In today's swiftly evolving society, companies are faced with an unprecedented demand for adaptability and seamless business operations. At the same time, effectively conveying their sustainability commitments to stakeholders in a clear and comprehensible manner has become an imperative.
Until now, the Gakken Group has documented its association with the environment and society, along with its contributions, within its CSR REPORT. As a conglomerate deeply interwoven with society through its primary operations in education, healthcare, and nursing, we are convinced that generating not just financial but also societal value is pivotal for fostering the lasting enhancement of corporate worth.
We have recently conducted a comprehensive reassessment of our materiality, marking the first review in four years since our initial alignment with the SDGs in 2019. This realignment is in response to evolving societal dynamics and the incorporation of new business elements. (Page 16)
Within the framework of the Group's value creation process, a distinctive feature emerges wherein the amplification of social value originating from its businesses directly correlates with an augmentation of its internal management capital. We firmly hold the belief that articulating this social value serves as a conduit for fostering enhanced comprehension of the Group's sustainable approach and its diligent endeavors.
The Group has two major business areas: education and healthcare and nursing.
In the realm of education, our endeavors encompass a spectrum of activities, such as operating learning centers, publishing educational content, and providing services to preschools and schools. Our overarching aspiration revolves around establishing sustainable education. Driven by a profound sense of duty as a private enterprise, we are resolute in
addressing regional and economic disparities in education. This commitment is channeled through our contributions toward elevating the standard of education in Japan. We actively nurture the growth of young minds who will shape the future, underpinned by our innovative concept of the online Virtual Smart Campus (ViSC) and the Gakken Toddler Class that places significant value on nurturing intellectual curiosity during the formative years of early childhood.
In the realm of healthcare and nursing, our efforts encompass offering specialized housing and services designed to cater to the unique physical and mental needs of the elderly. This includes the provision of serviced residences tailored for seniors, commonly referred to as "serviced senior residences," as well as group homes. Our primary objective is to facilitate an environment where a maximum number of individuals can sustain independent lives for as long as feasible.
Our objective is to enhance the quality of life for the elderly through distinctive initiatives. This encompasses delivering personalized care and fostering an environment geared towards diminishing hospitalization rates within our serviced senior residences. Furthermore, our efforts extend to implementing elderly care models that facilitate and uphold independence within our group homes.
Moreover, our Group's housing for the elderly contributes to the realization of a sustainable social security system. According to calculations, among those residing in designated facilities and special nursing homes for the elderly with nursing care levels of 1 to 3, individuals with a care level of approximately 3 can reduce their nursing care insurance premiums by living in a high-quality, serviced senior residence. The proactive expansion of serviced senior residences not only supports the lives of the elderly but also helps curb the increase in social security costs.
In our childcare support business, we provide not only childcare for infants and toddlers but also a variety of support services, such as child development assistance and after-school care, as part of our commitment to “leaving no one behind” in childcare support. Supporting the healthy growth of children also contributes to enabling parents to work with peace of mind.
In this way, in both the fields of education and healthcare and nursing, Gakken is continually advancing its business as a private company dedicated to supporting society, aiming to solve the social issues that surround its customers.
To ensure that everyone, from children to the elderly, can live happily, devising systems and providing services as a private company is a uniquely positioned endeavor and a strength of our Group.
Amidst the challenges posed by the pandemic, the medium-term strategic plan "Gakken 2023" was crafted. It aims for "Innovative Learning Approaches and Diverse Learning Opportunities" in the education sector, aspires to be a "Leading Contributor to Sustainable Urban Development" in healthcare and nursing, and envisions "Accelerating DX and Expanding Globally" across the entire group. In the second year, which concluded in September 2022, we successfully achieved an upswing in revenue and profitability.
In the education sector, Gakken Classroom boasts a combined total of 18,734 classrooms worldwide, engaging around 341,000 members. Additionally, Learning Centers span 408 classrooms and provide education to roughly 37,000 students, both domestically and internationally (as of March 2023).
Over the course of the pandemic's three years, conventional approaches like attending classes and learning centers underwent reassessment, allowing students to choose learning methods that resonate with them. Adapting to novel learning styles necessitated the delivery of quality content, irrespective of in-person or online formats, prompting structural changes within the education sector, including the publishing domain.
In pursuit of achieving the objective set forth in the medium-term management plan, the provision of "Innovative Learning Approaches and Diverse Learning Opportunities," we consolidated dispersed managerial resources within the Group.
In October 2022, Gakken Plus, Gakken E-Mirai, Gakken Medical Shujunsha, and Gakken Shuppan Service were amalgamated, marking the inception of Gakken Inc. In the fiscal year ending September 2022, hit products like the "Chikyu-no-Arukikata" travel guidebook series and the "Saikyo Ou" illustrated book series underscored this, fostering our anticipation of future synergistic effects.
In the realm of healthcare and nursing, the total number of our operating facilities, including both serviced senior residences and group homes, is 494, ranking first in Japan (as of March 2023).
The number of seniors aged 65 and over has exceeded 36 million and will reach its peak (about 39 million) in 2040. The percentage of the elderly aged 75 and over in the total population has continued to increase and is expected to exceed 25% by 2055. Furthermore, as the working population declines, it is highly likely that the provision of nursing care services to detached houses and mountainous areas will reach its limits. We believe that the need for elderly housing complexes, such as serviced senior residences that can provide efficient nursing care services, will continue to increase, and we aim to have 1,000 locations by 2030.
In the medium-term management plan, we planned to invest 25 billion yen in strategic areas including DX business, global business, and other existing businesses. Besides the investments in nursery school management companies, our investments in global enterprises, mainly in Vietnam (e.g., DTP), capital investments in serviced senior residences and group homes, and the establishment of a new company to accelerate DX business have generally progressed as planned.
In the fiscal year ending September 30, 2023, the final year of the medium-term management plan “Gakken 2023,” we aim to achieve net sales of 162 billion yen, operating profit of 6.7 billion yen, and return on equity (ROE) of 7.2%, including the effects of the above investments.
The parent organization of Gakken Group, Gakushu Kenkyusha, was founded in 1946 by Hideo Furuoka based on his conviction that “There is nothing more important than education for post-war (World War II) reconstruction.” After the war, Japan achieved a rapid recovery unparalleled in the world and became one of the most advanced countries in the world.
Since 2022, we have been distributing, free of charge, the "Play Smart" workbook for young children (Ukrainian version) to displaced persons in and outside Ukraine. We are also providing Ukrainian children who have fled to Romania with Gakken Classroom materials and teaching methods.
These activities are not only based on Gakken's founding beliefs but also on our strong determination to provide everyone with access to learning, whether domestically or globally. We believe that no matter what the situation, the realization and development of a sustainable society is all about fostering the next generation of human capital.
Within our Group, human capital holds paramount importance as the fundamental driver of corporate value creation̶a pivotal element for ensuring sustainable growth. Presently, women employees constitute the majority of our workforce, accounting for 68.4% of our total personnel. Their substantial contributions play a vital role in our operations. Notably, the proportion of female employees in section manager roles stands at 34%, and that of female managers at the department head level is 16%.
While these figures surpass the average within Japanese companies, they have yet to reach a global standard. Our aim is to bridge this gap by aligning these ratios more closely with the proportion of female employees in our workforce. To accomplish this, we are actively implementing a range of training initiatives, promotion programs, and other personnel strategies.
Furthermore, our focus on human capital management encompasses fostering an organizational culture that values diversity across dimensions such as race and age.
In our commitment to curbing greenhouse gas emissions, we have embraced the TCFD (Task Force on Climate-related Financial Disclosures) recommendations. As a part of this commitment, we have devised a comprehensive roadmap to achieve carbon neutrality by 2050 through CO₂ emissions reduction initiatives. Beyond this, we've initiated focused efforts in areas such as biodiversity preservation and upholding business and human rights. To tackle these matters, a dedicated Sustainability Committee has been established to craft policies, integrate them into actionable strategies, and actively engage in implementation. Furthermore, in October 2022, we inaugurated a new Sustainability Promotion Office.
To address these issues more quickly and steadily, starting in the fiscal year ending September 30, 2023, we will introduce a new executive compensation system for directors and executive officers of Gakken Holdings and directors of major Group companies. The new approach adds non-financial indicators to the financial indicators we have traditionally incorporated.
There are still many issues to be addressed with regard tosustainability, and we will continue to report and disclose them as needed in the Integrated Report. We would appreciate your continued cooperation and feedback to the Group.
Born in Kure City, Hiroshima Prefecture in 1959. Following graduation from the N ational Defense Academy of Japan, and a stint at a trading company, Hiroaki Miyahara joined Gakushu Kenkyusha (now Gakken Holding s Co., Ltd.) in 1986. Over the years, he held diverse roles within the company, including the esteemed positions of General Manager of the Ga kken Classroom Business Division, Executive Officer, and Director. This trajectory culminated in his appointment as Director of Gakken Holdings in 2009. Concurrently, he took on the role of President and Representative Director of Gakken Juku HD and Gakken Educational, further solidifying his leadership posi tion.
In December 2010, he assumed the pivotal role of President and Representative Director of Gakken Holdings, spearheading transformative business reforms centered around education, healthcare, and nursing. Under his stewardship, the company experienced a remarkable V-shaped recovery, with 13 consecutive terms of revenue growth and 8 consecutive terms of revenue and profit growth.
He currently serves as an outside director of Nippan Group Hol dings, Inc., Chairman of the Board of Directors of the Furuoka Scholarship Foundation, and Vice Chairman of the Japan Magazine Publishers Association. He is the author of "Gyakufu ni Mukau Shain ni Nare (Become an employee facing the opposing wind)" (Gakken) and "M&A Management
Theory: Success Rules for Business Model Innovation" ( Toyo Keizai Inc.).
Through his communication with employees, Hiroaki Miyahara regularly shares his thoughts on the president's blog, “Rashinban.” His book, "Gyakufu ni Mukau Shain ni Nare (Become an Employee Facing the Opposing Wind)," was published by Gakken in April 2022. It conveys a strong expectation and message to employees.
In March 2023, he published “M&A Management Theory: Success Rules for Business Model Innovation” from Toyo Keizai Inc. In this book, which targets a broad range of businesspeople, he shares a management theory derived from his own experiences.
Once a half year, MVPs are selected and awarded in the entire Group. Successful experiences are shared among all Group companies, leading to employee motivation improvement and human capital management.
As a means of connecting with the local community, the lighting ceremony of the Christmas tree displayed in the entrance hall, carried out by children from the childcare center within the Gakken Building, has become an annual tradition. We also value our connection with the community. (Featured on page 65)
Furthermore, in order to understand the perspectives of the environmentally-conscious younger generation, we conducted an interview with Ms. Rena Kawasaki, who was awarded the International Children's Peace Prize. Through interactions with the emerging generation making a mark globally, we will contemplate the role Gakken Group can play in nurturing globally active talent.
