Thank you very much. Am I coming through?
Yes, we can hear you.
Thank you. Well, firstly I have two questions. Firstly, Mr. Kambe, this is about ESG engagement. 2018, since Mr. Yoshida assumed his office, value creation of the long term has been your business policy. Also, you enhanced the consideration for the stakeholders with the social issues. Now, long-term perspective and consideration for the broad range of stakeholders, I guess you're referring to your stakeholders, your large top stakeholders may not be in favor of these ideas. The value creation through long-term perspective, how are you explaining this to the stakeholders? How do you approach the investors? How do you assess what you have done in the last two years, and also the response of the investors? This next one can then be answered by either Mr. Katsumoto or Mr. Kambe, and this is about Sony Computer Science Laboratories, this idea of Synecoculture.
It uses AI to make use of the ecosystem to support farming and also forestry. When can this process be commercialized? Do you have any target for this business? Together with this, the large ITs in the United States are also embarking on forestation, for instance, with the use of AI. Also, do you want to link this to any initiatives for climate change and also greenhouse gases?
Thank you for those questions. I will answer the first question. The second point will be addressed by Shiga-san. If need be, I will also make some additional comments. As you say, you are right, it was in 2018 that our CEO, Yoshida, assumed his office as CEO. Since then, he has been focusing on ESG and also putting emphasis to communication with the stakeholders. This briefing also, this is the third time, the third year, that we're holding this briefing. During this time, what we have been doing is to increase the number of these opportunities to present ourselves so that we can reach a lot of stakeholders. As you say, investors have different positions and different stakes. Therefore, we try to explain what we are doing very carefully as possible and get feedback from them.
Reflect that to our ESG activities going forward. We attach importance to this. More concretely, this briefing is one example. We also issue integrated report publication. We also have IR activities to speak with investors, particularly those investors who are keen about ESG activities. We try to enhance our engagement with them. On top of that, our approach to E and also to S. Capital market is also raising interest or voice about this, particularly our initiative for long-term management and long-term value creation. The fact that we are working on E and S does contribute to value creation long term. I think there's increasing number of investors understanding that point. Also, speaking about stakeholders, we have customers, we have employees, we have business partners.
They're interested in Sony's approach to E&S very keenly. The feedback that we receive from them are actually encouragement for us to do more. The second point on Synecoculture will be addressed by Shiga. Shiga speaking. Yes, to respond to the question concerning Synecoculture, when it will be commercialized, the size, and the monetary target, I think were the questions. I would have to refrain from answering those specific questions. As far as the Synecoculture is concerned, it's CSL that's been working to try and find a new way of farming since 2010 and experiments and have been collecting since. It's not just because we are trying to follow other large companies doing. We have been working on this initiative ourselves for a long time. Also to address climate change, to increase vegetation.
By increased vegetation, we can eliminate or alleviate climate change through absorption in the forest. The purpose is to maintain the biodiversity, that's a big thing. Also sustainable farming can be well established on the strength of Synecoculture. Thank you.
Going to the next question. Next question. Weekly Toyo Keizai, Takahashi-san, please.
Thank you. Do you hear me? Yes, we hear you. Go ahead. I have two questions I'd like to ask some specifics. With regards to diversity, Sony has a very diverse portfolio, and if it's Pictures, for example, the percentage of women or percentage of African American persons might be clear. There may be sections where there may not be so many women being hired. Have you identified such issues? What is your understanding of that? The other question is with regards to supply chain, the second, third tier suppliers. There may be some issues that perhaps you may be aware that there are issues, but not be very clear on them. Those are my questions.
That is a question on diversity and supply chain management. The first question, Kambe will answer the question.
With regards to the diversity of engineers, Deputy Vice President Katsumoto will answer. Especially with regards to the hiring of women in Sony Group, depending on the business and in the various countries, we have targets so that diversity can evolve, especially with regards to gender diversity. Now, entertainment businesses, most of them are in the U.S., Sony Music, Sony Pictures, or Sony Interactive Entertainment. There, the women in management, the percentage there is quite high. On the other hand, if there are to be issues, it would be in electronics, for example, diversity in Japan. Again, we have set targets, and we are promoting efforts, and compared to a few years ago, I think that we have made much progress. However, still, we have issues remaining, and towards resolving those issues, we are working hard.
Katsumoto speaking.
Especially with regards to engineers, diversity is very important. When making challenges on various technologies, we need ideas with diversity so that using and hiring women is very important. In the case of corporate R&D, within the leadership team, we have four global employees and two women. There are various diverse views which are brought forward, and I think that would broaden the base of our engineers. Going forward, we are going to promote the hiring of talented women. But if there is to be an issue, the engineering students all over the world, there are more male engineering students than female engineering students. To overcome that, recently, in the sciences, that is mathematics and chemistry, or there are excellent female students in science colleges in Japan.
Now, with regards to the second question, supply chain, I, Kambe, will like to answer.
In our company, we have the Sony Group Code of Conduct, there, all kinds of types of forced labor or child labor are to be prohibited. That is the basic policy of the group. Based on that policy, looking at the best practice in the industry, we refer to those standards. For the supply chain as a whole or for suppliers, we set the code of conduct. For those suppliers that have transactions with Sony, we ask for compliance. Well, the primary suppliers where we have direct relationship, for those suppliers, we can have a grasp of what is going on to quite an extent. Over the past few years, we have done the assessments where we found some issues, there have been remedies. Also our staff visit the supplier sites and conduct audits. That also takes place.
Where we don't have direct transactions, the second or third tier, because electronics is very broad, it could be that you go down to the fourth or fifth layer, and in that case, it is not easy to know what is actually going on. It's a challenge. For those suppliers too, it won't just be efforts on our side. We have a participation in the Responsible Business Alliance. In many countries of the world, the famous manufacturers, it could be in electronics or it could also be in IT, it is a organization with the membership of those companies. Together, we try to protect human rights in the supply chain or to respect human rights in the supply chain, and we are continuing those efforts. Probably, over the long term, we have to continue to make efforts.
I believe human rights diversity is what we emphasize at Sony. We are going to continue to make our utmost efforts. Thank you very much.
I'd like to now invite the next question from Asahi newspaper. Suzuki-san, please.
Thank you. Suzuki from Asahi newspaper. I hope you can hear me.
Yes, we can.
Thank you. First question, the reducing the amount of plastics used in your products. If you have newly designed compact products, you are going to reduce the use of plastic. What is the type of product, or do you have any specific data? How small would these products be? Can you be specific? What are the other alternative packaging material that you are planning to use instead of plastic?
It's the packaging material that they're going to reduce in terms of plastic. This is in Green Management 2025. We want to reduce the amount of plastics used in packaging materials. I would like to invite Mr. Shiga to respond.
Thank you. I'm Shiga. I'd like to respond. For the newly designed compact products, what are we talking about? That's the question. I cannot give any comments about the size in specific numbers, but there are some relative small size products, electronics products. That's what we have in mind. As for the alternative packaging material, we are considering various materials. For example, some paper-based materials instead of plastic is what we are considering. That is all.
For audio products are basically what we are talking about.
Yes.
Thank you. Let's move on to the next question. From Bloomberg, we have Furukawa-san. Furukawa-san, please.
Thank you. My name is Furukawa, Bloomberg. Can you hear me?
Yes.
About the environment, first of all, about the CSL, this new Synecoculture, there will be an initiative that we're seeing. Beyond that, what are you going to do, and what will be your plan about the investment to make in these areas?
Thank you for those questions. Sony Innovation Fund: Environment was the subject of your question. I will answer that question. As I explained briefly earlier in my presentation, the first project is this Synecoculture done by Sony Computer Science Laboratories.
Mainly. In terms of timing of this, from the end of this year to next year, early, we would like to be able to launch this project. Initially, as far as the size is concerned, this fund is for JPY 1 billion. Initially, that would be a very large size fund, but the initial target is to focus on seed and early-stage entities, ventures with the technology, expected to make contribution to the environment. We'd like to make sure that we can solid track record in those areas. In terms of investment terms, it's going to be between three and five years, and multiple investments will be completed during this term using this JPY 1 billion fund. At the same time, while making solid contributions to global environment, because this is a corporate venture capital, we have to think about the return on the investment.
Far as that is concerned, we're looking at the time span of 10 years, in 10 years to get a relative acceptable level of return on investment. That is what we are contemplating at this point in time.
Due to time constraints, the next question will be the final question. From Nikkei, Yamada-san, please.
I wonder if you can hear me.
Yes, we can.
I have two questions. First question. You have evaluations from various ESG evaluators. Some are famous. For example, there are NPOs who evaluate the human rights of supply chain. To what extent have you been able to grasp all these evaluating agencies? Second question. There are all kinds of ways to evaluate the ESG, the criteria. How do you view what criteria to use?
Thank you very much. ESG evaluating organizations and their evaluation is what you are asking about, and I would like to explain. As you say, in various ways, E, S, and G, and sometimes various different indicators are used for ESG. Towards the end of my speech, as I mentioned, for the ESG in our company, for example, FTSE, MSCI, these are investing organizations, and they have an index where they incorporate what is globally understood to be the ESG. These are global organizations, and whether it be for E or S or G, we have received very high evaluation. In terms of the environment, there is CDP, Carbon Disclosure Project. With regards to their evaluation of us, for five consecutive years in climate change, we have received a ranking of A, which is quite high.
These evaluating agencies, and there are NGOs that are specialized in supply chain, we try to have a very good dialogue with them. That is, we try to have good engagement with various parties to hear their views and to improve on what is necessary, where it is necessary. For example, in the area of environment, in GM 20 or 2025, as was mentioned today, there are a number of challenges that remain with regards to climate change, renewable energy in Japan. Those initiatives need to be accelerated. For example, in S area, as was asked in the supply chain, the initiatives there are still incomplete. We are still on the path. We want to continue the efforts there. There are quite a number of evaluating organizations, it is true. On our side, too, what kind of indicators should we use?
What should we base our activities on? When we think about that, yes, there are difficulties. With regards to the environment, I think we see a certain convergence. For example, in S, the evaluation criteria perhaps is not fixed as yet. Along with time, it could be that, to an extent, there will be a convergence. Some people think so. We would like to have our own core, our own position, and listen to the views of others, and reinforce our engagement and activities in E, S, and G.
Thank you for the questions. It's now time for us to stop. We will close the Q&A of the media here. Thank you very much.
The question and answer session for analysts will be starting at about 10 minutes past five. Please wait for a while. Ladies and gentlemen, thank you for waiting. I'd like to now entertain questions from institutional investors and analysts. I am Hayakawa of IR. I shall be serving as the emcee. If you have a question, please press asterisk followed by number one, and we will be appointing you. When your name is called, please state your question. If the question is in English language, it will be translated consecutively into Japanese and the response will be in Japanese. Please limit your questions to two questions per person. If you should like to cancel your request for a question, press asterisk followed by number two.
If there is a disruption in the communications due to some connection problems, due to time constraints, we will move on to the next question. Thank you for your cooperation. We'd like to now start the Q&A session. If you have a question, please press asterisk and then one. The first question will be Ohmi from JP Morgan Asset Management.
Thank you very much. Can you hear me?
Yes, I hear you clearly.
Thank you. About the talent and evaluation for your people, which is a source of value creation for your company, starting in fiscal 2020, part of the bonuses for the senior executives, including sustainability initiatives as a value creation initiatives that have included as a part of the evaluation. What items are included in evaluation? If there's difficulty in introducing those items, can you tell us that? In order to maximize the capabilities of the talent to improve engagement and empowerment and this kind of performance linked to compensation will be difficult, but why is it that you're not applying the same compensation system to your general employees? Thank you very much.
Performance linked to compensation now includes assessment in terms of ESG, but what are the specifics of that kind of evaluation was the question, and I will try to explain that. Starting this year, we've started an initiative for one thing, focusing on E&S mainly, where all of the businesses respectively, what they are doing and what are the challenges they are facing to E&S, what sort of social value creation they can make in terms of E&S. For the mid-range plan to be started next year, we are asking the business units to include those items in the next year's MRP. The headquarters have requested that of all the business units.
In doing so, between the headquarters and all the heads of the businesses, discussions are carried out and the expectations on the headquarters are presented. That will also include expectations from the outside stakeholders, and also from the business side as well. From the perspective, the management of the business units, we also receive input, and we have considered a significant amount of discussion in this. In the last few years, our approaches, initiatives on E&S has received a lot of focus. We have enhanced this. Value creation at Sony, it must be done through our businesses, and value should be created over long-term. That is most important. Any initiatives must be along those lines, firstly. For example, last month, Electronics Products & Solutions business, Mr. Ishizuka, in charge of that business, they held the briefings to introduce the business.
There, EPS' initiatives on sustainability was presented, because that was an important part of their business management. In a similar way, in semiconductors business or in entertainment businesses as well, they are all working on this, along those lines. In addition to that, the results of those will be affected in our business performance. It means that that will be reflected to the business performance of all the general employees of these businesses as well. Also for senior executives, separately and on individual basis, we assess their performance in that respect as well.
Next question, please. From Nomura Securities, Okazaki-san, please. Okazaki from Nomura Securities.
Can you hear me?
Yes, we can.
I would like to ask two questions. First question. This is the introduction of 3R technology, and I would like to hear your views on the contribution, especially in this COVID pandemic. Long-term perspective are held, but maybe you would want to accelerate. What is the time span that you are thinking about? Secondly, this time you have decentralized sensing as a new keyword. You have sensing technology and your strength in the sensing area. When it becomes decentralized, what kind of strength will Sony gain?
Thank you very much for the questions. I would like to answer both questions. First has to do with 3R technology. In terms of the time span, I think we could think of various things. In my speech today, virtual production-related aspects are where we are already in commercialization. In production, the 3-6-0 virtual environment was mentioned today, that it will be used on site. Sometimes the time is not that long. In sports and live events going forward, well, right now it is difficult for people to gather. Musicians and athletes, they're very emotional scenes. We would want to be able to experience that live feeling remotely. Volumetrics was mentioned today. That is the Ikimonogakari video, and that was on a real-time basis. You can feel like you're actually on site and enjoy yourself.
I think we are getting closer to doing this. Of course, depending on the difficulty, the timing will differ. Because of COVID-19, yes, I think it is clear that things will be accelerated. Second question about decentralized, the meaning of decentralized. For example, you have something like Intelligent Vision Sensor that was mentioned. Basically, on the edge side or within the chip, you have AI processing. That's the way of thinking. In the past, if you compare to the past AI processing, it is on using the edge processing so the power can be lowered, or the amount, the information in the chip can be made compact, for example. Face tilt recognition is, I think, used in many scenes with AI. If you just need the number of faces, then there are four persons, then it's four.
In the past, the video of the faces was on the cloud, and that means very large data is brought into the cloud, and that means that it requires a lot of energy or bandwidth in communication. You have the individual's face there, so in terms of security, there were some problems. If it's decentralized, then you can use various sensors and gather on the edge side so that.
I think we can make an approach to those issues. The essence of decentralization, it means that you can make compact information and lower the energy required. Also, the effect is that it's close to real-time, and you can use it for such applications. Thank you very much.
Thank you. I'd like to move on to the next question from SMBC Nikko Securities, Katsura-san, please.
Thank you. I hope you can hear me.
Yes, we can hear you.
I also have two questions. First question. First to Mr. Katsumoto, second to Mr. Kambe. The first question, for corporate R&D, you said that more than 5% is retained for R&D. More specifically, what are the specific items? As Yoshida-san mentioned, maybe outer space, that's one item. I would like to know more about the specifics, if you can share that with us.
In the past, what was the level before? Now you're saying more than 5% for R&D. You have that quantitative number. Could you give me the principles behind that? The second question to Mr. Kambe. In ESG, we're looking at the presentation material, 11 pages for E, eight for S and G for four pages. That's the balance. It is the third year, so what is the commitment that you have? In the first year, you probably focused on G the first year and then S the second year. Was it the reason why E was focused? You're looking at the social background and you now think that the environment is most important? The message from Mr. Kambe, I would like to know what was the philosophy behind your message this year.
Thank you for the question.
I would like to respond to the first question. I am Katsumoto. When I say long-term, I think I need to break that down. For many of the topics, the market size is very large and the Sony technology can be capitalized and can contribute to various businesses of Sony. That's how we prioritize. When we say long-term, we are looking at the 10 years or beyond in the future. There may be a time when the technology will bloom or blossom, so those are base technology. As of now, we don't know exactly yet whether that technology will really lead to a major business, but there's this major trend. We feel now that it is something that should be captured. We are always internally discussing the possibility or potential for that technology.
I cannot disclose everything, but for quantum computing, for example, we at Sony, we can probably consider how we can capitalize that technology at Sony. We are looking at various things and also in entertainment, emotions or moving emotionally when we think about that, you have to look at the brain science, for example. We need to know more or learn more about the brain. In the mid and long-term, there may be some technology development that would take a long time, but we are envisioning these things to engage in our activities.
Now, the second question regarding the balance between E, S, and G. Thank you for that question. As you said, yes, every year, E and S and G, we have many topics to cover in each of the areas, and we are doing various things.
How we strike a balance, we do have a lot of discussion which one to focus. If I may first talk about G. For G, well, you have to be really good in G in order to engage in E&S. I think governance is really important as a basis for conducting E&S. For us, for E&S, the awareness level has been raised in our governance activities. On the other hand, how about the specific initiatives that we are taking for E&S? That's what we wanted to focus on this year. Especially for environment, as was mentioned by Yoshida-san, the COVID-19 has spread very extensively, and in many ways, we may be criticized for investing money in this. We do have the sense of crisis for the destruction of the environment.
We have employees, we have business community partners, we have the capital market. I think the interest has been increasing among the stakeholders. We think that in order for Sony to have a sustainable business long term, this initiative on the environment is definitely going to be very important. By continuing this effort, we can probably identify potential business opportunities. As for S, social. Yes, it can be varied. That is, the employees are very important. Under this COVID-19 situation, our purpose, continuing to deliver Kando. We have this sense of mission for that. Under the circumstances, the employees are still trying to deliver Kando to the people, and I'm very grateful for their efforts. Human rights or diversity, that's something that has been fostered at Sony. It's our strength.
This is something that we should continue to foster and cherish at Sony. In the business communities that we thrive in, we want to do everything that we can to contribute to make it better. As the top management, we have a very strong awareness for that. I mentioned this in the speech, this year, the Black Lives Matter movement, that really is directly connected to our business. Our initiatives there is actually a business issue itself. I don't know if I was able to respond to your question, but that is my response. Thank you.
Thank you. We're running short of time. The next question will have to be the last question. Morgan Stanley MUFG. Mr. Ono.
Thank you. Ono speaking. Morgan Stanley. I know time is short, there's just one big question I'd like to ask. Comparing this time and the previous briefing, we have Mr. Katsumoto representing technology business, the focus point of the technology was you talk about long-term diversity. Those were the important focuses. Previously, you were talking about supporting the creators' dreams. Your comments were narrow. Is there any change in your perspective looking at this business? Particularly now, you are talking about diversity and giving us a lot of examples. Is it because there will be a lot of businesses that you will not be able to run solely on your own? That was my impression. In other words, alliance, partnership with other partners.
Can we expect that you will increase those? Is that what you're thinking? The second point, related to the previous point, is in your organization, you had a presentation about the experiences represented by the board members, board of directors. Previously, there have been a lot of members of the board who were experienced in global business management, relatively, background in engineering and IT and technology. Those expertise were not necessarily well represented in the board. As compared to last year, you have one member more in that area. That, and also in terms of the composition of the employees, because you talk about diversity of technology, is it likely that there will be change in these compositions?
Thank you for those questions. The first question will be addressed by myself, Katsumoto.
Last year, we had a Technology Day, luckily it was before the corona situation, we were able to introduce a lot of topics, including demonstrations. We are glad that we were able to do that. There was entertainment in the financial services that we were not able to show previously. It was the first opportunity for us to show technologies relevant to those businesses. This year, we have the ESG Technology Day. The focus is on E&S, how technology is being adopted in those areas. That's what we wanted to show this year. Also, as you indicated, diversity and long-term perspective. We're looking at Sony in five years, 10 years' time, because we believe that kind of future is very important. Being responsible for R&D, that's what I keenly feel every day.
Because diversity, if you don't have diversity, our view on the future, our thinking about the market, or in terms of breadth of technology, it's all going to be limited, restricted. If we have only discussions about male engineers, then we lose perspective of Sony as a whole, which is very diverse. We do not have a lot of boxes with the technology possibilities, and that's why we believe that there's importance in maintaining diversity of the engineers. Even still, there's a limit to what one company alone can do. Therefore, compared to times before, in all the R&D bases internationally, we are enhancing the collaboration with the universities in a more synergy manner. Sony Innovation Fund is now there with a lot of contact with the startup entities. We are accelerating collaboration in those areas.
As we announced recently, collaboration with Microsoft technologies that we do not have within Sony, and we do believe collaboration is necessary to obtain those. Myself, personally, going forward, alliance and collaboration will have to be increased. The second question will be answered by Kambe-san.
The second point about the expertise represented by the board, particularly in the area of technology. Directors with the technological background, is there an intention on our part to increase directors with that kind of background? As you pointed out, Sony's business is very much diverse. Therefore, the directors of the board, ideally, they have to represent a diversity of background and expertise. As I briefly mentioned earlier, if you look at the board of directors, of 12, 10 are outside directors. What we have is what you would call the monitoring board.
The supervisory function is that they get to be the executive management team. Individual business running is the responsibility of the management team. What is expected of the board of directors is to look at the management. Management would bring proposals or bring strategies and plans and individual projects to the board, and they will apply the stakeholder's perspective to see the relevance of those proposals. That, we believe, is the role of the board. Therefore, yes, we need a certain level of expertise, but the ability to look at the global business, including technological aspect of the global business. Not that individually, directors will require a technology background, but what is needed is that directors would have an experience in having engaged in running of the businesses, including those technologies.
This June, we added three more directors, and those new directors, as well as those who joined us last year, they have experience in running the businesses. Those businesses involve technological aspects, although these directors personally may not be engineers. That kind of experience, having run and managed the businesses with technological aspects, is what is important.
Thank you very much. It is now time to close this ESG technology briefing session for today. Thank you very much for your participation.