The relationship between business and society is currently undergoing major changes. As the nature of the demands that society makes of enterprises is changing, the criteria of corporate value are also diversifying. We see corporate social responsibility (CSR) at such a time of changes as a matter of fulfilling the responsibility that the enterprise owes to society or, in other words, responding to the expectations of society.
We, Sekisui Chemical Group, have adopted a corporate philosophy of creating social value by responding to our stakeholders' expectations.
This is a clear expression of management as essentially a matter of fulfilling social responsibility. In the practical implementation of this corporate philosophy, I am confident that when we are considering how we should respond to society's expectations, based on our understanding of the function of the enterprise in society, Sekisui Chemical Group's CSR philosophy is that our business activities themselves should do so. Our products and services, and the processes by which we create and provide them, respond to the expectations of the full spectrum of stakeholders, including our customers, and contribute to society. These factors form a cornerstone of Sekisui Chemical Group's CSR.

To develop a business that inherently contributes to society, we feel that the best approach is to make a prominent business by offering products and services that possess unique strengths. Such prominence will naturally involve standards that make us prominent in the Environment, CS & Quality and Human Resources. In other words, if we seek sustainable growth based on environmental standards, then we will have to become what we call an environmentally creative organization. We will also need to provide prominent quality that impresses our customers, and we will have to provide a positive work environment for our employees, precious assets entrusted to us by society, that encourages them to achieve their own personal prominence and supports their self-realization. This is the true meaning of the "three prominences."
Sekisui Chemical Group's CSR management has therefore focused on these "three prominences."
Awareness of this has heightened throughout the Group and is already bearing fruit. In terms of the Environment, we have advanced from the concept of "environmental friendliness" to "environmental contribution," as part of our initiative designed to make us an "Environmental Top Runner Plan." In terms of CS & Quality, the motto of the entire group "we take customer opinions as the seed for manufacturing development," has been practically embodied in both organizational mechanisms and employee activities. And in terms of Human Resources, the culture of volunteering to take on challenges is taking root. These results encourage us in our commitment to pursuing the "three prominences."

Recently, Sekisui Chemical Group published within and outside the company the Midterm Management Vision for the three years commencing in fiscal 2006, "GS21-Go! Frontier." This midterm vision seeks to transform us into a genuine "Premium Company," and its central pillar will be "Opening Up Frontiers of Growth." Markets are undergoing dynamic changes. New possibilities are arising and expanding around Sekisui Chemical Group. By accurately grasping these market changes, and making good use of the characteristics of the Group, we can provide new values and satisfaction to our customers, while at the same time securing higher profits and, more importantly, responding to society's expectations. This is what we mean by "Opening Up Frontiers of Growth," and by contributing to society through our businesses. "GS21-Go! Frontier" also has a second main pillar, that of implementing CSR so as to create a Premium Company that contributes to society. A serious commitment to CSR is not only a response to the expectations of society but also to becoming a company that truly deserves society's respect.

As is clear from our corporate philosophy, there have been many concepts and approaches discussed and implemented by Sekisui Chemical Group's management consistent with CSR. By codifying and systemizing these concepts and approaches in what we call CSR management, we have identified deficiencies and inadequacies. The result has been to see the need for deployment of CSR throughout the Group, including its overseas operations, and the identification of issues in opportunities for women, and the need to foster human resources globally. To fulfill our responsibilities to each of our stakeholders while we resolve these issues, it is vital for us to adopt an objective viewpoint for our activities. It is also important for us to actively disclose information to our stakeholders and involve them in dialogs. The publication of this report is part of our efforts to improve communications and its role is to convey a proper view the Group's approach to CSR.
While recognizing that the details of our approaches and the way they are described still leave much room for improvement, we will be pleased to hear frank opinions and suggestions from our readers. Sekisui Chemical Group is determined to respond to everyone's expectations as it evolves into a prominent and highly profitable company. It would be a great encouragement to hear your suggestions.

June 2006
Naotake Okubo
President