TOP STATEMENT

TOP STATEMENT

Representative Director and President Masaaki Ito

Representative Director and President
Masaaki Ito

Promoting Initiatives with an ESG Perspective—Aiming to Be a Trusted Company

In recent years, there has been a growing demand for corporate management to carry out proactive initiatives for sustainability and ESG. We not only pay due consideration to the environment and society as a good corporate citizen, but also seek to contribute through the dynamics of chemistry to improving the sustainability of the globe and society as well as our own self-growth.

Based on its mission “for people and the planet—to achieve what no one else can,” the Kuraray Group has been engaging in businesses that contribute to an improved natural environment and quality of life since its foundation. To this end, in our sustainability activities, we had set our own important issue as materiality* and identified areas to focus on. However, a challenge surfaced in that the existing materiality did not effectively reflect contributions made through businesses; therefore, we updated materiality after having all of the division general managers engage in repeated discussions, including with respect to workability. I believe a challenge for the next Medium- Term Management Plan is to set an index for the degree of contribution to an improved natural environment and living environment, using materiality as an axis.

* Materiality refers to important issues related to the Company among those which society wishes to resolve.
Materiality of Kuraray Group

In addition, chemical manufacturers are strongly expected to address actions for climate change and the plastic waste problem. With regard to climate change, the Paris Agreement entered the implementation phase from 2020, aiming to preventing global warming, and numerical targets to reduce greenhouse gas (GHG) emissions have been set for each country; however, the plastic waste problem has no definite course of action yet in terms of regulations. We recognize that it is important to show our stakeholders the Kuraray Group’s initiatives toward a circular economy. We consider this point as one of the highest-priority issues for the next Medium-Term Management Plan and are proceeding with the study.

Moreover, in recent years, there has been a push for enhanced disclosure of issues that might have significant impacts on business performance out of potential events that are not expressed in a company’s consolidated financial statements. One of such movements is the Task Force on Climate-related Financial Disclosures (TCFD), which discloses a company’s response to risks and opportunities regarding climate change. We will review the TCFD recommendations carefully and work on the enhancement of information disclosure.

Now, it is each one of our employees who carries out measures to resolve those challenges. I believe a “workplace where people can safely work at ease, and are able to carry out their tasks and exhibit their capabilities while feeling a sense of pride and fulfillment in their work” will lead to an enhanced driving force for a company. As part of the efforts to support this, we have introduced an hourly flextime system, in addition to a telework program and conventional flextime system, to promote the establishment of an environment that is easy to work in. Those measures also play a major role in the business continuity plans in the event of disruptions to usual business execution, such as responding to the outbreak of the new coronavirus that we are facing right now, and will help mitigate impacts related to the Tokyo Olympic Games, which have been postponed until next year.

In addition, we are aggressively working on the enhancement of governance and diversity and inclusion in the workplace. We increased the number of Outside Directors by one (from three to four) and newly appointed a foreign national as Director as well. As a global company, our entire company will strive to build an environment where people with a variety of personalities can shine and thrive.

The Company underwent an on-the-spot inspection in February 2017 by the Fair Trade Commission of Japan in relation to the manufacturing and sale of activated carbon used in water purification facilities, waste incinerators, etc., and was issued a cease-and-desist order and an administrative monetary penalty payment order under the Antimonopoly Act by the said Commission in November 2019 with regard to the manufacturing and sale of designated activated carbon used in some of the water purification facilities, waste incinerators, etc. in eastern Japan and districts in the Kinki region. We were also issued a cease-and-desist order by the Fair Trade Commission of Japan in March 2017 in relation to the bid participation for designated KURALON™ (PVA fiber) products for which the Acquisition, Technology & Logistics Agency was to place orders.

We seriously and sincerely accept the gravity of the situation of having received cease-and-desist orders due to violations of the Antimonopoly Act on two occasions, consider compliance with the Antimonopoly Act as one of the highest-priority management issues, and are making every effort to prevent recurrence through various measures. Specifically, in addition to the initiatives that we have been working on since fiscal 2017, we are hosting seminars by external speakers for officers of the Company and the Group companies, and those for sales staff in Japan and overseas, as well as transmitting a message from the President again to officers and employees of the entire Group, with a view to strengthening compliance awareness. In addition, we systemized the establishment of internal rules such as the Antimonopoly Act Compliance Guidelines, development of a system that monitors bid participation, etc., interviews on the status of compliance with the Antimonopoly Act, enhancement of education and training, and implementation of bid participation audits as a series of programs to be operated in a consistent manner, including at overseas locations. Further, on the HR front, we made a change to the rotation system for managerial staff to prevent the same person from being in charge of the same duties for more than a certain period of time. We are committed to executing those measures steadily with a view to preventing recurrence.
Compliance Handbook

We have also caused our stakeholders a great deal of concern due to the fire accident that occurred at the EVAL™ plant of Kuraray America, Inc. in May 2018. Although the plant resumed operation after taking various measures to prevent recurrence, we have been conducting safety inspections of overseas plants since fiscal 2019 from the perspectives of whether or not we are now incapable of doing what we used to be capable of, whether there is any omission or deficiency in the management items, and whether stable operation over the years may have led to over-confidence and false confidence as to safety, in order to ensure that no such accident occurs ever again. We will address issues extracted therefrom, that is, improvement of the management system, enhancement of education and training, and expansion of risk assessment, one by one. Additionally, in fiscal 2020 and thereafter, we will continue to work on the enhancement of facilities with regard to safety at plants in Japan and overseas, as well as on the soft skills, including the management system, the review and improvement of manuals, and the enhancement of employee education.
Process Safety and Disaster Prevention, Occupational Safety, Logistics Safety

The Kuraray Group will continue to strive to realize “workplaces where people can safely work at ease without accidents” on a global basis, under the Corporate Statements’ guiding principle that “Safety is the cornerstone of everything we do.”

Masaaki Ito